the impact of regulation on advertising: a content analysis

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Harold H. Kassarjian and Waltraud M. Kassarjian The Impact of Regulation on Advertising: A Content Analysis ABSTRACT. This paper reports the results of a formal content analysis of claims made in advertisements found in 16 consumer magazines for four product categories -- antiperspirants, skin lotions, prepared foods, and pet foods -- before (t970), during (1976), and after (1984) the spurt of regulatory activity in the US. The results suggest that significant changes were evident in types of claims made and the manner in which advertising claims were presented. If causality can be claimed, one can conclude that the regulatory program was moderately successful. In 1976 consumers were provided less information, but it was of better quality than in 1970. However by 1984 the various trends seem to suggest that advertisers are returning to their pre-regulation ways. In the US, the past twenty years have witnessed massive changes in the regulatory climate of advertising for consumer goods and services, particularly in the hands of the Federal Trade Commission. From the neglect of the 1950's, an era of stringent regulation of advertising emerged by the mid-1970's. At that time, Miles Kirkpatrick, Chairman of the Federal Trade Commission, stated, "There is little doubt that the FTC, once known as 'the little old lady of Pennsylvania Avenue,' has now entered a new era. For that 'little old lady' has now put on tennis sneakers with cleats." Several programs were aggressively created and enforced: counter- advertising, corrective advertising, and affirmative disclosure, among others. In June 1971, the Commission announced the advertising substantiation program -- advertisers must have available all docu- mentation, proof, and substantiation for claims that purport to be based on objective evidence. And that proof must exist before the claim is advertised. Industry after industry -- from air conditioners and television sets to suntan lotions and hair shampoos -- were asked to supply the evidence. In the belief that such information should be available to con- sumers, copies of this material, often voluminous in nature, were then deposited at the several Federal Trade Commission offices through- out the country. As might be expected, few consumers, indeed, Journal of Consumer Policy 11 (t 988) 269--285. © 1988 by KIuwer Academic Publishers.

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Harold H. Kassarjian and Waltraud M. Kassarjian The Impact of Regulation on Advertising: A Content Analysis

ABSTRACT. This paper reports the results of a formal content analysis of claims made in advertisements found in 16 consumer magazines for four product categories -- antiperspirants, skin lotions, prepared foods, and pet foods -- before (t970), during (1976), and after (1984) the spurt of regulatory activity in the US.

The results suggest that significant changes were evident in types of claims made and the manner in which advertising claims were presented. If causality can be claimed, one can conclude that the regulatory program was moderately successful. In 1976 consumers were provided less information, but it was of better quality than in 1970. However by 1984 the various trends seem to suggest that advertisers are returning to their pre-regulation ways.

In the US, the past twenty years have witnessed massive changes in the regulatory climate of advertising for consumer goods and services, particularly in the hands of the Federal Trade Commission. From the neglect of the 1950's, an era of stringent regulation of advertising emerged by the mid-1970's. At that time, Miles Kirkpatrick, Chairman of the Federal Trade Commission, stated, "There is little doubt that the FTC, once known as 'the little old lady of Pennsylvania Avenue,' has now entered a new era. For that 'little old lady' has now put on tennis sneakers with cleats."

Several programs were aggressively created and enforced: counter- advertising, corrective advertising, and affirmative disclosure, among others. In June 1971, the Commission announced the advertising substantiation program -- advertisers must have available all docu- mentation, proof, and substantiation for claims that purport to be based on objective evidence. And that proof must exist before the claim is advertised. Industry after industry -- from air conditioners and television sets to suntan lotions and hair shampoos -- were asked to supply the evidence.

In the belief that such information should be available to con- sumers, copies of this material, often voluminous in nature, were then deposited at the several Federal Trade Commission offices through- out the country. As might be expected, few consumers, indeed,

Journal of Consumer Policy 11 (t 988) 269--285. © 1988 by KIuwer Academic Publishers.

