How Advertising is influenced by Ethics - Research Paper Example

? How Advertising is influenced by Ethics? of the Table of Contents Introduction 3 2. Literature Review 4 2 Influence of Ethics in Advertising 4 2.2 Principles of Advertising Ethics 5 2.3 Advertising Ethics Germane to Healthcare Marketing 6 2.4 Code of Ethics in Healthcare Marketing 7 2.5 Pharmaceutical Companies and Misleading Practices 8 2.6 Downplaying Information related to Drug Risk on Television 9 2.7 How much Trouble Health Care Marketing Causes? 10 2.8 Ethics in Advertising Healthcare Services 10 2.9 Effect of Unethical Healthcare Marketing Advertisements 12 2.10 Online Healthcare and Pharmaceutical Marketing 13 3. Conclusion and Recommendation 15 References 17 1. Introduction Since historic times, the advertising segment has maintained a stereotype image of being excessively cut-throat and cynical among the masses. With time, advertisers have tried to portray this image to be their own, but the field of advertising is more complex. The people who are actually responsible for developing advertisements have to work within the domain of ethics, which is also applicable for the society at large. These regulations are the ingredients of which the advertisements are actually made up of. There are certain areas of concern, when it comes to advertisement. Honesty is an integral part of ethics in advertisement and manipulation is a significant characteristic of unethical practice in this field (Reader, 2013). In order to discuss the influence of ethics on advertisement, this paper has been designed to divulge the code of ethics, principles, significance, troubles, unethical practice and other media vehicles. However, since it would be difficult to throw light on the practices of different industry, the report will only concentrate on healthcare marketing. Advertising plays an integral role in marketing healthcare products and services. However, the major point of concern is that ethics has a significant part in advertising healthcare products and services because this segment deals with the well-being of people. Unethical practices or manipulation can cause serious damage to living-beings. This explains that the influence of ethics on advertisement is most important in case of health care segment and its marketing. In the literature review below, a comprehensive discussion on the different aspect of ethics and its influence on advertising for healthcare segment has been stated, which will assist the readers in getting a glimpse of the control that ethical advertising has on healthcare segment. 2. Literature Review 2.1 Influence of Ethics in Advertising Advertisements influence the thought process of the people and modify their outlook and behavior for the environment around them and the world. Therefore, moral principles, which are better known to be ethics, should be taught and understood by the advertisers, so that they can positively deliver the message that they intend to transmit. Ethics in advertising involves certain moral principles that have crucial role. The moral principle mainly emphasize on truthfulness, social dignity and responsibility of human beings. Truthfulness or honesty is the first characteristics that every advertisement must possess. Misrepresentation of information or exaggeration should be strictly avoided. On the other hand, human dignity should not be harmed through advertisement, through criticism that violates rights or involves discriminations on any grounds. Ethics is just the starting point in advertising. The ethical decisions that are taken by the advertisers are generally complex and it includes steering through a moral maze of contradictory forces. When advertisements are developed by marketers, contradictions are apparent between cost and ethics, strategy and ethics or effectiveness and ethics. It is the obligation of the advertiser or the advertising professional to have an absolute knowledge of the industry standards, so that tactics can be executed without barring the industry norms. In these situations, aspects like personal judgment and intuition based on moral compass of right and wrong have significant role to play. 2.2 Principles of Advertising Ethics With the explosion of innovative technologies, the advertising and marketing landscape is changing both globally and domestically. New challenges, ideas, cultural opportunities and media vehicles have strong influence in the way business is done. However, the only factor that remains constant is transparency. An ethical framework is required which will draw the line between right and wrong. The Institute for Advertising Ethics (IAE) came into existence for developing certain principles, so that they can be practiced in order to prepare ethically right advertisement for marketing products or services. These principles were mainly based on different communication vehicles, which include advertising (American Advertising Federation, 2011). The principles have been discussed below: 1. When it comes to serving people, marketing communication, advertising, news, public relation or editorial, share a common objective that is truth and enhanced ethical standards. 