Surrogate Indicatorsand Deception in Advertising

DOROTHY COHEN

The FTC is showing concern with deceptiveadvertising of a subjective nature. The

author discusses recent cases in whichthe potential for deception has been

found to exist when an advertiser usedvisual and verbal cues to imply that a

product possessed certain features which,in reality, it did not. Guidelines which

apply concepts from the behavioralsciences are suggested for regulating

implied and subjective advertising claims.

• ABOUT THE AUTHOR.

Dorothy Cohen is professor of marketing at HofstraUniversity, Hempstead, Long Island, New York.

Journal of tnarketing, Vol. 36 (July, 1972), pp. 10-15.

T) ERCEPTIONS are often developed on the basis-t of cues taken from the environment. A con-sumer frequently faces a purchase decision with-out adequate information concerning the extentto which a particular brand possesses certaincharacteristics. Under these conditions, the con-sumer may select a substitute cue as a meansof evaluating a brand. For example, when a con-sumer is uncertain about a product's quality hemay rely on price to infer this attribute.^ Inthis case, the consumer is substituting one cue(price) for another (quality), in order to providehimself with a set of expectations regarding onecharacteristic of the brand. A cue actually usedby the consumer in place of another to evaluatealternatives may be called a "surrogate indicator."

Behavioral scientists have noted that buyer be-havior involves the process of evaluating altema-tives in an effort to select the one most satisfyingto the consumer's goals. The consumer may referto various "evaluative criteria" which are specifi-cations he uses to compare product and brandfeatures. These evaluative criteria often have aneconomic base such as price, performance, dura-bility, or maintenance costs; however, they mayalso include subjective considerations such as ap-pearance and style.

It is frequently difficult for the consumer todirectly compare products using evaluative cri-teria. For example, without actually using severalbrands simultaneously, what criteria serve tojudge strength, mildness, richness, cleaning power,and so on? Where direct comparisons of productsare difficult, consumers tend to evaluate theseproducts through their perception of the sensorystimuli the products present. Perception then isthe complex process by which people select, or-ganize, and interpret sensory stimulation into ameaningful and coherent picture of the world.^

Behavioral science research has shovvn that

1. D. S. Tull, R. A. Boring, and M. H. Gonsior, "A Noteon the Relationship of Price and Imputed Quality," Jour-nat of Business. Vol. 37 (April, 1964), p. 186.

2. Bernard Berelson and Gary A. Steiner, Human Be-havior, An Inventory of Scientific Findings (New York:Harcourt, Brace & World, Inc., 1964), p. 88.

10

Surrogate Indicators and Deception in Advertising I I

where stimuli are ambiguous, perception imposesthe task of interpretation, of deciding what ob-jects or events the stimulus actually does repre-sent.3 Where a consumer cannot directly compareproduct features using evaluative criteria, he maymake these comparisons on the basis of his per-ception of surrogate indicators taken from theenvironment.* For example, research has shownthat color may be used as an indicator of therichness of flavor of ice cream, whereas fragrancesuggested longer wearing qualities of stockings.^Other examples of surrogate indicators are sym-bols, endorsements, and magnitudes.

Applying Behavioral Criteria toConsumer Protection Efforts

During the next decade empirical investigationsof buyer behavior will be one of the marketingareas receiving increased emphasis. Informationderived from such research has many applica-tions, including the field of consumer protectionwhere it has been recommended that regulatoryagencies use knowledge from the behavioral sci-ences to improve consumer protection efforts.*

This article identifies areas where behavioralcriteria have already been adopted by the FederalTrade Commission in its efforts to protect theconsumer from advertising abuse. More specifi-cally, subjective deception via surrogate indicatorsis discussed, and current efforts by the Commis-sion to minimize the use of unacceptable surro-gate indicators are reported. In addition, it issuggested that guidelines for evaluating subjectiveas well as objective claims be established by theregulatory agencies in order to reduce the extentof false and misleading advertising.

