Affirmative Disclosure of Nutrition Information and Consumers' Food Preferences: A Review

In order to evaluate a food advertising regulation proposed by the FTC, this paper examines some empirical studies of food marketing practices and their influence on consumer attitudes and behavior toward nutrition information and dietary habits. The requirement for affirmative disclosure of nutrition information may fall short of its intended goal because consumers have low motivation to use such information and inadequate comprehension of it. Moreover, the limited information processing capacity of the average person may preclude effective communication of nutrition information in a television commercial. The regulation's most likely impact would be to create awareness of nutrition information and increase the salience of nutrition in the consumer's food choices. Unless consumer education programs are coordinated with the regulatory efforts, lack of motivation and comprehension in the use of nutrition information will be a major barrier in achieving any significant improvement in the nutrition status of consumers.     

The FTC's Public Interest Requirement: An Anomoly in Consumer Protection*

Proposals for consumer class actions and individual law suits have been considered by Congress during its last two sessions. Both bills sponsored by the administration condition recovery by the consumer upon successful completion of action by the FTC. FTC action, under these proposals, would be an absolute prerequisite to private recovery. Since private recovery is made to depend upon FTC action, the jurisdiction of the Federal Trade Commission becomes critical in determining whether or not a consumer will be entitled to relief. The “Public Interest Requirement” has long been viewed by the courts as a limitation upon Commission Jurisdiction. Thus, if the administration proposals are adopted, that requirement will have to be satisfied before individual consumer recovery will be available. This article seeks to identify the elements of the public interest requirement. Both judicial opinions and the Commission's criteria are considered and evaluated.     

Deceptive advertising and abnormal stock returns

This study examined the impact of deceptive advertising on the abnormal stock returns of firms. Using an event study analysis with 101 cases from the FTC database over the period 1987–2005, the FTC rulings on deceptive advertising were found to have the negative effects on the abnormal stock returns of firms. Among the firm-specific factors examined in this study, the amount of advertising expenditures played a role in alleviating the impact of deceptive advertising on the abnormal stock returns, and the firms charged with consent agreements alone were found to lose less firm value than those charged with additional actions by the FTC. Results also showed that the negative effects on the abnormal stock returns created by the FTC actions did not quickly disappear afterwards. These results imply that marketing managers should exercise caution in designing advertising messages that may or may not intend to violate the FTC rules and regulations on deceptive advertising.     

Liu,Peter Yi-Chih. The Development of the Advertising Industry in Japan and Taiwan: A Comparison, 1945–1975. Taipei: International Advertising Agency,Ltd., 1975

Abstract

An increase in regulatory activity regarding false and deceptive advertising during the late 1960s and throughout the 1970s instigated an increase in the number of articles on the subject in both the academic and trade journals. Most of the developing literature centered on post hoc regulation done by formal government agencies (such as the FTC) and informal self-regulatory agencies (such as NAD/NARB). Largely overlooked was the routine but important advertising clearance process that addresses matters of falseness, deception and taste before the advertisements appear in the media. Recent trends toward de-regulation make the clearance process more important than ever before.

This article focuses on widely followed clearance procedures prevalent among major advertisers who use agencies and national media. A case example is included to show nuances and intricacies of the process. Common exceptions to the example are noted. Figures are included to model the general process and primary concerns of the involved parties.     

Processing Advertising Information: Deception,Salience, and Inferential Belief Formation

Four recent FTC cases on deceptive advertising were used to examine Fishbein's concepts of attribute salience and inferential belief formation. The findings suggest that (1) attributes considered salient by the FTC may not be considered by consumers when making brand choices, (2) a truthful ad may lead subjects to form incorrect inferential beliefs about product attributes (therefore, such an ad may ultimately be deceptive), and (3) information contained in advertising is processed by subjects to discount exaggerated statements, thus reducing the credibility of the ad.     

Consumer Attitudes toward and use of Advertising Content in a Small Daily Newspaper

Results of the study indicate that the advertising content of the newspaper in the present study is viewed as local news by its subscribers and consequently has the highest readership of any type of content in this paper. While it was assumed that the advertising content of this newspaper would be well-read, the magnitude of readership and reader-interest in advertising was surprising.

