Legal and Ethical Implications

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Chapter 3

• Legal and Ethical Implications

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• Federal regulation
• Federal Communications Commission
• Sponsorship identification Must sponsors name
  be mentioned in a commercial?
• Yes, public must be aware that its listening to
  an advertisement. Sponsors name must be
  mentioned at least once.
• Payola and Plugola What are they? Payola
  Penalty, 10,000 fine and year in jail Plugola
  announcer plugs product, not mentioning that
  he has received payment or some inducement.
• Station-conducted contests What do you always
  hear about contests on the radio?
• Station must disclose the terms of the contest
  (What are they?)

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• Political sponsorship identification . What do
  you always hear at the end of a political ad?
• Sponsor of a political ad must be clearly
  identified listeners must know they are
  listening to a political ad and understand who
  paid for the broadcast time.
• In Radio spots, announcement at the end in TV
  ads, sponsor information may be presented
  visually.
• What is Equal time? .If a station carries an
  ad for one candidate, it must carry ads for
  others.

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• Liquor advertising Why did liquor advertising
  not appear on TV until 1996? Liquor industry
  voluntarily refrained from broadcast advertising
  never a law against it.
• Stations cautious about liquor advertising,
  fearing backlash against beer and wine
  advertising (cigarette advertising banned in
  1971).
• Federal Trade Commission protects the public
  from unfair and deceptive business practices,
  including false and misleading advertising
• Deceptive advertising What makes advertising
  deceptive? Deliberately false demonstrations or
  statements or true statements that convey a
  misleading implication.

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• Rigged demonstrations FTC expects advertisers
  to show a product as it really is not altered
  for effect.
• FTC tolerates a certain level of exaggeration
  What about the statement Bayer works wonders?
  Such exaggerations are known as puffery
  broad, vague, laudatory language.
• FTC believes everyday consumers are intelligent
  enough to recognize puffery and not take it
  seriously.
• Volvo fined for misrepresenting the strength,
  crashworthiness and structural integrity of its
  automobiles Pickup driving over a row of
  automobiles, all crushed except the Volvo Volvo
  was structurally reinforced, others not.

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• Testimonials must celebrity endorsers use the
  product? Yes, testimonials and endorsements must
  be genuine.
• Actors need not actually use a product but if
  you identify a person as Mrs. Jones of Omaha,
  she must be Mrs. Jones of Omaha (unless an
  obvious spoof).
• Comparative advertising comparative ads should
  not disparage or unfairly attack competitors.
• Research data .claims based on research must not
  be false or misleading

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• Truth in lending Why the rushed reading of
  legal information at the end of an ad? Advertiser
  must fully disclose all credit terms.
• Self-regulation ethical questions
• Stereotyping What is it? Shorthand used for
  convenience. Help to avoid character development.
  Guy in the black hat (bad guy) young man with
  thick glasses (geek) burly college athlete
  (dumb jock).
• Viewers may come to believe stereotypes are true,
  or almost always true.
• What are some stereotypes of women?
• What are some ethnic stereotypes? Complaints
  about the Taco Bell chihuahua (Yo quiero Taco
  Bell.) Others liked the Chihuahua and the
  character survived.
• Avoid blatant and unflattering stereotypes.

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• Cable advertising
• Cable is regulated more by local franchising than
  FCC. Not required to observe the FCC rules for
  sponsorship identification and contests.
• But cable must observe FCC political sponsorship
  identification rules.
• FTC may regulate advertising in all media.