Truth and Ethics in Advertising

December 13, 2005 – Ed Wax, former Chairman of Saatchi, a most prestigious advertising firm, spoke to Rotarians today on the subject of truth and ethics in advertising. Ed was both informative, as well as entertaining, as he educated Rotarians about what is, and is not truth about this industry.

Ed began his talk hypothesizing whether, in this post-Enron environment, the term “business ethics” and “truth in advertising” had become oxymorons. He assured his audience that this was not the case and that the majority of advertising one sees is, in fact, the truth.

Unfortunately, that isn’t the general perception shared by the consumers. In a survey of ethics intended to rank public perception of ethical behavior by industry, the advertising industry came in 23rd, followed only by that of the used car industry and by politics. Further, eighty- five percent of the public believes most advertisements are not truthful and sixty-three percent believes the government should institute regulatory controls on the advertising industry.

Mr. Wax pointed out that the fundamental issue should not be whether or not every single bit of truth is offered in an ad. Advertisers always wants to present their product in the best possible light and, after all, there is such a thing as offering too much of the truth. Rather, the real point should be whether or not it conveys the whole truth while not being misleading or not misrepresenting the truth it purports to tell. An ad which is either deceptive or patently false does a disservice not only to consumers but also to the advertising industry as well.

Members of this industry subscribe to a rigorous code of ethical standards and must follow a prescribed regulatory approval process. Each ad begins with a detailed storyboard which is then submitted for approval. Before the ad ever appears on television, the networks must also pass off on it according to the criteria they have established for truth and tastefulness. Additionally, any simulations which are shown in an ad must be documented with substantive evidence that the simulation is true and that it happened exactly as it appears in the ad. Proof is usually offered in the form of the simulation video and affidavits from those involved in the simulation . One particular ad which demonstrated stacked champagne glasses on the hood of a Lexus going 145 miles per hour was given as an example of this process.

Advertisers can also find themselves subjected to significant external pressures exerted not only by members of their own industry but also by watchdog groups. Ed presented an example of a Citigroup ad in which a woman talked about an action figure she went to great lengths to find for her son. At the end of the ad, she remarked that her son had broken the action figure, but “Citibank took care of it”. American Express took exception to the ad and presented statistics they conducted indicating that fully 35% of respondents thought those words meant that Citibank would replace the little action figure. The ad was withdrawn.

So why do perceptions continue about the lack of truth in this industry? Usually, it is due to local advertising which is not regulated in any way. Ed calls for local groups to become more diligent in creating forums for discussion and to begin the process of self-regulation.

In concluding , Ed said the cost of cheating is very high. For whatever reasons advertising should not be misleading or untruthful whether the advertising is local or national, the primary reason should be because it is the right thing to do.

Submitted by Helen Harloe, Keyway Committee