MBA Notes - Regulation of Advertising

Answer

Introduction to Advertising Regulation

In today's world of cut throat competition, advertisement plays an important role in brand building and informing public about available products so that they can make informed choice among different products or brands.

On one side advertising carries several responsibilities, but on the other side advertising is accused of  encouraging materialism and consumption, of stereotyping, of causing us to purchase unnecessary, of using sex to sell, of taking advantage of children, of manipulating our behaviour; contributing to downfall of our value system. 

In order to protect consumer interest and to monitor and control advertising a number of different regulatory bodies are established. Many countries have an Advertising Standard Authority to ensure advertising claims are truthful, not exaggerated or misleading; or to protect particular groups like children.

Meaning of Advertising Regulation

Advertising regulation refers to the laws and rules defining the ways in which products can be advertised in a particular region. Rules can define a wide number of different aspects such as ad placement, timing and content.

Advertising Regulations in different countries

• United States -  False advertising and health related ads are regulated most.
• Sweden and Norway - Domestic ads that target children are prohibited.
• Some European Countries don't allow sponsorship of children programs, no ads are targeted to children under the age of twelve.
• United Kingdom - Tobacco ads on television, bill boards, or at sporting events is banned.
• India - Alcohol and Tobacco ads are banned.

Self Regulation
The word 'Self' refers to the actor. Here the actor can be a company or a group of companies acting collectively. 'Regulation' refers to what the actor is doing. Regulation has three components:-

1. Legislation - to define appropriate rules,
2. Enforcement - igniting actions against violators,
3. Adjudication - decision on violation and and imposing an appropriate sanction.

The term 'Self Regulation' means the company or the industry rather than the government is doing regulation. In self regulation it is not necessary that government involvement lacks entirely. One or two components of regulation are taken over by the industry other remains with the government.