Monique Goodyer

What Are the Legal and Ethical Issues in Marketing

By: Monique Goodyer | May 28, 2015 | 
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What Are Ethical Issues in Marketing

By Monique Goodyer

The concept of marketing has existed since the start of time, but it recently has become an area of high contention where legal and ethical issues in marketing are dubious and ill-defined.

For example, when does data collection become an invasion of privacy? When does promotional activity become a misleading claim?

It’s easy to claim you don’t know because, well, you don’t know where the line for ethical issues in marketing lies, but there are some things to always consider. 

Privacy Concerns and Data Collection

Data collection is the first step in any good marketing campaign.

Businesses are required to collect data on their current or potential customer base to ensure they gain the most number of conversions per dollar they spend.

Essential data will include information about age, demographic, spending habits, and interests.

This is why advertising through Google or Facebook is so appealing to businesses.

But this activity creates privacy concerns.

While this activity is not strictly illegal in most countries, there is an ethical issue in marketing that has received much media attention and uproar in recent times.

For example, Facebook has received extensive public criticism for its lax privacy concerns. 

What does it all mean for marketers who’d like to conduct research to find out the demographics and preferences of their target audience?

They should certainly become more conscious of the privacy of consumers when collecting data.

They should request the permission for data collection and clearly state what they offer in exchange.

Being transparent is essential because users won’t be ready to trust a company with their data.

Organizations should build a data policy and stick to it at all times.

Moreover, it’s best to ask for data once you’ve build a relationship with your audience—be honest and you can be sure of a positive response.

Dissemination of Information

After a business has collected data on its customer base, it will want to distribute marketing information through a series of delivery channels.

Unfortunately, many modes of delivery are extremely controversial and borderline illegal. Some of these areas include: Door-to-door sales, telemarketing, and unsolicited emails.

Door-to-door sales and telemarketing activity are generally legal within certain bounds in most jurisdictions.

Some countries and states will specify timeframes in which the marketing activity is allowed. 

For instance, a sales person may only approach you between 9 a.m. and 6 p.m. on weekdays and 9 a.m. and 5 p.m. on Saturdays.

However, a problem arises because most households will be unaware of such laws.

Further, even if they were aware, it takes time and effort to report a minor annoyance. This means that marketers often unethically abuse these “unenforceable” laws. 

In terms of unsolicited emails, the CAN-SPAM laws in most jurisdictions require that a business have the receiver’s consent before they can send marketing information.

Further, emails must include an option for readers to unsubscribe from the mailing list.

However, consent is another ethical issues in marketing grey line.

For example, marketers often argue they have consent because contact information is listed on a public directory. Generally, however, consent is required to be explicit and cannot be implied.

How can marketers make sure that their marketing strategy is within the letter of law and doesn’t cause annoyance?

It’s best to simply check the local rules and adopt the perspective of the consumer for a moment—every marketer should treat their audience with respect and express this value when distributing their promotional materials, be it through emails, phone calls, or face-to-face.

Misleading Advertisement

Advertising claims are another grey area that causes ethical issues in marketing.

For example, an advertisement that a hand sanitizer kills 99.9% of germs has become pretty standard and attracts lots of customers.

However, tests have shown the percentage is closer to 40-60% in real-life scenarios. The reason marketers can legally get away with this is because companies can achieve the 99.9% under perfect lab conditions.

Legal and Ethical Issues in Marketing

Marketers working for various brands know their reputation will be severely damaged by any kind of misinformation their audience will pick up on and address in public channels, such as social media.

That’s why every piece of their promotional materials should accurately reflect the features of the product—once consumers realize the product, which promises certain results, doesn’t really deliver them, a brand will be in trouble.

Honesty is the best policy, particularly when you’re dealing with ethical issues in marketing.

What we do is communication and relationships.

This, of course comes with a certain level of risk—from misunderstanding and misinterpretation to violation of individual privacy rights.

Be aware of the major legal and ethical issues in marketing and fashion your communications to stay well within the legal and ethical standards of the industry.

About Monique Goodyer


Monique Goodyer works as a marketing specialist at Monaco Compensation Lawyers, one of Australia’s compensation law firms. She’s interested in all things online and the latest trends in social marketing.