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How does the FTC decide what cases to bring? |
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| Answer | The FTC weighs several factors, including:
FTC jurisdiction. Although the FTC has jurisdiction over
ads for most products and services, Congress has given
other government agencies the authority to investigate
advertising by airlines, banks, insurance companies,
telephone and cable companies, and companies that sell
securities and commodities.
The geographic scope of the advertising campaign. The FTC
concentrates on national advertising and refers local
matters to state, county or city agencies.
The extent to which an ad represents a pattern of
deception, rather than an individual dispute between a
consumer and a business or a dispute between two
competitors. State or local consumer protection agencies or
private groups such as the Better Business Bureau (BBB)
often are in a better position to resolve disputes
involving local businesses or local advertising. To get the
address and phone number of your state attorney general's
office, your local consumer agency, or the nearest BBB,
check your telephone directory or the Consumer's Resource
Handbook.
The amount of injury -- to consumers' health, safety, or
wallets -- that could result if consumers rely on the
deceptive claim. The FTC concentrates on cases that could
affect consumers' health or safety (for example, deceptive
health claims for foods or over-the-counter drugs) or cases
that result in widespread economic injury.  |
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| Question |
What kind of advertising claims does the FTC focus on? |
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| Answer | The FTC pays closest attention to:
ads that make claims about health or safety, such as:
"ABC Sunscreen will reduce the risk of skin cancer."
"ABC Water Filters remove harmful chemicals from tap water."
"ABC Chainsaw's safety latch reduces the risk of injury."
ads that make claims that consumers would have trouble
evaluating for themselves, such as:
"ABC Refrigerators will reduce your energy costs by 25%."
"ABC Gasoline decreases engine wear."
"ABC Hairspray is safe for the ozone layer."
Ads that make subjective claims or claims that consumers
can judge for themselves (for example, "ABC Cola tastes
great") receive less attention from the FTC.
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| Question |
My company offers a money-back guarantee. Very few people
have ever asked for their money back. Must we still have
proof to support our advertising claims? |
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| Answer | Yes. Offering a money-back guarantee is not a substitute
for substantiation. Advertisers still must have proof to
support their claims.  |
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| Question |
What kind of evidence must a company have to support the
claims in its ads? |
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| Answer | Before a company runs an ad, it has to have a "reasonable
basis" for the claims. A "reasonable basis" means objective
evidence that supports the claim. The kind of evidence
depends on the claim. At a minimum, an advertiser must have
the level of evidence that it says that it has. For
example, the statement "Two out of three doctors recommend
ABC Pain Reliever" must be supported by a reliable survey
to that effect. If the ad isn't specific, the FTC looks at
several factors to determine what level of proof is
necessary, including what experts in the field think is
needed to support the claim. In most cases, ads that make
health or safety claims must be supported by "competent and
reliable scientific evidence" -- tests, studies, or other
scientific evidence that has been evaluated by people
qualified to review it. In addition, any tests or studies
must be conducted using methods that experts in the field
accept as accurate.
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| Question |
How does the FTC determine if an ad is deceptive? |
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| Answer | The FTC looks at the ad from the point of view of
the "reasonable consumer" -- the typical person looking at
the ad. Rather than focusing on certain words, the FTC
looks at the ad in context -- words, phrases, and pictures -
- to determine what it conveys to consumers.
The FTC looks at both "express" and "implied" claims. An
express claim is literally made in the ad. For
example, "ABC Mouthwash prevents colds" is an express claim
that the product will prevent colds. An implied claim is
one made indirectly or by inference. "ABC Mouthwash kills
the germs that cause colds" contains an implied claim that
the product will prevent colds. Although the ad doesn't
literally say that the product prevents colds, it would be
reasonable for a consumer to conclude from the
statement "kills the germs that cause colds" that the
product will prevent colds. Under the law, advertisers must
have proof to back up express and implied claims that
consumers would take from an ad.
The FTC looks at what the ad does not say -- that is, if
the failure to include information leaves consumers with a
misimpression about the product. For example, if a company
advertised a collection of books, it would be deceptive if
the ad did not disclose that what consumers actually would
receive were abridged versions of those books.
The FTC looks at whether the claim would be "material" --
that is, important to a consumer's decision to buy or use
the product. Examples of material claims are
representations about a product's performance, features,
safety, price, or effectiveness.
The FTC looks at whether the advertiser has sufficient
evidence to support the claims in the ad. The law requires
that advertisers have proof before the ad runs.  |
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| Question |
What makes an advertisement unfair? |
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| Answer | According to the Federal Trade Commission Act and the FTC's
Unfairness Policy Statement, an ad or business practice is
unfair if:
it causes or is likely to cause substantial consumer
injury;
which a consumer could not reasonably avoid;
and it is not outweighed by the benefit to consumers.  |
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| Question |
What makes an advertisement deceptive? |
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| Answer | According to the FTC's Deception Policy Statement, an ad is
deceptive if it contains a statement -- or omits
information -- that:
is likely to mislead consumers acting reasonably under the
circumstances; and
is "material" -- that is, important to a consumer's
decision to buy or use the product.  |
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| Question |
How do I know I'm reaching my target audience? |
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| Answer | To improve your ability to reach your target audience,
consider using demographic, geographic, or psychographic
profiles.  |
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| Question |
What factors should be considered when choosing a media
vehicle? |
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| Answer | There are six factors to consider when choosing a media
plan. Factors such as budget, target audience, and sales
objectives.  |
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| Question |
What's more important: reach or frequency? |
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| Answer | Both are important, your marketing plan and sales
objectives should dictate the level of each.  |
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| Question |
How to make certain that my ad will pull? |
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| Answer | While there are creative factors that influence ad
effectiveness, marketing considerations should also be
considered.  |
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| Question |
How to evaluate the efficiency of different media? |
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| Answer | The true evaluative tool to compare the efficiency of one
medium to another is cost per thousand or CPM.  |
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