270 Harold H. Kassarjian and Waltraud M. Kassarjian

availed themselves of the opportunity. The primary users of the deposited material appeared to be an occasional competitor and a few interested researchers and professors. In some, but not all cases, the FTC staff would examine the submitted data searching for false or deceptive claims that might then lead to a lawsuit. More typically, it was felt that requesting the substantiation and having it publicly available would lead to more accurate advertising and to better consumer decisions. The FTC felt that public disclosure would also enhance competition by encouraging competitors to challenge adver- tising claims which have no basis in fact (36 Federal Register 12,058; 1971). For further details and references on the advertising substanti- ation program, see Healey (1978).

The advertising industry reacted with great consternation toward the entire program. Advertisers simply did not wish to be responsible for the substantiation of the various claims made in the advertise- ments. Some industry spokespeople (e.g., Blore; as quoted in Business Week, June 10, 1972, p. 50if) observed that advertisers were gripped with fear of investigation and that commercials were changing to "plain pap"; that advertising would become less informative and advertisers would shift to meaningless puffery. Others (e.g., Loevinger; as quoted in Fortune, July 1972, p. 70if) predicted an opposite trend, that all ads would begin to read like a Security Exchange Commission prospectus for a stock offering: all dull boring facts and disclaimers.

By the late 1970's and the 1980's the political climate again had changed, now from tough enforcement of regulation to an era of deregulation. Advertisers felt that being saddled with the responsi- bility of having proof of claims available was onerous. The political theorists and conservative economists now in positions of power felt that truth in advertising and appropriate protection of the consumer is best served not by government regulation but rather by a free market. Those firms which did not provide information desired by the consumer would cease to exist in an unencumbered marketplace. Liberal theorists, of course, disagreed and felt that without appro- priate and vigorous regulation, many advertisers would revert to their pre-regulation claims with poorer quality information being presented to the consumer. Nevertheless, under President Reagan's administra- tion, the "little old lady on Pennsylvania Avenue" had not only removed her cleats, but the tennis shoes were traded in for ballet slippers.

Regulation of Advertising 271

In fifteen years, regulatory conditions had shifted from benign neglect to vigorous enforcement to deregulation. The purpose of this study was to examine the content of advertising during this period and draw conclusions about the impact of the political climate on advertising. This paper reports the results of a content analysis of claims made for four product categories -- antiperspirants, skin lotions, prepared foods, and pet foods -- before, during, and after the spurt of vigorous regulatory activities of the Federal Trade Commis- sion in the 1970's. The years chosen were 1970, almost two years before the advertising substantiation program; 1976 during its most active enforcement; and finally eight years later, 1984, after half a decade of deregulation.

The first phase of the study was conducted in 1977 (Healey & Kassarjian, 1983) and focused upon a comparison of the years 1970 and 1976. The present study was conducted in 1985--86, and is referred to as the 1984 study. It draws comparisons of 1984 adver- tisements with the earlier results.

HYPOTHESES

During periods of vigorous regulation, industry could avoid the expense and adverse publicity of a governmental investigation and trial by simply making very few claims. For example, an ad with nothing but a neutral background, the picture of an automobile, and the words "The New Volvo," was unlikely to be challenged as deceptive or be a candidate for an advertising substantiation inves- tigation. If few claims are made or implied, there would be little opportunity to be deceptive. The first hypothesis claims that advertis- ing within industries from which substantiation was demanded would include fewer claims than before the program was implemented and fewer claims than advertising within similar industries which had not been required to provide substantiation. In other words the effect of substantiation orders would be to reduce the number of claims made.

Once the regulatory climate ended it was hypothesized that advertisers would revert to their pre-regulation ways and the number of claims would increase, that is a U-shaped curve was hypothesized.

HI: The number of claims made in 1976 advertisements would be less than those made in 1970, and would once more increase in

272 Harold H. Kassarjian and Waltraud M. Kassarjian

1984. The effect would be more pronounced in those industries that were required to provide substantiation than in similar, but non-targeted industries.

