Ethics in Advertising: Exploring the Telecommunication Industry’s Employment of Ethics in Advertisements

Background of Study

Advertising is one of the key components of marketing mix of an organization and largely trusted to be the most important factor in establishing the brand as well as the corporate image of the company. Both these factors, as believed generally, increase the sales and profit of a brand. Advertising is considered important not only for building market share for a new brand but also as a kind of ‘maintenance cost’ for the upkeep of market share of established brands (Dhalla, 1978). Sales people in their forced pursuit for making their sales numbers push the management for increased media frequency of products’ advertisement together with depending very frequently on ‘sales promotion’ tools. Researchers and practitioners have attempted to design tools for a close forecast of relationship between advertising spend and sales but not quite successfully (Nichols, 2013; Venkatesan, 2014). The issue being more qualitative than quantitative, the job has proved to be difficult. As advertising and media cost have risen over time and in several industries constitute significant percentage of sales turnover, marketers have pleaded the management to treat advertising not as a short term expense but as a medium term or long term investment (Dhalla, 1978; Joshi & Hanssens, 2010).

As the competitive rivalries started getting intensified and consumers are bombarded with huge list of brands in each category, advertising messages were declared as an ‘assault’ on the minds of consumers and consumers are not ready to retain many brands in the limited ‘mind space’, thus Brand experts came out with new concept to depict this change which is termed as ‘Positioning’ (share of mind before share in the market) (Ries & Trout, 2004). 

Brands hence resorted to all sort of tools and techniques to be noticeable to the consumer or be caught and retained in consumers’ minds. Creativity and innovation in corporate communications go haywire and cross the ethical boundaries. This brings in perspective the discussion of ethics or avoiding unethical practices which hurts the consumer having negative societal value impact; as organizations despite having clear ‘Value System’ clauses in their Big Picture document, care less on aspects of ethical communication to have good moral impact on consumers’ minds. External bodies and Associations come in picture and tried to rope the advertising with ethical clauses of what is to be presented (content) and how it is to be presented (media). Another resultant angle is the ‘Noise Level War’ in advertising to meet or beat competition and make one’s brand heard loudly and clearly. Practitioners and researchers have undertaken a number of research studies to identify ethical advertising non-conformance (Abbasi, Akhter, & Umar, 2011; Nichols, 2013). Jumping advertising budget in several industries and segments is also not without hurting the consumers in terms of overcharging in price due to the enhanced cost of the product. Advertising budget in Telecommunication industry in Pakistan has beaten the benchmark of Fast Moving Consumer Goods Industry and stands at number 1 (Gallup, 2010). The consumer bears the ultimate cost and this certainly has a societal impact. Creating Value Innovation as per business strategists is not just bringing new solutions or giving consumers modern amenities but it is a simultaneous pursuit of ‘differentiation’ (uniqueness) and cost (reduce cost of product to keep a balance in consumers spending for an optimal welfare of society) (Chan Kim & Mauborgne, 2004; Venkatesan, 2014). From this angle as well, costs which are incurred but may be undesirable from consumers’ point of view need to be avoided. A colossal spending on exaggeration, consumers will certainly not want.

Problem Statement

The debate about ethical advertising has been an old one, research studies have been done a lot of work on it based on extensive literature survey. However few researches have done quantitatively on this aspect specially in the case of Pakistan’s telecommunication industry. This research aims at exploring the ethical aspects set by the 4A’s (American Association of Advertising Agencies) and PEMRA (Pakistani Electronic Media Regulatory Authority) along with what the consumers think about the advertisements used by the telecommunication industry for the promotion of their products and services. Advertising Spend and Frequency have been added in the investigation as new components of ethical dilemma. Consumers have been confronted on these critical aspects where gaps in research have been observed based on our  literature review.

Literature

Advertisement is a one way mode of communication directed towards an intended audience to deliver information about a product or service (Wells, et al. 2007). In 2005 the spending done on advertisements globally amounted at $ 300 billion (Laczniak, 2008). Advertisement is seen as a medium to increase the profitability of a company and hence many times companies ignore certain social aspects held close by the population at which the advertisement is aimed.  

Improving the image is essential for each industry especially when it comes to advertising industry since it is one of the most visible industries and also at the forefront of the marketing of a brand. However, the vast evidence shows that the public at large is quite annoyed by the advertisements. The audience is of the opinion that the advertisements seem to talk down to them, the advertising managers too are concerned about such advertisements and are trying to enhance the image and curb the abuses (Wells, Burnett, &Moriarty, 1998). In this regard, to facilitate the brains behind the advertisements a standard has been set by the American Association of Advertising Agencies (4A’s).

