Misleading advertising


The issue chosen for discussion is misleading advertising. Marketers are constantly looking for ways in which they can sell their commodities at a profit as some of them may employ ethical mechanisms to do so but others may resort to questionable methods. In response to this, a number of stakeholders in the Australian marketing scene have laid out some policies to prevent unethical marketing through misleading advertising.

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These issues shall be examined in depth in subsequent portions of the paper. However, these regulations may not eradicate all cases of misleading advertisement as will be highlighted through newspaper reports, journal articles etc. An overall conclusion will be given on the condition of misleading advertising in Australia and what can be done to curb such practices.

Why tackling misleading advertisement is important for business and society

Advertisements are a crucial aspect of any type of business because they promote products or let the public know about them. Consequently, when this route is exploited by unscrupulous businesses persons to mislead the public, then it may destroy the very image of advertising. When that occurs, the public may loose faith in advertising in general and this may hinder sales for vast numbers of companies. (Australian Competition and Consumer Commission, 2008)

It should be noted that the public can loose faith in advertising if they discover that large numbers of businesses are engaging in misleading advertisement. However, if the public or any other stakeholder fails to detect this, then it allows dishonest business men to offer promotions that they cannot deliver or to sell commodities that cannot function in the manner that they were supposed to. Consequently, this influences the consumer who may be affected either physically, psychologically or emotionally by this misconceptions. Aside from that, it is the right of the consumer to get value for his money. Misleading advertisement breaks the 1974 Trade and Practices ACT which requires that all advertisements be conducted in a manner that ensures fair-play so as to offer consumers due protection. (Chaples, 2007)

Additionally, misleading advertising is of interest to the country as a whole because if allowed to continue, then it would deteriorate the country’s business environment. Unscrupulous businesses would sell at the same level as honest businesses and this would violate marketing principles. Eventually, the overall marketing climate or the country’s economy may even begin to decline.

Stakeholder’s analysis

There are a number of issues that have been plaguing the marketing scene with regard to misleading advertisement. The first one amongst this is advertisements made to children. These advertisements are created in such a manner that they target individuals who do not have the capability of differentiating fact from fiction hence it can be argued that those advertisements are actually misleading. (EPM Communications, 2005)

Australia has instituted a number of laws intended on protecting children from misleading advertisements. This is because the country has outlawed advertisements during children’s viewing times. However, this does not mean that the entire practice has been curbed. In fact, there are still certain advertisements that are geared towards capturing the attention of young viewers even during other times. For instance, advertisements playing music or having jungles are likely to attract children who may then believe whatever those advertisements are telling them.

One such example is the case of milk advertisements to children. A number of milk companies claim that their products enhance performance during sports. This assertion has no scientific backing. In fact, some physicians have claimed that skimmed milk can actually heighten the chances of getting prostate cancer. These experts have asserted that the information should be included in product packages so as to protect various consumers from any health risks. (Kraak & Pelletier, 2003)

Additionally, certain advertisements use celebrities to endorse their products. By doing this, the products will be creating the impression that it is those food products that can cause one to live their dreams or live a celebrity-like life. Adults have the ability to differentiate between marketing and real assertions. They can understand that celebrity endorsements do not necessarily mean that the product can cause someone to become just like the celebrity. However, such complex reasoning may not be prevalent in children. They usually take things at face value and this misleads them into purchasing those items as they are.

Another interesting feature about advertisements to children is that most of them are usually done for products that are low in nutrients; these include breakfast cereals and other junk foods. Such foods are high in sugar and low in other essential nutrients. However, many companies do not include that information in their advertisements; instead, most of them assert that children should actually purchase the products so as to become healthy. This is very misleading and can cause children to become overweight or even obese. (Graeme, 2008)

In close relation to advertisement made to children is the issue of making assertions about certain commodities that may not necessarily reflect their true nature. For instance, many food companies are fond of this. They usually, call their foods light. In other words, such companies have two different versions of certain products. One product may be richer in fat or sugar while the other one which is called light is alleged to contain half the amount of fat or sugar in the original. This is misleading advertising because it causes people to believe that they are consuming products with high nutritional value or products with less harmful effects. This belief can actually lead to obesity because the products still have fats and sugars and these are not healthy.

In close relation to the latter example is the labeling of food as containing zero fat. This is also another gimmick that could cause dire consequences to the consumer because it does not necessarily mean that the item has no fat at all; it simply means that its fat content is lower than in other similar products. This means that when consumers continually purchase and use such food items, then they may still be subjected to the same health problems that their counterparts eating the non-low fat foods are. (Taras et al, 2003)

In certain circumstances, some companies may assert that the food they sell has no fat and this may actually be true. However, what those companies do not advertise is that their product has excess quantities of sugar; which is usually the case for most of these products. The overall consequence is that when consumers purchase these commodities, they end up taking as much calories as they would have if they had bought the original version. This is misleading advertising because it makes consumers believe that lacking fat implies lacking calories yet those products have a lot of sugar. Instead, these companies need to include such vital information for the public to understand it. (EPM Communications, 2005)

A number of companies have been engaging in misleading advertising with regard to their overall prices. A good example of such a company is one of Australia’s leading DVD renters and sellers; Video Enzy. The company had been in the news during the month of March this year because of engaging in misleading advertisements. The company had made claims that they would offer the cheapest prices in Australia for a certain period of time. The company has made these assertions in bold over their product package but they had attached some conditions to it. The conditions were written in very small print and could scarcely be read by whoever was interested in purchasing the item. The company has decided that they would beat lower prices at about a dollar.