Further, it is reasonable to expect that the type of claim made would also be affected. Before 1971 an advertiser for a mouthwash might have claimed that it lessens the severity of colds while after the program a safer claim might be that it is mint-flavored or comes in several sizes. The earlier claim would have to be supported by scientific tests and could lead to a lawsuit while the latter one of taste or size is inherently verifiable and safe from regulatory activity.

As pointed out above, a second conjecture, based on the com- ments of industry spokespeople at the time, is that industries would polarize their reactions to this governmental program. Some felt the ads would contain nothing but gross exaggerations and puffery while others felt that advertisers would react with cautious footnotes and disclaimers. An advertiser could avoid governmental interference either by making claims of which evidence would be presented in the ad ("Our mouthwash has the color of fresh green mint") or by making exaggerated claims for which no verification is possible. The claim, "Dial soap kills twice as many bacteria" might require verification, but "Dial soap looks as fresh as you feel," would not. Hence the second hypothesis was that advertising within industries from which substantiation was demanded would have handled verification in one of two extreme ways: either by providing inherent verifiability and verifying evidence or, at the other extreme, by making non-verifiable vague claims or puffery. It was assumed that by 1984 after the cessation of regulatory activity, the trends would reverse. Hence the second set of hypotheses:

H2a: The percentage of claims made in which evidence is pre- sented in the ad or is inherently verifiable will increase from 1970 to 1976 and decrease in 1984 -- an inverse U-shaped curve.

H2b: The percentage of claims which could have been scientifi- cally verified but for which no evidence is presented in the ad should be less for 1976 than 1970 or 1984. This type of claim is the stuff of governmental lawsuits and should have decreased in 1976 and increased by 1984 -- a U-shaped curve.

Regulation of Advertising 273

H2c: There should be an inverse U-shaped curve in the percentage of claims made which are vague, ambiguous gross exaggerations, or puffery. That is, there should be less vague puffery in 1970 and 1984 than in 1976 since it was safe in those years to make more substantive claims without having scientific evidence available.

Turning to the amount of informational cues available to the consumer, if fewer claims are made overall, and there is a decrease in factual claims and an increase in exaggerated claims, one would expect that the number of informational cues would decrease; that is, advertising would contain less information on which to base a purchase decision. On the other hand, if advertising were to become more concrete with more facts and verification, one would expect an increase in the level of informational cues. For hypothesis testing we presumed that there would be a U-shaped curve with information decreasing in 1976 and increasing by 1984 as advertisers became less fearful of unsubstantiated "facts."

H3: Advertising within industries from which substantiation was requested would provide a lower level of informational cues in 1976 than they had in 1970. By 1984 the number of information cues would again rise. Further, in 1976 these ads would be less informative than advertisements from industries without substan- tiation orders.

In addition to a comparison between years, a comparison between products is of interest. Two of the products examined, antiperspirants and pet foods, had received substantiation orders from the Federal Trade Commission, while the remaining two, skin lotions and pre- pared people food, had not. If differences emerged between the products targeted for substantiation and the control group of non- targeted products, that would be of significant interest (especially since all advertisers can be assumed to have been aware of federal regulatory activity and may even have shared lawyers and advertising agencies).

The major question of interest in the 1984 study was, "What changes had occurred in the ensuing 8 years since the earlier study was conducted? Had advertisers reverted to the prior style of content presentation or had the regulatory activity led to long term changes in the number of claims and types of claims made?"

274 Harold H. Kassarjian and Waltraud M. Kassarjian

METHODOLOGY

The methodology of this study is virtually identical to the 1977 study. Every attempt was made to keep the procedures as identical as possible so that comparisons could be made.