In the light of the standards set by the American Association of Advertising Agencies the advertisements are not supposed to be misleading in terms of attributes or pricing of the product or service. No comparison is to be shown with the competitors, taste and decency is to be the most important aspect of the advertisement. No vulgar language is to be used or indecent scenes are to be shown in the Ads. Exaggeration is to be avoided to attract the consumers. 

PEMRA (Pakistan Electronic Media Regulatory Authority) too has set standards of advertising; in 2009 a notification to all the concerned bodies was issued by PEMRA (Pakistan Electronic Media Regulatory Authority) elaborating the standards for advertising. Few points in that notification included that no content promoting violence, anarchy, sedation, promoting adultery, sensitive content not upholding the criteria of decency, influencing children to force their parents to buy certain products, content seen offensive by minorities, misleading information or price claim is to be advertised on any media channels as such advertisements do not uphold the sanctity of the constitution of Pakistan and Islamic principle.

In the last two decades many researchers have done extensive review of literature in the field of ethical advertising. How advertising can damage the society and how to build ethics in it. Most of the studies done by Haefner, (1991); Conna et al.,(1994); Childs & Maher, (2003); Tamburro, Gordon, Apolito & Howard, (2004), in this field are based on a central theme of how advertisements are being targeted at children and exploitation of children. While Pollay, (1986); Henthrone & LaTour, (1994) did research on advertisements using sex appeals, Coltrane & Messineo, (2000); Chatterji, (2005); Schaffter, (2006) researched stereotypical advertising, Richins, (1991); Lavine et al., (1999); Fay & Price, (1994) researched the negative psychological effects of advertisements, the advertisements promoting materialism were studied by Richins, (1995); Roy (2006) and deceptive advertising was focused by Burns, Ferrell & Orrick, (2005); Drumwright & Murphy, (2009). 

In Pakistan total advertising spending increased to Rs. 30 billion (PKR), an increase of 12% in the fiscal year 2009-10. PTCL, Telenor and Mobilink were amongst the top 10 companies advertised heavily in the same year. Furthermore, the telecommunication industry rose from its 16^th position in 2001 to 1^st position in 2009 for most spending on advertising (Gallup, 2010).

Contemporary Advertisements & Islamic Ethical System

Contemporarily advertisement is meant to create a need in the minds of the consumers; advertisement is used to influence the consumers’ mind into thinking that they need to buy a certain product or service regardless of the reality of that product/service’s actual need (Singh, 1998).

In the current competitive era success or failure of a firm is linked to the firm’s advertising strategy and its effectiveness (Abbasi et al., 2011). In the heat of competition to capture the most market share both local and multinational companies are investing tremendously in advertising campaigns to grab the attention of the audience and to attract them towards their brand. At many times to grab the attention companies use tactics like the use of controversial images of celebrities, exaggeration of adventurous feats, targeting the emotions of the consumers through a recent tragedy or targeting the children (Rice, 1999; Saeed, et al., 2001). Such an act is seen deceptive; a form of cheating and an unethical practice in Islam, Prophet Muhammad (S.A.W.W.) said “He who cheats is not one of us” (Keller, 1994).

Exaggeration in contemporary advertisements is used as a bluff to motivate the consumers to spend money on the respective product/service shown in the advertisement, which most of the time they don’t even need (Singh, 1998). Toynbee (1961) was of the opinion that this practice is deceptive and leads to misallocation of economical resources. He further stated that now people spend considerable amount of their time, ability, energy and resources on influencing the population at large to spend their most time doing head labor to earn enough money to keep on purchasing material goods that they would never have thought of wanting or buying if they were left on their own in the market.

Allah’s Prophet said on one occasion “The signs of a hypocrite are three i) whenever he speaks he tells a lie. ii) Whenever he promises, he always breaks it. iii) If you trust him, he proves to be dishonest” (Al-Bukhari, 1.32).

Islam believe in equality and promotes women to take part in the growth of the country economically, get education and even take part in business activities like Hazrat Khadija (R. A.) did. But using women to exploit emotions or to deceive others through emotional simulation is discouraged and disliked in Islam. Al-Olayan & Karande (2000) in their study highlighted that showing other parts except face, hands and feet is not allowed in Islam. Chachula, Kucharski, Lubaś, Malachowska, & Martinovski (2009) further elaborated on this point and said that showing of any part except the mentioned ones comes under sexual stimulant and hence their public presentation is deemed inappropriate.

