Blackwell Publishing, Ltd.Oxford, UKBASRBusine.docx

Blackwell Publishing, Ltd.Oxford, UKBASRBusiness and
Society Review0045-3609© 2005 Center for Business Ethics at
Bentley College1104Original ArticleBUSINESS and SOCIETY
REVIEWDWANE HAL DEAN
Business and Society Review 110:4 433–458
After the Unethical Ad:
A Comparison of Advertiser
Response Strategies
DWANE HAL DEAN
Arecent television ad for Alcatel, a French telecom equipment
maker, opened with black-and-white film footage of Dr.
Martin Luther King’s “I have a dream” speech. Special effects
were used to show King speaking to a digitally depopulated
Wash-
ington Mall. A voice-over then says that before you can inspire
you
must first connect, and the telecom company that can do that for
you is Alcatel. Suddenly, the quarter of a million people who

were
actually present for the speech appear in the ad.1 Critics charge
that
Dr. King stood for civil rights and human dignity and that using
his
image and the civil rights movement to sell products cheapens
King’s
speech and the influence it had on society.2 The advertiser
counters
that permission was obtained from Dr. King’s family to use his
image,
and the advertiser was just trying to be creative and break
through
the clutter of other ads that compete for the attention of the
consumer.
This opening vignette raises two important questions. Would
consumers (as opposed to critics) view such an ad as unethical,
and
if so, what could an advertiser do to regain any lost goodwill
that
might result from airing an ad perceived to be unethical? These
two
questions are explored in this study. In part 1, five ads, each a
possible violation of advertising ethics, are shown to a sample
of
adults and the ads are rated for their degree of ethical
transgression.
In part 2, the ad chosen by respondents as the most ethically
offen-
sive is presented to four additional groups of adults and
different
Dwane Hal Dean is assistant professor at the Department of
Marketing, Information Systems
and Decision Sciences, the Anderson Schools of Management,

University of New Mexico.
© 2005 Center for Business Ethics at Bentley College.
Published by Blackwell Publishing,
350 Main Street, Malden, MA 02148, USA, and 9600
Garsington Road, Oxford OX4 2DQ, UK.
434 BUSINESS AND SOCIETY REVIEW
advertiser response strategies to an unethical ad are compared
on
their ability to recapture lost goodwill.
These two objectives are believed to be substantive. Although
there

is a growing body of literature on advertising ethics, relatively
few
studies present a spectrum of ads of varying ethical
offensiveness
and reproduce the same ad stimuli used in the investigation.
This
study will present such a spectrum and reproduce each stimulus
in
its entirety, allowing readers to easily compare and contrast
their
ethical judgment with that of others. Furthermore, there are no
previous investigations comparing different advertiser response
strategies to ads perceived to be unethical. The results of this
inves-
tigation may help managers better understand what consumers
perceive to be ethical and unethical in promotion practice; also,
the
study suggests ways to minimize the impact of an unethical ad
on
brand equity.
BACKGROUND
There is a large body of literature on advertising ethics. Among
other topics, papers have addressed the ethicality of political
attack
ads,3 the use of sexual appeals in print advertising,4 the use of
fear
appeals in advertising,5 lottery advertising,6 the use of
questionable
environmental claims to sell products,7 the use of reference
prices
in advertising,8 the use of cookies and spamming in electronic
media,9
advertising that targets children,10 advertising that stereotypes

minorities,11 and alcohol advertising that specifically targets
low-
income minority populations.12
In general, it has been found that consumers believe advertising
often violates broad ethical norms.13 This summary statement is
particularly disturbing because research has shown that
perceiving
an ad to be unethical significantly and negatively impacts
attitude
toward the ad, attitude toward the brand, and purchase
intention.14
Thus, the ethicality of advertising is not just a moral issue; it
may
well impact corporate revenue and profit.
Individual Ethical Judgment
People may differ greatly in their ethical orientations. Later in
the
present study, ethical perceptions of advertisements or
marketing
https://intention.14
https://norms.13
https://populations.12

435 DWANE HAL DEAN
practices will be reported, but only as group means and standard
deviations. No attempt was made to determine how or why
subjects
arrived at the ethical judgments they expressed, and the ethical
orientation of individual subjects remains unknown. The
remainder
of this section will lay a conceptual foundation for how
consumers,
in general, form ethical evaluations of advertising.
Consumers are believed to judge ads using the principles of
idealism,
pragmatism, and relativism.15 Idealism (deontology)
emphasizes
universal statements of right and wrong. This belief system
argues
that actions may be judged on their inherent rightness or wrong-
ness, and that actions are not justified by the consequences of
the
actions. Rather, the motives and character of the agent are more
important than the consequences produced by the agent.16 This
moral
principle would appear to imply, in part, that advertising should
be
truthful, not exploitative of the lower inclinations of man (to
lust,
vanity, envy, or greed), and not targeted to vulnerable groups
(such
as children and the poor).

A second belief system, pragmatism (teleology), maintains that
an action is right if it results in the greatest good for the
greatest
number of people. Here, the decision maker must consider all of
the
outcomes of an action or inaction and weigh one against the
other
to determine what is best for all concerned. Furthermore,
pragmatism
implies that the ends justify the means, even if the means are
inhe-
rently wrong.17 As an example, pragmatism suggests that the
use of
a fear appeal (a scare tactic, an inherently wrong action) would
be
justified if the fear appeal were used for a noble cause (such as
deterring drug abuse).
The third philosophy, relativism, states that ethical decisions
are a
function of time, place, and culture, and therefore no universal
rules
exist.18 From a relativistic perspective, a moral standard is
simply a
historically sanctioned custom and not a set of objectively
justifiable
principles. An example of the impact of relativism on
advertising ethics
might be the necessity to modify an ad containing the image of
a
scantily-clad woman when the ad is released in Islamic
countries. That
is, a photo image of a woman showing a lot of skin would not
neces-
sarily be unethical in many Western countries, but the same ad
would

likely be judged unethical (and probably illegal) in Islamic
cultures.
A currently popular model of ethical decision making incorpo-
rates both idealism and pragmatism as well as a cultural norm
influence.19 The model suggests that people evaluate actions
from
https://influence.19
https://exist.18
https://wrong.17
https://agent.16
https://relativism.15
both idealistic and pragmatic perspectives. That is, an action is
not evaluated by using one set of principles exclusively.
However,
research suggests that consumers tend to rely more on idealistic
principles rather than pragmatism in forming ethical
judgments.20
Organizational Codes of Ethics

While the above section discussed how individuals might arrive
at an
ethical judgment, a number of organizations have developed
written
rules or standards of ethics to guide members in creating and
evalu-
ating advertising. Prominent among these is the American
Advertising
Federation’s (AAF) Advertising Principles of American
Business21 and
the American Marketing Association’s (AMA) code of ethics.22
An
additional set of guidelines is the three moral principles for
judging
the ethics of advertising identified by the Vatican Pontifical
Council
for Social Communications.23 The first of these principles,
truthfulness,
states that advertising should not deliberately deceive, distort
the
truth, or withhold relevant facts. The second principle, human
dignity,
suggests that advertising should not pander to the base desires
of man
by appealing to lust, vanity, envy, or greed. Further, advertising
should
not exploitatively target vulnerable groups such as children, the
poor,
the elderly, and the culturally disadvantaged. The third
principle, social
responsibility, requires that advertising not promote a lavish
lifestyle
that contributes to the waste of resources and the despoiling of
the
natural environment. A reading of the AAF, AMA, and Vatican
sets of

guidelines suggests a number of similarities in proscribed
behavior.
It may be noted that many businesses have their own written
code
of ethics and that some of these codes reference advertising
practices.
However, a survey of 198 large, U.S.-based companies found
that
only 25% of the firms included ethical guidelines for
advertising in
their codes.24 Attempting to explain this lack of attention to
adver-
tising ethics, the author speculates that it may be due to a diffu-
sion of responsibility among the trinity of advertisers,
advertising
agencies, and the media. That is, each group is expecting the
other to
stand up and accept responsibility for raising ethical standards.
Part 1 of This Study
Now that a basis for ethical evaluation of ads has been laid, the
two
parts of this study may be described in more detail. In part 1,
subjects
https://codes.24
https://Communications.23
https://ethics.22
https://judgments.20

437 DWANE HAL DEAN
were given descriptions of five ads or promotion practices and
were
asked to rate them for degree of ethical transgression. To help
the
reader understand the hypotheses and what will follow later in
this
article, these five ads are briefly described.
Low Price Guarantee. This ad concerns a furniture store chain
that promises they have the lowest price on a particular model
of a
well-known brand of mattress. In fact, they promise to refund
the
difference plus 10% if the buyer can find a lower advertised
price on
the same mattress within 30 days of purchase. However,
because
this chain has such a large sales volume, the mattress
manufacturer
produces a named version of their flagship model only for
distribu-
tion to this retailer. Thus, it would be impossible to find the
same
mattress offered for sale in any other store. The alleged ethical
impropriety is that the ad suggests competition on price when,
in
fact, there is no competition on price for this mattress. This ad
may
be a possible violation of the AAF truth principle, “Advertising
shall
tell the truth, and shall reveal significant facts, the omission of
which would mislead the public.” Also, this ad might violate a

tenet
of the AMA Code of Ethics, “Communications about offered
products
and services are not deceptive.” The description of this ad is
based
on the author’s personal experience when purchasing a mattress,
but the ad is not referenced by way of a publication citation.
Using MLK to Sell a Product. This ad, for the French telecom
company Alcatel, was described in the introduction to this
paper.
Critics charge that using the image of a dead civil rights leader
(Dr. Martin Luther King Jr.) to sell products cheapens the civil
rights
movement and the influence of Dr. King.25 On the surface, this
ad
appears relatively innocuous; it does not violate any particular
AAF
principle or tenet in the AMA Code of Ethics. However, the ad
might
be a violation of the Vatican principle of human dignity, in the
sense
that the right of Dr. King to make a voluntary decision to allow
his image to be associated with a marketer’s product could not
be
accommodated.
Marketing of Sunny Delight. Sunny-D is an orange drink
product
formerly marketed by Procter & Gamble. Although positioned
as a
healthy alternative to soft drinks, Sunny-D is only 5% actual
fruit
juice. The remaining 95% is a blend of chemicals that imitate
the