2. All the professionals (marketing, advertising and public relation) are obliged to follow high degree of ethics in dissemination and creation of the commercial information that is prepared for customers. 3. A distinction should be made between corporate communication, advertising, public relation from editorial content, news or entertainment, in case of both offline and online advertisement. 4. All the material conditions has to be disclosed by advertisers, which includes receipt of free product or service, identity of the endorsers and channels of endorsements. These should be transparently and full disclosed. 5. The consumers must be treated fairly by the advertisers. This has to be irrespective of the nature of the customers to whom the advertisements are directed to or the characteristics of the service or product. 6. The advertisers cannot compromise with the privacy of the consumers in marketing communication. 7. The local, federal and state advertisement laws have to be followed by the advertisers and they also need to co-operate with the self-regulatory industry programs for transparent advertising practices. 8. The advertising agencies of both offline and online media need to discuss among themselves regarding the ethical concerns before creating or developing advertisements (American Advertising Federation, 2011). 2.3 Advertising Ethics Germane to Healthcare Marketing Healthcare has an industry dominated environment, where patients and physicians mainly depend on the pharmaceutical companies for medication to address the health concerns. However, the healthcare segment also includes services offered by the hospitals and physicians. Due to the presence of innumerable players both in the healthcare product and service segment, companies are forced to share their profits (UNESCO Chair in Bioethics Office, 2013). The major objective of the pharmaceutical companies is to maximize profit, while the interest of the patient is to receive safe drug and healthcare service. In this scenario, the major breakthrough is extensive use of promotional or communication vehicles. Advertisement is gaining strong foothold gradually in the healthcare segment too. Traditionally, advertisements of hospitals, medicines or medical facilities were rare. The customers never took interest as they were not so medically literate. They solely depended on the recommendations of the doctors or physicians to avail any healthcare service or medicine. Nowadays, healthcare marketing helps to win patients, enhance reputation and grow revenue. There are unique challenges associated with marketing of healthcare products and services in comparison to consumer services or goods. This is because it these case the heath behaviors are in contradiction to the purchasing behavior of the customers. Healthcare marketing includes education and awareness, which is influenced by the changing population, external factors, advancement in research and other related problems (Johnson, 2013). 2.4 Code of Ethics in Healthcare Marketing The healthcare marketing advertising campaigns fall under various “truth-in-advertising and privacy laws. The drug makers and the medical professionals have segregated advertising rules to follow. The healthcare marketers have to strictly obey the law that limits the physicians to get patient recommendations, which they can incorporate in their advertising. In such cases the personal as well as medical information of the patient is carefully guarded (Lane, 2013). There are several laws and government regulation with regards to healthcare marketing and advertisement. The hospitals and the doctors’ ways of marketing themselves and the use of customers’ information in this regard is strictly regulated under The Health Insurance Portability and Accountability Act. Even The Food and Drug Administration have pre-defined regulations for prescribing medical services or drugs, such as for LASIK surgery. The claims that the advertisements usually make such as food products claiming to be low sodium or fat free, etc are monitored by The Federal Trade commission (Nelson & Campfield, 2008). In case of drugs advertisements in healthcare, the customers must be demonstrated at least an approved use, its generic name and most importantly, the side effects and risks associated with the medicine. The advertisements are not required to reveal information about similar drug in market or whether these will improve the condition or change the behavior of the consumer or not. The advertisements in case of healthcare marketing must be truthful and supported by relevant document or evidence that provides what it claims to offer. Any healthcare or medical service contributor must not advertise as specialist unless and until they are certified to do so (WHPRMS, 2013). 