Selection of Products

Among all products receiving substantiation orders prior to 1977, those which did not advertise much in magazines and those with legal restrictions on advertising from agencies such as the Food and Drug Administration or the Environmental Protection Agency were elimi- nated (e.g., automobiles which must state miles per gallon in US advertising). From the remainder, two products were selected -- antiperspirants and pet foods.

Next, to serve as a "control group," comparison products, ones that had not been challenged by the government, had to be found. Using similar procedures, skin lotions and creams and prepared food were selected. Of course, it is possible that skin lotions and prepared food advertisers might be affected by actions against antiperspirants and pet foods (they might even have the same legal counsel or advertising agency), but any differences that did appear might still be meaningful.

Magazine Selection

Consumer magazines with circulations greater than 500,000 were designated as the "universe" for the selection process. Those with few or no ads for each product class in this study were then eliminated. From that list, the following magazines were randomly selected: Better Homes and Gardens, Cosmopolitan, Family Circle, Glamour, Good Housekeeping, Ladies Home Journal, Mademoiselle, McCall's, Newsweek, Parents Magazine, Readers Digest, Redbook, Seventeen, Sports Illustrated, Vogue, and Women's Day.

Selection of Advertisements

Every ad for every brand of the four products in 1970 and 1976 was then photographed on 35 mm slides and all duplicate ads eliminated. For the 1984 study, high quality color xerographic reproductions

Regulation of Advertising

TABLE I Number of Ads in Study

275

Product Class 1970 1976 1984 Total

Antiperspirants 38 69 26 133 Skin Lotions 69 66 55 190 Pet Foods 36 69 36 141 Prepared Foods 67 54 77 198

Total 210 258 194 662

were substituted for the 35 mm. slides. The reader is urged to turn to Healey and Kassarjian (1983) for further explication of the detailed methodology. The number of ads examined by product class by year are as presented in Table I.

Categories for Analysis

The function of content analysis is to categorize symbolic material into meaningful units using carefully applied rules. The categories used in this study are as follows.

1. Product claim. Does the ad contain a claim, statement, or

assertion about an attribute describing what the advertised product does? Lists of attributes were presented to the judges who were asked to extract all claims made in the copy and illustrations.

2. Verification. Three levels of verification were judged: a. Evidence Presented or Inherently Verifiable. These would be

advertisements that presented scientific evidence in the ad itself; or claims that are accepted as known facts lacking ambiguity - - self- evident, obvious, and clear. An example would be a claim stating that "The ABC research company in a nationwide probability study found that among single adults 30% preferred Brand A, 17% preferred brand B, etc."

An inherently verifiable ad would also be classified in this cate- gory; for example, claims about size, form, contents, color, or other characteristics that were obvious and inherently clear. The claim that Coca-Cola now comes in a two liter clear plastic container would be an example.

b. Sounds Verifiable but No Evidence. A claim with sufficient detail that it could have been verified but the evidence is not

276 Harold H. Kassarjian and Waltraud M. Kassarjian

presented. For example, "Dry Ban antiperspirant keeps you 20% drier than other brands." That claim could be measured in a labora- tory under scientifically controlled conditions. The claim, "More people use Right Guard Deodorant than any other brand," could be verified in a survey, but the evidence is not presented.

c. Vague, Ambiguous, Gross Exaggeration, Puffery. A claim so exaggerated that literal verification is not possible; e.g., "Brand X skin lotion will give you the softest skin in the world."

3. Level of Informativeness. The final category was defined, after Resnick and Stern (1977), as a measure of the number of cues contained in an advertisement. These include informational cues such as price, quality, performance, taste, safety, nutrition, or warranties. Judges were to indicate which cues were present.

Judges, recruited from university students, were each given about 20 ads for processing. Of the 662 ads judged, 37% were seen by at least 2 judges in order to determine reliability figures. With the high reliabilities that were obtained it was deemed unnecessary to have the remainder of the ads seen by more than one judge. The reliability or percentage of inter-judge agreement 1 for the study ranged from a high of 0.97 to a low of 0.82 depending on the year and category of analysis, averaging 0.90 -- a quite respectable figure (Kassarjian, 1977). The ads in the 1977 study were not rejudged in the 1984 study. There were no interesting or significant differences in relia- bility between categories or years.