In regard to questions concerning the reader's attitude toward the amount of advertising carried by the newspaper under study, it was found that rather than feeling there was too much advertising in the paper, the majority felt that it was either “just right” or that they wanted more advertising in the future.

This article is based in part on a paper presented for the Advertising Division at the Association for Education in Journalism convention in Ottawa, Canada, August 16–20, 1975.     

Direct-to-Consumer (DTC) Branded Drug Web Sites Risk Presentation and Implications for Public Policy

Direct-to-consumer (DTC) branded drug Web sites inform consumers of certain specific facts, including risk information, about drugs. Prominently displayed risk disclosures can reduce the potentially misleading aspects of advertising information and encourage a deeper level of consumer processing. Although previous studies of DTC Web sites have examined the presence and absence of risk information, no research to date has evaluated the placement of risk information relative to benefit information on DTC Web sites or whether risk information is presented consistently in the DTC category. Bettman, Payne, and Staelin (1986) suggested that "the same information presented in different formats can result in different decisions" (p. 2). Schema theory can guide Web site development, as it suggests that consistency of information presentation in an on-line environment can help consumers maximize their ability to utilize information at the site. In addition, current regulatory practices (Food and Drug Administration [FDA] guidelines for fair balance in DTC ads, the Federal Trade Commission [FTC] "clear and conspicuous" standards for television and Web site disclaimers) suggest that consistency in information presentation can also help consumers comprehend information. This study, then, examines whether risk information presentation is consistent across DTC Web sites, and serves as a first step in the process of understanding what guidance might be necessary at DTC Web sites.     

Advertising and the Professions

This article aims to assess the consequences for prices and consumer protection of permitting professional advertising. The need to protect consumers given their lack of knowledge in the buying of professional services is seen as explaining the role of professional self-regulation particularly with respect to entry standards. But the case is not so strong for advertising restrictions, and it is shown that there are logical reasons to expect such restrictions to raise fees without much protecting the consumer. Empirical studies are surveyed confirming the favourable effect of advertising on prices. The conclusion reached is that specific advertising of fees and specialism would not necessarily be costly to monitor and would bring benefits in terms of increased price competition.     

Unavailability and Mispricing of Advertised Specials: The Food Shopper's Knowledge,Experience and Response

Unavailability and mispricing of advertised specials has been under FTC regulation for a number of years. Despite FTC trade regulation rules a large proportion of the shoppers surveyed in this study recalled a recent experience with product unavailability or overpricing. They were, moreover, surprisingly docile when confronted with this problem even though most were quite knowledgeable about regulations covering it. It appears that a store would have to be a major offender before consumers would shift their patronage elsewhere.     

The Typicality and Accessibility of Consumer Attitudes Toward Television Advertising: Implications for the Measurement of Attitudes Toward Advertising in General

Despite the wide array of contemporary advertising formats and media, television advertising remains the most dominant form to which typical consumers are exposed. Research on attitudes toward advertising in general (Att-AiG) implicitly assumes that the Att-AiG measure represents advertising as a whole. A major finding of the current research is that consumers tend to have a mental representation, or exemplar, of the most typical type of advertising—television advertising—when they report their Att-AiG. Therefore, in reality, Att-AiG primarily reflects attitudes toward television advertising. In addition, the results of our experiments indicate that television ad exemplars generate temporal changes in consumers’ reported Att-AiG and attitudes toward television advertising. Theoretical and practical implications are discussed.     

Smoke Gets in Their Eyes? Third-Person Effects of Electronic Cigarette Advertising

This study examined the relationship between smoker status and attitudes toward e-cigarette usage, third-person perceptions of e-cigarette advertising, and support for regulation of e-cigarette advertising within the context of a media-saturated environment. Survey results (n = 615) indicated that participants perceived e-cigarette advertisements as having a more powerful effect on others than on themselves and that nonsmokers perceived this more strongly than did smokers. Nonsmokers were found to have more negative attitudes toward e-cigarette use than smokers. Mediation analysis indicated support for a serial indirect effect of smoker status on support for regulation through attitudes toward e-cigarettes and third-person perceptions.     

