Integrated Marketing
Communications
Regulation for
Advertising & Promotion
By
Arun Karthik
Self Regulation
Advertising is
regulated Federal Regulation
through:
State Regulation
Self- • Self -regulation is done by regulation is done
by :
Regulation • Advertisers and Agencies
• Trade Associations
of • Businesses - BBB
• National Advertising Review Board
Advertising • Media
NAD
The NAD is an important self-regulatory body
• Sources of NAD Cases
• Competitor Challenges
• NAD Monitoring
• Local BBB Challenges
• Consumer Challenges
Modified/Discontinued
Decisions Substantiated
on NAD
Cases
Referred to
Government
Appraising Self-
regulation of advertising
Advertisers,
agencies and
the media view
self-regulation
as an effective
mechanism
and preferable
to government
intervention
Concerns over
self-regulation Time needed to resolve complaints
Budgeting and staffing limitations
Lack of power or authority
Self-serving to advertisers and media
The First Amendment
• Freedom of speech or expression
• Commercial speech protected
Federal
Federal Trade Commission Act (1914)
Regulation of • Created the FTC to help enforce antitrust laws
Advertising
Wheeler-Lea Amendment of 1938
• Amended FTC Act to make unfair or deceptive
practices unlawful
Concept of Causes substantial physical or economic injury to
consumers
Unfairness
Could not be reasonably avoided by consumers
Must not be outweighed by countervailing benefits
to consumers or competition
Three key elements of deception:
Likelihood of misleading consumer
Perspective of reasonable consumer
Materiality – information will influence consumer
choice
FTC Programs Addressing Deceptive
Advertising
Affirmative disclosure Advertising substantiation
Affirmative disclosure • Advertisers provide supporting
• Requires advertisers to include documentation for their claims as
information in their ads so consumers proof the claims are truthful
will be aware of all consequences,
conditions, and limitations
Cease and desist orders Corrective advertising
• Stop the claim until resolved with FTC • Run additional advertising designed to
remedy the deception contained in
previous ads
Other Federal Agencies That Regulate
Advertising and Promotion
Federal Communications Commission
Jurisdiction over broadcast communications; radio, television, telephone, and telegraph
industries
Food and Drug Administration
Authority over labeling, packaging, branding, ingredient listing, and advertising of packaged
food and drug products
U.S. Postal Service
Control over advertising that uses mail and ads that involve lotteries, obscenity, or fraud
Bureau of Alcohol, Tobacco & Firearms
Enforces laws, develops regulations, and responsible for tax collection for the liquor
industry
The Lanham Act
Companies/
brands that Alpo and Ralston Purina dog
have been
involved in food
Lanham Act
cases
include: Gillette and Wilkinson razor
blades
Prego and Ragu spaghetti
sauce
Duracell and Energizer
batteries
State Regulation of
Advertising
In addition to federal rules and regulations, advertisers must
concern themselves with state and local laws and regulations
The National Association of Attorneys General (NAAG) has been
involved with:
Airfare advertising
Car rental price advertising
Nutrition and health claims advertising
Regulation of other sales promotion
Contests and Cannot be classified as a lottery
sweepstakes
Cannot be required to give up something of value to participate (consideration)
Premiums Cannot misrepresent their value
Must take care with special audiences (kids)
Trade Must be available on proportionally equal terms
Allowances
FTC and US Postal Service police
directresponse advertising closely\
Telemarketing faces increased regulation
Regulation including the:
Telephone Consumer Protection Act of
of Direct 1991
Marketing Pay-per-call rule
Development of “do-not-call” registry by
FTC
Self-regulation occurs through various
industry groups
Regulation of marketing
on the Internet
Restrictions have been proposed with
regard to privacy including:
• Banning unsolicited email,
• Disclosing marketers identity,
• Giving consumers the right to bar marketers
from selling or sharing personal information
• Children’s Online Privacy and Protection Act
(COPPA) – places restrictions on collecting
information from children over the internet
