Are Marketing and Ethics Mutually Exclusive?

Ethics in marketing is a hot topic that draws a fine line between right and wrong, depending on how you look at it. But what is right or wrong? There is inherent subjectivity within. So how does one figure out—objectively— what the best way is to take an adulterated and altruistic approach to planning an ethics roadmap for their brand—and living by it? It’s imperative it’s one that will guide all of their communications in a manner that will ensure ethics are upheld in the most transparent and consistent manner.

Ethical marketing is not so much a marketing strategy, rather, a philosophy that drives all marketing efforts. Ethics ought to also promote honesty, fairness and responsibility—in all communications—including advertising, marketing, PR, content, social, etc. Really, it’s any form or technique—traditional or digital—of selling to, or connecting with, consumers. And it most definitely needs stringency when it comes to minors. Ethics is a difficult topic to discuss, let alone arrive at any consensus, because of the subjective judgments everyone displays about what is ethical and what it isn’t.

Ethical marketing is not a clearly defined list of rules or regulations; rather, a guideline or framework to help companies evaluate their marketing strategies and tactics. They develop them in accordance to their culture, their belief systems, and their views on right vs. wrong. As mentioned, earlier, anyone can develop a set of ethics, but actually living by them is an entirely different story. And the latter is where most of the issues lie when it comes to brands and marketers. Not to oversimplify it, but it boils down to: Do vs. say.

Questionable, or perhaps outright unethical marketing practices, are rampant—in most, if not all, business sectors! From pharmaceuticals, to food and dining, to agriculture, to credit-scoring, to advertising itself, to politics, to law enforcement, to automotive and emissions, to recycling, to cosmetics, skincare and testing, to charity and transparency, to healthcare, to finance and trust, to energy, to news, to real estate and, to what has become the most important and high-profile concern: personal-data privacy. As you can see, the list is lengthy. And we all, in some form or other, have been adversely affected by unethical behaviours in marketing.

Ethical marketers exercise sympathy and emotion, while unethical ones exploit them. Some unethical marketing practices could, for example, include those who intentionally evoke sadness, empathy—even rage— to effect or manipulate consumer decision-making. Such widely used tactics as fear, targeting disadvantaged people, or trickery, including bait-and-switch, where brands advertise something that is not really available or at the price communicated, just to get customers to come in, at which point they pitch them with other more expensive products.

Bait-and-switch is an advertising technique, which can be—and oftentimes is—considered illegal. But in many cases it is looked upon as a dishonest practice by consumer protection agencies. A typical bait-and-switch practice includes advertised prices, which are exceptionally low in order to muster attention and motivate consumers to come into your store or visit your online channel, and then switch on them. That’s the “cheat” part.

Such practices are used by many brands, who, for myriad reasons, try to maintain shareholder value, sales and revenue targets, social corporate responsibility, etc. Some practices result in brands covertly, and diabolically carrying out campaigns and claims supporting their ethics in business. For example, VW allegedly misled and deceived customers with its advertising campaign, which it used to promote its supposedly “Clean Diesel” vehicles. But the truth was uncovered by the Federal Trade Commission (FTC). Consequently, VW were slapped with a $25B fine because it allegedly cheated on pollution emission tests, which needed to meet stringent environmental testing thresholds. Their marketing efforts supported this claim. Then the paying consumer and customer found out. Rage ensued because they were tricked into believing they bought from a socially conscious company. And they proudly did so based on this very belief. So you can see how ethics was a key and emotional issue here.

Before we dive into some examples, let’s take a moment to clarify what ethical marketing means and encompasses. There are issues around ethics that include respect for the environment; transparency and accountability; good and fair working conditions; fair-trade practices; gender equity; child and enforced-labour practices, to name but a few. Ethical marketing refers to the application of marketing ethics into the marketing process. A few of my sources—generally and briefly—state that marketing ethics refers to the philosophical examination of particular marketing issues that are matters of moral judgment.

To get a firmer understanding of ethics in practice, let’s look at some examples where brands live by a good set of ethics—overall, not just in marketing. TOMS, the shoe brand, https://www.toms.com/ was founded by Blake Mycoskie in 2006, following a trip to Argentina. During his visit, he saw, first-hand, how the impoverished were living—without shoes; something many of us likely take for granted. As a result, Mycoskie established his company with giving in mind.