It is expected and demanded by the Islamic ethical system that the followers of Islam do the right thing in the light of Quran and Sunnah and forbid what is deemed wrong “You are the best people, evolved for mankind, enjoying what is right, forbidding what is wrong, and believing in Allah” (Quran 3:116).

Conceptual Framework

Figure 1 : Conceptual Framework

The conceptual framework in Figure 1 has been devised in visual form from the standards set by 4A’s (American Association of Advertising Agencies) manual titled as “STANDARDS OF PRACTICE OF THE 4A ’ s,” (2011).

• False Statements/Exaggerations: advertisements should not employ exaggerations in visual or verbal form as they tend to be false and misleading for the consumers
• Non Real Opinions: advertisements should not use such testimonials for promotion that do not reflect the real opinions of the consumers/individuals shown in them
• False/Misleading Price claims: advertisements should not mislead the consumers by giving them half, limited or false price information that either confuses or misleads the consumers into believing a false price for the product/service being shown

• Offensive Content: advertisements should not contain such statements, suggestions, and/or pictures that can be considered offensive and indecent by the public at large or by minority segments of the population

Methodology

The data were collected from two hundred consumers residing in various areas of Karachi using a closed ended questionnaire. The questionnaire contained images of advertisements used by the telecommunication industry to promote their products and services. Questions were asked upon them whether the consumers took those advertisements as ethical or unethical. Sample selection was done through convenience sampling for collecting the data from the consumers. Reliability of the scale is checked through Cronbach Alpha which came out to be 0.744 which is acceptable (Leech, 2008) and regression analysis was done to find out the relationship and effect of offensive content, exaggeration used in the advertisements, frequency of ads shown, targeting the youth and misleading price claims on the consumer’s perception on unethical advertisements.

Analysis

General Attitude towards Advertisements

Table 1: Spending 

Table 2: Telecom Spending

Table 3: Frequency of Advertisements

Table 4: Information Conveyed 

Table 5: Age Appropriation

Table 6: Targeting the Youth

Table 7: Targeting the Youth

Table 8: Price Increase

Table 9: Exaggeration

Table 10: Exaggeration

Reaction to Ethical Boundaries

Table 11: Overall Regression Model

Dependent Variable= Unethical advertising, R² = 0.452, Adjusted R² =.435, F (6, 193) = 26.560, p = 0.000 < 0.05. The results of the regression indicate that the predictors offensive content, frequency of advertisement shown, targeting the youth

and exaggeration are highly significant and the consumers perceive that due to these factors the advertisements used by the  telecommunication industry are unethical.

Descriptive Analysis

Table 12: Descriptive Analysis

Table 8 shows that frequency of advertisement shown (M=6.24, SD=0.772) has the highest skewness (0.691) followed by targeting the youth (M=4.50, SD=0.5305), offensive content (M=3.176, SD=1.105) and exaggeration (M= 5.86, SD= 0.846). On the other hand the least level of skewness (-0.030) was for misleading price claims (M=5.18, SD=0.478). Exaggeration (M= 5.86, SD= 0.846) has the highest kurtosis (-1.115), followed by offensive content (M=3.176, SD=1.105), targeting the youth (M=4.50, SD=0.5305) and frequency of advertisement shown (M=6.24, SD=0.772) respectively. While misleading price claims (M=5.18, SD=0.478) has the lowest kurtosis (-0.459). Since the skewness and kurtosis ranged between ±2.5, therefore it can be safely assumed that the data fulfills the requirements of univariate normality (Kline, 2010).

Discussion and Conclusion

Hypothesis 1

The hypothesis on the frequency of telecommunication Ads was substantiated (Refer to Table 3 & 11). This answers hypothesis 1.

The consumers found that the frequency of telecommunication advertisiments shown was too much. The consumers felt bombarded by the frequent telecommunication advertisements. Furthermore, consumers felt that it was unnecessary to show the same advertisments continuously as they become redundant and lose impact due to frequent continuous exposure (Fu et al., 2011).

Hypothesis 2

The hypothesis on the spending of telecommunication on advertisements was substantiated (Refer to Table 1, 2 & Table 11). This answers hypothesis 2.

Consumers felt that the spending done by the telecommunication industry is too much, 80% of the respondents saw the amount of spending done by the telecommunication industry as a waste and unethical. On the other hand it is observed that the firms see large spendings on advertisements as a symbol of increased brand image and quality (Moorthy & Zhao, 2000).

