Advertising Ethics: What They Are and How They Apply

Ethics guide people in all professions across all industries, serving as the moral principles for how someone behaves or conducts certain activities. Understanding the role of ethics in advertising can help you better understand what general rules may apply in this area of business. Certain standards for ethical advertisement apply to those working in the marketing and advertising field, and the violation of those standards can lead to legal repercussions. In this article, we will discuss advertising ethics and the role they play in creating ads that appeal to consumers.

What are advertising ethics?

Advertising ethics are the moral principles that govern how a business communicates with members of its target audience. Advertising has a set of defined principles that outline the type of communication that can take place between a potential buyer and a seller of goods or services. An example of ethical advertising is an ad that presents true statements in a decent manner, although the definition of decency may vary between individuals.

The purpose of advertising is to increase sales and generate more brand awareness. Good advertising can appeal to a wide audience and generate more demand for a product or service. Companies may claim that what they sell is better than what competitors sell, but ethics come into play when a business cannot back up their claims or use unacceptable methods to generate brand awareness.

Applying ethics in advertising can pose a challenge because the ethical beliefs that people hold vary, based on their background and moral beliefs. For example, one consumer might feel tricked by an advertisement that shows someone snapping their fingers and having a home full of new furniture appear, while another consumer would understand that this advertisement is not attempting to show reality. Certain regulations do apply to advertisers, who must exercise caution when creating ads to avoid facing legal issues or consumer backlash.

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Ethical standards for advertising

Some of the key ethical standards for advertising apply to all brands and industries, requiring those involved in the creation and rollout of ads to carefully review what they produce and avoid violations. The following eight standards were established by the Institute for Advertising Ethics (IAE) and administered by the American Advertising Federation in partnership with two key journalism institutions located in the U.S.

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Share a common objective of truth

One ethical standard for advertising is that all involved in the creation of an ad, including those in the advertising, public relations, communications, editorial and news departments should share a common objective of truth. Consumers value ethical and honest advertising, so maintaining an objective to share the truth can help advertisers better appeal to a wide audience while maintaining their ethics.

Obligation to high personal ethics in creating and sharing commercial information

When creating and sharing information, advertisers have an obligation to exercise the highest personal ethics. The mission of the IAE is to provide education to professionals in the advertisement industry to produce true and ethical advertisements while demonstrating a high level of professionalism.

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Clearly disclose all material conditions and endorsement identities

An advertisement may offer something for free in exchange for an action taken by the consumer, but this type of advertisement should clearly disclose the conditions of such an exchange to maintain a high ethical standard. Any endorsers should also be clearly identified in advertisements in the interest of transparency and full disclosure. Social media has added a new layer of complexity to advertising in the form of influencers, or people who share their opinions about products and services in exchange for compensation and/or free products and services.

When using influencers or endorsers or offering something for free, advertisers must maintain transparency about the conditions of this deal and whether the people presented in the ad receive any compensation for their participation. Presenting this information clearly allows a consumer to make an informed decision about moving forward with the brand.

Distinguish between advertising and news or editorial content

One area in which consumers have been treated unethically more frequently is the differentiation between advertising and editorial content or news. A press release should be presented differently than an advertisement, but companies have started to mislead consumers by presenting advertising content as editorial content to create confusion.

Transparent usage of personal information

Advertisers have an obligation to consumers to provide transparency around the usage of their personal information, as well as provide details on how any information they provide will be used. As marketers use enhanced methods to target online behaviors and actions, consumers continue to worry about their privacy and how companies will use their information. Government regulations have shifted the way marketers obtain and use private information, affording more control to consumers over what they have to share with businesses.

Fair treatment of consumers

An advertiser must treat all consumers fairly, although stricter rules apply to the audience to whom ads are directed and the nature of the services or products being represented. For example, products geared toward children may have stricter advertising regulations in place because they are more vulnerable and prone to being misled. The same rules may apply to the elderly. Prescription drugs and alcohol also have unique regulations applied to their advertising because of the potentially sensitive nature of these products.

Permission to discuss ethical concerns

Those working in advertising should have permission to bring up any potential ethical concerns when developing and rolling out ad campaigns. Practicing and applying the highest ethical standards requires those involved in the development of advertising campaigns to take the time to analyze the key standards for ethics in advertising and ensure that what they share with consumers adheres to those standards. When making considerations, ethical advertisers should always think about what is best for the consumer and allow that mindset to drive their actions.

Follow all legal regulations

All advertisers must follow the legal regulations that apply to the industry, including any local, state and federal laws. Various self-regulatory bodies and programs exist to address and resolve issues in advertising, including the Better Business Bureau and the Federal Trade Commission. Many advertisers rely on these programs to guide their actions and better understand the importance of ethics in advertising. The National Advertising Review Council is a regulatory body established within the advertising industry that reviews ads geared toward all age groups and target audiences.