2.5 Pharmaceutical Companies and Misleading Practices The Trustees of Dartmouth College (2013) has stated that, six out of every ten claims made advertisers for pharmaceuticals are misleading for the viewers. This has been presented by the researchers in their article that has been published in Journal of General Internal Medicine. The researchers in The Dartmouth Institute of Health Policy & Clinical Practice have found that the misleading claims that are prevailing in consumer-targeted recommendation and also in case of non-prescription drug promotion or advertisement are ruining the industry internally. Over a decade, the policymakers are in a debate whether advertisements on healthcare or pharmaceutical products are for informing the consumers about the new drugs and its benefits or for persuading them to buy the product or service. Ethics says that consumers have the right to access high quality information regarding healthcare service and products, but in such case misleading statements and unnecessary exaggeration is illegal. These researchers have also put forward that the pharmaceutical companies have already spent around $4.8 billion in the year 2009, which surpassed the promotion for the non-prescription products, which was around $3 billion in that year. Companies like GlaxoSmithKline had to pay a civil and criminal liability of around $3 billion for one of the largest frauds settlement in healthcare industry in US. The company was caught for promoting or advertising several drugs for the unapproved uses. The company failed to provide safety data or price reporting for the same. 2.6 Downplaying Information related to Drug Risk on Television GlaxoSmithKline was illegally promoting an antidepressant medicine called Paxil, for the treatment of the patients under the age of 18. They also published and distributed misleading medical article that also supported a clinical trial of the same. It put forward the fact through pictorial representation that gloomy patients became happy. Now in such a case the question arises that is it right to advertise such medicines regarding which customers has little or no knowledge. The answer is yes as the companies can advertise for promoting their service or product, but the risks associated with the medicine, its side effects and benefits need to be clearly mentioned. The right to promote healthcare products is derived from the freedom of speech. On the other hand, the clinical judgment of the physician is also necessary. The advertisement for medicines such as stated above is an indirect way to pressurize physicians to prescribe specific medications as patients request them to prescribe what they see. This may also jeopardize the patient-doctor relationship. The issue of Direct-to-Consumer Advertising (DTCA) is highly debatable. DTCA is prohibited in many countries, while the drug companies claim that DTCA is advantageous for the customers. The players in the healthcare industry consider it to be a means to spread public awareness regarding services, products and even diseases. However, the economic significance of DTCA is quite clear from the above example of GlaxoSmithKline. 2.7 How much Trouble Health Care Marketing Causes? Around $4 billion is being spent by the pharmaceutical companies in a year for DTCA and the companies claim it to be working. The patients are asking for those medications that they are television advertisement and also on medical journals or magazines. However, this is giving rising to the debate regarding the rationale for marketing and advertising healthcare services and products. Healthcare marketing and advertising has been augmenting since 1997 and accordingly the companies have also increased their spending on such activities. It has been observed in the survey that was issued in the Consumer Reports of 2007 that consumers are asking for specific medicines or services which they see on television. Even 67 percent of physicians are also willingly prescribing them. However, in such case it might happen that the prescribed medicine might not be appropriate for the patient. In that case, the consequence might be fatal to human life. Just because the companies are advertising the medicine and its utility does not mean that it’s the best drug. This is a major cause of frustration for the physicians because they lose their liberty of prescribing medicine based on their best knowledge or requirement. 