flavor, color, and texture of orange juice, including added
vitamins
and minerals. Critics charge that Sunny-D is little more than
sugar
water and food dye, and that its nutritional value is inconsistent
with its positioning.26 Although Sunny-D is adequately labeled,
it is
possible that many purchasers are unaware of its true nutritional
value. If that is the case, then the product might be in violation
of
a tenet of the AMA Code of Ethics, “Identification of any
product
substitution that might materially change the product or impact
on
the buyer’s decision.”
Fake Film Critic. The films “The Animal” and “A Knight’s
Tale”
from Sony Pictures were promoted with quotes from David
Manning
of The Ridgefield Press. The problem—this weekly newspaper
does
not have a film critic, and there is no David Manning. Under
ques-
tioning from Newsweek, the studio admitted that its marketing
department had invented a film critic to give their films positive

reviews.27 Of the five ads to be considered here, this is
probably the
most egregious ethical transgression. It is a clear violation of
the
AAF principle of substantiation, “Advertising claims shall be
sub-
stantiated by evidence in possession of the advertiser and
advertis-
ing agency, prior to making such claims” as well as a tenet of
the
AMA Code of Ethics, “Avoidance of false and misleading
advertising.”
Indeed, this gaffe was selected as one of the ten lowest
moments in
advertising of the last decade.28
Frequent Gambler Card. Certain segments of casino patrons are
more profitable for the house than others. Harrah’s tries to lure
profitable customers back with a loyalty program (a frequent
gam-
bler card) that entitles patrons to a free steak dinner, a hotel
room,
and other freebies based on the number of visits and the amount
of
money wagered.29 The ethical criticism of such a loyalty
rewards
program does not come from the AAF principles or AMA tenets,
but
from the Vatican principle on human dignity. That is, the
promotion
appeals to a vice, contributes to gambling addiction, and
exploit-
atively targets a vulnerable group. There is an additional ethical
question about the privacy and use of the consumer information
gathered and maintained on these gamblers.

A comparison of the above five ads/promotions to the written
ethical standards of the AAF, AMA, and the Vatican moral
principles
https://wagered.29
https://decade.28
https://reviews.27
https://positioning.26
439 DWANE HAL DEAN
suggests that consumers will judge the fake film critic ad to be
the
most ethically offensive, and that the ad using the image of Dr.
Martin Luther King Jr. will be considered the least offensive.
This is
stated as hypothesis 1:
H1: Of the five ads in this study, respondents will judge the
fake film critic ad to be the most severe ethical violation, and
the ad using the image of Dr. Martin Luther King Jr. to sell a
product will be considered the slightest ethical violation.
Part 2 of This Study
The second part of this study builds on part 1 by focusing on the
ad
rated most unethical and comparing four alternative advertiser
com-
munication strategies to recapture lost goodwill resulting from

the
release of the ad. To lay a theoretic foundation for this part of
the
investigation, the following will be discussed: the negativity
effect,
the fundamental attribution error, the discounting principle, and
past
research on corporate responses in the wake of a product-harm
event.
The Negativity Effect. Social scientists have identified a
general
negativity bias, a tendency for people to weight negative
information
more than positive information in the evaluation of people,
objects,
and ideas.30 Within the context of this study, the negativity
effect
suggests that perceiving an ad as unethical would disproportion-
ately and negatively impact the consumer’s attitude toward the
advertiser. However, the negativity effect might be moderated
by the
context in which the perception of the unethical ad occurs. That
is,
a consumer with a strong preexisting favorable attitude toward
the
advertiser (a brand-loyal consumer) might be less affected by an
unethical ad than a consumer with a preexisting neutral opinion
toward the advertiser. Indeed, research on the effects of
negative
publicity has shown that customer loyalty moderates the
negativity
effect in just this way.31 This is good news for advertisers; it
sug-
gests that the damage from a negative event will be greatest
among

those consumers who were least likely to purchase the
advertiser’s
products.
The Fundamental Attribution Error. People have a tendency to
attribute human actions to the actor’s internal disposition and
dis-
count the importance of situational factors. For example,
suppose
https://ideas.30
you are standing in line at a bank. You notice a man speaking in
an
agitated manner to a teller. You may assume the man simply has
a
hot temper. However, it is possible that he is frustrated because
the
bank made an error on his statement, and he has made four
phone calls,
written a letter (including photocopy documentation), and
visited
the bank on a prior occasion all in order to resolve the dispute.
Given
the situation, the man’s behavior is more understandable. This
ten-
dency to regard behavior as reflective of personal rather than
situational
factors has been labeled the fundamental attribution error.32

From a communications strategy standpoint, the fundamental
attribution error suggests that an advertiser accused of an
unethical
ad must respond. A no-response would imply that the advertiser
knowingly and willingly released an ad likely to be considered
unethical by the public. To counter the fundamental attribution
error
and minimize the damage to its image, the advertiser must
respond.
The Discounting Principle. Related to the above, this corollary
of
attribution theory states that the role of a specific cause in
produc-
ing a given effect is discounted when other plausible causes are
also
present.33 In the context of the present study, the discounting
prin-
ciple suggests that if the advertiser can offer an explanation for
the
unethical ad, one that presents the advertiser in the best light,
then
the damage resulting from the ad will be minimized. Thus, the
dis-
counting principle works in concert with the fundamental
attribution
error—by making a response and offering an explanation for the
offensive action, the advertiser may minimize the negative
results.
Corporate Response Literature. There is a significant body of
literature on how a corporation should respond after a negative
event.
Most of this work is in the form of case studies, drawing
conclusion

about what managers should and should not do. Benoit has
taken
the next step, conceptualizing a classification of response
strategies
that can be employed to manage the image of the affected
organiza-
tion.34 This typology includes five broad categories that are
sometimes
subdivided into distinct tactical variations. Because this
classifica-
tion was developed to address the universe of corporate crises
that
might occur, some categories and subcategories do not directly
apply to a perceived unethical promotion. A brief discussion of
how
the typology might apply to an advertiser accused of an
unethical as
follows.
https://present.33
https://error.32
441 DWANE HAL DEAN
The strategy of evasion of responsibility suggests that the firm
might blame its ad agency for the unethical ad. Or, if the ad was
produced in-house, the company might say that the ad somehow
escaped the usual pretesting, and the whole mishap is really an
accident. The strategy of reduction of offensiveness suggests
that
the firm might compare the alleged unethical ad to the ads of
other
companies and say theirs is no worse. Or, the firm could say

that
the unethical ad draws attention to a controversial point, a
larger
issue in society, and that this is actually a good outcome. The
strategy
of corrective action implies that the firm will announce
measures to
prevent the future occurrence of such an unethical ad. Finally,
the
strategy of mortification suggests that the advertiser will
express
regret, apologize, and seek public forgiveness for the
impropriety.
In summary, these image restoration strategies address the
issues
of “blame,” “offensiveness,” and “remorse” central to any
negative
event.35
One of the very few studies to investigate corporate response to
accusations of ethical impropriety from an experimental
perspective
is that of Bradford and Garrett.36 The alleged unethical action
was
the marketing of a new prescription drug with a developing
history
of product safety problems. These authors evaluated five
different
responses to the allegations under each of four different sets of
pre-
vailing conditions; the dependent variable was consumer
perception
of corporate image. The possible responses were: (a) no
response,
(b) deny that the firm is the cause of the event, (c) offer an
excuse,

(d) agree that the company is to blame but argue that the
severity of
the event is less than publicized, and (e) agree that the event is
severe and accept responsibility. The possible conditions were:
(a) the
firm can provide evidence that they committed no unethical
action,
(b) the firm can provide evidence that they had no control over
the
event, (c) the firm can provide evidence that the event is less
severe
than suggested in the media, and (d) the firm has no evidence to
minimize guilt. Across the different conditions, the accept
responsi-
bility response was found to be the optimal communication
strategy.
This study will test four advertiser response strategies to an
unethical ad. They are: (a) no comment, (b) justification, (c)
apology
and corrective action, and (d) excuse. The context surrounding
the
responses and the exact wording of each will be presented later.
However, based on attribution theory and the results of
Bradford
and Garrett, it may be hypothesized that the apology and
corrective
https://Garrett.36
https://event.35
action response will result in the most favorable consumer

attitude
toward the advertiser. This is stated as hypothesis 2:
H2: Among the four advertiser response strategies in this study
to an unethical ad, the apology and corrective action response
will result in the most favorable attitude toward the advertiser.
PART 1
In part 1, respondents were presented with a series of five ads
or
promotion practices and asked to rate them for degree of ethical
transgression.
Sample
A convenience sample was drawn from students enrolled in an
undergraduate Principles of Marketing course at a large public
uni-
versity in the southeast United States. Ad stimuli were
presented to
students individually in a paper questionnaire format during
class,
and quiet time was allowed for the completion of the question-
naires. A total of 83 questionnaires were distributed and 82
usable
questionnaires were received. The sample consisted of 65
percent
men and 35 percent women, and the mean age for total group
was
21.09 years with a standard deviation of 1.83 years.
Stimuli
The ad stimuli are presented here in the same order in which
respondents encountered them in the questionnaire. All ad

stimuli
were text descriptions of ads or promotion practices rather than
images. The deceptive low price guarantee ad was worded as
follows:
An ad from a furniture store chain promises that they have the
lowest price on the brand X “Excalibur” mattress in the region.
In fact, they promise to refund the difference plus 10% if you
find a lower advertised price for the same mattress within 30
days of purchase. However, there is more to the story. This
chain
of stores has a large enough sales volume that brand X produces
a special version of its best-selling mattress, the “Excalibur,”
only
for distribution to this company. Thus, it would be impossible
to find an “Excalibur” mattress offered for sale by any other
store.
443 DWANE HAL DEAN
Critics charge that the ad is misleading because it suggests
competition on price when, in fact, there is no competition on
price for this mattress. The advertiser says that they are just
advertising a great price and they don’t see any harm done.
Note that this and all ad stimuli in this study conclude with
“pro”
and “con” statements about the ethical issue posed by the ad.
This
was done in an effort to focus respondent attention on the
subject of
ethics and prepare them for the scaled questions that
immediately

followed each stimulus. For each ad, an effort was made to
realisti-
cally present the strongest arguments on both sides of the
ethical
issue. Also, brand names were removed from all ad stimuli in
this
study. This was done to prevent triggering brand associations
and
emotions that might bias subject responses. Brands are referred
to
as brand X, or they are not mentioned at all.
The ad using the image of Martin Luther King Jr. to sell a
product
was described as follows:
A recent advertisement for a telecommunications company
opens with a black and white film footage of Dr. Martin Luther
King Jr. (MLK) delivering his 1963 “I Have a Dream” speech.
The theme of the ad is that before you can inspire, you must
first connect, and the telecom company that can do that for
you is the advertiser.
Critics charge that MLK stood for civil rights and human
dignity, and that using his image and the civil rights movement
to sell something cheapens Dr. King’s speech and the influence
it had on society. The advertiser counters that permission was
obtained from Dr. King’s family to use his image, and that the
advertiser was just trying to be creative and break through
the clutter of other ads that compete for the attention of the
consumer.
The ad describing the marketing of Sunny Delight was
presented as
follows:

Advertisements for an orange drink product associate it with
sunshine and the wholesomeness of orange juice. In fact, the
drink product contains only 5% actual fruit juice. The remaining
95% is a blend of chemicals that imitate the flavor and color of
orange juice, including added vitamins and minerals.
Consumer activists have criticized the advertiser for asking
supermarkets to shelve the product next to 100% orange juice
in the refrigerated section. They say consumers are deceived
into thinking the orange drink has the nutritional value of
orange juice when, in fact, it is little more than sugar water and
food dye. The advertiser argues that it would be impossible to
market an orange drink without associating it with oranges.
Further, the drink does contain vitamins and minerals and
these are beneficial for children.
The promotion practice regarding the fake film critic was
described
in the following way:
Ads for a new movie from a major Hollywood studio contain
glowing reviews from film critic, David Manning of the
Ridgefield
Press. There’s just one problem. This weekly newspaper does
not have a film critic, and there is no David Manning. Studio
executives admitted to having “invented” a film critic to give
their film positive reviews after the scheme was discovered by

a Newsweek reporter.
Critics say that the studio intentionally deceived consumers,
an action worthy of legal prosecution. The studio contends
that it is industry practice to “bribe” film critics with airline
flights, meals, and merchandise in an attempt to obtain positive
reviews—what the studio did is no worse.
The frequent gambler card marketing tactic was presented as
follows:
A casino has determined that gamblers losing between $100
and $499 per trip make up only 30% of gamblers but account
for 80% of the company’s revenue. To lure this type of gambler
back to the casino on a regular basis, the company offers them
a sort of “frequent gambler’s card” entitling them to perks like
a free steak dinner and hotel room, based on the number of
visits to the casino.
Critics charge that the “frequent gambler” program contributes
to gambling addiction, and that such action is morally repre-
hensible. The casino counters that their program is modeled
after the frequent flyer program in the airline industry and they
do not understand why they should not be allowed to promote
their product in the same manner.
Measures
Immediately following each individual ad stimulus, on the same
page, was a series of five scaled statements (−4 through +4)
anchored

445 DWANE HAL DEAN
by strongly disagree and strongly agree. These items attempted
to
tap the construct of perceived unethicality of the ad or
marketing
practice. The complete wording of each scale stem appears in
the
Appendix. To avoid dealing with negative numbers, responses
were
recoded 1 through 9; a higher number indicates that the ad was
perceived to be more unethical. The dependent variable was
computed
as the average of the five scale responses for each subject.
Other Items
The questionnaire contained an exercise asking subjects to rank
the five ads they had just finished reading in order of severity
of
ethical transgression. The purpose of the ranking exercise was
to
force subjects to consider all ads together and compare them to
each
other. Results from the ranking exercise should be consistent
with the
rating exercise, in which respondents encountered each ad
separately
and rated it against (presumably) their own internal ethical
standard.
Results
Measures. The scale items accompanying each ad were
examined
separately with principal components factor analysis and

reliability
coefficient determination (Cronbach’s α).37
The factor loadings and levels of explained variance and
reliability
for the construct of perceived unethicality of the ad were found
to be
within recommended guidelines.38
Rating and Ranking Exercises. The results of respondent ratings
of the ads for perceived unethicality are shown in Table 1.
Listed in
order of most to least unethical, the ads are: fake film critic,
low-price
guarantee, marketing of Sunny Delight, frequent gambler card,
and
the ad using the image of MLK to sell a product.
The rank sums for the five ads are also reported in Table 1. A
lower
sum indicates an ad perceived to be more unethical. The order
of ads,
from most to least unethical based on rank sums, is the same as
that
found in the rating exercise. The fact that the same ordering of
ads was
achieved by two different methods bolsters the validity of order
found.
The rank sums may be used to determine if there are significant
differences among the ads on the attribute of ethicality.39 For
the
five ads, the critical rank sum difference at α = 0.05 is 55.24.40
This
https://55.24.40

https://ethicality.39
https://guidelines.38
±±±
TABLE 1 Perceived Unethicality of Five Questionable Ads and
Promotion Practices (N = 82)
Rating Ranking
Exercise Exercise
Ad or Promotion Mean ± SD Rank Sum
Deceptive low price guarantee 5.92 ± 1.29 207
Ad using image of dead civil rights leader 3.54 ± 1.59 322
to sell a product
Marketing of Sunny Delight 5.23 ± 1.83 255
Ad for movie using quote from 7.05 ± 1.48 149
fake film critic
Luring patrons into a casino 4.07 ± 1.80 297
with frequent gambler’s card
Notes: See text for a full description of each ad or promotion.

A higher rating indicates greater perceived unethicality.
A lower rank sum indicates greater perceived unethicality.
suggests that the fake film critic is perceived as significantly
less
ethical than all other ads. The ad using the image of MLK to
sell a
product is perceived as significantly more ethical than the
market-
ing of Sunny Delight, the low-price guarantee ad, and the fake
film
critic ad. The frequent gambler card promotion is perceived as
sig-
nificantly more ethical than the low-price guarantee ad and the
fake
film critic ad. The marketing of Sunny Delight is perceived to
be sig-
nificantly more ethical than the fake film critic ad, but
significantly
less ethical than the ad using the image of MLK to sell a
product.
Discussion of Part 1
The objective of part 1, to present a group of ads or promotion
tactics
with varying degrees of ethicality, was generally achieved. The
reader
may read each ad or promotion stimulus and compare their judg-
ment of the stimulus to that of respondents and note differences
or
similarities. Through a comparison of each ad or promotion
prac-
tice with the published codes of ethics of the AAF and AMA, as
well
as the three moral principles of the Vatican Pontifical Council

for
Social Communication, it was hypothesized (H1) that the fake
film
critic would be perceived as the most unethical ad and that the
ad
using the image of MLK to sell a product would be perceived as
the
447 DWANE HAL DEAN
least unethical ad. The results of the rating and ranking
exercises
support H1.
PART 2
The ad rated the most ethically offensive in part 1 was selected
as the
scenario stimulus for part 2, and four alternative advertiser
response
strategies were compared for their ability to recapture goodwill.
Sample
A convenience sample of students was obtained from sections of
an
undergraduate Principles of Marketing course different than
those
used in part 1. Ad stimuli were presented to students
individually in a
paper questionnaire format during class, and quiet time was
allowed
for the completion of the questionnaires. A total of 120
question-

naires were distributed and 107 usable questionnaires were
received.
The respondents on the deleted questionnaires missed a
multiple-
choice manipulation check, asking them to recognize which of
the
four alternative advertiser responses they had been exposed to.
The sample consisted of 55 percent men and 45 percent women,
and the mean age for the total group was 21.30 years with a
standard
deviation of 2.32 years.
The Questionnaire
The fake film critic ad stimulus was presented to respondents
first,
and they filled out a series of scaled items on the same page
addressing their attitude toward the advertiser (the movie
studio).
The next page presented a stimulus labeled “the studio
response,”
and this was immediately followed by the same series of
attitude
scales encountered on the previous page. The remainder of the
questionnaire consisted of a manipulation check, in multiple-
choice
format, and items addressing gender and age.
Stimuli
The wording of the fake film critic stimulus was as presented in
part
1, except that the last paragraph, summarizing the “pro” and
“con”

arguments of the ethical issue did not appear. The truncated
fake
film critic stimulus reads as follows:
Ads for a new movie from a major Hollywood studio contain
glowing reviews from film critic, David Manning of the
Ridgefield
Press. There’s just one problem. This weekly newspaper does
not have a film critic, and there is no David Manning. Studio
executives admitted to having “invented” a film critic to give
their film positive reviews after the scheme was discovered by
a Newsweek reporter.
One of four different studio responses appeared on the next
page.
The “no comment” response was worded as follows:
Following the Newsweek report, the movie studio issued a
statement saying they had “no comment.”
The “excuse” response was presented as follows:
Following the Newsweek report, the movie studio issued a state-
ment saying that severe competition in the movie industry
forced
them to use aggressive marketing tactics. The studio said that
their actions were no worse than what other studios have done.