RESULTS

Hypothesis 1: Number of Attribute Claims Made

The first hypothesis assumed that advertisers would protect them- selves by reducing the number of attributes claimed for a product; in other words, advertisements for targeted products would include fewer attributes than non-targeted products in 1976 as compared with 1970 or 1984. The mean number of attributes per ad are in Table II.

Ideally, the targeted products should have decreased in number of claims between 1970 and 1976 but not so for the non-targeted products. These data indicate no significant change in the number of claims made from 1970 to 1976 for the "control products" as

Regulation of Advertising

TABLE II Mean Number of Attribute Claims Per Ad

277

1970 1976 1984 Total

Targeted Products Antiperspirant 4.13 4.12 2.88 3.88 Pet Foods 5.36 4.00 3.78 4.29

Non-Targeted Products Skin Lotion 4.08 4.27 3.40 3.95 Prepared Foods 3.55 3.59 2.87 3.30

hypothesized. There was a significant decrease (p>0.001) in the number of claims made for one substantiated product, pet foods. Note however that the second test product, antiperspirants, did not evidence such a decrease. In 1976 pet foods had supported the hypothesis while antiperspirants did not. Perhaps, since pet foods were making more attribute claims in 1970 than antiperspirants, they had more room to maneuver.

In 1984, after deregulation, all four products dropped in the number of attribute claims made, the greatest drop occurring in the pesky antiperspirant product class (however, the change in pet foods from 1976 to 1984 was not significantly different at the 0.05 level). The hypothesized U-shaped curve did not emerge. If one can extrapolate from these data and assume causality, a risky assumption, the long run effects of advertising regulatory activity may be that advertisers will tend to make fewer claims. The number of claims made in 1984 were considerably less than in 1970.

Hypothesis 2: Verification of Claims

The second hypothesis stated that industries from which substantia- tion was demanded would handle verification of claims in one of two extreme ways, either by providing inherent verifiability and verifying evidence within the ad, or at the other extreme by making non- verifiable vague claims. These data are presented in Figures 1, 2, and 3 which follow.

Hypothesis 2a stated that there would be an inverse U-shaped curve in the percent of inherently verifiable claims made, increasing in 1976 and decreasing in 1984. The results in Figure 1 suggest that the number of claims that are inherently verifiable (e.g., "Dial Soap is

278 Harold H. Kassarjian and Waltraud M. Kassarjian

yellow in color") increased for both the test and the "control" products from 1970 to 1976 and it was more pronounced for the targeted product. (The change from 1970 to 1976 for prepared foods was not significant at the 0.05 level.)

These were the ads with information that was dependable, with proof in the ad itself. Unfortunately for consumerists, after deregula- tion, the 1984 ads seemed to revert to fewer such claims than were evident during the regulation era, in general supporting Hypothesis 2a. Note that the inherently verifiable claims increased between 1976 and 1984 for antiperspirants although the difference was not signifi- cant at the 0.05 level of confidence. The most dramatic change that is evident is in the prepared foods class between 1976 and 1984. That may have been caused by consumer demand for increased nutritional information which is not inherently verifiable.

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Fig. 1. Percent of claims made in which evidence is presented in ad or inherently verifiable.

Regulation of Advertising 279

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Fig. 2. Percent of claims made in which attribute sounds verifiable in laboratory or survey.

Figure 2 presents the percent of claims made in which the attribute sounds verifiable. The number of claims which sound verifiable, but were not verified (the stuff of FTC lawsuits; e.g., "Dial Soap kills twice as much bacteria") were hypothesized (Hypothesis 2b) to decrease in 1976 and increase in 1984 upon deregulation -- a U-shaped curve.