The legal criterion used by the Federal TradeCommission for declaring an advertisement to befalse or misleading rests on its "tendency to de-ceive the public, to their injury."" Thus, in orderto decide whether an advertisement is false, theclaim it contains must be examined. While thereis some latitude in determining the falsehood ofan objective claim, a statement will generally beconsidered deceptive where a standard exists fordetermining its truth and where there is sufficient

3. Same reference as footnote 2, at p. 112.4. James F. Engel, David T. KoUat, and Roger D. Black-

well, Consumer Behavior (New York: Holt, Rinehart andWinston, 1968), p. 433.

5. Donald F. Cox, "The Measurement of InformationValue: A Study of Consumer Decision Making," in Emerg-ing Concepts in Marketing, William S. Decker, ed. (Chi-cago: American Marketing Association, 1962), pp. 414-415.

6. Dorothy Cohen, "The Federal Trade Commission andthe Regulation of Advertising in the Consumer Interest,"JOURNAL OF MARKETING. Vol. 33 (January, 1969), p. 44.

7. "The Regulation of Advertising," Columbia Law Re-view, Vol. 56 (November, 1956), p. 1025.

knowledge to establish its falsity." Thus, it isan obvious falsehood if a product is claimed tobe made of gold, and it is actually made of silver.

It is more difficult to prove subjective claimsto be false. "Trade puffery" such as "my producttastes better," is considered permissible, and ex-aggerated claims concerning matters of subjectivejudgment and opinion have generally been con-sidered acceptable since they can not easily beproved or disproved. In its past efforts to reducethe extent of false and misleading advertising,the Federal Trade Commission has primarily ex-amined the validity of objective claims. Morerecently, however, the Commission has been con-cerned with deception in advertising of a sub-jective nature.

Deception Via Surrogate Indicators

When the marketer designs surrogate indicatorsto suggest the existence of characteristics whichthe product does not in fact possess, the consumermay be misled into believing this product willsatisfy his needs. The regulatory agencies shouldbe alert to this potential for consumer deceptionthrough subjective claims, which takes on addedsignificance when it tends to mislead particularsegments of society, such as the poor, the young,the elderly, or the less well educated.

Although clear guidelines have not been enunci-ated, in several recent cases concerning mislead-ing advertising, the Federal Trade Commissionhas noted that the potential for deception existswhen an advertiser employs surrogate indicatorsto imply that his product possesses certain fea-tures which, in reality, it does not. Surrogate in-dicators whose use in some circumstances havebeen considered unacceptable are colors, symbols,endorsements, and magnitudes.

Colors

Colors have emotional associations which arenot necessarily related to objective reality. Inadvertising, colors may be used to indicate thata product contains certain benefits. For example,the addition of blue or green coloring to productshas been used to suggest great cleaning power.The Federal Trade Commission has recently askedtwo manufacturers of denture cleaners to provide"all documentation and other substantial data"for the following claims: "The green shows speed,as powerful cleaning bubbles scrub dentures fast,"and " . . . bubbles are scrubbing away at stainand odor; when the blue disappears . . . denturesare clean."»

8. Ira M. Millstein, "The Federal Trade Commission andFalse Advertising," Cotumbia Law Review, Vol. 64 (March,1964), pp. 47M83.

9. Block Drug Company and Warner-Lambert Co., 3Trade Regulation Reporter (December, 1971), Itl9,879.

12 Journal of Marketing, July, 1972

The Standard Oil Company of California usedthe absence of color in automobile exhaust fumesto support its claim that Chevron F-310 signifi-cantly reduces air pollution. The demonstrations,in which plastic balloons were filled with auto-mobile exhaust fumes, showed that emissionsfrom automobiles using competitive gasolines ap-peared much blacker than emissions from auto-mobiles using Chevron with F-310. The FederalTrade Commission, however, declared that lack ofcolor, despite appearances to the contrary, doesnot indicate lack of pollutants. In fact, somepollutants are colorless and fairly odorless. Acomplaint has been issued against Standard OilCompany of California for deceptively advertisingits F-310 gasoline additive. As of this writing,hearings have not yet been held on this matter.However, a proposed order by the Federal TradeCommission would prohibit the alleged misrepre-sentations and require that any gasoline advertis-ing by Standard for the next year clearly andconspicuously disclose that the Federal TradeCommission has found the company's previousadvertising for Chevron with F-310 contained false,misleading, and deceptive statements and demon-strations, and that the product, in fact, does notreduce air pollution.'°

The inability to distinguish between two liquidsof similar color and consistency has been con-sidered a misleading indicator of the "greasy"content of a cooking oil. The Commission attackedcooking oil advertisements which purport to provethat a person does not have to "worry about friedfoods being greasy again. . . ." The demonstra-tions consist of pouring a cupful of oil into thefrying pan, cooking four pieces of chicken, pour-ing the oil back, and noting that "only one table-spoon" has been absorbed by the chicken. How-ever, despite the fact that the remaining substancein the pan after frying chicken is of uniform color,it is not solely Crisco Oil but a combination ofCrisco Oil and chicken fat.

