Advertising Ethics & Regulations Flashcards
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Read the first 7 Advertising Ethics & Regulations flashcards as text
Which federal agency has primary authority to regulate deceptive advertising practices in the United States?
Answer: Federal Trade Commission (FTC)
The FTC enforces truth-in-advertising laws and takes action against deceptive or unfair business practices in advertising.
Under FTC guidelines, when a celebrity endorses a product they have a financial relationship with, what is required?
Answer: The financial relationship must be clearly disclosed
FTC Endorsement Guides require clear and conspicuous disclosure of material connections between endorsers and advertisers.
What is the primary ethical concern with 'puffery' in advertising?
Answer: It uses exaggerated subjective claims that cannot be proven
Puffery involves vague, subjective boasts (e.g., 'the best pizza in the world') that are not considered deceptive because no reasonable consumer takes them as literal facts.
Which self-regulatory body in the U.S. advertising industry reviews national advertising claims for truthfulness and accuracy?
Answer: National Advertising Division (NAD)
The NAD, part of BBB National Programs, is the primary industry self-regulatory body that reviews national advertising for truthfulness and accuracy.
What does the Children's Online Privacy Protection Act (COPPA) primarily restrict in advertising?
Answer: Collecting personal data from children under 13 without parental consent
COPPA prohibits collecting personal information from children under 13 without verifiable parental consent, directly impacting targeted digital advertising to children.
Which type of advertising claim requires the advertiser to have substantiation before the ad runs?
Answer: Objective product performance claims
FTC policy requires advertisers to have a reasonable basis—substantiation—for objective claims about product performance before the advertisement is disseminated.
In comparative advertising, what is legally required to avoid FTC action?
Answer: Claims must be truthful, substantiated, and not misleading
FTC guidelines permit comparative advertising as long as comparisons are truthful, clearly substantiated, and not presented in a misleading way.