The percent of verifiable claims dropped in 1976 after vigorous

280

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Harold H. Kassarjian and Waltraud M. Kassarjian

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I I I

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Skin Lot ion s

A n t i p e r s p i r a n t s

Prepared Foods

Pet Foods

Fig. 3. Percent of claims made which are vague, ambiguous, gross exaggeration, puffery.

regulatory activity and as hypothesized the change was greater for the targeted industries than the not targeted ones (the change in claims between 1970 and 1976 for skin lotions was not significant).

By 1984, these sorts of claims that might have led to a govern- mental complaint at an earlier time significantly increased for all products except the troublesome antiperspirants. The U-shaped expectation was confirmed for the most part.

Turning to Figure 3 the results are more ambiguous. The expecta- tion (Hypothesis 2c) was that puffery, vague claims, and gross exag- gerations ("Dial Soap makes you look as fresh as you feel"), would increase in 1976 and decrease in 1984 -- an inverted U-shaped curve -- and that the effect would be greater for the targeted industries. Puffery did increase from 1970 to 1976 for the target products but stayed more or less the same for prepared foods and decreased for skin lotions. After deregulation, note that the targeted industries (antiperspirants and pet foods) significantly decreased the amount of puffery while skin lotions and prepared foods held steady

Regulation of Advertising 281

(the increase was not statistically significant). When taken as a whole, the amount of puff and ambiguous claims increased by 1976 and dropped back slightly by 1984. However the pattern among the several products are such that the inverted U-shape hypothesis cannot be verified.

Overall, these results seem to indicate that the tone of advertising claims changed in the studied years. Three years after the advertising substantiation program the number of claims that had evidence presented in the ad and ads that consisted of ambiguous puff increased, while the number of verifiable claims with no evidence decreased. Both these actions would lessen the probability of a government lawsuit. After deregulation there was some reverting to earlier ways. The inherently verifiable type ad and puffery decreased making room for claims that sound verifiable but in which the evidence was not presented and undoubtedly not available.

Hypothesis 3: Number of Informational Cues

The tlfird hypothesis postulated changes in the number of informa- tional cues provided in the advertisements. Information level was measured by a method developed for TV advertising by Resnick and Stern (1977; also see Healey, Fisher, & Healey, 1986). The mean number of informational cues are presented in Table III.

Resnick and Stern (1977), in April 1975, found that 49% of television commercials, contained at least one informational cue (51% contained none at all) with an average number of usable informa- tional cues per commercial less than 0.6. Healey, Fisher, and Healey (1986), using the same methodology, point out that the number of cues in television ads had increased to 3.1 and 3.8 during the early 1980's.

TABLE III Mean Number of Informational Cues

I970 i976 1984 Total

Targeted Products Antiperspirants 3.97 3.68 2.35 3.50 Pet Foods 4.31 3.96 4.25 4.12

Non-Targeted Products Skin Lotion 3.16 4.05 3.22 3.49 Prepared Foods 3.01 4.06 4.03 3.69

282 Harold H. Kassarjian and Waltraud M. Kassarjian

The Kassarjian and Healey (1983) results suggest that in the 1970's magazine advertising (for the selected products) contained considerably more informational cues (3.0 to 4.3) than could be found in TV advertising, but by the 1980's that difference seems to have disappeared according to the Healey, Fisher, and Healey data.

Turning to the results, it appears that the effects are opposite those presumably wanted by the FTC, i.e., an increase in the informational cues presented to consumers in advertising. We had hypothesized that the number of cues would decrease in 1976 and revert back in 1984, for less information might mean less legal liability. Indeed, by 1976, the targeted industries were giving less information to con- sumers (although the differences were not significant) while the non-targeted industries were providing significantly more informa- tion. By 1984 the picture of informational cues available in magazine advertising is mixed. Antiperspirants and skin lotions had signif- icantly fewer informational claims than in 1976, while pet and people food remained more or less the same (differences were not signif- icant). In short, the activists failed in creating advertising with more information either for the long term or in the short run. If anything, magazine advertising, at least for the targeted products, had become less informative in 1976 and even less so by 1984.