Model-based development and testing of advertising messages: a comparative study of two campaign proposals based on the MECCAS model and a conventional approach

Traditionally, the development of advertising messages has been based on ‘creative independence’, sometimes catalysed by inductively generated empirical data. Due to the recent intensified focus on advertising effectiveness, this state of affairs is beginning to change.

The purpose of the study described in this article is to compare the development and effects of two campaign proposals, with the common aim of increasing the consumption of apples among young Danes (18 to 35 years of age). One of the proposals is the result of an inductive-creative process, while the other is based on the MECCAS model, i.e. means—ends based data collection employing the laddering method and subsequent use of the guidelines for message development formulated in MECCAS. The project was a joint venture of the Association of Danish Fruit Growers, Odense, Denmark, and the MAPP Centre, and was financed by EU funds.

The comparison involved the efficiency of the managerial communication taking place in the message development process as well as target group communication effects. The managerial communication was studied by interviews with the involved advertising agency (Midtmarketing, Ikast, Denmark) and client staff. The target group communication was assessed by pre-testing the two campaign proposals (n = 500).

The main finding of the managerial study was that the implementation of the MECCAS guidelines for message development led to better agency-client communication, which resulted in a more common understanding of the objective of the campaign. The pre-test showed that the MECCAS-based message compared to the conventionally developed message was perceived as more focused by the target group and stimulated better central processing.     

Advertising and the Federal Trade Commission: A Reposte

Abstract

Making advertisements which perform their basic function of selling goods and services in a competitive economy has become more difficult lately, largely due to increased intervention in advertising matters by the Federal Trade Commission and a broadening of their interest in all affairs relating to the market place. Somewhat paradoxically, this has had some favorable effects on the advertising business. It has encouraged greater attention to product performance. It has caused advertising to be more specific and accurate in what It says or implies. And it has accelerated the movement toward serious advertising self-regulation. But it's a short step from the sublime to the ridiculous. And in its vigorous efforts to regulate, the FTC has often overstepped its authority and has taken stupid—If not down-right dangerous—positions.     

Decision Points in FTC Deceptive Advertising Matters

Many advertising practitioners and academicians do not know or understand the bask decision steps involved in an FTC deceptive advertising matter. The steps are 1) is the ad in tact deceptive, 2) is an injunction appropriate, 3) are corrective efforts appropriate, 4) should a cease and desist order be issued and 5) what industry-wide action should be taken. A knowledge and appreciation of the considerations at each step in the process helps the practitioner prepare a defense strategy rebutting a complaint and provides the advertising professor with an orderly framework for teaching about government regulation of false and deceptive advertising.     

The ethics of lottery advertising: Issues and evidence

After a discussion of the evolution and criticisms of state run lotteries, this article examines the ethics of lottery advertising. A discussion of the appeals used by lottery advertisers is followed by evidence concerning the impact of expected value information on lottery purchase intentions. Findings point toward less emphasis on the lottery as a solution to financial and job problems and more emphasis on information about the actual value of a lottery bet. Using accepted standards from the marketing literature, lottery advertising is found to be deceptive.Shaheen Borna is Professor of Marketing at Ball State University. He has a DBA. His articles have appeared in theJournal of Business Ethics, Journal of Health Care Marketing, British Journal of Criminology, Journal of Accountancy, Akron Business and Economic Review, andProceedings of the American Marketing Associations.James M. Stearns is Associate Professor of Marketing at Miami University, Oxford, Ohio. Dr. Stearns is co-author ofThe Integration of Ethics into the Marketing Curriculum: An Educator's Guide andMarketing Ethics: An Annotated Bibliography. He is co-editor ofReadings in Marketing Ethics. Dr. Stearns' current research interests are the use and portrayal of the elderly in advertising, ethical and unethical behavior in academe, and the impact of technology on marketing curriculum.     