Hypothesis 3

The hypothesis on targeting the youth was substantiated (Refer to Table 6, 7 and 11). This answers hypothesis 3.

74% of the consumers saw targeting of youth in the advertisements as an unethical practice. According to the standards set by 4 A’s (American Association of Advertising Agencies) and PEMRA (Pakistan Electronic Media Regulatory Authority), selling to minors/youth in advertisements is seen as unethical and such advetisements are required to be removed from air if they intend to influence the young concumers.

Hypothesis 4

The hypothesis on the exaggeration used by telecommunication Ads was substantiated (Refer to Table 9, 10 and 11). This answers hypothesis 4.

88.5% consumers were of the opinion that advertisements should not use exaggerations to mislead the consumers. The advertisers most often in exaggeration forget the line between a lie and over emphasis on the features of a product or a service. Exaggeration is seen as a bluff to motivate the consumers to spend money on the respective product/service shown in the advertisement, which most of the time they don’t even need (Singh, 1998). Toynbee (1961) was of the opinion that this practice is deceptive and leads to misallocation of economical resources. He further stated that now people spend considerable amount of their time, ability, energy and resources on influencing the population at large to spend most of their time doing head labor to earn enough money to keep on purchasing material goods that they would never have thought of wanting or buying if they were left on their own in the market.

Hypothesis 5

The hypothesis on price claims of the telecommunication on advertisements, was substantiated (Refer to Table 8 and11). This answers hypothesis 5.

Consumers felt that many of the price claims of telecommunication advertisements are mere exaggeration and misleading. Such acts are considered unethical as per Islamic principles. It is stated that such misleading claims fall under the criteria of bluff, and bluffing is a form of lying done that confuses or cheats a person. Al-Bukhari (1.32) states bluffing is a form of lie and it is a sign of a hypocrite.

Hypothesis 6

The hypothesis on the content of telecommunication advertisements was substantiated (Refer to Table s and 11). This answers hypothesis 6.

Recently it has been observed that the advertisements mostly show intermingling of opposite genders with exaggerating gestures. On many occassions women are shown in advertisments where the product or service has nothing to do with women. Women are also shown in an objectifying way in many advertisments. Using women to exploit emotions or to deceive others through emotional simulation is discouraged and disliked in Islam. Al-Olayan & Karande (2000) in their study highlighted that showing other parts except face, hands and feet is not allowed in Islam. Chachula, Kucharski, Lubaś, Malachowska, & Martinovski (2009) further elaborated on this point and said that showing of any part except the mentioned ones comes under sexual stimulant and hence their public presentation is deemed inappropriate.

Hypothesis 7

The hypothesis on non real opinions was substantiated (Refer to Table 4). This answers hypothesis 7.

Consumers felt that the exaggeration, misleading price claims and testimonial shown in the advertisments are a means of creating non real opinions. The testimonial of people shown in advertisments are paid opinions and cannot be taken as real. This too is a form of bluff and is perceived as an unethical practice by the consumers.

Limitations

There are many other social, cultural and religious factors that are linked to ethical and non ethical advertising, however in this research study we have not been able to cater for all those factors. The literature review does not include all the Quranic verses and Hadith linked with ethical marketing and advertising. The research has highlighted only selected set criteria by the 4 A’s (American Association of Advertising Agencies) and PEMRA (Pakistan Electronic Media Regulatory Authority). Other standards need to be studied in the future. The study has been done only in Karachi, Pakistan and may be expanded to cover other major cities and diversified consumer base.

Managerial Implications

This research paper highlights factors that the advertisers and marketing managers should keep in mind while designing their promotional and advertising campaigns keeping in view the consumers approval of desirable and acceptable standards and parameters. This leads to realization of self regulated ethical boundaries for the organizations to get consumer acceptamce. In order to avoid the pitfalls of marketing myopia one best approach is to consult consumers and research their mindset. This research also provides an idea to consult consumers on the legitimacy of advertising spend which in case of several industries and products would constitute major marketing cost. The increasing advertising spend in view of competitive benchmark could become a zero sum game and also not without hurting the consumer cause and social well being by asking for unjustified resource diversion.

References

• Abbasi, A. S., Akhter, W., & Umar, S. (2011). Ethical issues in advertising in Pakistan: An Islamic perspective. World Applied Sciences Journal, 13(3), 444–452.Al-Bukhari, Sahih. Hadith No. (1.32) (3.403)

• Al-Olayan, F. S., & Karande, K. (2000). A content analysis of magazine advertisements from the United States and the Arab world. Journal of Advertising, 29(3), 69–82.