2.8 Ethics in Advertising Healthcare Services Advertising is a marketing effort, which is necessary when it involves services, but the method undertaken should be ethical and suitable. While discussing marketing and advertising healthcare services, the focus would be mainly on hospitals, laboratories and physicians. In the competitive arena of healthcare industry, new hospitals and medical centers are emerging every day, thus segregating the market share further. Marketing should function as the extension of transparent practices of the hospitals for communicating its services. As stated by The American Marketing Association, the thumb rule for ethical standards involves fairness and honesty. The hospitals while designing their advertising campaign must ensure that the activities or services that they are promoting are addressing the health needs or requirements of its target consumers or not. For marketing efforts, treatment should be viewed as medically necessary aspect rather than just promoting care for excessive financial gain (Kapko, 2012). In order to attract customers, hospitals offer treatment packages, which are beneficial for middle income and lower income customer segment. However, in reality they might involve several hidden cost, which are not revealed in advertisement. This is an example of downplaying or hiding facts from customers, which can be also treated as an unethical practice in advertisement. The hospitals promise best healthcare through electronic hoarding and other forms of advertisement. However, this has given rise to a various debates and doubts regarding the offerings of these hospitals. It has been found that the promise of healthcare facilities is not being fulfilled in reality. This is a violation of code of ethics that the Government in several countries are seriously considering and laying down stricter regulations. Laws are even developed, which will prevent the physicians from advertising or printing about their services which boasts of guaranteed cure. Advertisements are important and it is significant for people to know about the existing products or service, but exaggeration or misrepresentation is unethical. However, the pharmaceutical companies or healthcare service providers think that there is no harm in advertising services or products they are offering, boasting of its quality or showing their reputation publically (eMarketer Inc., 2013). 2.9 Effect of Unethical Healthcare Marketing Advertisements The concept of health care marketing emerges from the task to identify the values, needs and wants of the customers. Another reason behind marketing is to promote the health care systems that are available for satisfying the customers. However, ethics has an important place in this system. Selling unapproved products is unethical but marketing and promoting them to the customers for use by making false claims is equally unethical. The effects of such practice can be really harmful to patients (Mandal, 2010). The infant health product companies such as Nestle, Similac or Enfamil are aggressively marketing their products, which have been found to be of inferior quality. These products are the substitute of breast milk for the infants. The US Government took the initiative and succeeded in motivating around 75 percent of new mothers for breastfeeding, so as to avoid the use of those health products, which were not suitable for infants. Such products resulted in ear infection, gastrointestinal distress and respiratory complications (Tate, 2009). Almost all the countries have strict norms against unethical advertising, but there are good numbers of examples to prove that these practices are prevalent in the society. Shai Mulinari, a researcher of biomedicine and social science reviewed all the advertisement for the antidepressants that has been published in The Swedish Medical Journal. He found that around 34 percent of the advertisements were absolutely misleading. This figure might be even higher. It was identified that Vioxx, which is manufactured by Merck & Co. was promoted and prescribed for arthritis sufferers, but the drug carried serious cardiovascular risks and it was unethical to prescribe it to any patient. However, in the year 2000 and in 2001, the company spent heavily on their DTCA campaign. The outcome of this was 140,000 serious patients with cardiovascular complication in US (Science Newsline, 2013). 2.10 Online Healthcare and Pharmaceutical Marketing The advent and increase of internet usage around the world has also encircled the global healthcare industry. Web allows people to freely communicate on real-time basis, notify patients and physicians regarding the diseases and treatments. It has been identified that the digital media spending on advertising in this sector has increased to $1.18 billion in 2013 in US. It is expected that by 2017, it would be augmenting to $1.47 billion. As can be seen from Figure 1, the spending of US digital media spending on healthcare has increased rapidly (Batten, 2012). Accordingly to the survey conducted in April 2013 by the Medical Marketing & Media and Ogilvy CommonHealth, an average of 75 percent of the budget for healthcare marketing was aimed for healthcare professionals and about 25 percent of the consumers were aimed directly (West & Miller, 2009). Majority of pharmaceutical companies or healthcare service providers prefer mobile, digital search and digital video