SUMMARY AND CONCLUSIONS

If one may take a great leap of faith and make generalizations about causality from three data points, some conclusions might be drawn. First, there was a change in the way product attributes were presented in magazine advertisements before and after the advertising sub- stantiation program. By 1976 there were more ads with inherent verification (Figure 1) and more ads that were ambiguous than in 1970 (Figure 3). Fewer ads were of the kind that are scientifically verifiable but without evidence being presented (Figure 2). In general, by 1984 all product classes, except for antiperspirants, had reverted to their earlier types of claims.

Meanwhile the level of informativeness of the ads between 1970 and 1976 dropped for the targeted products, at the time that the non-targeted industries were providing more information. That surely was not what government regulators had in mind. By 1984 antiper- spirants and skin lotions continued to drop in the number of informa-

Regulation of Advertising 283

tional cues presented while the remaining products showed minimal variation.

If causality can be claimed, one must conclude that the advertising substantiation program was moderately successful, or at least it seemed to have an impact on the industry as reflected in the content of advertisements. Generally, consumers were provided with less information, but it was of better quality.

The long run implications seem to point toward increased levels of regulatory activity. By the 1980's deregulation in the United States had freed companies from the fear of governmental lawsuits and the various trends seem to indicate that, in general, advertisers are slowly returning to their pre-regulation ways. As advertising becomes less and less informative and less reliable in substance and content, pressure from consumers for the government to do "something" should increase. Consumerism and vigorous consumer protection activity seems to emerge in 30 year cycles, and then return to periods of regulatory neglect.

The first of these was in the 1900's with the publication of Sinclair Lewis's book, The Jungle and passage of the Meat Inspection Act and the Food and Drug Act. Next came the heightened activity of the 1930's and the passage of numerous laws regulating advertising as well as other consumer protection activities. Following neglect during the War years, in the 1960's the consumer movement and advertising regulation emerged again; this time spurred by Rachel Carson's book, The Silent Spring, and Nader's Unsafe at Any Speed. The next spurt of activity should emerge in the mid 1990's if these 30 year cycles are a recurring event.

In addition, in the US, multi-million dollar civil false advertising lawsuits have become common in the 1980's. Companies that feel they have been unfairly treated in comparative advertisements are suing other companies. For example, cases in which producers of soft drinks and manufacturers of cosmetics have sued their competitors for disparaging claims in advertisements are well known. Recently one manufacturer of vitamins sued a large chain retailer of nutritional foods and vitamins for false advertising that claimed the retailer carried a wide assortment of the manufacturer's products when they did not. It was asserted that a consumer asking for the branded vitamin was being switched by the sales clerks to the retailer's private label. The settlement was in the millions of dollars.

The fact that civil suits have become far more expensive than

284 Harold H. Kassarjian and Waltraud M. Kassarjian

litigation involving federal regulators, bodes for significantly increased levels of regulatory activity in the coming years. The demand for vigorous regulation will come not only from the anti-business and consumerist sectors, but even more vigorously from advertisers and the world of business. The FTC and the Nader movement were far less expensive alternatives to the multi-million dollar lawsuits that are proliferating in this era of deregulation. Whereas a government lawsuit might cost a company some ill will and the cost of litigation, the civil lawsuits filed by competitors are often settled for tens of millions of dollars plus costs of litigation for both sets of attorneys. Further investigation in the 1990's will show whether our expecta- tions will bear out.

