Regulations in

Advertising

What is Advertising?

Advertising
is
the
non-personal
communication of information usually paid for
and usually persuasive in nature about
products, services or ideas by identified
sponsors through the various media.
- Bovee

Advertising regulation refers to the laws and

rules defining the ways in which products
can be advertised in a particular region.

"Advertising is a non-moral force, like

electricity, which not only illuminates but
electrocutes. Its worth to civilization
depends upon how it is used."

(J. Walter Thompson)

The namesake & Founder of the JWT advertising agency

- Advertising has been in the vortex of

controversy of the many ills that it brings to
society
- It is accused of encouraging materialism and
manipulating our behaviour generally
contributing to the downfall of our social
system.

Hence, there comes a need for regulatory

bodies

Purpose
The purpose of the regulatory bodies would be to make
sure that advertisers and advertisements are -

- Truthful and fair to consumers and competitors.

- Within the bounds of generally accepted standards of
public decency.
- Not used indiscriminately for the promotion of products,
hazardous or harmful to society or to individuals
particularly minors, to a degree unacceptable to society
at large.

Advertising Regulatory Bodies Around the World

Some of the well known regulatory bodies are Advertising Standards Council of India (ASCI)
Federal Trade Commission for United States
Advertising Standards Authority (ASA) for United Kingdom
Advertising Standards Authority ASA) for South Africa

(ASCI)

-Was set up in 1985

-The Advertising Agencies Association
of India, the media owner's association
and the Indian Newspapers Society,
came together and took the initiative
to form the ASCI (the council)
- The council was voluntary and selfregulatory, registered as a non-profit
Company .

Composition of ASCI
The Council is managed by a Board of Governors
consisting of 16 elected members, constituted as follows:
- 4 from Advertisers
- 4 from Advertising Agencies
- 4 from Media and
- 4 from Allied Professions like outdoor contractors, audiovisual producers/distributors, consumer researchers,
printers, etc.

Objectives
The objectives of ASCI are to make sure
advertisers and advertisements are- Truthful and Honest
- Not offensive
- Not hazardous to society
- Fair with competitors
The Complaints the ASCI receives are handled by
Consumer Complaints Council (CCC)

CONSUMER COMPLAINTS COUNCIL (CCC)

Birth and composition of

CCC

The ASCIs Board of Governors set up a

Consumer Complaints Council (CCC) to
examine complaints received by the ASCI.

The composition of the CCC is as follows:

9 from within the advertising industry
representing advertisers, advertising agencies,
media owners and allied professions.
12 from society at large, consisting of eminent
consumer activists, educationists, prominent
journalists, lawyers, engineers, doctors, etc

Receiving
complaints
- For public awareness sake, from time-to-time the
Council puts out advertisements in newspapers
- This invites them to complain to the Council
Each year the Council receives approximately 150
complaints.
-

50 % Upheld

80% Voluntarily modified/withdrawn

This is one of the ads of ASCI encouraging people to complaint against ads
making false claims!

Complaining
Procedures

Online and Offline

complaining
Who can Complaint?
ANYONE!
There are two ways of complaining to CCC. They are through
-

Online and

Printed form

The form can be downloaded from,

ASCIs Official Website - http://www.ascionline.org/

Online Complaint Form

Printed Form
This is the form
that has to be
filled and sent to
ASCI

CASE STUDIES

CASE STUDIES: CASE 1

DECISION IN FAVOR OF
COMPLAINANT
Brand- Bajaj Pulsar

Complaint- Visuals had bikers doing extreme

stunts but the disclaimer was almost invisible. So
complaint was filed keeping in consideration of
the recent bike stunt mishaps.
CCC said that- This shows dangerous stunts
without having a regard for safety and hence
some action should be taken by the brand.
Result- Ad was modified with a clear disclaimer in
the beginning itself.

CASE STUDIES: CASE 2

DECISION IN FAVOR OF
COMPLAINANT

Brand- AXE Dark Temptation Deodorant

Complaint- Ad is in bad taste and is vulgar, as it
shows the girls licking and biting the boy. The
scene of the girl biting his backside is highly
objectionable.

CCC said that- The Visuals were indecent and

likely to cause grave or widespread offence.

