What are Ethical Standards for Advertising?

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  • 0:04 Truth in Advertising
  • 0:50 Institute for…
  • 2:21 Doing the Right Thing
  • 3:24 Lesson Summary
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Lesson Transcript
Instructor: David Whitsett

David has taught computer applications, computer fundamentals, computer networking, and marketing at the college level. He has a MBA in marketing.

With the explosion of media and new ways to reach consumers, it's crucial for advertisers to be honest and ethical. In this lesson, we'll discuss ethical standards for advertising and how these standards affect the way advertisers reach the public.

Truth in Advertising

If ethics is defined as moral principles that guide a behavior or activity, ethical standards for advertising would seem to imply a set of guidelines. In 1962, President John Kennedy signed the Consumer Bill of Rights, which includes the right to be informed and legal protections for consumers. It says businesses must provide complete and truthful info so consumers can make informed decisions.

Uncle Sam, in the form of the Federal Trade Commission, also says that ads can't lie to us or mislead us, regardless of where they appear (print, TV, online, etc.). So if the federal government is regulating the advertising industry, are there any other constraints on what advertisers can say or do?

Institute for Advertising Ethics

The advertising industry itself recognizes the need for internal policing, so a group called the Institute for Advertising Ethics (IAE) was created. It is governed by an advisory council of educators and industry professionals and is administered by the American Advertising Federation, the Reynolds Journalism Institute, and the Missouri School of Journalism. The IAE has put out a list of eight principles and practices to serve as guidance:

  1. The industry should share an objective of truth and high ethical standards when serving the public.
  2. High personal ethics should be used in the creation and dissemination of information to the public.
  3. The industry must clearly separate news and editorial content from paid ads so as not to confuse the public.
  4. Ads should clearly disclose if the endorser or spokesperson has received compensation from the brand.
  5. Advertisers should use care and discretion based on the types of ads offered (i.e., alcohol) and the target audience.
  6. Advertisers should protect consumers' privacy in marketing communications and be clear to consumers about gathering info.
  7. Advertisers should follow all applicable local, state, and federal laws regarding ads and also comply with industry guidelines.
  8. Advertisers should have private discussions regarding ethical concerns and team members should be free to express their opinions.

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