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Recent FTC Actions: Implications for the Advertising Strategist

A function is primarily to inform potential buyers of the problem-solving utility of a firm's market offering, with the objective of developing consumer preference for a particular brand. Consumers, however, are viewing the execution of this function with increasing skepticism and criticism. In a 1972 nationwide survey, approximately 60% of the consumers questioned felt that recent criticisms of advertising were totally justified.1 Less than half of all advertising was rated as honest and informative, while charges of misrepresentation and exaggeration were prevalent among the complaints encountered. The Federal Trade Commission (FTC) has responded to this increasingly vocal criticism of advertising by implementing or proposing policies specifically intended to improve the kind and quality of information contained in advertisements. As a result, a new and substantially different environment now faces the marketing strategist. It is important, therefore, for marketers to be familiar with these FTC expectations regarding advertising content and the possible actions which the commission has indicated it may take in cases wherein its expectations are not met. The primary objectives of this article are: (1) to review and comment on the more important policies recently employed or proposed by the FTC, and (2) to suggest a procedure by which the firm may lessen the prospect of FTC intervention. A substantial number of recent cases are discussed to illustrate the development of FTC policy.