Result- Ad was modified by deleting a few scenes

CASE STUDIES: CASE 3

DECISION IN FAVOR OF
COMPLAINANT
Brand- KFC

Complaint- Car crashes after driver loses concentration

while eating KFC product. Showing eating while driving a
car, is promoting an unsafe practice. The words "non stop
khao, non stop khilao", in conjunction with the Ad being of
KFC bucket size pack, is clear intention of advertiser
promoting over/excessive consumption of KFC, which being
fried chicken has high content of fat in it.
CCC said that- Visual depiction of the driver licking his
finger implied that he has been eating whilst driving,
which could result in harm to the driver/passengers. Ad
shows a dangerous practice without justifiable reason

Result- Ad was modified

CASE STUDIES: CASE 4

DECISION IN FAVOR OF
ADVERTISER
Brand- MOTOROLA

Complaint- A father telling his son to be responsible and

not to litter the house. The son who is shown having a
mobile phone (Motoyuva model) with earphones just keeps
staring at his father and increases the voice of the music
on the mobile hone therby making the voice of this father
fading. Ad conveys the message that it is cool for todays
youth to just ignore what their elders are telling them.
CCC said that- The behaviour of the son ignoring his
father, as shown in the Ad, was not likely to cause grave or
widespread offence.

Result- Complaint Not Valid

CASE STUDIES: CASE 5

DECISION IN FAVOR OF
ADVERTISER
Brand- BIG BAZAAR

Complaint- Print ad has the tagline- Is se sasta aur

accha kahin nahi!. According to the Complainant,
there are items available outside, which are cheaper
than what Big Bazaar claims.
CCC said that- Claim misleading by exaggeration.
Result- The Advertiser provided comparative bills of
Big Bazaar and other stores, which proved that on a
basket of commodities, they are cheaper. So no
changes to the ad was made.

BIG BAZAAR- PRINT AD

Advertising
Regulatory
Body In
USA
Federal
Trade
Commission
(FTC)

ASCI is a non- profit organization while FTC is a government

organization
FTC collects complaints about companies, business practices,
and identity theft while ASCI only concern advertising.
The FTC enters all complaints it receives into Consumer
Sentinel, a secure online database that is used by
thousands of civil and criminal law enforcement
authorities worldwide. This is not the process in ASCI as it
is not govt and hence cant and doesnt involve law
enforcement authorities and also they receive very less
complaints.

ASCI home page says- Regulate yourself, or

someone else will.
Self-regulation is the most advised way to stay out
of unwanted troubles. In India, self regulation is
quite high considering the low complaints.
Also, when complaints are filed at ASCI, there is a
high chance that the brand image may get
damaged. So, its high time that advertisers think
twice before spending lakhs and crores on an
advertisement.

Advertising is Regulated Through

Self
Self
Regulation
Regulation
Federal
Federal
Regulation
Regulation

State
State Regulation
Regulation

Direct Mail Under Attack

Many Ads Are Review by Law Firms

Self-Regulation of Advertising

Advertisers
Advertisers and
and
Agencies
Agencies

Industry
Industry Trade
Trade
Associations
Associations

Voluntary
Voluntary self
self regulation
regulation by
by the
the advertising
advertising
industry,
industry, business,
business, and
and media
media to
to maintain
maintain
consumer
consumer trust
trust and
and confidence
confidence and
and limit
limit
government
government interference
interference
Business
Business (BBB)
(BBB)
NARB
NARB

Media
Media

Malt Beverages Advertised on Television

*Click outside of the video screen to advance to the next slide

Liquor Advertising on TV

The National Advertising Review Council

Sources of NAD Cases

Competitor
challenges

51%

NAD monitoring

46%

Local BBB
challenges

3%

Consumer
challenges

1%

10

20

30

40

50

60

Mission of the ERSP

To
To enhance
enhance consumer
consumer confidence
confidence
in
in electronic
electronic retailing
retailing
To
To demonstrate
demonstrate aa commitment
commitment to
to meaningful
meaningful
and
and effective
effective self-regulation
self-regulation
To
To discourage
discourage advertising
advertising and
and marketing
marketing in
in
the
the electronic
electronic retailing
retailing industry
industry that
that
contains
contains unsubstantiated
unsubstantiated claims
claims

TV Network Guidelines for Childrens Ads

Must not over glamorize product
No exhortative language, such as Ask mom to buy
Generally no celebrity endorsements
Cant use only or just in regard to price
Generally no comparative or superiority claims
No costumes or props not available with the toy
Three-second establishing shot of toy in relation to child
No shots under one second in length

Advertising Self-Regulation
Encourages truthful, ethical and
responsible advertising

Perspective
Perspective of
of
Advertisers,
Advertisers,
Agencies,
Agencies,
Media
Media

Effective regulatory mechanism

Preferable to government intervention
Can result in more stringent standards
than those imposed by legislation

Takes too long to resolve complaints

Problems with budgeting and staffing
Lack of power or authority
Self-serving to advertiser and media

Perspective
Perspective
Of
Of Critics
Critics

Test Your Knowledge

Which of the following is a common complaint often
lodged about the self-regulation of advertising?
A) The NAD/NARB has a limited budget
and staff.
B) It takes the National Advertising Division
a long time to resolve a complaint.
C) Self-regulation is viewed as being selfserving to the advertising industry.
D) Self-regulation lacks the power and
authority to be a viable alternative to
government regulation.
E) All of the above.

