Mass Communication Law and Ethics

By Roy L. Moore | Go to book overview

CHAPTER 5
CORPORATE AND COMMERCIAL SPEECH

In 1986, the annual expenditure on advertising in this country exceeded, for the first time, $100 billion. By 1994, the tally had climbed to $159 billion. According to the Radio Advertising Bureau, radio alone raked in a record $12.4 billion in advertising in 1996 -- an 8% increase from the prior year. Newspapers also set a new advertising revenue record in 1996 -- $38 billion, an increase of 5.8% from 1995. In 1997, Jerry Seinfeld successfully negotiated a salary of $1 million an episode for his top-rated NBC-TV series, "Seinfeld," a show that reportedly brought the network more than $250 million each year in advertising revenues. 1 When "Seinfeld" made its finale on May 14, 1998, NBC sold two 30-second commercials for $2 million each. That broke the 1998 Super Bowl record of $1.3 million for 30 seconds on the same network. 2 In 1997, magazines earned a record $12.8 billion in ad revenues. According to a 1997 report by the American Association of Advertising Agencies, during November 1996, the four major commercial television networks -- ABC, NBC, CBS, and Fox -- carried an average of 15 minutes and 21 seconds of nonprogram content during prime time, translating into an average of 27 commercials per hour -- both record levels. 3 Advertising today is a huge business in the United States and many other countries.

In any big industry, there is always the possibility of abuse of the public trust; advertising and other forms of commercial speech are no exception. Indeed, ever since the days of patent medicines and elixirs that promised cures for every ailment from indigestion to baldness in the late 19th and early 20th centuries, there has been concern about false, deceptive, and fraudulent ads and promotions. That concern on the part of the government and the public was never translated into affirmative regulations until the Federal Trade Commission (FTC) was created by Congress in 1914. It was many years later before the FTC attempted to regulate advertising. Today the Commission is clearly a prime regulator of commercial speech, although a myriad of other federal and state agencies are involved.

This chapter focuses on the regulation of corporate and commercial speech, including advertising, and the development of the "commercial speech doctrine" in the U.S. Supreme Court. The analysis begins with U.S. Supreme Court decisions on commercial speech and then moves to state and federal restrictions on advertising and other forms of corporate and commercial speech.

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