The “apology and corrective action” response appeared as
follows:
Following the Newsweek report, the studio issued a public
apology for the incident, announcing that two advertising
executives have been reprimanded and suspended without
pay for their part in the scheme. Further, the studio said it had
created checks and balances in its advertising procedures to
ensure that such an occurrence will not happen in the future.
Finally, the “justification” response was worded as follows:
statement saying that their movie went on to become one of the
top-20 box office hits of the year. The studio feels that their
aggressive marketing tactics should not be questioned since the
movie was so popular. That is, the public acceptance of the
movie
suggests that the aggressive promotion of the film did no harm.
Measures
Scales measuring the construct of attitude toward the advertiser
appeared on the same page as each stimulus, immediately
following
449 DWANE HAL DEAN
the initial fake movie critic stimulus as well as the studio
response.
That is, the same measures were repeated. The construct was
mea-

sured by a series of four scaled statements (−4 through +4)
anchored
by strongly disagree and strongly agree. The complete wording
of
each scale stem appears in the Appendix. To avoid dealing with
negative numbers, responses were recorded 1 through 9; a
higher
number indicates a more favorable attitude toward the
advertiser.
The dependent variable was computed as the average of the four
scale responses for each subject at time 1 and time 2.
Results
Measures. The scale items accompanying each stimulus were
examined separately with principal components factor analysis
and
reliability coefficient determination (Cronbach’s α).41 The
factor
loadings, levels of explained variance, and reliability for the
measures
are within recommended guidelines.42
Analysis of Variance. Group means at both time 1 and time 2
are shown in Table 2. There were no significant differences
among
the groups at time 1 (after respondents had read the fake film
critic
stimulus but before the studio response).43 Since all four
groups were
responding to the same stimulus at time 1, no significant
differences
would be expected. Analysis of time 2 data revealed that the
apology
and corrective action response was significantly more effective
than the

other response options in enhancing attitude toward the
advertiser.44
Other Analysis. Since dependent variable measures were
captured
at both time 1 and time 2, paired t-tests may be performed to
more
finely examine the data. As shown in Table 2, this perspective
suggests
that both the excuse and apology and corrective action
responses
were able to significantly enhance attitude toward the
advertiser.45
Discussion of Part 2
The objective in part 2 was to compare alternative advertiser
response
strategies to an unethical ad for the ability to recapture lost
goodwill.
Attribution theory and past research suggested that the apology
and corrective action response would be the most effective of
the
four, and this was stated as hypothesis 2. The results support
H2,
https://advertiser.45
https://advertiser.44
https://response).43
https://guidelines.42
4

5
0
TABLE 2 Attitude Toward the Advertiser After an Unethical Ad
(Time 1) and Following Different Advertiser
Responses (Time 2)
Mean Paired Significance
Response n Time 1 Time 2 Difference t-value (P-value)
No comment 27 2.49 ± 1.67 2.31 ± 1.26 0.19 0.86 0.399
Excuse 29 2.07 ± 1.32 3.10 ± 1.84 1.03 4.18 < 0.001
Apology and corrective action 24 1.98 ± 0.97 5.19 ± 2.24 3.21
6.32 < 0.001
Justification 27 2.34 ± 1.41 2.70 ± 1.58 0.36 2.24 0.034
Note: Values in time columns are means plus or minus standard
deviations.
A higher rating in the time columns indicates a more favorable
attitude.
B
U
S
IN
E
S
S
A
N
D

S
O
C
IE
T
Y
R
E
V
IE
W
451 DWANE HAL DEAN
but they also suggest that the “excuse” response was
significantly
effective in boosting attitude toward the advertiser.
Interestingly,
a “no comment” response resulted in a negligible loss in
attitude
toward the advertiser.
GENERAL DISCUSSION
The general objectives of this study appear to have been
achieved.
Part 1 presented a series of five ads or promotion practices of

varying
degrees of ethicality to respondents and asked them to rate each
for
ethical transgression. These stimuli were reproduced in their
entirety
to allow readers to review each stimulus and compare their
ethical
judgment against that of others. Respondent ratings of the ads
gener-
ally paralleled the degree to which the ads violated the
American
Advertising Federation’s “Advertising Principles of American
Business”
and the American Marketing Association’s “Code of Ethics.”
In part 2 of this study, the ad chosen in part 1 as the most ethi-
cally offensive was used as an initial stimulus and four
alternative
communication strategies were compared for their ability to
recap-
ture goodwill toward the advertiser. The apology and corrective
action response by the advertiser was hypothesized to be the
most
effective of the four strategies, and this hypothesis was
supported
by the results. Conceptually, the superiority of this response
strategy
is largely due to its ability to counter the fundamental
attribution
error. That is, it frames the unethical ad as an atypical event,
occur-
ring due to unforeseen circumstances, and it presents the
company
in a positive light by saying that the company will now install
safeguards to prevent such an occurrence in the future. The
latter

corrective action part of the response presents positive
information
about the company that helps to counter the initial negative
infor-
mation and the resulting negativity effect.
The paired t-test analysis revealed that the excuse response also
significantly enhanced attitude toward the advertiser after the
unethical ad, although to a much less degree than the apology
and
corrective action response. Conceptually, the excuse response is
a
reduction in offensiveness strategy, pointing a finger at the
movie
industry as a whole, and saying that the advertising tactic was
necessitated by severe competition. A corollary of attribution
theory,
the discounting principle, suggests that giving readers an
alternative
explanation for the unethical ad (similar actions by the
competition)
allows readers to discount the idea that the company would nor-
mally have engaged in an unethical practice. The other
responses
tested (the “no comment” response and the “justification”
response)
have no real theoretic basis for enhancing attitude toward the
advertiser, and it is not surprising that they were not effective.
Limitations

Perhaps the greatest limitation of this study is the fact that
brand
names were not mentioned in the ad stimuli. The rationale for
not
including brand names is the belief that they would have
triggered
brand associations and emotions and this could have biased the
responses obtained. That is, the response would be a
combination
of attitude toward the brand and the perceived ethicality of the
ad or
marketing practice in question and not just the latter. Certainly,
research has shown that brand commitment moderates consumer
response to negative brand publicity.46 Brand commitment is an
unexamined probable moderator of attitude toward the
advertiser
in this study. Another limitation is the rather narrow age
spectrum
represented by the sample and the fact that the ethnicity of
respon-
dents was not recorded. Especially with regard to the MLK ad in
part 1, it cannot be assumed that the results would generalize to
other populations.
Two additional limitations are worthy of mention. The first is
the
likely demand effect induced by the repeated measures in part 2.
That is, subjects may have recognized that what intervened
between
the two sets of measures was intended to change their
responses,
and this may have biased their answers. This criticism is muted
somewhat by the presence of four experimental groups and
widely
varying mean responses. The last limitation to be addressed is

the
capture of subject responses at only one point in time and im-
mediately after reading a stimulus. Longitudinal measurement
of
attitudes may reveal different results.
Managerial Implications
As noted earlier, the ethicality of advertising is not just a moral
issue. Research has shown that perceiving an ad to be unethical
significantly and negatively impacts attitude toward the ad,
attitude
https://publicity.46
453 DWANE HAL DEAN
toward the brand, and purchase intention.47 The results of the
present
study suggest that an advertiser accused of an unethical ad
should
respond and that the optimum response is one that will refute
the
fundamental attribution error and counter the negativity effect.
Given that a minority of firms that have organizational codes of
ethics include guidelines for ethical advertising 48 and that the
eth-
ical judgments of respondents in this study generally paralleled
the
guidelines outlined by the AAF and the AMA, companies may

wish
to consider incorporating the ethical guidelines of these two
groups
into their organizational codes of ethics.
Managers are also urged to pretest ads among a variety of
groups
before they are sent to the media. For example, the television ad
used as the opening vignette for this paper (the ad using MLK
to sell
a product) was not pretested among minority groups prior to
airing.49 The advertiser, Alcatel, believed that obtaining the
consent of
Dr. King’s estate to use his image subsumed any need for
testing.
The ad resulted in a number of protests, including one from
Julian
Bond, chairman of the National Association for the
Advancement of
Colored People and a professor of civil rights history.50
The relationship among advertisers, advertising agencies, and
the media is also worthy of note. A possible diffusion of
responsibility
for ethical standards among these three entities was mentioned
earlier
as a possible cause for unethical marketing practices. This
conclusion
is supported by a recent study that conducted detailed
interviews
with advertising agency personnel and asking how they deal
with
ethical issues.51 The authors report that many advertising
agency
employees have moral myopia (a distortion of moral vision) or
moral

muteness (a tendency to rarely talk about ethical issues).
Indeed, they
found that a strongly held view is that advertising practitioners
are
there to do the client’s bidding rather than raise a flag about the
marketing tactics the client wishes to employ. The authors
recommend
that the conception of an advertising professional’s
responsibility be
reformulated to include a moral fiduciary duty. That is, the
agency
should express concern when they discover that the client’s
marketing
plans are ethically questionable and do not simply defer to the
client.
Future Research
Additional research on the ethicality of advertising may wish to
focus on responder factors such as level of brand commitment
and
https://issues.51
https://history.50
https://airing.49
https://intention.47
ethical orientation. The former has already been mentioned as a
limitation. The latter implies that responders may vary in how
liberal or strict they are in arriving at an ethical judgment. That
is,

consumers may cluster into strict, moderate, and liberal-minded
groups on how they perceive an ethical issue. Ethical
orientation
was not measured or controlled in this study, but it is assumed
that
each of the groups had similar ethical orientation
characteristics;
this is inferred by the similar levels of the dependent variable at
time 1 in part 2.
NOTES
1. John Obrecht, “Alcatel’s Dream a Nightmare,” B to B, vol.
86, April
16, 2001, p. 9.
2. Vanessa O’Connell, “Alcatel Has a Dream—and a
Controversy,”
Wall Street Journal (Eastern Edition), March 30, 2001, B5.
3. Spencer F. Tinkham and Ruth Ann Weaver-Lariscy, “Ethical
Judg-
ments of Political Television Commercials as Predictors of
Attitude Toward
the Ad,” Journal of Advertising, vol. 23, no. 3, 1994, pp. 43–57.
4. Michael S. LaTour and Tony L. Henthorne, “Ethical
Judgments of
Sexual Appeals in Print Advertising,” Journal of Advertising,
vol. 23, no. 3,
1994, pp. 81–90.
5. Suzanne Benet, Robert E. Pitts, and Michael LaTour, “The
Appro-
priateness of Fear Appeal Use for Health Care Marketing to the
Elderly: Is

It OK to Scare Granny?” Journal of Business Ethics, vol. 12, no.
1, 1993,
pp. 45–55.
6. James M. Stearns and Shaheen Borna, “The Ethics of Lottery
Advertising: Issues and Evidence,” Journal of Business Ethics,
vol. 14,
no. 1, 1995, pp. 43–51.
7. Michael Jay Polonsky, Judith Bailer, Helen Baker,
Christopher
Basche, Carl Jepson, and Lenore Neath, “Communicating
Environmental
Information: Are Marketing Claims on Packaging Misleading?”
Journal of
Business Ethics, vol. 17, no. 3, 1998, pp. 281–94.
8. Beng Soo Ong, Foo-Nin Ho, and Kenneth E. Clow, “Ethical
Perceptions
of Reference Price Advertising,” American Business Review,
vol. 15, no. 1,
1997, pp. 7–13.
9. Bette Ann Stead and Jackie Gilbert, “Ethical Issues in
Electronic
Commerce,” Journal of Business Ethics, vol. 34, no. 2, 2001,
pp. 75–85.
10. Kevin Heubusch, “Is It OK to Sell to Kids?” American
Demographics,
vol. 19, no. 1, 1997, p. 55.