Federal Regulation of Advertising

Federal
Federal
Communications
Communications
Commission
Commission
(FCC)
(FCC)
Federal
Federal Trade
Trade
Commission
Commission
(FTC)
(FTC)

Bureau
Bureau of
of Alcohol
Alcohol
Tobacco,
Tobacco, and
and
Firearms
Firearms

Food
Food and
and Drug
Drug
Administration
Administration
(FDA)
(FDA)

U.S.
U.S. Postal
Postal
Service
Service

Advertising and the First Amendment

Freedom
Freedom of
of speech
speech or
or
expression
expression is
is the
the most
most basic
basic
federal
federal law
law that
that governs
governs
advertising
advertising and
and promotion
promotion
Speech
Speech promoting
promoting aa
commercial
commercial transaction
transaction
is
is protected
protected but
but must
must
be
be truthful
truthful
Speech
Speech must
must be
be
balanced
balanced against
against competing
competing
interests
interests such
such as
as advertising
advertising
of
of harmful
harmful products
products

Federal Trade Commission

Created
Created By
By FTC
FTC Act
Act
(1914)
(1914)
Wheeler
Wheeler Lea
Lea
Amendment
Amendment (1938)
(1938)
Made
Made Deceptive
Deceptive
Practices
Practices Unlawful
Unlawful
Three
Three Major
Major Divisions
Divisions
Consumer
Consumer
Protection
Protection
Economics
Economics
Competition
Competition

The Concept of Unfairness

Causes
Causes substantial
substantial physical
physical
or
or economic
economic injury
injury to
to
consumers
consumers

Could
Could not
not reasonably
reasonably be
be
avoided
avoided by
by consumers
consumers

Must
Must not
not be
be outweighed
outweighed by
by
countervailing
countervailing benefits
benefits to
to
consumers
consumers or
or competition
competition

Deceptive Advertising: Key Elements

Likelihood
Likelihood of
of misleading
misleading
consumer
consumer
Perspective
Perspective of
of reasonable
reasonable
consumer
consumer
Materiality
Materiality
misrepresentation
misrepresentation or
or
practice
practice is
is likely
likely to
to affect
affect
consumers
consumers
purchase
purchase decision
decision

Puffery: Some Examples

Bayer
The wonder
drug that works
wonders

Nestle
The very best
chocolate

BMW
The ultimate
driving
machine

Snapple
Made from
the best stuff
on earth

Presentations that praise the item to be sold with

subjective opinions, superlatives, or exaggerations,
vaguely and generally, stating no specific facts

Ways the FTC Handles Deceptive Ads

FTC
FTC Programs
Programs to
to Prevent
Prevent
Deceptive
Deceptive Advertising
Advertising
Affirmative
Affirmative
Disclosure
Disclosure

Advertising
Advertising
Substantiation
Substantiation

FTC
FTC Programs
Programs to
to Deal
Deal With
With
Deceptive
Deceptive Advertising
Advertising After
After It
It Occurs
Occurs
Cease
Cease and
and
Desist
Desist Orders
Orders

Corrective
Corrective
Advertising
Advertising

Federal Regulation by the FTC

1970s
1970s

1980

FTC
FTC is
is powerful,
powerful,
active
active regulator
regulator

Improvements
Improvements Act
Act
passed
passed

1980s and 1990s

2000 to present

FTC
FTC becomes
becomes
less
less active
active

Focused
Focused on
on
enforcing
enforcing existing
existing regs
regs

Additional Federal Regulatory Agencies

The
The Federal
Federal
Communications
Communications
Commission
Commission

The
The Food
Food and
and Drug
Drug
Administration
Administration

Additional
Additional Federal
Federal Regulatory
Regulatory Agencies
Agencies and
and
Departments
Departments That
That Also
Also Regulate
Regulate Advertising
Advertising
and
and Promotion
Promotion

Bureau
Bureau of
of Alcohol,
Alcohol,
Tobacco,
Tobacco, and
and
Firearms
Firearms

The
The U.S.
U.S. Postal
Postal
Service
Service

Test Your Knowledge

The _____ is a federal agency that was founded in
1934 to regulate broadcast communications that
include the radio, television, telephone, and telegraph
industries.
A) Federal Trade Commission
B) Federal Communications Commission
C) Fairness Doctrine
D) U.S. Postal Service
E) National Association of Broadcasters