as their chosen media vehicle. Apart from just internet advertisement or use of social networking websites, healthcare service providers are also utilizing blogs, e-journals, articles and white papers to advertise and promote services (Batten, 2012; West & Miller, 2009). Figure 1: Digital Advertising Spending of US Healthcare and Pharma Industry Source: (eMarketer Inc., 2013) The five major trends that are seen in healthcare or pharmacy advertising or marketing are: 1. Mobile is the basic channel, as already discussed. The mobile rich advertisements are usually static or animated GIFs. 2. The healthcare companies are struggling hard to harness social media for advertising. Online forum are being used for information sharing as well as promotion. 3. The dynamic ads or smart ads are electronic ad templates which are customized by the companies according to their requirements. 4. Internet advertisements on websites or medical blogs or sites. 5. Own websites (eMarketer Inc., 2013) According to Pricewaterhouse Coppers, the healthcare and pharmaceutical spending on online advertising increased every year to around $1.1 billion. As can be identified through figure 2, around 47 percent of spending is on search, then 21 percent on display and so on. Even classifieds, digital video, and lead generation are effective formats in online advertising. Figure 2: Online Advertising Formats Source: (Kapko, 2012) 3. Conclusion and Recommendation According to a customer, advertising is a way by which marketers can demonstrate about their product and lure them to buy it. However, advertising is not mere a lure game. It goes beyond just showing what is there to be sold. It is a serious business, which might cost lives of customers if not ethically done. In this research paper the focus was on exploring the influence of ethics in advertising in healthcare marketing. Healthcare marketing involves promoting medicines, healthcare service by hospital and physicians, etc. Ethics is the most significant characteristics in advertising, but in healthcare segment it is further important because it involves well being of humans and animals too. Every country has their set of regulations and code of ethics for advertising, marketing or promotion. However, innumerable cases of misrepresentation, unethical practice, exaggeration, false claims, etc reveal that there are loop hole in codes of ethics which are being taken advantage of. There are no restrictions on freedom of speech or expression in any country, but it would be recommended that stricter laws for advertisement selection or broadcasting on television or online platforms. References American Advertising Federation. (2011). Principles and practices for advertising ethics. Retrieved from: http://www.aaf.org/images/public/aaf_content/images/ad%20ethics/IAE_Principles_Practices.pdf Batten, J. (2012). The latest healthcare/ pharma online advertising trends. Retrieved from: http://www.clickz.com/clickz/column/2225484/the-latest-healthcare-pharma-online-advertising-trends eMarketer Inc. (2013). Healthcare & Pharmaceuticals. Retrieved from: https://www.emarketer.com/coverage/healthcarepharma Johnson, K. S. (2013). About the marketing of healthcare services and products. Retrieved from: http://smallbusiness.chron.com/marketing-healthcare-services-products-58741.html Kapko, M. (2012). Pharma and healthcare drive biggest online ad spending gains. Retrieved from: http://www.clickz.com/clickz/news/2216594/pharma-and-healthcare-drive-biggest-online-ad-spending-gains Lane, T. (2013). Healthcare marketing laws. Retrieved from: http://smallbusiness.chron.com/healthcare-marketing-laws-67307.html Mandal, S. K. (2010). Ethics in business & corporate governance. New Delhi: Tata McGraw-Hill Education. Nelson, W. A., & Campfield, J. (2008). The ethics of hospital marketing. Healthcare Management Ethics. Retrieved from: http://academics.ochsner.org/uploadedFiles/Education/Library/Portals/M3.pdf Reader, C. (2013). What are the ethics of advertising? Retrieved from: http://www.ehow.com/info_7759721_ethics-advertising.html Science Newsline. (2013). Unethical advertising at launch of antidepressants. Retrieved from: http://www.sciencenewsline.com/articles/2013050215000031.html Tate, S. (2009). The ethics of direct to consumer marketing of prescription drugs. Retrieved from: http://www.honors.umaine.edu/files/2009/08/2009-tate.pdf The Trustees of Dartmouth College. (2013). TV drug ads: The whole truth? Retrieved from: http://tdi.dartmouth.edu/press/press-releases/tv-drug-ads-the-whole-truth UNESCO Chair in Bioethics Office. (2013). The ethics of pharmaceutical industry influence in medicine. Retrieved from: http://medlaw.haifa.ac.il/index/main/4/EthicsofPharmaceutical.pdf West, D. M. & Miller, E. A. (2009). Digital medicine: Health care in the internet era. Washington D. C.: Brookings Institution Press. WHPRMS. (2013). Code of ethics. Retrieved from: http://whprms.org/code-of-ethics/ Read More