Adcreep

The Case Against Modern Marketing

Mark Bartholomew

• Publisher: Stanford Law Books
• Year: 2017
• ISBN:
  9781503602182
• Edition: 1
• Topic: Droit
• Subtopic: Droit de la propriété intellectuelle

Advertising is everywhere. By some estimates, the average American is exposed to over 3, 000 advertisements each day. Whether we realize it or not, "adcreep"—modern marketing's march to create a world where advertising can be expected anywhere and anytime—has come, transforming not just our purchasing decisions, but our relationships, our sense of self, and the way we navigate all spaces, public and private.

Adcreep journeys through the curious and sometimes troubling world of modern advertising. Mark Bartholomew exposes an array of marketing techniques that might seem like the stuff of science fiction: neuromarketing, biometric scans, automated online spies, and facial recognition technology, all enlisted to study and stimulate consumer desire. This marriage of advertising and technology has consequences. Businesses wield rich and portable records of consumer preference, delivering advertising tailored to your own idiosyncratic thought processes. They mask their role by using social media to mobilize others, from celebrities to your own relatives, to convey their messages. Guerrilla marketers turn every space into a potential site for a commercial come-on or clandestine market research. Advertisers now know you on a deeper, more intimate level, dramatically tilting the historical balance of power between advertiser and audience.

In this world of ubiquitous commercial appeals, consumers and policymakers are numbed to advertising's growing presence. Drawing on a variety of sources, including psychological experiments, marketing texts, communications theory, and historical examples, Bartholomew reveals the consequences of life in a world of non-stop selling. Adcreep mounts a damning critique of the modern American legal system's failure to stem the flow of invasive advertising into our homes, parks, schools, and digital lives.

1

Advertising on Trial

IN THE 1930s, Americans were confronted with startling evidence of the mendacious nature of early twentieth-century advertising. The U.S. Senate held hearings on a potential new law regulating food and drug advertising, the first major legislation in this area since the pioneering Pure Food and Drug Act of 1906. To illustrate the deficiencies of the current regulatory regime, Food and Drug Administration (FDA) inspectors supplied Congress with an exhibit showcasing the harmful and fraudulent products being freely sold in the marketplace. One example was Lash Lure, an eyelash dye that its manufacturer promised would benignly help its purchasers “radiate personality.” It turned out that the product was made from coal tar, a now well-known allergen. Use of the product caused infection in many women’s eyes, one case resulting in permanent blindness. In their exhibit, the inspectors included graphic photographs of one Lash Lure user’s now ravaged eyes. When First Lady Eleanor Roosevelt toured the exhibit, according to Time magazine, she came upon the Lash Lure display, pressed the grisly photos to her breast, and cried out, “I cannot bear to look at them!”¹

Dubbed the “Chamber of Horrors,” the exhibit created by the FDA inspectors became a sensation. It traveled from the Senate to the White House to the 1933 Chicago World’s Fair, and then on to various women’s clubs and other civic organizations across the country.² As the exhibit graphically demonstrated, advertising blatantly misled Americans as to the actual ingredients and effects of the products they purchased. Consumers in the 1930s faced a gauntlet of misleading labels, packages with false bottoms, and newspaper and magazine advertising chock full of fraudulent claims. Although a furious counteroffensive by the affected industries slowed the legislative push produced by the Chamber of Horrors, eventually new federal legislation was secured. Congress granted the Federal Trade Commission (FTC) new powers to issue cease-and-desist orders for false advertising. The 1938 Food, Drug, and Cosmetic Act allowed the FDA to set new standards for food and cosmetics labeling and impound offending products. Lash Lure was the first product forcibly removed from store shelves after the act’s passage.³

This chapter describes the evolution of U.S. advertising law. The legislative response to the Chamber of Horrors is just one example of a long-standing pattern involving advertising and legal reform in this country. Advertisers seize on opportunities provided by technological or social developments; lawmakers respond with laws and regulations designed to rein in what they deem to be predatory behavior. Early twentieth-century advances in transportation and industrial production allowed foods, health remedies, and cosmetics to be sold across the country to buyers who had little to no information about their sellers. The Chamber of Horrors starkly illustrated the dangers of leaving this system unregulated, and Congress reacted. Other episodes in the history of advertising regulation have left their mark as well, producing a host of rules and mechanisms that remain in place for restraining different objectionable marketing technologies and behaviors. After describing the various entities that populate the advertising law ecosystem, the chapter lays out three thematic fault lines that guided past regulatory responses and continue to influence this policy domain today.