The latter company had engaged in misleading advertising because they had designed their packaging in such a manner that it would confuse consumers. Most of them were attracted to the large prints and could not see the smaller prints written on their products. Consequently, these companies attracted many consumers on a false promise. This was the reason why the Australian Competition and Consumer Commission had to intervene in the situation. The Commission asserted that categorical statements made during any kind of advertisement must be substantiated in order to ensure that consumers are not confused by these assertions. Additionally, the Commission also felt that it was absolutely necessary for the clients to be informed about this. (Cannold, 2008)

Video Enzy was therefore obliged to send apologies through short text messages to all their customers. The company was also required to offer refunds for the price difference that arose out of the disparities between their offers and the true claims. These refunds were enforceable by the court of law. They depicted the fact that companies need to be held accountable for their actions especially with regard to advertisements that misled the public about prices. (Lawrence, 2008)

There are certain scenarios in which misleading advertising can occur in indirect methods. For instance, Pregnancy Counseling Australia has been guilty of engaging in misleading advertizing. Usually this company targets young women (or older ones in rare cases) who may be dealing with an unintended pregnancy. The latter organization is usually fond of telling these young women that they should consider

·         Parenting

·         Adoption

·         Other alternatives

Usually, the latter organization sends these advertisements to a series of general practice surgeons all over Australia. What the young women do not know is that Pregnancy Counseling Australia actually collaborates with Right to Life Australia and they even share mailing addresses. Consequently, the latter organization is engaging in misleading advertising because they are using another body to do their work for them

Another closely related issue is tied to many sporting clubs found all over the country. These sporting clubs usually claim that children can try out for the tam at certain points in time and then think of joining the team later. These advertisements create the implication that children need not be subjected to the kind of problems that are being encountered by others in relation to the enrollment process. Consequently, most of them go for those try outs thinking that they may actually get a chance of escaping the recruitment process. However, this is not what usually happens because those children who attend the try outs will eventually have to participate in the recruitment process and they will still not be able to escape the high stress scenario that is synonymous with the latter process. In other words, this is still misleading advertising. (Australian Competition and Consumer Commission, 2008)

Sometimes, misleading advertisements may not necessarily be linked to monetary gains for the companies under consideration. In other situations, those companies may simply be trying to gain status through those approaches. For instance, the issue of churches offering free meals to the homeless is another form of misleading advertisements. Such churches usually advertise that they are engaging in charitable acts where they are actually helping destitute persons or the like. Consequently, the target audience usually approaches these institutions with certain ideas in mind. However, when they reach the organizations, such persons are usually obliged to first attend church services before they can get their free meals. In other scenarios, these homeless people may be required to fulfill certain bible class obligations before being given any meals. While these advertisements are being created by nonprofit organizations, it still does not undermine the fact that it is an advertisement. This is because it is tailored to meet certain objectives which are geared towards the public.

Misleading advertising can also be depicted in political advertisements. Many people have examined this issue within the Australian context and have asserted that certain political advertisements can be considered as misleading ones. Australian politicians and other stakeholders have been trying to regulate this issue for the past two decades. In the nineteen eighties, some people tried to regulate the content of political advertisements by asserting that this should reflect the truth. However, this motion was ignored in parliament. (Catalano, 2004)

 During the country’s 2004 elections, the country was then forced to consider these matters again. At that time, the media group – Free TV Australia – had created certain rules that allowed political advertisements to contain whatever they wanted. These groups represented a series of commercial television stations within the country. It asserted that the political parties were given the permission to express themselves and that the accuracy of the information which they disseminated would not necessarily have to substantiated.

 It should be noted that political advertisements are a particularly sensitive issue because they are not included in the 1974 Act. Additionally, they are sensitive because they affect so many individuals who may elect their representatives based on the promises they made during their political advertisements yet those individuals may not have any intention of keeping them. This creates a problem because it does not relay true information and is therefore misleading. (Young, 2003)


There are a series of motivations that may cause individuals to engage in misleading advertising. Some may do it for monetary gains. These are usually tied to pricing strategies or they may also be tied to misguided information about the product content. Consequently, consumers end up purchasing items at a higher price or at a lesser quality than they had intended. In certain scenarios, misleading advertising may occur in order to boost an individual’s status as is the case with political advertising. Lastly, misleading advertising can occur in order to boost membership for instance through sporting clubs or church donations.


Catalano, C. (2004): Voters to be socked with $40m advertising blitz; Sydney Morning Herald, 30 August, p. 49

Young, S. (2003): Scare campaigns – negative political advertising in Australia; Australasian Political Studies Association conference report, University of Tasmania, Hobart, 29, p. 27

Kraak, V. & Pelletier, D. (2003): How marketers reach young consumers: Implications for nutrition education and health promotion campaigns; Family Economics and Nutrition Review, 11, 3, 31-41

EPM Communications (2005): TV Is the Most-Often-Used Source of Health Information; Research Alert, 16, 7

Taras, H., et al. (2003): Television’s Influence on Children’s Diet and Physical Activity; Developmental and Behavioral Pediatrics Journal, 10, 17, 68

Cannold, L. (2008): Submission to review of Australia’s Consumer policy framework, retrieved from http://www.pc.gov.au/ accessed on 15th October

Australian Competition and Consumer Commission (2008): Misleading advertising; retrieved from http://www.accc.gov.au/ accessed on 15th October

Graeme, S. (2008): Product development, misleading advertising and regulatory compliance; Australian Regulatory Compliance review, 12, 3, 45

Lawrence, C. (2008): Video Enzy apologizes over misleading advertising; Sydney Morning Herald, p 12, 12th May

Chaples, E. (2007): What now for misleading advertisers? The Australian, 22nd October2007

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