The Nutrition Labeling and Education Act

The U.S. Postal Service

The
The U.S.
U.S. Postal
Postal Service
Service has
has control
control over
over
ads
ads that
that involve
involve
Lotteries
Lotteries
Obscenity
Obscenity
Fraud
Fraud

Bureau of Alcohol, Tobacco, and Firearms

The
The BATF
BATF
Enforces
Enforces liquor
liquor laws
laws
Develops
Develops regulations
regulations
Collects
Collects taxes
taxes on
on liquor
liquor sales
sales
Regulates
Regulates liquor
liquor advertising
advertising
Imposes
Imposes sanctions
sanctions

Suing Competitors Under the Lanham Act

Elements
Elements
Required
Required
To
To Win
Win aa
False
False
Advertising
Advertising
Suit
Suit
Under
Under the
the
Lanham
Lanham Act
Act

False
False statements
statements have
have been
been made
made about
about
advertisers
advertisers product
product or
or your
your product
product
The
The ads
ads actually
actually deceived
deceived or
or had
had the
the
tendency
tendency to
to deceive
deceive aa substantial
substantial segment
segment
of
the
audience
of the audience
The
The deception
deception was
was material
material or
or
meaningful
and
is
likely
to
influence
meaningful and is likely to influence
purchasing
purchasing decisions
decisions
The
The falsely
falsely advertised
advertised products
products or
or services
services
are
sold
in
interstate
commerce
are sold in interstate commerce
You
You have
have been
been or
or likely
likely will
will be
be injured
injured as
as aa
result
result of
of the
the false
false statements,
statements, either
either by
by
loss
loss of
of sales
sales or
or loss
loss of
of goodwill
goodwill

Suing Competitors

State Regulation

In
In addition
addition to
to recognizing
recognizing decisions
decisions
by
by the
the federal
federal courts
courts regarding
regarding false
false
or
or deceptive
deceptive practices,
practices, many
many states
states
have
have special
special controls
controls and
and regulations
regulations
governing
governing the
the advertising
advertising of
of specific
specific
industries
industries or
or practices.
practices.

Regulation of Sales Promotion

Contests
Contests and
and
Sweepstakes
Sweepstakes
Cannot
Cannot require
require purchase
purchase
to
to enter
enter

Rules
Rules and
and details
details must
must be
be
disclosed
disclosed to
to consumers
consumers

Premiums
Premiums
Cannot
Cannot misrepresent
misrepresent
their
their value
value

Care
Care must
must be
be taken
taken with
with
special
special audiences,
audiences, like
like
children
children

Regulation of Trade Allowances

Trade
Trade Allowances
Allowances
Must
Must not
not violate
violate any
any
stipulations
stipulations of
of the
the
Robinson-Patman
Robinson-Patman Act
Act

Co-op
Co-op funds
funds must
must be
be equal
equal
and
and non-discriminatory
non-discriminatory

Regulation of Direct Allowances

Self-regulation
Self-regulation occurs
occurs through
through
various
various industry
industry groups
groups
FTC
FTC and
and US
US Postal
Postal Service
Service police
police
direct-response
direct-response advertising
advertising closely
closely
Telemarketing
Telemarketing faces
faces increased
increased
regulation
regulation including
including
Telephone Consumer Protection Act of 1991
Pay-per-call Rule
Development of Do-not-call Registry by FTC

Protecting Consumers from Unwanted Calls

Created by the FTC to allow
consumers to limit the calls they
receive from telemarketers
Does not cover calls from political
organizations, charities, telephone
surveyors, or companies with
which the consumer has an
existing relationship
Over 145 million consumers
registered since October 2003.
Companies calling consumers on
the registry subject to fine of up
to $11,000 per incident

Internet Marketing Issues

Banning
Banning
unsolicited
unsolicited emails
emails
(SPAM)
(SPAM)

Privacy
Privacy issues
issues
such
Protecting
such as
as
Protecting children
children
profiling
when
profiling and
and
when
they
collecting
they are
are online
online
collecting personal
personal
information
information

Childrens Online Privacy Protection Act

Enacted
Enacted to
to protect
protect the
the privacy
privacy
of
of children
children when
when they
they are
are
using
using the
the Internet
Internet

Places
Places restrictions
restrictions on
on collecting
collecting
information
information from
from children
children via
via
the
the Internet
Internet

Privacy
Privacy policies
policies must
must
be
be posted
posted on
on home
home pages
pages
and
and area
area where
where information
information
is
is collected
collected