An Evaluation of Government and Industry Proposed Restrictions on Television Advertising of Breakfast Cereals to Children

In the United States, both industry and the federal government have worked to establish voluntary guidelines for how firms market food to children and to establish a threshold for the nutritional quality of foods marketed to children. The authors evaluate three US guidelines that deal with television advertising of breakfast cereals, which is both heavily advertised and a common meal item for children. They find that the majority of cereals advertised primarily to children from 2006 to 2008 do not meet any of the current and proposed self-regulatory nutrition guidelines, and that this is generally due to excessive sugar content. Further, children and adolescents are exposed to more advertising for products that do not meet the nutritional guidelines. We evaluate the extent to which each of the guidelines impacts advertising of cereals that are most viewed by children and purchased by households with children. The results provide insight for policy makers concerned with limiting the extent to which children see television advertising and ultimately consume unhealthy breakfast cereals.     

Survey of Internet users’ attitudes toward Internet advertising

Many have speculated about the current state of Internet advertising (IA), how it compares to advertising in general (GA), and its implications for traditional marketing models and practices. Although many estimates exist regarding who uses the Internet as well as guidelines about how best to design IA, little is known about Internet users’ attitudes toward IA, much less what characterizes these attitudes. To test this, a national sample of over 400 participants with at least some exposure to the Internet was surveyed. The results revealed no majority opinion of IA: approximately a third of respondents liked, disliked, and felt neutrally toward IA, respectively. A regression analysis indicated that enjoyment of looking at Internet advertisements, its informativeness, and its utility for making behavioral (purchasing) decisions contributed to participants’ attitudes toward IA. Enjoyment of looking at IA contributed the most to attitudes toward IA, yet at the same time appears to be one of IA's weakest features. In order to assess whether attitudes toward and perceptions of IA might reflect attitudes toward advertising in general by this demographic group, rather than attitudes toward IA per se, responses were compared to those of a demographically weighted-to-match national sample of over 1,000 who answered similar questions in regard to advertising in general. The results indicate that more respondents found IA to be informative and trustworthy than a demographically similar sample found GA. Even though the attitudes and perceptions of IA and GA were significantly different, the structure of GA and IA attitudes was the same. Implications for the design of IA are discussed.     

A longitudinal assessment of consumers' attitudes toward physicians' advertising

The purpose of this study is to investigate current attitudes and opinions toward physicians' advertising and to compare them to the attitudes expressed 20 years ago. It replicates a survey done in 1986 and uses the same questionnaire and the same population to compare responses longitudinally. Both the 1986 and 2006 respondents agreed that the public would be provided useful information through advertising by physicians, and both groups also believed that it is proper for physicians to advertise. The study seems to confirm the belief of many marketing professionals that advertising and marketing clearly have a place in the future of health care services.     

Attitudes Towards Advertising Among Executives in Saudi Arabia

The executives of 65 Saudi companies were surveyed to determine their attitudes toward five issues in advertising: need for advertising; economic concerns; social concerns; ethical concerns; and regulation of advertising. The findings of the study indicated that the executives generally held mixed feelings toward advertising. While concurring with the need for advertising, they showed concern for the high costs of advertising and supported the need for regulating advertising aimed at children and for harmful products.     

College Student Attitudes Toward Advertising's Ethical, Economic, and Social Consequences

Little research has focused on college students' attitudes toward advertising's ethical, economic, and social consequences over the last two decades. Exploring and tracking the attitudes of college students toward advertising is important, however, for several reasons. College students represent an important segment of consumers for many marketers, negative attitudes toward advertising on the part of college students could lead to their support for restrictive regulation in the future, and there are potentially negative consequences concerning the effects of advertising that college students uniquely share with other youth markets. The results of this study – a differentiated replication of an earlier study of college students in the late 1970s – indicate the salience of various beliefs that help determine attitudes toward advertising and provide a useful benchmark for future studies. The implications of the study's findings for advertising practice and future regulation are discussed.