455 DWANE HAL DEAN
11. Charles R. Taylor and Barbara B. Stern, “Asian-Americans:
Television Advertising and the ‘Model Minority’ Stereotype,”
Journal of
Advertising, vol. 26, no. 2, 1997, pp. 47–61.
12. Henry J. Pomeroy, Joseph P. Castellano, Jeffrey G. Becker,
Elaine
M. Johnson, and Jesse W. Brown, “Distilling the Truth About
Alcohol Ads,”
Business and Society Review, no. 83, Fall, 1992, pp. 12–17.
13. Debbie Treise, Michael F. Weigold, Jenneane Conna, and
Heather
Garrison, “Ethics in Advertising: Ideological Correlates of
Consumer
Perceptions,” Journal of Advertising, vol. 23, no. 3, 1994, pp.
59–69.
14. Penny M. Simpson, Gene Brown, and Robert E. Widing,
“The
Association of Ethical Judgment of Advertising and Selected
Advertising
Effectiveness Response Variables,” Journal of Business Ethics,
vol. 17,
no. 2, 1998, pp. 125–36.
15. Treise, “Ethics in Advertising,” pp. 61–63.
16. Randall S. Hansen, “A Multidimensional Scale for
Measuring

Business Ethics: A Purification and Refinement,” Journal of
Business Ethics,
vol. 11, no. 7, 1992, pp. 523–34.
17. Ibid.
18. Ibid.
19. Shelby D. Hunt and Scott J. Vitell, “A General Theory of
Marketing
Ethics,” Journal of Macromarketing, vol. 6, no. 1, 1986, pp. 5–
16.
20. Scott J. Vitell, Anusorn Singhapakdi, and James Thomas,
“Consumer Ethics: An Application and Empirical Testing of the
Hunt-Vitell
Theory of Ethics,” The Journal of Consumer Marketing, vol. 18,
no. 2, 2001,
pp. 153–78.
21. American Advertising Federation Board of Directors,
“Advertising
Ethics and Principles,” www.aaf.org/about/principles.html
(accessed
December 17, 2003)
22. American Marketing Association, “Code of Ethics,”
www.marketing-
power.com/live/content1175/php (accessed December 18, 2003)
23. Gene Laczniak, “Reflections on the 1997 Vatican
Statements
Regarding Ethics in Advertising,” Journal of Public Policy &
Marketing,
vol. 17, no. 2, 1998, pp. 320–24.
24. Patrick E. Murphy, “Ethics in Advertising: Review,

Analysis, and
Suggestions,” Journal of Public Policy & Marketing, vol. 17,
no. 2, 1998,
pp. 316–19.
25. Andrew McMains, “Revisionist History,” Adweek (Eastern
Edition),
vol. 42, no. 21, 2001, p. 12.
26. Conor Dignam, “Sunny Delight May Be a Success, but It’s
Caused a
Storm,” Marketing, August 19, 1999, 17.
https://power.com/live/content1175/php
www.marketing
www.aaf.org/about/principles.html
27. Anonymous, “Hollywood’s Ad Ethics Gap,” Advertising
Age, vol. 72,
no. 26, 2001, p. 16.
28. Anonymous, “The Lowest Moments in Advertising,”
Adweek, vol.
44, no. 23, 2003, pp. 38–40.
29. Joe Ashbrook, “Welcome to Harrah’s,” Business 2.0, vol. 3,

no. 4,
2002, pp. 48–54.
30. Richard W. Mizerski, “An Attribution Explanation of the
Dispro-
portionate Influence of Unfavorable Information,” Journal of
Consumer
Research, vol. 9, no. 3, 1982, pp. 301–10.
31. David H. Henard, “Negative Publicity: What Companies
Need to
Know About Public Relations,” Public Relations Quarterly, vol.
47, no. 4,
2002, pp. 8–12.
32. E. E. Jones and R. E. Nisbett, “The Actor Observer:
Divergent
Perceptions of the Cause of Behavior,” in E. E. Jones, D. E.
Kanouse, H. H.
Kelley, R. E. Nisbett, S. Valins, and B. Weiner, eds.,
Attribution: Perceiving
The Causes of Behavior (Morristown, NJ: General Learning
Press, 1971).
33. H. H. Kelly, Attribution in Social Interaction (New York:
General
Learning, 1971).
34. W. L. Benoit, Accounts, Excuses, and Apologies: A Theory
of
Image Restoration Strategies (Albany, NY: State University of
New York
Press, 1995).

35. Donald A. Fishman, “ValuJet Flight 592: Crisis
Communication
Theory Blended and Extended,” Communication Quarterly, vol.
47, no. 4,
1999, pp. 345–75.
36. Jeffrey L. Bradford and Dennis E. Garrett, “The
Effectiveness of
Corporate Communicative Responses to Accusations of
Unethical Behavior,”
Journal of Business Ethics, vol. 14, no. 11, 1995, pp. 875–92.
37. For the low price guarantee ad data, factor analysis returned
one
component (lowest loading = .554) accounting for 46.61% of
total variance
and with α = 0.70. Analysis of data for the ad using the image
of MLK
revealed one component (lowest loading = 0.643) accounting for
66.46% of
variance and with α = 0.87. For the Sunny Delight promotion
data, factor
analysis uncovered one component (lowest loading = 0.757)
explaining
67.60% of variance and with α = 0.88. Analysis of the fake film
critic ad
data revealed one component (lowest loading = 0.734)
accounting for
66.20% of variance and with α = 0.87. Finally, analysis of data
for the frequent
gambler card promotion found one component (lowest loading =
0.858)
explaining 76.88% of variance and with α = 0.92. It is
interesting that there
appears to be a general progressive increase in factor loadings,
explained

variance, and reliability with the data from successive ads. It is
unclear
457 DWANE HAL DEAN
if this is due to scale items being differentially effective in
measuring the
ethicality of different types of ads and promotions or if the
phenomenon is
due to respondent learning or increased task attention as the
exercise
progressed.
38. Joseph F. Hair, Rolph E. Anderson, Ronald L. Tatham, and
William
C. Black, Multivariate Data Analysis, 4th ed. (Englewood
Cliffs, NJ: Prentice
Hall, 1995).
39. The Friedman test, using rank-sums, is a nonparametric
equivalent
of one-way ANOVA. The Friedman test statistic for the five ads
is 94.58, well
above the critical value of 18.47 at P = .001 and d.f. = 4. This
suggests that
there are significant differences in ethical perception among the
group of ads,
but it does not tell us which ads differ. Similar to a post hoc

multiple means
comparison after ANOVA, there is a distribution-free multiple
comparisons
test based on Friedman rank sums.
40. M. Hollander and D. A. Wolfe, Nonparametric Statistical
Methods
(New York: John Wiley & Sons, 1973).
41. For the initial fake film critic stimulus, factor analysis
found one
component (lowest loading = 0.898) accounting for 84.95% of
total variance
and with α = 0.94. Analysis of studio response data revealed
one com-
ponent (lowest loading = 0.931) accounting for 90.95% of
variance and with
α = 0.96.
42. Hair, Multivariate Data Analysis, pp. 385, 642.
43. ANOVA showed no significant differences (F = 0.78, d.f. =
3/103,
P = 0.506).
44. ANOVA suggested a significant difference (F = 13.33, d.f. =
3/103,
P < 0.001). A Student-Newman-Keuls post hoc multiple means
comparison
procedure revealed that the apology and corrective action
response is
significantly more effective than the other three response
options in
enhancing attitude toward the advertiser.

45. Following Bonferroni adjustment for multiple t-tests, this
significance
still holds.
46. Rohini Ahluwalia, Robert E. Burnkrant, and H. Rao Unnava,
“Consumer Responses to Negative Publicity: The Moderating
Role
of Commitment,” Journal of Marketing Research, vol. 37, May,
2000,
pp. 203–14.
47. Simpson, “The Association of Ethical Judgment of
Advertising,”
p. 134.
48. Murphy, “Ethics in Advertising,” p. 317.
49. O’Connell, “Alcatel Has a Dream,” p. B5.
50. O’Connell, “Alcatel Has a Dream,” p. B5.
51. Minette E. Drumright and Patrick E. Murphy, “How
Advertising
Practitioners View Ethics: Moral Muteness, Moral Myopia, and
Moral
Imagination,” Journal of Advertising, vol. 33, no. 2, 2004, pp.
7–24.
APPENDIX
Scale for perceived unethicality of an advertisement or
promotion prac-
tice (5 items)
The advertisement described above:

• violates a standard of conduct that advertisers should follow;
• exhibits a lack of respect for the rights of consumers;
• promotes the product in a way that is unacceptable in our
society;
• suggests the motives of the advertiser are corrupt;
• is less ethical than most other ads.
Scale for attitude toward the advertiser (4 items)
Based on the ad described above, the (advertiser):
• is an honest company;
• is a trustworthy company;
• is concerned about doing business ethically;
• conducts business in a responsible manner.
Structure BookmarksAfter the Unethical Ad: A Comparison of
Advertiser Response Strategies After the Unethical Ad: A
Comparison of Advertiser Response Strategies DWANE HAL
DEAN recent television ad for Alcatel, a French telecom
equipment maker, opened with black-and-white ﬁlm footage of
Dr. Martin Luther King’s “I have a dream” speech. Special
effects were used to show King speaking to a digitally
depopulated Washington Mall. A voice-over then says that
before you can inspire you must ﬁrst connect, and the telecom
company that can do that for you is Alcatel. Suddenly, the
quarter of a million people who were actually present for the
speech appear in the ad.Critics charge that Dr. A-1 2 This
opening vignette raises two important questions. Would
consumers (as opposed to critics) view such an ad as unethical,

