ADV 205 1st Edition Lecture 3 Outline of Last Lecture I Post war advertising influences II Postindustrial Advertising III Advertising today IV Social impact on advertising Outline of Current Lecture I Issues in advertising II Advertising and the law III Advertising and the FTC IV FTC rules and regulations Current Lecture Issues in advertising Advertising controversial products o Tobacco o Alcohol o Gambling o Prescription drugs Subliminal advertising Advertising and the Law First amendment freedom of expression Speech vs Commercial Speech o Commercial speech is hardier driven by profit harder to quiet than personal opinions Valentine vs Christensen 1942 can t deliver hand message unless it has a political message He wanted to hand out a message for his subs He made an advertisement with his ad on one side and a political argument against the law banning ads on the back o This lead to commercial speech is not protected by the first amendment Bigelow vs Virginia Commercial speech deserves a degree of protection Virginia State Board of Pharmacy vs Virginia Citizens Council 1976 Medication should be aloud to advertise so people are getting correct safe products Bates vs St Bar of Arizona 1977 Now everyone can advertise Hudson Gas whether or not government would have problems with advertising 1 Is product truthful and legal These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute 2 Does the government have a substantial reason for regulating product People will be hurt people will lose money 3 IF they have a good reason to regulate they must have evidence that regulating the advertising will help the problem from happening 4 Whatever regulation draw up it can be no more than necessary This is a 4 part test to see whether or not the advertising will get regulated Advertising and the FTC Federal Trade Committee Wheeler Lea Amendment o FTC unsuccessful with trying to regulate advertising because it wasn t trade o Changed FTC to give power to regulate unfair methods of competition and unfair or deceptive acts or practices o This gave them the power to regulate advertising FTC rules and regulations Regulating deception o Misleading reasonable injuries Regulating substantiation o Type of claim type of products possible consequences degree of reliance type of evidence provide substantiation for all claims Remedies for Deception and Unfair advertising o Consent decree cease and desist orders corrective advertising consumer redress agency responsibility Deception o Must mislead a consumer o Reasonable consumer average American not children not impaired o Must lead to material injury you were hurt lost money o If nothing happens the FTC doesn t have the time and power to pursue the case Unfair Advertising o Causes or is likely to cause substantial injury to consumer o Which is not reasonably avoidable by consumers o And is not outweighed by countervailing benefits to consumers or to competition if harm IS caused something else is gained that outweighs harm Substantiation must make reliable claims Comparative advertising Products compared MUST be truthful and have proof They monitor endorsements o Weightless ads you have to show the average consumer Not the unaverage extreme with a results not typical note Demonstrations o Products are aloud to be used as substitutes as long as you don t misrepresent the actual product ice cream etc FTC deceptive and unfair advertising remedies o Consent decrees consent order need to change misleading information and the advertising does If consent is signed and then broken people will go to jail because legal document was broken o Cease and desist order advertisement NEEDS to stop o Corrective advertising harshest can t just stop the advertisement corrections need to be made to the misconception This costs extra money o Affirmative Disclosure Need to include extra information that says what will happen if you don t follow directions o Consumer refunds o Is the ad agency legally responsible YES ad agency and manufacturer are always both responsible Apple and Lugz Lugz filed Cease and Desist order against Apple because of their advertising was too much like theirs Apple changed their ad before the FTC could do anything about it