He has donated 60M+ pairs of shoes to children in need all over the world. What’s more, TOMS’ eyewear division has donated 400,000+ pairs of glasses to those who are visually impaired and have no access to eye care. There are many more examples about TOMS’ “giving” nature. And his communications programs support these initiatives. But most importantly, TOMS follows through on their commitments!

Another example of ethical marketing from a brand that perhaps is not as widely known as some leading brands, is Dr. Bronner, a cleansing (soap) product company. We know there’s controversy around what brands use as their ingredients: Is it safe? Do they engage in animal testing? Does it harm the environment? Do the labelling of products include genetically modified ingredients?

These are just some of the questions that concern consumers, especially among the younger demographics such as Gen Z and Gen Y. They’re looking for brands who are socially responsible—and live by their claims; but also those who don’t assault them with ad messages which they have learned to pretty much ignore. Did you know that 92% of millennial consumers are more likely to buy products from companies who have ethical practices in place? And 82% of those consumers believe ethical brands do better than similar companies that lack or don’t have a firm commitment to ethical principles. These are big numbers; and brands not paying attention to them will experience drastic—and surprising—reductions in revenue, brand reputation and brand equity. All, very costly for brands to build, and take years to achieve.

Back to Dr. Bonner: So what’s unique about them? For starters, Founder, Emanuel H. Bronner established a book on ethics: The Moral ABC, an example would include raising environmental awareness, social injustices, the use of USDA-certified fair-trade ingredients, and equitable compensation such as that limiting executive pay to five times that of field-level employees. To put the last point into some perspective, Dunkin’ Donuts CEO, Nigel Travis, for example, said in 2015, that paying workers a minimum wage of $15 per hour was “absolutely outrageous” despite the fact that he personally earns about $4,889 per hour. Do the math; it’s incredulous!

Here’s a chart Dr. Bronner uses to gauge their ethics, engagement—and results:

“Everyone is a product of choices and circumstances. No one has power over circumstances, but each person has power over one’s choices.”  —Eric-Emmanuel Schmitt

As mentioned earlier, personal privacy, with e-commerce sites and online shopping, and other sites that ask for your personal information so you can use their app and pay, and where they can develop intelligence around your buying habits and preferences, is a big concern among consumers right now. Many e-commerce sites like Amazon, Walmart and Wayfair, among thousands more, as well as credit card companies like Visa, MasterCard and Amex, and merchants—online and off—like Apple and Shopify, and like Canadian Tire, Lowe’s, Best Buy and HBC, etc., all collect personal data. This collection provides them with intelligence and the ability to personalize offerings, and predict their customers’ next purchase, among other things. But consumer concerns are valid and justified, especially given how so many breaches have occurred over the past decade. And the breaches are getting bigger and bigger.

Most recently, in February 2020, Estée Lauder experienced a large-scale data breach. Locally, here in Toronto, just weeks ago in early 2020, The Beer Store in Ontario, Canada, also experienced a data breach that not many knew about. Consequently, they opted to cash-only transactions. Problem was, this happened during the Covid- 19 health crisis, so customers were perplexed, wondering why, during a time like this, were they asking for cash-only transactions. In 2017, Equifax experienced a data breach that exposed 147M personal records. Or what about Ashley Madison, the site that offers discreet encounters? The site, from my readings, exposed 32M records, which also resulted in some divorces. Others that had their customers’ databases breached, include Capitol One – 106M, Cathay Pacific – 9.4M, Dropbox – 68.7M, Facebook, on one of numerous occasions – 540M, Home Depot – 56M, JP Morgan Chase – 76M, and Microsoft – 250M, among many more. And counting! So you can see how prevalent it is. It’s become a serious problem. So consumers, depending on where in the world they live—some more than others, some less—all have a growing degree of apprehension toward parting with their personal information; it’s extremely private and personal data. But the issue with these perceived diabolic incidents, is what brands do with personal data. For example—and most problematic—is the selling to, or sharing of, your data with third parties.

