False and deceptive information can be linked to humans since the dawn of history, yet the first formal attempts to curtail commercial advertisement date back to only a few decades.

In our age of multiple channels and transnational advertisement, the name of the game is the same but the effectiveness of current legal or other forms of “best practice” vigilance falls short of its intentions. What can be done about it? Perhaps something can be learned from the past.

If we take the US market as our prototype market it’s interesting to note how corrective measures to try hinder this type of advertisement came about. A reference historical point is actually linked with soups and marbles. This happened back in 1968. A well-known soup manufacturer, after a probe from the FTC (which led to a lawsuit), finally pulled their soup advertising back. Curiously enough, a group of law students who adopted the name SOUP, for Students Opposed to Unfair Practices, thought that this was not enough and that corrective advertisement was still needed to rectify the false impressions already given to consumers through the, by then, already withdrawn advertisement.

he result: the First Amendment would apply only to legal products and, evidently, to ads that are not misleading. Evidently, this stance aspect does clearly identify what may be considered misleading and who is supposed to evaluate this and how.

In the years to come the above story had an important effect on how this whole issue came to be looked at. To start with I would like to mention three different aspects and their particular relevance. One of them involved the birth of the National Advertising Review Council in 1971. The prevalent lines of thought in this approach were that of self-regulation and of how any company´s competitors were to be considered the best effective watchdogs. This view did not remain uncontested. One consequence of this was the Children’s Advertising Review Unit in 1974. Another approach had a much more profound legal angle as it involved the First Amendment, that is: freedom of speech. This had its roots already in the 1940’s when the Supreme Court ruled that the First Amendment does not protect commercial advertising. This issue needed some further Supreme Court clarification. This happened later, in the 1970’s. The result: the First Amendment would apply only to legal products and, evidently, to ads that are not misleading. Evidently, this stance aspect does clearly identify what may be considered misleading and who is supposed to evaluate this and how.

Evidently, passing judgment on advertisement is no easy task. Consumers can quickly consider, and often rightfully so, what is deceptive or unfair to them. The issue becomes more complex when FTC actually makes distinctions between what is “false” and “deceptive”, or between misinformation and the actual proof that deception materialized and then, whether there was intentionality behind it. If we dig even deeper we will face even more challenges when trying to evaluate whether the consumer’s own idiosyncrasy and many other factors, such as mood, climate or even hunger, may have played a determining role in the cognitive feelings that are connected to any consumer’s decision to buy. In fact, advertisement can have a lagging effect between actual consumer’s awareness and decisions. The issue is a complex one. Yet, no one will deny that deceptive or directly untruthful advertisement still exists.

This takes us to a third area or “approach”. This relies more on the Advertising Agencies’ ability to introduce procedures for the development and review of any client’s advertisement projects. Taking into account that by 2004 about 65% of the world’s media-buying revenue goes through the six largest holding companies in the sector, their role is a key-determining factor in the pursuit of general ethical standards for advertising.

Evidently, the above focused on the US experience, where the FTC is the key authority, and the various states also have similar norms and approaches. Noticeably, despite the legal statutes, the overall approach is focused more on prevention than it is on punishment. Other countries have enacted laws and frameworks for supervision, there being, noticeably so for various EU countries, a not too different approach from that which exists in the US. We will not discuss the differences here. The prevailing view in countries where there is greater consciousness about deceptive advertisement practice and their breach of consumer’s rights is more linked to civil than to criminal law. There is room for interpretation and the scope and capacity of institutions to prevent is evidently limited, especially if the focus is on prevention.

Consumers call for greater cooperation, the acceptance and adherence to a code of ethic and the enactment of transnational laws along with the creation of supervisory bodies with the responsibility and capacity to reinforce rules of fair advertising whenever consumer rights are infringed.

But there is no reason to expect much in an area that is already difficult to supervise on a national level. The lack of transparency, the very fragile rules and the poor supervision of international commerce should come as surprise to no one. All one has to look at the level of cooperation in many other critically important areas, such as the environment, health, food, human rights not to speak of international financial transactions.

It’s interesting to note that in the Supreme Court’s ruling about the First Amendment not applying to commercial advertising, politics was clearly excluded. In other words, political ads, not being commercial, can promise whatever.

Meanwhile we should all remind each other of a more responsible consumption and greater consumer awareness, remembering that half-truths do not add up to the whole truth.


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Ragnar A. Brigg
RAGNAR is passionate about his pursuit of a better understanding of our “global village” in a range of topics. Despite his business, educational and personal life experience having given him much to draw from, he still aims at not being curtailed by “excess weight” in order to try maintain a fresh and balanced perspective on today’s rapidly changing world. He believes that everything that happens is convolutedly intertwined and that we all are, for better or for worse, at the very heart of it. Ragnar feels an urge to try discovering, unmasking, divulging or denouncing what and how he sees things. Often it’s about soul searching and storytelling; or about engaging himself in learning and critical analysis in order to expand his borders and sharing it, whenever possible. Ragnar has lived in several countries and held management positions in major entities. From his very early exposure to technology, his career moved to the re-/insurance and finance areas, where team building and general management skills were pivotal; later to entrepreneurial activities, both as consultant, international business-model researcher as well as trader and industrial project designer/developer. Ragnar is fluent in a number of languages and has a passion for others. He holds a B.Sc. from Florida Tech/F.I.T. and an MBA from the University of Chicago. He has recently reestablished himself with his wife in Norway. Besides some niche consulting jobs Ragnar is currently working on two book projects, both of which require much research in libraries in different countries.
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