• Al-Quran, (3:104), (26:181), (4:135), (24:31, 32), (18:46), (3:116).Beekun, R. I. (1997). Islamic Business Ethics, the International Institute of Islamic Thought. Herndon, VA.

• Burns, R., Ferrell, J., Orrick, E. (2005). False advertising, suggestive persuasion, and automobile safety. Southwest Journal of Criminal Justice, 2 (2), 132-152.

• Chachula, G., Kucharski, H., Lubaś, A., Malachowska, K., & Martinovski, B. (2009). The 16th NIC Conference on Intercultural Communication. University of Bora As, Sweden.

• Chan Kim, W., & Mauborgne, R. (2004). Value innovation: The strategic logic of high growth. Harvard Business Review, 82(7-8), 172-180.

• Chatterji, S. A. (2005). How advertisements exploit women. (Online). Available: http://www.gather.com/viewArticle.jsp?articleId=281474976719311 (July 18, 2006).

• Childs, N. M. and Maher, J. K. (2003). Gender in food advertising to children: boys eat first. British Food Journal, 105 (7), 408-419.

• Coltrane, S. and Messineo, M. (2000). The perpetuation of subtle prejudice: race and gender imagery in 1990s television advertising. Sex Roles, 42 (5-6/ March), 363-389.

• Conna, J., Garrison, H., Treise, D. and Weigold, M. F. (1994). Ethics in advertising: ideological correlates of consumer perceptions. Journal of Advertising, 23 (3), 59-69.

• Dhalla, N. K. (1978). ASSESSING LONG-TERM VALUE OF ADVERTISING. Harvard Business Review, 56(1), 87–95.

• Drumwright, M. E. and Murphy, P. E. (2009). The current state of advertising ethics. Journal of Advertising, 38 (1), 83-107.

• Fay, M. and Price, C. (1994). Female body-shape in print advertisements and the increase in anorexia nervosa. European Journal of Marketing, 28 (12), 5-18.

• Fu, Q., Murray, R., Patel, V. Y., Maksy, P. S., Desu, R. K., Sullivan, S., & Davis, D. R. (2011). Estimating reach and frequency of advertisements. Google Patents. Retrieved from https://www.google.com/patents/US8087041

• Haefner, M. J. (1991). Ethical problems of advertising to children. Journal of Mass Media Ethics, 6 (2), 83-92

• Joshi, A., & Hanssens, D. M. (2010). The direct and indirect effects of advertising spending on firm value. Journal of Marketing, 74(1), 20–33.

• Keller, N. H. M. (1994). Reliance of the traveller: the classic manual of Islamic sacred law ʻUmdat al-salik. Sunna Books.

• Moorthy, S., & Zhao, H. (2000). Advertising spending and perceived quality. Marketing Letters, 11(3), 221–233.

• Nichols, W. (2013). Advertising Analytics 2.0. Harvard Business Review, 91(3), 60–68.

• Richins, M. L. (1991). Social comparison and the idealized images of advertising, Journal of Consumer Research, 18 (1), 71-83.

• Richins, M. L. (1995). Social comparison, advertising and consumer discontent, American Behavioral Scientist, 38 (4), 593-607.

• Ries, A., & Trout, J. (2004). Positioning. American Media International. Retrieved from http://palibrary.proathleteinc.com/surpass/summaries/Positioning%20–%20The%20Battle%20For%20Your%20Mind.pdf

• Roy, S. K. (2006) Advertising and its discontents. (Online). Available: http://www.icfaipress.org/906/AE.asp (October 11, 2006).

• Singh, J. (1998). Ethics in advertisements. KELOLA, 19.

• Schaffter, S. J. (2006). Privileging the privileged: gender in Indian advertising. Promilla & Co., Publishers in association with Bibliophile South Asia, New Delhi and Chicago.STANDARDS OF PRACTICE OF THE 4A’ s. (2011), 10174.

• Tamburro, R. F., Gordon, P. L., Apolito, J. P. D. and Howard, S. C. (2004). Unsafe and violent behavior in commercials aired during televised major sporting events. Journal of Communication Inquiry, 25 (1), 55-71.

• R, (2014). Design of Price and Advertising Elasticity Models. Darden Business Publishing.Wells, William, J. Burnett, and S. Moriarty (1998). Advertising: Principles and Practices. Upper Saddle River, NJ: Prentice-Hall, Inc.