But what is personal data or personal information? According to The Office of the Privacy Commissioner of Canada website https://www.priv.gc.ca/en/ at time of writing, it states the following criteria that define personal information:

• Race, national or ethnic origin, colour, religion, age or marital status
• Education, medical, criminal or employment history of an individual or information about financial transactions
• Any assigned identifying number or symbol
• Address, fingerprints or blood type
• Personal opinions or views except where they are about another individual
• Proposal for a grant, an award or a prize to be made to another individual by a government institution
• Private or confidential correspondence sent to a government institution
• The views or opinions of another individual about the individual
• The views or opinions of another individual about a proposal for a grant, an award or a prize to be made to the individual by an institution
• The name of the individual where it appears with other related personal information, and where the disclosure of the name itself would reveal information about the individual

Criteria on how personal data is used:

Regarding research itself, there are major ethical issues to consider:

1. Informed consent
2. Beneficence – Do not harm
3. Respect for anonymity and confidentiality
4. Respect for privacy
5. Transparency regarding use of personal information. What brands, third parties do with information
6. Ensuring those under eighteen years of age, are—in every regard—excluded from collection. Full stop!
7. Data collection must be completely voluntary.

Although this is a departure from marketing, I wanted to share this just to give you insight on how far some employers will go to collecting personal information. Regardless, albeit used and collected differently, for different purposes, marketing is not new to some of this. Here is what some employers in the U.S. do regarding collecting personal data on prospective employees, for example. According to Michael McFarland, SJ of Markkula Center of Applied Ethics at Santa Clara University, “[…] some employers collect data that would surprise many. For instance, potential employers have a great interest in the medical, financial and criminal records of applicants. They often request and receive such information.” https://www.scu.edu/ethics/focus- areas/internet-ethics/resources/unauthorized-transmission-and-use-of-personal-data/ “A congressional survey in 1978, for instance, found that 20 percent of the criminal history records given out by the states went to private corporations and government agencies not involved in criminal justice.”

January 28 is Data Privacy Day—recognized by countries around the world. Data Privacy Day highlights the impact technology has on privacy rights, and emphasizes the importance of valuing and safeguarding of personal information. The marketing community certainly takes this very seriously. But every year the day comes and goes. Does this mean those behind collecting the data can go back to unethical practices after a 24-hour reprieve? It has become very evident over the past decade that consumer fears surrounding personal data breaches, which include identity theft, money theft, and personal-information theft, and selling of same, landing in the hands of unknown, unscrupulous and unethical third parties. It happens every day, and consumers know this, and hear about it often in the news, online, on the radio and in the papers. It’s real and it happens—too often.

Among consumers, there is a growing expectation that brands will provide relevant and timely offers, information, personalization and improved experiences—all of which are reliant on collecting your personal data. But there is an ultimate purpose: these yield to brand advocacy. Consumers know this and they feel, somewhat, caught between a rock and a hard place; they feel cornered, so to speak, in having to give their personal information, or they have limited or no way of buying products they want, online. So what’s one to do? Well, like the masses, you trustingly give your information to marketers and brands, and hope all will be okay.

It’s all you have, really. Sure, those seeking restitution have somewhat been successful. Indeed, there have been lawsuits, and out-of-court payouts, but that doesn’t bring back your data from potentially unscrupulous parties. But is that really what one has to endure to buy something?

But, look, I’m not trying to bash or cast a negative light on marketers and brands—not at all. I mean I’m in the business, myself! But I do believe in ethics, I do believe in transparency, and I do believe in earning trust—and keeping it. But what I am doing is merely highlighting real-life cases where data—for marketing purposes—is collected, and how things go awry.

That said, I think a shift ought to happen where privacy should be about trust. Trust is a long-term thing, whereas privacy can only last a day, an hour, a transaction. It’s not merely about semantics; it’s about positively deepening the feeling and emotions of those who part with their personal data, and consistently delivering on ethics-based uses of it; not selling or sharing it with third parties; keeping it safe; and being honest and transparent. Because once data is let out of the bottle, there’s no getting it back in. The reality is many, if not most consumers, know that data is being collected about them. Consumers leave it behind like a popcorn trail with every card transaction, bank ATM visit, website we visit, and mobile phone call we make. In each and every one of these scenarios we send off signals that say something about our interests, our behaviours and our preferences.

