Advertising is the most important and most effective way manufacturers or service providers can get their message out to the public, in other words, to the consumer. The only way consumers will know about a product is through the company's advertising. Retailers, as well as manufacturers, are always concerned about the effectiveness of their advertising campaigns: Are their advertising dollars being spent effectively? The advertising media that make their living from advertising revenue encourage businesses to advertise.
A variety of strategies is used in advertising. A very common advertising strategy is known as comparative advertising. It attempts to show the consumer a direct comparison among products in the marketplace. The idea behind the strategy is to show that one product is far superior to another product, thus enticing the consumer to purchase that more superior product. The comparative advertising strategy is not only used to promote products and services but is also often used in political advertising. It will attempt to point out the weaknesses of one candidate and the strengths of the opposing candidate.
The comparative advertising strategy is widely used in many types of industries. It has been used in the consumer goods industry comparing, for example, one brand of detergent to another brand and detailing the poor performance of one brand. Gasoline companies will tout their brand of gasoline over another by showing how their brand contributes to the extended life of the engine. Automobile manufacturers will use comparative advertising to showcase the gas mileage of their vehicle against the mileage of the same size car manufactured by its competitor.
There are two types of comparative advertisements: direct and indirect. Direct advertisements actually identify the comparison brand by name. They will describe the advertised brand as being far superior to the named competing brand and will point out various differences. Indirect comparison advertisements will describe the advertised brand as being superior to other unnamed competitive brands. The advertisement may claim that the advertised brand is better than "other brands."
Both types of comparative advertisements are guaranteed to attract the consumer's attention and elicit comparative cognitive responses.
Another type of comparative advertising is comparative price advertising. Advertisers attempt to persuade consumers to buy their product by either implicitly or explicitly comparing the selling price of their product to the price of the competitor's product. Although quoting the price of a product is useful information for the consumer, comparing it to the competitor's price can border on unethical. This is because the amount that is quoted for the competitor's price may be an arbitrary price and is inflated or exaggerated, and the price quoted by the advertiser may be a "sale" price. Therefore, It may be possible for consumers to reach conclusions about the product that are not based on real and actual savings. These issues have been at the heart of many lawsuits, and many studies have focused on these topics.
The Federal Trade Commission (FTC) began permitting comparative advertising in 1971 and sanctioned its use under a strict set of guidelines. Since then, this type of advertising has become more and more prevalent. One of the main requirements is that the advertisement must be sustained and backed up by data that clearly show that the advertised product is truly superior to the comparison brands. The advertiser must demonstrate that its product does perform better and does contain the featured dimensions it claims. Comparative advertisements must display unique selling propositions, known as USP, or messages containing brand differentiations.
The European Community issued regulations in 1984 concerning advertising, with one of the directives called Misleading Advertising Directive. The directive was issued in order to protect consumers from misleading advertising; an amendment was passed in 1996 that lays down criteria for comparative advertising.
The regulation defines misleading advertising as any presentation that in any way deceives or can deceive the people whom it is intended to reach or that is likely to cause economic injury to the competitor.
The European Community has imposed strict fines upon those engaged in misleading advertising and misleading comparative advertising. Advertisers must be able to prove every claim they make about the comparison brand.