Leadership and the Law Reflection 2
- chloeknox30
- Mar 16, 2022
- 3 min read
Updated: May 4, 2022
How do we know if an advertisement is speaking truth? As consumers do we have a role in marketing regulations?
When a graduate course asked about the value of advertising to individuals and society, I started to think about my opinions on the monetary value advertising has created. It has expanded reach of consumers and therefore revenue generation. Businesses have found a way to grab consumer's attention and sell them through persuasive tactics. Nowadays with the ever improving technology, advertising is able to be even more persuasive by having a more targeted approach through data analytics. With the ability to be more specific in marketing tactics, there comes a responsibility.
Regulations
Business ethics has driven how brands run and how they prepare advertisements with consumers in mind. Additionally, formal regulations also guide how marketing strategies may be planned. The FTC, Federal Trade Commission, was created in 1914 to regulate and prevent unfair practices in commerce. According to the FTC website, "The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them." By having a regulatory system in place it helps prevent harmful advertisements and repetitive marketing material.
One of the former Commissioners of the FTC stated, "Some might say that the very idea of regulation of advertising is incompatible with the concept of a free market. In fact, I believe, the opposite is true. One of the fundamentals of a market economy is the free flow of information about goods and services offered for sale." In the same public statement, Azcuenaga went on to say that along with the free flow of information regulation is needed to keep the system balanced. In order for consumers to be able to make informed decisions the market needs to be fair.
Why regulate?
Society needs regulation in order to avoid harmful practices projected towards consumers. Having regulation helps prevent companies taking advantage of another person's work or falsely advertising to consumers. I would like to think the majority of businesses would not purposefully be deceptive in their advertisements, but there are always a couple that push the boundaries and make the need for regulations a necessity. For example, in my Leadership and the Law graduate class we learned about cigarette companies and the progression of their advertisements. Some companies utilizing cartoon characters gears years ago in their marketing efforts targeted children, who fall under vulnerable consumers. Although this may or may not have been purposeful, the cigarette companies continued to advertise in this way even though they knew the consequences of their actions. Situations like this have created the need for regulations in order to protect consumers and somewhat level the playing field among companies.
Future of regulation
In recent years consumers have become a bit more demanding of businesses when it comes to ethical practices. From fair wages and conditions at factory levels to truthful marketing, consumers are starting to increase the need for businesses to self-regulate their practices. It is becoming an expectation that brands are cognizant of their target market's requirements on brand's ethical standards and practices. I believe the future of advertising is gearing towards self-regulation, or at lease entails self-regulation along with official regulations. Brands that fail to take this seriously will fall behind and loose customer's retention.
Regulation is needed so customers don't end up like Eeyore. The goal is that marketing material is true so customer's can be satisfied and want to purchase from the company again.
There is definitely value in advertising. Brands gain monetary value from customers who see and then buy products or services, and customers gain a useful product or service. Being a money generating tool, it is important that marketing material is regulated to some degree. Without some regulation, brands are left to be moral and ethical in their advertisements, and that can't always be trustworthy.
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*Post written for Leadership and the Law Course*
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