So you can see how consumers are worried about parting with their data, or about data that’s already available, and therefore, vulnerable. But marketer data (like marketing content) is the new currency. They need it to better market to you—in a very targeted, timely and personalized fashion. That’s the goal. But the process in getting there, from a marketer’s perspective, is what separates ethical marketers from unethical ones. The more they know about you, the more they can curate their offerings to you. Personalization is a big trend right now, especially in retail. Amazon, for example, is a huge collector of personal data. And they work hard to use it to their benefit, so as to make the shopping experience relevant, timely, and personable—on a hyper-targeted, granular 1:1 level. All of this is written in the extensive “fine print” on websites or paper versions—all of which are never read by most because in modern commerce there’s an unwritten or unspoken understanding and expectation between brands and marketers—and their customers—that their data will be used ethically. That’s why most of us never read the terms and conditions before clicking, ‘I agree’.

There’s this kind of “blissful ignorance” or naiveté among consumers who simply assume brands will do right and be ethical just to keep their business. But is sharing of their data, which is written in the lengthy legalese as to what they can, and will, do with it, considered ethical because it is assumed you read it, but really don’t? There’s an element of trust and an element of blissful ignorance, so consumers move along the path-to-purchase. Their belief is, “I don’t think it will happen to me.” Until it does! Based on my research, 75% of consumers (three out of every 4), say they would take negative action against irresponsible or unethical brands. So brands need to be aware of these consequences where brand equity will be affected, trust diminished, and loyalty declined—all serious factors that can take years to rebuild, if at all.

Data should be used to benefit both parties—culminating a personalized experience that delights the customer, and the increased revenue and profit that benefits shareholders. Earning the respect and trust of customers and consumers at every point of contact, every transaction, is key. If brands and marketers put such processes in place, and truly understand the nature of their ethical responsibility, it’s a win/win.

There are governing bodies, professional organizations like Ontario Medical Association, Professional Engineers of Ontario, Ontario Bar Association, Association of Registered Graphic Designers of Ontario, that have ethics committees. Some have formal and stringent Legislation Bills to help mitigate, investigate, enforce or avoid unethical practices in their respective fields. But it still happens. So are these watchdog eyes enough?

What checkpoints or measures can be exercised to ensure absolute transparency? Is it even realistic? Is it supported? Are they up-front with their intentions? Does industry speak out of both sides of its mouth? Are there any companies that can claim they’re ethical? There are characteristics, which ethics comprise, such as stewardship, honesty, integrity and respect. I would opine that some institutions, companies, government agencies, non-profits, etc., may practice some of these, but I’m inclined to think many do not engage in all of these characteristics. So does being a partial supporter make one ethical? Or does one have to exercise all characteristics to be considered “ethical?” I mean, is anyone or any brand perfect? Can they be? Then, of course, there is the all-important profitability: What role does bottom-line reporting to shareholders play when it comes to answering to ethics? Is it a key motivator?

Ethical use in marketing-driven data:

We now live in a world of data-driven everything; it’s all around us. And there are varying levels of consumer trepidation. But it’s also an exciting place to be for consumers and marketers, alike. From ordering an Uber, to ordering in dinner, to purchasing movie tickets, to grocery shopping, to even finding a soul mate—everything is online these days. We live in a world of data-driven convenience for consumers. But with these new levels of conveniences and experiences, come new levels of responsibilities (hopefully ethical ones), for brands.

In Canada, ethics or moral philosophy is a branch of philosophy that involves systematizing, defending, and recommending concepts of right and wrong conduct. https://www.ourcommons.ca/Committees/en/ETHI

Ethics seeks to resolve questions of human morality by defining concepts such as good and evil, right and wrong, virtue and vice, justice and crime.

But…

Take Nivea, for example, a well-known German-based brand we regularly see on TV commercials (in Canada), https://www.youtube.com/watch?v=-zOfpBVQnes featuring, Tessa Virtue, promoting, “feeling good in your skin.” But in West Africa, the spot https://www.npr.org/sections/goatsandsoda/2017/10/20/558875377/nivea– ad-for-visibilty-fairer-skin-sparks-controversy-in-west-africa says communicates virtually an opposite message. It says it “[T]o visibly lighten [and care for] your skin.” But the issue is, the messages are fundamentally contrasting—for the same product: Feel good in your own skin vs. How to lighten your skin. Feel good vs. vanity. Hmm…

In West Africa—from Cameroon to Ghana and Senegal, there was call on social media for a boycott on Nivea products, and for the ads to be pulled, using the hashtag #pullitdownnow. Many described this ad as “racist, colourist and tone-deaf.” If true, is Nivea being unethical? Is their ad misleading? You decide. After all, principle aside, you are the consumer, and your threshold, tolerance and acceptance levels will determine if such practices are ethical. Or not. Perception is reality.