and if so, what could an advertiser do to regain any lost
goodwill that might result from airing an ad perceived to be
unethical? These two questions are explored in this study. In
part 1, five ads, each a possible violation of advertising ethics,
are shown to a sample of adults and the ads are rated for their
degree of ethical transgression. In part 2, the ad chosen by
respondents as t-Dwane Hal Dean is assistant professor at the
Department of Marketing, Information Systems and Decision
Sciences, the Anderson Schools of Management, University of
New Mexico. © 2005 Center for Business Ethics at Bentley
College. Published by Blackwell Publishing, 350 Main Street,
Malden, MA 02148, USA, and 9600 Garsington Road, Oxford
OX4 2DQ, UK. advertiser response strategies to an unethical ad
are compared on their ability to recapture lost goodwill. These
two objectives are believed to be substantive. Although there is
a growing body of literature on advertising ethics, relatively
few studies present a spectrum of ads of varying ethical
offensiveness and reproduce the same ad stimuli used in the
investigation. This study will present such a spectrum and
reproduce each stimulus in its entirety, allowing readers to
easily compare and contrast their ethical judgment with that of
others. Furthermore, there are no previous investigations
comparing different-BACKGROUND BACKGROUND There is
a large body of literature on advertising ethics. Among other
topics, papers have addressed the ethicality of political attack
ads,the use of sexual appeals in print advertising,the use of fear
appeals in advertising,lottery advertising,the use of
questionable environmental claims to sell products,the use of
reference prices in advertising,the use of cookies and spamming
in electronic media,advertising that targets children,advertising
that stereotypes minorities,and alcohol advertising that specifi3
4 5 6 7 8 9 10 11 populations.12 In general, it has been found
that consumers believe advertising often violates broad ethical
This summary statement is particularly disturbing because
research has shown that perceiving an ad to be unethical
significantly and negatively impacts attitude toward the ad,

attitude toward the brand, and purchase Thus, the ethicality of
advertising is not just a moral issue; it may well impact
corporate revenue and profit. norms.13 intention.14 Individual
Ethical Judgment People may differ greatly in their ethical
orientations. Later in the present study, ethical perceptions of
advertisements or marketing practices will be reported, but only
as group means and standard deviations. No attempt was made
to determine how or why subjects arrived at the ethical
judgments they expressed, and the ethical orientation of
individual subjects remains unknown. The remainder of this
section will lay a conceptual foundation for how consumers, in
general, form ethical evaluations of advertising. Consumers are
believed to judge ads using the principles of idealism,
pragmatism, and Idealism (deontology) emphasizes universal
statements of right and wrong. This belief system argues that
actions may be judged on their inherent rightness or wrongness,
and that actions are not justified by the consequences of the
actions. Rather, the motives and character of the agent are more
important than the consequences produced by the This moral
principle would appear to imply, in part, that advertising should
be trurelativism.15 -agent.16 A second belief system,
pragmatism (teleology), maintains that an action is right if it
results in the greatest good for the greatest number of people.
Here, the decision maker must consider all of the outcomes of
an action or inaction and weigh one against the other to
determine what is best for all concerned. Furthermore,
pragmatism implies that the ends justify the means, even if the
means are inherently As an example, pragmatism suggests that
the use of a fear appeal (a scare tactic, an inherently wrong-
wrong.17 The third philosophy, relativism, states that ethical
decisions are a function of time, place, and culture, and
therefore no universal rules From a relativistic perspective, a
moral standard is simply a historically sanctioned custom and
not a set of objectively justifiable principles. An example of the
impact of relativism on advertising ethics might be the necessity
to modify an ad containing the image of a scantily-clad woman

when the ad is released in Islamic countries. That is, a photo
image of a woman exist.18 -A currently popular model of
ethical decision making incorporates both idealism and
pragmatism as well as a cultural norm The model suggests that
people evaluate actions from A currently popular model of
ethical decision making incorporates both idealism and
pragmatism as well as a cultural norm The model suggests that
people evaluate actions from -influence.19 both idealistic and
pragmatic perspectives. That is, an action is not evaluated by
using one set of principles exclusively. However, research
suggests that consumers tend to rely more on idealistic
principles rather than pragmatism in forming ethical
judgments.20 Organizational Codes of Ethics While the above
section discussed how individuals might arrive at an ethical
judgment, a number of organizations have developed written
rules or standards of ethics to guide members in creating and
evaluating advertising. Prominent among these is the American
Advertising Federation’s (AAF) Advertising Principles of
American Businessand the American Marketing Association’s
(AMA) code of An additional set of guidelines is the three
moral principles for judging the ethics of advertising identified
by the Vatica-21 ethics.22 Communications.23 It may be noted
that many businesses have their own written code of ethics and
that some of these codes reference advertising practices.
However, a survey of 198 large, U.S.-based companies found
that only 25% of the firms included ethical guidelines for
advertising in their Attempting to explain this lack of attention
to advertising ethics, the author speculates that it may be due to
a diffusion of responsibility among the trinity of advertisers,
advertising agencies, and the media. That is, each group is
ecodes.24 --Part 1 of This Study Now that a basis for ethical
evaluation of ads has been laid, the two parts of this study may
be described in more detail. In part 1, subjects were given
descriptions of five ads or promotion practices and were asked
to rate them for degree of ethical transgression. To help the
reader understand the hypotheses and what will follow later in

this article, these five ads are briefly described. Low Price
Guarantee. This ad concerns a furniture store chain that
promises they have the lowest price on a particular model of a
well-known brand of mattress. In fact, they promise to refund
the difference plus 10% if the buyer can find a lower advertised
price on the same mattress within 30 days of purchase.
However, because this chain has such a large sales volume, the
mattress manufacturer produces a named version of their
flagship model only for distribution to this retailer. Thus, it
would be impossible-Using MLK to Sell a Product. This ad, for
the French telecom company Alcatel, was described in the
introduction to this paper. Critics charge that using the image of
a dead civil rights leader (Dr. Martin Luther King Jr.) to sell
products cheapens the civil rights movement and the influence
of Dr. King.On the surface, this ad appears relatively
innocuous; it does not violate any particular AAF principle or
tenet in the AMA Code of Ethics. However, the ad might be a
violation of the Vatican principle of human25 Marketing of
Sunny Delight. Sunny-D is an orange drink product formerly
marketed by Procter & Gamble. Although positioned as a
healthy alternative to soft drinks, Sunny-D is only 5% actual
fruit juice. The remaining 95% is a blend of chemicals that
imitate the Marketing of Sunny Delight. Sunny-D is an orange
drink product formerly marketed by Procter & Gamble.
Although positioned as a healthy alternative to soft drinks,
Sunny-D is only 5% actual fruit juice. The remaining 95% is a
blend of chemicals that imitate the flavor, color, and texture of
orange juice, including added vitamins and minerals. Critics
charge that Sunny-D is little more than sugar water and food
dye, and that its nutritional value is inconsistent with its
Although Sunny-D is adequately labeled, it is possible that
many purchasers are unaware of its true nutritional value. If that
is the case, then the product might be in violation of a tenet of
the AMA Code of Ethics, “Identification of any product
substitution that might materially change the
productpositioning.26 Fake Film Critic. The films “The Animal”

and “A Knight’s Tale” from Sony Pictures were promoted with
quotes from David Manning of The Ridgefield Press. The
problem—this weekly newspaper does not have a film critic, and
there is no David Manning. Under questioning from Newsweek,
the studio admitted that its marketing department had invented a
film critic to give their films positive Of the five ads to be
considered here, this is probably the most egregious ethical
transgression. It is a clear violation of the AAF -reviews.27 --
decade.28 Frequent Gambler Card. Certain segments of casino
patrons are more profitable for the house than others. Harrah’s
tries to lure profitable customers back with a loyalty program (a
frequent gambler card) that entitles patrons to a free steak
dinner, a hotel room, and other freebies based on the number of
visits and the amount of money The ethical criticism of such a
loyalty rewards program does not come from the AAF principles
or AMA tenets, but from the Vatican principle on human
dignity. That is, the promoti-wagered.29 -A comparison of the
above five ads/promotions to the written ethical standards of the
AAF, AMA, and the Vatican moral principles suggests that
consumers will judge the fake film critic ad to be the most
ethically offensive, and that the ad using the image of Dr.
Martin Luther King Jr. will be considered the least offensive.
This is stated as hypothesis 1: H1: Of the five ads in this study,
respondents will judge the fake film critic ad to be the most
severe ethical violation, and the ad using the image of Dr.
Martin Luther King Jr. to sell a product will be considered the
slightest ethical violation. Part 2 of This Study The second part
of this study builds on part 1 by focusing on the ad rated most
unethical and comparing four alternative advertiser
communication strategies to recapture lost goodwill resulting
from the release of the ad. To lay a theoretic foundation for this
part of the investigation, the following will be discussed: the
negativity effect, the fundamental attribution error, the
discounting principle, and past research on corporate responses
in the wake of a product-harm event. -The Negativity Effect.
Social scientists have identified a general negativity bias, a

tendency for people to weight negative information more than
positive information in the evaluation of people, objects, and
Within the context of this study, the negativity effect suggests
that perceiving an ad as unethical would disproportionately and
negatively impact the consumer’s attitude toward the advertiser.
However, the negativity effect might be moderated by the
context in which the perception of the unethical ad ideas.30 -31
-The Fundamental Attribution Error. People have a tendency to
attribute human actions to the actor’s internal disposition and
discount the importance of situational factors. For example,
suppose The Fundamental Attribution Error. People have a
tendency to attribute human actions to the actor’s internal
disposition and discount the importance of situational factors.
For example, suppose -you are standing in line at a bank. You
notice a man speaking in an agitated manner to a teller. You
may assume the man simply has a hot temper. However, it is
possible that he is frustrated because the bank made an error on
his statement, and he has made four phone calls, written a letter
(including photocopy documentation), and visited the bank on a
prior occasion all in order to resolve the dispute. Given the
situation, the man’s behavior is more understandable. This
tendency to regard behavior as reﬂect-error.32 From a
communications strategy standpoint, the fundamental attribution
error suggests that an advertiser accused of an unethical ad must
respond. A no-response would imply that the advertiser
knowingly and willingly released an ad likely to be considered
unethical by the public. To counter the fundamental attribution
error and minimize the damage to its image, the advertiser must
respond. The Discounting Principle. Related to the above, this
corollary of attribution theory states that the role of a speciﬁc
cause in producing a given effect is discounted when other
plausible causes are also In the context of the present study, the
discounting principle suggests that if the advertiser can offer an
explanation for the unethical ad, one that presents the advertiser
in the best light, then the damage resulting from the ad will be
minimized. Thus, the discounting principle works in concert

