Ethics in advertising: Industry forms Mo. research center to boost image, sway consumers

Friday, July 23, 2010

Ad industry seeks image makeover of its own

COLUMBIA, Mo. — From gimlet-swilling adulterers on TV’s “Mad Men” to seven-figure fines for deceptive ads touting cold remedies and credit scores, the ad industry sure could use an image makeover of its own.

Industry leaders are teaming up with the nation’s oldest journalism school to launch the Institute for Advertising Ethics. Among the research center’s goals is to improve the public image of a business that spent $125 billion last year but isn’t exactly known for its bedrock principles and unwavering scruples.

Whether it’s the duplicitous exploits of fictional television character Don Draper or the latest penalties levied by the Federal Trade Commission, the ad industry struggles to put its best face forward. A 2007 Gallup survey ranked advertisers among the least trustworthy professionals — barely beating out lobbyists and car salesmen.

“Because it is persuasion, advertising is viewed in a questionable way by a lot of people,” said Margaret Duffy, a former ad executive who now teaches at the University of Missouri School of Journalism and is helping to organize the ethics institute.

But even though the industry’s fundamental purpose is to convince shoppers to buy a product they may not actually need, such persuasion can be done in an “ethical and tasteful” way, she added.

The research center’s leader is visiting professor Wally Snyder, a former FTC lawyer and American Advertising Federation president. While acknowledging the need to improve the industry’s reputation, he emphasized that the institute will also benefit the people who view ads.

Snyder pointed to research that suggests consumers are more likely to do business with companies they consider ethical, ones that don’t use deceptive ads.

“This is what consumers want, and expect,” he said.

The ethics institute is just part of a broader PR campaign envisioned by the industry.

The Washington-based trade group once led by Snyder is shopping a reality TV show featuring young ad reps — a “Mad Men” for the modern age. The federation also wants to shift its industry Hall of Fame, an online entity, to a physical location in New York City.

According to the oft-cited 2007 survey, the industry can use the help. Just 6 percent of respondents ranked advertisers’ ethics as “high” or “very high,” with 42 percent ranking their ethics as “low” or “very low.”

Nursing, the top-ranked of the 22 professions listed, received an 83 percent trustworthy ranking. Even nursing home operators (21 percent), lawyers (15 percent) and members of Congress (9 percent) scored higher.

The research center will be affiliated with Missouri’s Reynolds Journalism Institute, a nonprofit think tank and futures lab intended to help the struggling industry figure out new ways to make money while embracing technology and re-engaging a skeptical and time-pressed citizenry.

Its priorities include developing a voluntary code of ethics, honoring businesses for ethical behavior and examining the effects of social media and digital technology on the ad world.

The first principle of the ethics code, as envisioned by Snyder, outlines advertising’s purpose as “to provide commercial information that will assist consumers in their purchase decisions in a truthful, fair and cost-effective manner.”

A group of the industry’s heaviest hitters will serve on the institute’s advisory board, including executives from Procter & Gamble, Omnicom Group, Interpublic and Ketchum.

Both Duffy and Snyder acknowledge that the effort must overcome initial skepticism — much of it from within the ad industry itself.

Mark Fleisher, owner of a small advertising agency in central Pennsylvania near Harrisburg, says the industry doesn’t need to be reminded of the importance of ethical behavior. It just needs to increase the honesty quotient.

“The industry has become more ethical because the clients have become smarter,” he said. “Agencies are still going to pull whatever they need to (clinch a deal). And those agencies will run roughshod over the honest ones. That’s been going on for years.”

Business journalist Jim Edwards, a former Adweek managing editor who still writes about the industry, is also dubious about the latest effort. He notes there have been no fewer than four other attempts to codify industry ethics, including one generated by the American Association of Advertising Agencies in 1924.

“History does not suggest that these things catch on very well,” he said. “There’s a structural problem in the advertising business. The entire industry is engaged in a race to the bottom. Whoever can do it the cheapest and the fastest wins.”

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