Then there is the controversy over animal testing use in the cosmetics industry. How many times in the last decade have we heard of brands claiming to be cruelty-free, and touting they use no animals in their testing? It’s become a marketing selling point and a key differentiator. But when it is not the case, is this considered covert manipulation? Is it a play on ignorance? According to https://www.peta.org/living/personal-care- fashion/beauty-brands-that-you-thought-were-cruelty-free-but-arent/ these companies, in China, allegedly still use animals in their testing. They include Estée Lauder, Maybelline, Mary Kay and Elizabeth Arden, among others.

Another example is L’Oreal. They don’t test on animals in the U.S., but allegedly, “[…] pays for testing in China, where experiments on animals are required for cosmetics.” But in North America, we probably don’t hear about this. In China, Internet walls are installed to block Chinese from seeing or hearing about western adoption of cruelty-free testing. As such, ethics—or lack thereof—continue to be exercised, all in the name of commercialism, capitalism and profit.

Yet, another: Uber, the ride-hailing service was caught red-handed after its drivers realized major discrepancies in pay: “[t]he FTC said Uber had “inflated” its hourly drivers’ earnings in online marketing and advertisements to attract drivers to its platform. “However, once drivers [had] begun to receive their paychecks, [d]rivers [had] discovered their actual earnings were substantially less than Uber claimed[…] For example, on Craigslist, Uber advertised drivers in Minneapolis could earn $18 per hour, and Boston drivers as high as $25 per hour. In both cases, however, less than 10% of Uber [drivers made] the advertised hourly rate.

And, still, according to The Telegraph article in February 27, 2017, “Energy drinks brand, Red Bull was claiming that the drink ‘gives you wings.’ https://www.telegraph.co.uk/news/worldnews/northamerica/usa/11155731/13m-lawsuit-proves-Red-Bull- doesnt-give-you-wings.html “The company settled the class action case by agreeing to pay out a maximum of $13 million—including $10 to every U.S. consumer who had bought the drink since 2002. The tagline, which the company has used for nearly two decades, went alongside marketing claims that the caffeinated drink could improve a person’s concentration and reaction speed.”

“Beganin Caraethers was one of several consumers who brought the case against the Austrian drinks company. He said he was a regular consumer of Red Bull for 10 years, but that he had not developed “wings,” or shown any signs of improved intellectual or physical abilities. Red Bull settled the lawsuit to avoid the cost and distraction of litigation. However, Red Bull maintains that its marketing and labeling have always been truthful and accurate, and denies any and all wrongdoing or liability.” One has to wonder.

How about “scientifically proven” or “guaranteed results?”

According to a Business Insider article https://www.businessinsider.com/false-advertising-scandals-2017-2 – activia-yogurt-said-it-had-special-bacterial-ingredients-2, “[a]ds for Danone’s popular Activia brand yogurt landed the company with a class-action settlement of $45 million in 2010, according to ABC News. The yogurts were marketed as being “clinically” and “scientifically” proven to boost your immune system and able to help to regulate digestion. The Activia ad campaign, fronted by actress Jamie Lee Curtis, claimed that the yogurt had special bacterial ingredients. As a result, the yogurt was sold at 30% higher prices than other similar products. However, the Cleveland judge overseeing the case said that these claims were unproven.”

Child labour

This form of labour is the most ethical part of Corporate Social Responsibility (CSR). It ought to be a key component of the CSR agenda of any business that has child labour in its supply chain. Brands that do not exploit children in their factories, fields, etc., do make this known to consumers. Sadly, this, too, in some cases, has become a differentiating factor for some brands, as they use it as a defence mechanism for the media, but also in their marketing communications plans.