with th-present.33 --Corporate Response Literature. There is a
significant body of literature on how a corporation should
respond after a negative event. Most of this work is in the form
of case studies, drawing conclusion about what managers should
and should not do. Benoit has taken the next step,
conceptualizing a classification of response strategies that can
be employed to manage the image of the affected
organization.This typology includes five broad categories that
are sometimes subdivided into distinct tactical variations.-34 -
The strategy of evasion of responsibility suggests that the firm
might blame its ad agency for the unethical ad. Or, if the ad was
produced in-house, the company might say that the ad somehow
escaped the usual pretesting, and the whole mishap is really an
accident. The strategy of reduction of offensiveness suggests
that the firm might compare the alleged unethical ad to the ads
of other companies and say theirs is no worse. Or, the firm
could say that the unethical ad draws attention to a
controversial point,event.35 One of the very few studies to
investigate corporate response to accusations of ethical
impropriety from an experimental perspective is that of
Bradford and The alleged unethical action was the marketing of
a new prescription drug with a developing history of product
safety problems. These authors evaluated five different
responses to the allegations under each of four different sets of
prevailing conditions; the dependent variable was consumer
perception of corporate image. The possible responses were: (a)
Garrett.36 -(b)(b)(b) deny that the firm is the cause of the event,
(c) offer an excuse, (d)(d) agree that the company is to blame
but argue that the severity of the event is less than publicized,
and (e) agree that the event is severe and accept responsibility.
The possible conditions were: (a) the firm can provide evidence
that they committed no unethical action, (b)(b) the firm can
provide evidence that they had no control over the event, (c) the
firm can provide evidence that the event is less severe than
suggested in the media, and (d) the firm has no evidence to
minimize guilt. Across the different conditions, the accept

responsibility response was found to be the optimal
communication strategy. -This study will test four advertiser
response strategies to an unethical ad. They are: (a) no
comment, (b) justification, (c) apology and corrective action,
and (d) excuse. The context surrounding the responses and the
exact wording of each will be presented later. However, based
on attribution theory and the results of Bradford and Garrett, it
may be hypothesized that the apology and corrective This study
will test four advertiser response strategies to an unethical ad.
They are: (a) no comment, (b) justification, (c) apology and
corrective action, and (d) excuse. The context surrounding the
responses and the exact wording of each will be presented later.
However, based on attribution theory and the results of
Bradford and Garrett, it may be hypothesized that the apology
and corrective action response will result in the most favorable
consumer attitude toward the advertiser. This is stated as
hypothesis 2: H2: Among the four advertiser response strategies
in this study to an unethical ad, the apology and corrective
action response will result in the most favorable attitude toward
the advertiser. PART 1 PART 1 In part 1, respondents were
presented with a series of five ads or promotion practices and
asked to rate them for degree of ethical transgression. Sample A
convenience sample was drawn from students enrolled in an
undergraduate Principles of Marketing course at a large public
university in the southeast United States. Ad stimuli were
presented to students individually in a paper questionnaire
format during class, and quiet time was allowed for the
completion of the questionnaires. A total of 83 questionnaires
were distributed and 82 usable questionnaires were received.
The sample consisted of 65 percent men and 35 percent women,
and the mean age for total gr--21.09 years with a standard
deviation of 1.83 years. Stimuli The ad stimuli are presented
here in the same order in which respondents encountered them
in the questionnaire. All ad stimuli were text descriptions of ads
or promotion practices rather than images. The deceptive low
price guarantee ad was worded as follows: An ad from a

furniture store chain promises that they have the lowest price on
the brand X “Excalibur” mattress in the region. In fact, they
promise to refund the difference plus 10% if you find a lower
advertised price for the same mattress within 30 days of
purchase. However, there is more to the story. This chain of
stores has a large enough sales volume that brand X produces a
special version of its best-selling mattress, the “Excalibur,”
only for distribution to this company. Thus, it would be
impossiblCritics charge that the ad is misleading because it
suggests competition on price when, in fact, there is no
competition on price for this mattress. The advertiser says that
they are just advertising a great price and they don’t see any
harm done. Note that this and all ad stimuli in this study
conclude with “pro” and “con” statements about the ethical
issue posed by the ad. This was done in an effort to focus
respondent attention on the subject of ethics and prepare them
for the scaled questions that immediately followed each
stimulus. For each ad, an effort was made to realistically
present the strongest arguments on both sides of the ethical
issue. Also, brand names were removed from all ad stimuli in
this study. This was done to prevent triggerin-The ad using the
image of Martin Luther King Jr. to sell a product was described
as follows: A recent advertisement for a telecommunications
company opens with a black and white film footage of Dr.
Martin Luther King Jr. (MLK) delivering his 1963 “I Have a
Dream” speech. The theme of the ad is that before you can
inspire, you must first connect, and the telecom company that
can do that for you is the advertiser. Critics charge that MLK
stood for civil rights and human dignity, and that using his
image and the civil rights movement to sell something cheapens
Dr. King’s speech and the influence it had on society. The
advertiser counters that permission was obtained from Dr.
King’s family to use his image, and that the advertiser was just
trying to be creative and break through the clutter of other ads
that compete for the attention of the consumer. The ad
describing the marketing of Sunny Delight was presented as

follows: Advertisements for an orange drink product associate it
with sunshine and the wholesomeness of orange juice. In fact,
the drink product contains only 5% actual fruit juice. The
remaining 95% is a blend of chemicals that imitate the flavor
and color of orange juice, including added vitamins and
minerals. Consumer activists have criticized the advertiser for
asking supermarkets to shelve the product next to 100% orange
juice Consumer activists have criticized the advertiser for
asking supermarkets to shelve the product next to 100% orange
juice in the refrigerated section. They say consumers are
deceived into thinking the orange drink has the nutritional value
of orange juice when, in fact, it is little more than sugar water
and food dye. The advertiser argues that it would be impossible
to market an orange drink without associating it with oranges.
Further, the drink does contain vitamins and minerals and these
are beneficial for children. The promotion practice regarding the
fake film critic was described in the following way: Ads for a
new movie from a major Hollywood studio contain glowing
reviews from film critic, David Manning of the Ridgefield Press.
There’s just one problem. This weekly newspaper does not have
a film critic, and there is no David Manning. Studio executives
admitted to having “invented” a film critic to give their film
positive reviews after the scheme was discovered by a
Newsweek reporter. Critics say that the studio intentionally
deceived consumers, an action worthy of legal prosecution. The
studio contends that it is industry practice to “bribe” film critics
with airline flights, meals, and merchandise in an attempt to
obtain positive reviews—what the studio did is no worse. The
frequent gambler card marketing tactic was presented as
follows: A casino has determined that gamblers losing between
$100 and $499 per trip make up only 30% of gamblers but
account for 80% of the company’s revenue. To lure this type of
gambler back to the casino on a regular basis, the company
offers them a sort of “frequent gambler’s card” entitling them to
perks like a free steak dinner and hotel room, based on the
number of visits to the casino. Critics charge that the “frequent

gambler” program contributes to gambling addiction, and that
such action is morally reprehensible. The casino counters that
their program is modeled after the frequent flyer program in the
airline industry and they do not understand why they should not
be allowed to promote their product in the same manner. -
Measures Immediately following each individual ad stimulus,
on the same page, was a series of five scaled statements (−4
through +4) anchored by strongly disagree and strongly agree.
These items attempted to tap the construct of perceived
unethicality of the ad or marketing practice. The complete
wording of each scale stem appears in the Appendix. To avoid
dealing with negative numbers, responses were recoded 1
through 9; a higher number indicates that the ad was perceived
to be more unethical. The dependent variable was computed as
the average of the five scale responses for each subject. Other
Items The questionnaire contained an exercise asking subjects
to rank the five ads they had just finished reading in order of
severity of ethical transgression. The purpose of the ranking
exercise was to force subjects to consider all ads together and
compare them to each other. Results from the ranking exercise
should be consistent with the rating exercise, in which
respondents encountered each ad separately and rated it against
(presumably) their own internal ethical standard. Results
Measures. The scale items accompanying each ad were
examined separately with principal components factor analysis
and reliability coefficient determination (Cronbach’s α).37 The
factor loadings and levels of explained variance and reliability
for the construct of perceived unethicality of the ad were found
to be within recommended guidelines.38 Rating and Ranking
Exercises. The results of respondent ratings of the ads for
perceived unethicality are shown in Table 1. Listed in order of
most to least unethical, the ads are: fake film critic, low-price
guarantee, marketing of Sunny Delight, frequent gambler card,
and the ad using the image of MLK to sell a product. The rank
sums for the five ads are also reported in Table 1. A lower sum
indicates an ad perceived to be more unethical. The order of

ads, from most to least unethical based on rank sums, is the
same as that found in the rating exercise. The fact that the same
ordering of ads was achieved by two different methods bolsters
the validity of order found. The rank sums may be used to
determine if there are significant differences among the ads on
the attribute of For the five ads, the critical rank sum difference
at α = 0.05 is This The rank sums may be used to determine if
there are significant differences among the ads on the attribute
of For the five ads, the critical rank sum difference at α = 0.05
is This ethicality.39 55.24.40 TABLE 1 Perceived Unethicality
of Five Questionable Ads and Promotion Practices (N = 82)
Rating Ranking Exercise Exercise Ad or Promotion Mean ± SD
Rank Sum Deceptive low price guarantee 5.92 ± 1.29 207 Ad
using image of dead civil rights leader 3.54 ± 1.59 322 to sell a
product Marketing of Sunny Delight 5.23 ± 1.83 255 Ad for
movie using quote from 7.05 ± 1.48 149 fake film critic Luring
patrons into a casino 4.07 ± 1.80 297 with frequent gambler’s
card Notes: See text for a full description of each ad or
promotion. A higher rating indicates greater perceived
unethicality. A lower rank sum indicates greater perceived
unethicality. suggests that the fake film critic is perceived as
significantly less ethical than all other ads. The ad using the
image of MLK to sell a product is perceived as significantly
more ethical than the marketing of Sunny Delight, the low-price
guarantee ad, and the fake film critic ad. The frequent gambler
card promotion is perceived as significantly more ethical than
the low-price guarantee ad and the fake film critic ad. The
marketing of Sunny Delight is perceived to be significantly
more ethical than the fake film c---Discussion of Part 1 The
objective of part 1, to present a group of ads or promotion
tactics with varying degrees of ethicality, was generally
achieved. The reader may read each ad or promotion stimulus
and compare their judgment of the stimulus to that of
respondents and note differences or similarities. Through a
comparison of each ad or promotion practice with the published
codes of ethics of the AAF and AMA, as well as the three moral