The Advertising Law Ecosystem

The call and response of advertising and government regulation has occurred many times, not just in the 1930s. Before the Industrial Revolution, legal rules for advertising through trademarks were slow to develop. The law offered little protection for consumers who might be deceived by misleading uses of brand names. But as national brands emerged in the American marketplace in the late nineteenth century, courts pivoted, expanding trademark law to protect purchasers from mistaken purchases (as well as to shield the advertising investment of mark holders).⁴ In the early 1900s, mass marketers used photographic technology to suddenly thrust the faces of unaware individuals into national advertising campaigns. State courts responded by birthing a new “right to privacy” to prevent such activities. In the 1910s and 1920s, companies rushed in to take advantage of a new advertising space, public roadways, subjecting drivers to a scenery-obscuring billboard barrage. Municipalities fought back, adopting zoning laws that restricted roadside ads. In the 1950s, advertisers were accused of abusing the relatively new medium of television by broadcasting split-second commercials designed to stimulate subconscious sales. Public outrage triggered bans on the practice. After a period of federal legal desuetude coinciding with the Reagan presidency, state attorneys general began filing an increasing number of cases aimed at consumer protection, particularly with regard to harmful products targeted at the young. The most notable among these was the multistate litigation strategy that produced the Tobacco Master Settlement Agreement of 1998, which ended many established cigarette advertising strategies.

Not every new advertising move has been checked by a legislative or judicial counter. Sometimes new marketing strategies failed to inflame public sentiment. On many other occasions, political calculations defeated the objections of consumer groups or effectively neutered new advertising regulations. Nevertheless, the history of select legal interventions in the world of advertising is instructive. Each of the controversies mentioned above, like the uproar over the Chamber of Horrors, generated a new legal response. The sum total of these responses produced a constellation of interweaving regulatory provisions designed to calibrate the consumer-advertiser relationship and set the boundaries of acceptable advertising.

A number of different governmental and private actors make up this constellation. Foremost among government regulators is the FTC. It files suit to prevent egregious or particularly high-profile deceptive advertising practices. It also provides nonbinding guidance for advertisers, like its disclosure rules for bloggers endorsing products on social media.⁵ Other government agencies have enforcement powers against advertisers in specific fields. For example, the FDA (thanks to the Chamber of Horrors) regulates labels on food and beverage products while the Federal Communications Commission promulgates advertising guidelines for broadcasters.⁶ State attorneys general sometimes issue rules for specialized marketing strategies within their jurisdictions. Through private lawsuits, holders of intellectual property rights stop certain advertising behaviors by contending that advertising campaigns infringe their copyrights or rights to control use of their name or likeness.

For the most part, however, competitors, that is, other advertisers, are meant to be the main vindicators of American advertising law. Competitors can sue under trademark law, which prevents confusing and dilutive uses of a business’s trademark, and false advertising law, which is designed to prevent false and misleading advertising claims. Aggrieved businesses can also turn to the National Advertising Division, a private, voluntary self-regulation system administered by the Better Business Bureau.

Consumers themselves take little part in this regulatory apparatus. Rigorous standing requirements prevent consumers from taking on advertisers under either false advertising or trademark law. Individual state consumer protection laws and common law actions for fraud and breach of warranty provide a vehicle for consumers to sue advertisers directly. But the injuries contemplated by such laws are often minimal, often rendering individual litigation infeasible, and recent judicial interpretation of the procedural rules for aggregate litigation makes it increasingly difficult for large groups of aggrieved purchasers to successfully prosecute class actions against mendacious marketers.⁷ Instead, consumers have their battles fought through proxies, chiefly businesses concerned with neutralizing the competitive advantages their rivals attempt to secure through marketing. Regardless, the advertising law ecosystem is undeniably complex. Multiple actors exist to police what is fair and foul when it comes to the commercial blandishments we experience.⁸ Undergirding the decisions of these actors is a set of normative frames further complicating the question of advertising’s proper role.

Assessing the Consumer-Advertiser Relationship

There are three main stakeholders when it comes to advertising regulation: consumers, regulators, and the advertisers themselves. Assessments of these interest groups and their proper relationship to each other determine the scope of advertising regulation. These assessments are not stable; they vary depending on the theoretical currents of the time. Historical examples reveal changing visions of consumer rationalism, regulatory competence, and advertiser professionalism, visions that shaped the advertising law framework and continue to affect the kinds of ads we are exposed to today.

Consumer Rationalism

In 1931, a former bootlegger from Enid, Oklahoma, opened what was to become the most famous nightclub in the world. Sherman Billingsley’s Stork Club, just off Fifth Avenue in Manhattan, became the place to see and be seen as a who’s who of the rich, famous, and royal vied to pass through its doors. On the right night, one could rub elbows with Kennedys, Roosevelts, the duke and duchess of Windsor, Judy Garland, Ernest Hemingway, Ethel Merman, or Marilyn Monroe. Billingsley ran his establishment with a firm hand, buying out the New York mobsters who had initially financed the club, banning Humphrey Bogart and Jackie Gleason for what he deemed overly rowdy behavior, and fighting efforts to unionize the club’s employees. He also advertised heavily, spending hundreds of thousands of dollars to promote the club in newspapers, magazines, direct mail, books, national radio programs, and an early television series, as well as through the award of lavish gifts and Stork Club–branded merchandise. Billingsley’s marketing blitz worked. As one society writer of the 1940s described it, “To millions and millions of people all over the world the Stork . . . means fame; it means wealth; it means an elegant way of life among celebrated folk.”⁹