Let’s define child labour:

International Labour Organisation (ILO), whose member states include myriad countries—from Austria, Afghanistan, Algeria, and Australia, to Chile, China, Canada and Croatia, to South Africa, Somalia, Sweden and Spain, to Ukraine, Uganda, USA, Uruguay, and so many more, defines child labour “as work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development.”

Basically, according to ILO it refers to any kind of work that is “mentally, physically, socially or morally dangerous and harmful to children; and interferes with their schooling by depriving them of the opportunity to attend school; obliging them to leave school prematurely; or requiring them to attempt to combine school attendance with excessively long and heavy work.”

A little back-story on the known beginnings of child labour: Sadly, it dates back to the Industrial Revolution occurring between 1712 – 1914. Children were considered effective labourers because of their small physical stature. Unlike adults, they were able to access places adults could not. In the colonies under European rule, mostly in Africa, governors promoted the use of child labour. Government administrations imposed head taxes on those who were older than eight. This levy helped factories legally recruit young children while at the same time, their adult parents could not work, with family living expenses. On this side of the ocean, in the U.S., child labour was also a common practice. So much so, in the 1900s eighteen percent of all workers in America were children. So child labour was quite prevalent.

Source: International Labour Office, 2013

The ILO, together with UNICEF, concluded that the primary cause of child labour is, indeed, poverty. Then child labour becomes a case of necessity—central, primary and crucial income for the family. That’s a lot of pressure on a little innocent person bearing the weight—literally and figuratively—of what an adult would be tasked to do in normal circumstances.

Marketing and child labour

Before we continue, let’s take a moment to watch these two PSA-type, eye-opening and emotional spots that try to educate and raise awareness about child labour’s rampancy: This one by Unicef: https://www.adsoftheworld.com/media/film/unicef_childlabour And this one by World Vision Canada: https://www.youtube.com/watch?v=vyGfVv6RI0k

The effects of child labour are many. Some are physical, while others are psychological. But both can be long-lasting—even permanent—if left untreated. Effects, include:

• A lack of a normal childhood and its pleasant memories
• Financial slavery
• Physical, psychological, and/or sexual abuse
• Inadequate nutrition, leading to possibly higher rates of diseases or small statures

So you can see why some brands that have child labour in their supply chain are silent about it. Somehow, sometimes, whether due to disaster, flooding, fire, child labour movements, etc., these companies’ practices get exposed. Then it becomes a PR nightmare for such brands. In today’s marketplace where tolerance is at an all-time low when it comes to unethical marketing practices, especially among the Gen Z and Y cohorts, you can appreciate what monumental issues some brands can—and do—face. But there is hope—a silver lining: There are many great brands, as mentioned above, that have never engaged in child-labour practices. Instead, they employ local or even international trade—fairly and equitably. Some of those brands, include:

1. https://consciouscoffees.com/
2. https://everlane.com/
3. https://patagonia.com/home/
4. https://lush.ca/en/home
5. https://barbour.com/us/

I researched many definitions on ethical marketing. And many were great. But I settled on Wordstream’s https://www.wordstream.com/blog/ws/2017/09/20/ethical-marketing definition because it’s so well written, and it encapsulates and defines the key and pertinent points of ethics in marketing. Here it is:

Ethical marketing relies on a long-term strategy of continuing education, campaigning, and activism. It’s about helping consumers make better, more conscious choices about the products they buy and the stores they frequent. It’s about changing the way we think about how goods are provided, the people who make and sell the things we buy every day, and the communities that rely on fair, ethical trade to survive. It’s about cultivating brand loyalty by aligning your organizational values with those of your ideal customers.

Ethics in marketing and advertising has become a very sensitive subject; it’s being amplified even more, especially in the last fifteen years, with younger cohorts demanding ethical marketing tactics from brands. In today’s complex and cutthroat retail world—online and offline—where brands fiercely compete for consumer attention, they’ve become very creative and resourceful in trying to win over consumers. As such, data (and content) has become the new currency. But sometimes marketers cross the line. But ignorance plays no favourable defence; nor do sympathy or empathy enter consumers’ minds. That said, in today’s digital world, those on the buying end need to be vigilant, leery, demanding, yet trusting, if they want to play in the same sandbox as the others. And those on the selling end, simply put, need to be transparent, ethical and scrupulous with their marketing and advertising—for the greater good.