NOTE

1 Using for a reliability index the percentage of judgments on which coders agree out of the total number of judgments, has been criticized by Scott (1955). If the distribution of responses among categories is not equal, percentage agreement would suggest an inflated reliability figure. For example with 95% of the responses belonging to category A and 5% to category B one would get higher agreement by chance alone than if the split was 50/50. Also, by chance alone, agreement should increase as the number of categories decreases. One would expect better agreement on a two-category variable or scale than on a five-category variable. To correct for this Bennett, Alpert, and Goldstein (1954) and Scott (1955) have presented new reliability indices. However the literature in consumer research continues to follow the more conventional approaches to reporting reliability figures. Cursory examina- tion of the results in this paper suggest that the issues raised by Scott are not a problem, and that if the reliabilitY figures are inflated, it is not particularly serious.

REFERENCES

Bennett, E. M., Alpert, R., & Goldstein, A. C. (1954). Communications through limited response questioning. Public Opinion Quarterly, 18, 303-306.

Healey, J. S. (1978). The Federal Trade Commission advertising substantiation program and changes in the content of advertising in selected industries. University of California, Los Angeles, Graduate School of Management. Unpublished Ph.D. dissertation.

Healey, J. S., Fisher, M. E., & Healey, G. F. (1987). Advertising screamers versus hummers. Journal of Advertising Research, 26 (December), 43--49.

Healey, J. S., & Kassarjian, H. H. (1983). Advertising substantiation and advertiser response: A content analysis of magazine advertisements. Journal of Marketing, 47 (Winter), 107--117.

Kassarjian, H. H. (1977). Content analysis in consumer research. Journal of Consumer Research, 4, 8--18.

Regulation of Advertising 285

Resnick, A., & Stern, B. L. (1977). An analysis of information content in television advertising. Journal of Marketing, 41 (January), 50--53.

Scott, W. A. (1955). Reliability of content analysis: The case of nominal scale coding. Public Opinion Quarterly, 19, 321-325.

ZUSAMMENFASSUNG

Die Auswirkungen regulierender Maflnahmen auf die Werbung: eine Inhaltsanalyse. Zuniichst schildert der Beitrag mittel- und lfingeffristige Verfinderungen in der Haltung der amerikanischen Wettbewerbsbeh6rde (Federal Trade Commission) zur Werbung in den USA. Eine sehr liberale Einstellung seit den 50iger Jahren wurde um die Mitte der 70iger Jahre durch eine Phase starker Regulierung, unter anderem in der Form von gegen- und richtigstellender Werbung sowie einer Offenlegungspflicht, abgel6st. Mit Beginn der 80iger Jahre setzte erneut eine Phase der Deregulierung ein.

Desweiteren berichtet der Beitrag fiber eine empirische Untersuchung der Auswirkung dieser Ver~inderungen auf den Inhalt von Werbung, insbesondere auf die Art und Zahl von Produktaussagen. Die Analyse stiitzt sich auf 662 Anzeigen ffir die 4 Produktgruppen Deodorantien, Hautlotionen, Haustierfutter und Fertig- gerichte aus insgesamt 16 Zeitschriften der Jahre 1970, 1976 und 1984.

Die Studie kommt zu dem Ergebnis, dab die Politik st/irkerer Regulierung der Werbung ziemlich erfolgreich war. Zwar enthielten die Anzeigen des Jahres 1976 eine etwas geringerc Anzahl informativer Produktaussagen, diese waren aber von besserer Aussagekraft als die des Jahres 1970. Die Daten ffir die Werbeanzeigen des Jahres 1984 deuten darauf hin, dab diese Entwicklung wieder rficklfiufig ist.

THE AUTHORS

Harold H. Kassarjian is a professor at the Anderson Graduate School of Manage- ment, University of California, Los Angeles, California 90024-1481, USA. Waltraud M. Kassarjian is a psy~:hologist, 8968 Gothic Ave., Sepulveda, California 91343, USA. The authors are indebted to Priscilla H. Wright for much of the clerical work and for conducting the judging sessions in this study; and to Rajeev Kohli for his insights into data analysis. The Editors of the journal were most helpful bringing this work to fruition.