In 1945, Billingsley learned that a small tavern was operating in San Francisco’s notorious Tenderloin district under the name “Stork Club.” One didn’t patronize the San Francisco bar for its elegance or glamour. The tavern had a total of ten bar stools and served only the bare minimum of food to “conform with the law regulating the operation of bars.” Nevertheless, perceiving a threat, Billingsley pounced, hiring a pair of high-powered attorneys to sue for unfair competition and trademark infringement. At heart, their argument was that consumers were being misled, somehow associating the San Francisco dive bar with the glitzy New York City nightclub. The tavern’s proprietor argued that a reasonable onlooker would quickly realize that his modest establishment had nothing to do with the other. But a federal court in San Francisco disagreed, finding for Billingsley and interposing its own assessment of consumer thought: “One would not have to be uncommonly naïve to assume that even a ‘humble’ café at Turk and Hyde Streets, San Francisco, might be an unpretentious branch of a glittering New York night spot.”¹⁰

The Stork Club case illustrates a court attempting to answer a question at the heart of advertising regulation: How do consumers perceive advertising? In large part, the law of advertising is governed by legal hypotheses about the cognitive abilities and habits of consumers. Most of the advertising law ecosystem is built on the principle that advertising’s value lies in the informational signals it broadcasts to consumers. Because advertisers supply consumers with the facts needed to make informed purchasing decisions (price, location, product specifications), they are providing a social good, helping consumers choose the best resources available to them and, relatedly, fueling the development of more competitive markets.¹¹

But these facts need to be accurate. False information, instead of making the market run more effectively, throws sand in its gears, causing consumers to make purchases for the wrong reasons. Falsehoods can also destroy the incentives for investments in product quality and increase cognitive burdens on consumers. Because the San Francisco tavern was perceived to be falsely telling potential patrons that it was affiliated with the New York nightclub, it was enjoined from further use of the “Stork” name. One of advertising law’s main purposes is to screen the information provided to consumers, preventing misleading information from infecting the marketplace. The desired rigorousness of this screening process depends on one’s view of consumer psychology. The Stork Club case characterized consumers as spending little time evaluating brand names and contextual cues. Rather than bemoaning this view of the consumer as “a moron in a hurry,”¹² trademark doctrine has come to celebrate it, maintaining that the law in this area is meant to reduce consumer “search costs.”¹³ In line with this thinking, one court described the average consumer as follows: “He acts quickly. He is governed by a general glance. The law does not require more of him.”¹⁴ Similarly, the Stork Club court explained: “It may well be true that a prudent and worldly-wise passerby would not be so deceived. The law, however, protects not only the intelligent, the experienced, and the astute. It safeguards from deception also the ignorant, the inexperienced, and the gullible.”¹⁵

By envisioning a harried, unthoughtful consumer, judges reduce search costs by preventing conflicting trademark uses that might demand more care and attention on the part of shoppers. At other times, courts give consumers more credit for using their deliberative faculties. Like trademark law, false advertising law is meant to filter out bogus information that jeopardizes marketplace efficiency. It takes as its subject not the presentation of a brand name, but advertising involving factual claims. The provisions governing false advertising and trademark infringement appear side by side in the U.S. Code and are worded almost identically. But thanks to judicial interpretation, false advertising law operates under a different view of consumer decision making. It assumes greater consumer engagement, taking as a given that thoughtful consumers will not be swayed by outrageous boasts or patently unverifiable statements. Similarly, vague claims of superiority over another product or hyperbolic assertions are not actionable. In general, false advertising law posits a more discerning consumer, one who marshals her rational faculties to separate truthful from false advertising to the best of her abilities.¹⁶

Despite these differing approaches, a consistent theme emerges in the law of advertising of a rational consumer who looks to ads for information, not emotional sustenance. For judges evaluating false advertising claims, consumers are like Joe Friday, examining “just the facts” and ignoring noninformational content. Even in the trademark context, consumers may be harried, but only because they have other things on their minds and expect the brand names they see to be consistent sources of information as to source and product quality. The problem, however, is that the overwhelming majority of advertising contains little in the way of factual information. Marketers use atmospherics to tug at the heartstrings and stir up anxieties. Famous trademarks signal not just a product’s source of manufacture but status, prestige, and conspicuous displays of difference. Most advertising is designed not to inform but to persuade.

How should the law evaluate advertising that entices, insists, shouts, and flatters? Two views have emerged, radically different, and each dependent on a particular view of consumer rationalism. On one side is the argument that persuasive advertising directly influences consumers, causing them to consume in ways that are inimical to their own self-interest. For those holding this position, persuasive advertising is a threat to consumer autonomy. For example, in his work The Affluent Society, John Kenneth Galbraith...