principles of the Vatican Pontifical Council for Social
Communication, it was hypothesized The objective of part 1, to
present a group of ads or promotion tactics with varying degrees
of ethicality, was generally achieved. The reader may read each
ad or promotion stimulus and compare their judgment of the
stimulus to that of respondents and note differences or
similarities. Through a comparison of each ad or promotion
practice with the published codes of ethics of the AAF and
AMA, as well as the three moral principles of the Vatican
Pontifical Council for Social Communication, it was
hypothesized --least unethical ad. The results of the rating and
ranking exercises support H1. PART 2 PART 2 The ad rated the
most ethically offensive in part 1 was selected as the scenario
stimulus for part 2, and four alternative advertiser response
strategies were compared for their ability to recapture goodwill.
Sample A convenience sample of students was obtained from
sections of an undergraduate Principles of Marketing course
different than those used in part 1. Ad stimuli were presented to
students individually in a paper questionnaire format during
class, and quiet time was allowed for the completion of the
questionnaires. A total of 120 questionnaires were distributed
and 107 usable questionnaires were received. The respondents
on the deleted questionnaires missed a multiple-choice
manipulation check, asking them to -The Questionnaire The
fake film critic ad stimulus was presented to respondents first,
and they filled out a series of scaled items on the same page
addressing their attitude toward the advertiser (the movie
studio). The next page presented a stimulus labeled “the studio
response,” and this was immediately followed by the same
series of attitude scales encountered on the previous page. The
remainder of the questionnaire consisted of a manipulation
check, in multiple-choice format, and items addressing gender
and age. Stimuli The wording of the fake film critic stimulus
was as presented in part 1, except that the last paragraph,
summarizing the “pro” and “con” arguments of the ethical issue
did not appear. The truncated fake film critic stimulus reads as

follows: Ads for a new movie from a major Hollywood studio
contain glowing reviews from film critic, David Manning of the
Ridgefield Press. There’s just one problem. This weekly
newspaper does not have a film critic, and there is no David
Manning. Studio executives admitted to having “invented” a
film critic to give their film positive reviews after the scheme
was discovered by a Newsweek reporter. One of four different
studio responses appeared on the next page. The “no comment”
response was worded as follows: Following the Newsweek
report, the movie studio issued a statement saying they had “no
comment.” The “excuse” response was presented as follows:
statement saying that severe competition in the movie industry
forced them to use aggressive marketing tactics. The studio said
that their actions were no worse than what other studios have
done. -The “apology and corrective action” response appeared
as follows: Following the Newsweek report, the studio issued a
public apology for the incident, announcing that two advertising
executives have been reprimanded and suspended without pay
for their part in the scheme. Further, the studio said it had
created checks and balances in its advertising procedures to
ensure that such an occurrence will not happen in the future.
Finally, the “justification” response was worded as follows:
statement saying that their movie went on to become one of the
top-20 box office hits of the year. The studio feels that their
aggressive marketing tactics should not be questioned since the
movie was so popular. That is, the public acceptance of the
movie suggests that the aggressive promotion of the film did no
harm. Measures Scales measuring the construct of attitude
toward the advertiser appeared on the same page as each
stimulus, immediately following the initial fake movie critic
stimulus as well as the studio response. That is, the same
measures were repeated. The construct was measured by a series
of four scaled statements (−4 through +4) anchored by strongly
disagree and strongly agree. The complete wording of each

scale stem appears in the Appendix. To avoid dealing with
negative numbers, responses were recorded 1 through 9; a
higher number indicates a more favorable attitude toward the
advertiser. The dependent variable was computed as the average
-Results Measures. The scale items accompanying each stimulus
were examined separately with principal components factor
analysis and reliability coefficient determination (Cronbach’s
α).The factor loadings, levels of explained variance, and
reliability for the measures are within recommended 41
guidelines.42 Analysis of Variance. Group means at both time 1
and time 2 are shown in Table 2. There were no significant
differences among the groups at time 1 (after respondents had
read the fake film critic stimulus but before the studio Since all
four groups were responding to the same stimulus at time 1, no
significant differences would be expected. Analysis of time 2
data revealed that the apology and corrective action response
was significantly more effective than the other response options
in enhancing attitude towarresponse).43 advertiser.44 Other
Analysis. Since dependent variable measures were captured at
both time 1 and time 2, paired t-tests may be performed to more
finely examine the data. As shown in Table 2, this perspective
suggests that both the excuse and apology and corrective action
responses were able to significantly enhance attitude toward the
advertiser.45 Discussion of Part 2 The objective in part 2 was to
compare alternative advertiser response strategies to an
unethical ad for the ability to recapture lost goodwill.
Attribution theory and past research suggested that the apology
and corrective action response would be the most effective of
the four, and this was stated as hypothesis 2. The results
support H2, The objective in part 2 was to compare alternative
advertiser response strategies to an unethical ad for the ability
to recapture lost goodwill. Attribution theory and past research
suggested that the apology and corrective action response would
be the most effective of the four, and this was stated as
hypothesis 2. The results support H2, TABLE 2 Attitude
Toward the Advertiser After an Unethical Ad (Time 1) and

Following Different Advertiser Responses (Time 2) Mean
Paired Significance Response n Time 1 Time 2 Difference t-
value (P-value) No comment 27 2.49 ± 1.67 2.31 ± 1.26 0.19
0.86 0.399 Excuse 29 2.07 ± 1.32 3.10 ± 1.84 1.03 4.18 < 0.001
Apology and corrective action 24 1.98 ± 0.97 5.19 ± 2.24 3.21
6.32 < 0.001 Justification 27 2.34 ± 1.41 2.70 ± 1.58 0.36 2.24
0.034 Note: Values in time columns are means plus or minus
standard deviations. A higher rating in the time columns
indicates a more favorable attitude. BUSINESS AND SOCIETY
REVIEW but they also suggest that the “excuse” response was
significantly effective in boosting attitude toward the advertiser.
Interestingly, a “no comment” response resulted in a negligible
loss in attitude toward the advertiser. GENERAL DISCUSSION
GENERAL DISCUSSION The general objectives of this study
appear to have been achieved. Part 1 presented a series of five
ads or promotion practices of varying degrees of ethicality to
respondents and asked them to rate each for ethical
transgression. These stimuli were reproduced in their entirety to
allow readers to review each stimulus and compare their ethical
judgment against that of others. Respondent ratings of the ads
generally paralleled the degree to which the ads violated the
American Advertising Federation’s “Adverti-In part 2 of this
study, the ad chosen in part 1 as the most ethically offensive
was used as an initial stimulus and four alternative
communication strategies were compared for their ability to
recapture goodwill toward the advertiser. The apology and
corrective action response by the advertiser was hypothesized to
be the most effective of the four strategies, and this hypothesis
was supported by the results. Conceptually, the superiority of
this response strategy is largely due to its ability to counter th--
--The paired t-test analysis revealed that the excuse response
also significantly enhanced attitude toward the advertiser after
the unethical ad, although to a much less degree than the
apology and corrective action response. Conceptually, the
excuse response is a reduction in offensiveness strategy,
pointing a finger at the movie industry as a whole, and saying

that the advertising tactic was necessitated by severe
competition. A corollary of attribution theory, the discounting
principle, suggests that giving The paired t-test analysis
revealed that the excuse response also significantly enhanced
attitude toward the advertiser after the unethical ad, although to
a much less degree than the apology and corrective action
response. Conceptually, the excuse response is a reduction in
offensiveness strategy, pointing a finger at the movie industry
as a whole, and saying that the advertising tactic was
necessitated by severe competition. A corollary of attribution
theory, the discounting principle, suggests that giving
explanation for the unethical ad (similar actions by the
competition) allows readers to discount the idea that the
company would normally have engaged in an unethical practice.
The other responses tested (the “no comment” response and the
“justification” response) have no real theoretic basis for
enhancing attitude toward the advertiser, and it is not surprising
that they were not effective. -Limitations Perhaps the greatest
limitation of this study is the fact that brand names were not
mentioned in the ad stimuli. The rationale for not including
brand names is the belief that they would have triggered brand
associations and emotions and this could have biased the
responses obtained. That is, the response would be a
combination of attitude toward the brand and the perceived
ethicality of the ad or marketing practice in question and not
just the latter. Certainly, research has shown that brand
commitment modpublicity.46 -Two additional limitations are
worthy of mention. The first is the likely demand effect induced
by the repeated measures in part 2. That is, subjects may have
recognized that what intervened between the two sets of
measures was intended to change their responses, and this may
have biased their answers. This criticism is muted somewhat by
the presence of four experimental groups and widely varying
mean responses. The last limitation to be addressed is the
capture of subject responses at only one point in time-
Managerial Implications As noted earlier, the ethicality of

advertising is not just a moral issue. Research has shown that
perceiving an ad to be unethical significantly and negatively
impacts attitude toward the ad, attitude As noted earlier, the
ethicality of advertising is not just a moral issue. Research has
shown that perceiving an ad to be unethical significantly and
negatively impacts attitude toward the ad, attitude toward the
brand, and purchase The results of the present study suggest
that an advertiser accused of an unethical ad should respond and
that the optimum response is one that will refute the
fundamental attribution error and counter the negativity effect.
intention.47 Given that a minority of firms that have
organizational codes of ethics include guidelines for ethical
advertising and that the ethical judgments of respondents in this
study generally paralleled the guidelines outlined by the AAF
and the AMA, companies may wish to consider incorporating
the ethical guidelines of these two groups into their
organizational codes of ethics. 48 -Managers are also urged to
pretest ads among a variety of groups before they are sent to the
media. For example, the television ad used as the opening
vignette for this paper (the ad using MLK to sell a product) was
not pretested among minority groups prior to The advertiser,
Alcatel, believed that obtaining the consent of Dr. King’s estate
to use his image subsumed any need for testing. The ad resulted
in a number of protests, including one from Julian Bond,
chairman of the National Association for the Advairing.49
history.50 The relationship among advertisers, advertising
agencies, and the media is also worthy of note. A possible
diffusion of responsibility for ethical standards among these
three entities was mentioned earlier as a possible cause for
unethical marketing practices. This conclusion is supported by a
recent study that conducted detailed interviews with advertising
agency personnel and asking how they deal with ethical The
authors report that many advertising agency employees have
moral myopia (a distortion of moraissues.51 Future Research
Additional research on the ethicality of advertising may wish to
focus on responder factors such as level of brand commitment

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