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Belch: Advertising and
Promotion, Sixth Edition
VII. Special Topics and
Perspectives
Summary
Regulation and control of advertising
stem from internal regulation
or self-regulation as well as from
external control by federal, state,
and local regulatory agencies. For
many years the advertising industry
has promoted the use of voluntary
self-regulation to regulate
advertising and limit government
interference with and control over
advertising. Self-regulation of
advertising emanates from all segments
of the advertising industry,
including advertisers and their
agencies, business and advertising
associations, and the media.
The NAD/NARB, the primary
self-regulatory mechanism for
national advertising, has been very
effective in achieving its goal of
voluntary regulation of advertising.
Various media also have their
own advertising guidelines. The
major television networks main-
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21. Regulation of
Advertising and Promotion
tain the most stringent review
process and restrictions.
Traditionally, the federal government
has been the most important
source of external regulation,
with the Federal Trade Commission
serving as the major watchdog of
advertising in the United States.
The FTC protects both consumers
and businesses from unfair and
deceptive practices and anticompetitive
behavior. The FTC became
very active in the regulation of
advertising during the 1970s when
it began several new programs and
policies, including affirmative disclosure,
advertising substantiation,
and corrective advertising.
Since 1980 the FTC has not been
allowed to implement industrywide
rules that would define unfair
advertising practices. However, the
advertising industry and Congress
are nearing agreement on a defini-
© The McGraw−Hill
Companies, 2003
at children. These concerns over online marketing to children led to the passage of the
Children’s Online Privacy Protection Act of 1998 (COPPA), which the FTC began
enforcing in April 2000. 102 This act places tight restrictions on collecting information
from children via the Internet and requires that websites directed at children and young
teens have a privacy policy posted on their home page and areas of the site where information
is collected.
Concerns over consumer privacy have become a major issue among the government
and various regulatory agencies such as the FTC. 103 The federal government is
currently considering a number of privacy-related laws, many of which would have an
impact on marketing and advertising over the Internet. The proposed laws include the
Online Privacy Protection Act, which requires the FTC to prescribe regulations to protect
the privacy of individuals not covered by COPPA and to provide greater individual
control over the collection and use of information. 104
Another Internet-related area that is receiving more regulatory attention is the use
of spam, or unsolicited e-mail. 105 More than 20 states have enacted some type of antispam
laws, although they vary in content. For example, California’s antispam law prohibits
sending unsolicited e-mail unless it includes opt-out instructions and the
sender’s contact information. Antispam legislation is at the top of the list of the regulatory
issues currently being considered by Congress and passage of legislation at the
federal level is likely. The Anti-Spamming Act will make it unlawful for anyone to
intentionally, and without authorization, transmit bulk unsolicited e-mail without a
valid return e-mail address. Laws are also being considered that would outlaw sending
unsolicited e-mail after a consumer has sent an unsubscribe message. 106
As the use of the Internet as a commercial medium increases, the need for ethical
standards by marketers and voluntary industry codes and guidelines will become
greater. If they fail to respond, stronger intervention by the FTC or other regulatory
agencies is likely.
tion of unfairness, and this power
may be restored to the FTC.
In 1983 the FTC developed a new
working definition of deceptive
advertising. Recently the FTC has
become more active in policing
false and deceptive advertising.
Under the Lanham Act, many companies
are taking the initiative by
suing competitors that make false
claims. Many states, as well as the
National Association of Attorneys
General, are also active in exercising
their jurisdiction over false
and misleading advertising.
A number of laws also govern the
use of other promotional mix elements,
such as sales promotion and
direct marketing. The Federal Trade
Commission regulates many areas
of sales promotion as well as direct
marketing. Various consumeroriented
sales promotion tools such
as contests, games, sweepstakes,