According to the Commission, the above adver-tisements amount to the false claim that foodsfried in this specific product are less greasy thanfoods fried in other cooking oils. A consent order,which has been agreed to by Procter and Gamble,forbids any such claims in the future unlessthey are documented in advance by written tests,studies, or other data. This substantiating ma-terial must be in writing and available for in-spection."

It appears the Federal Trade Commission is es-tablishing a procedure which requires that ifcolor is used as a surrogate indicator to suggest

the existence of a product benefit, such a claimshould be demonstrable via objective proof.

Symbols

Individuals frequently use symbols as surrogateindicators. Hayakawa noted that "the process bymeans of which human beings can arbitrarilymake certain things stand for other things maybe called the symbolic process."^- Levy stated that"the sellers of goods are engaged, whether will-fully or not, in selling symbols, as well as prac-tical merchandise," and declared that "the onlyquestion is whether the goods are to be symbol-ized thoughtfully or thoughtlessly."'^ Adequateconsumer protection suggests that Levy's questionalso encompasses whether the goods are decep-tively symbolized.

Symbols including phrases, names, figures, em-blems, or signs may serve as surrogate indicators.Some attempts have been made to control thepossible deceptive use of these substitute criteria,but the disposition of the Commission cases inthis area has not formed a consistent pattem.

In an early case involving a deceptive tradename, the Federal Trade Commission required abaking chain to abandon its trademark becauseof its misleading nature. The company had li-censed bakeries to produce bread through whatwas advertised as a "secret formula" to be soldunder the trademark "Lite Diet." The Commissiondiscovered that the secret formula did not resultin lower calories, only thinner slices. Althoughthe company requested that it be allowed to addthe qualifying phrase, "not low in calories," theCommission ruled that such a phrase would con-tradict the trademark and confuse the public."

In a more recent but related case against abaking company, the Commission proposed anorder which would prohibit use of the trade name"Profile." Contrary to its advertisements and itssymbolic representation. Profile bread was notfound to be lower in calories than ordinary bread,and eating two slices of Profile before lunch anddinner as recommended would not result in lossof body weight. The final order permits the com-pany to retain the name Profile; however, thecompany's future advertising must contain cor-rective advertisements declaring that the product

10. Standard Oil of California, et al., 3 Trade RegulationReporter (October, 1970), #19,352.

11. Procter & Gamble Co., 3 Trade Regulation Reporter(January, 1972), #19,889.

12. S. I. Hayakawa, "The Symbolic Process," in Con-sumer Behavior and the Behavioral Sciences, Steuart H.Britt, ed. (New York: John Wiley & Sons, Inc., 1968),p. 364.

13. Sidney J. Levy, "Symbols for Sale," in Perspectivesin Consumer Behavior, Harold H. Kassarjian and ThomasS. Robertson, eds. (Glenview, 111.: Scott, Foresman andCompany, 1968), pp. 211 and 213.

14. Bakers Franchise Corporation, et al., 3 Federal TradeCommission, 5 Trade Regulation Reporter (May, 1962),#70,307.

Surrogate Indicators and Deception in Advertising 13

is not effective for weight reduction, contrary topossible interpretations of prior advertising."

In a similar case against the Coca Cola Com-pany, the Commission initially stated that it mightprohibit the use of the trade name Hi-C, sinceit deceptively symbolized that the drink was highin vitamin C. The Commission subsequently modi-fied the proposed order and stated it would nolonger require the banning of the trade nameHi-C, but instead would use the corrective-ad-vertisement approach employed in the Profilecase.'*

The Commission has also changed its positionon a proposed order to bar use of the trade nameof a wafer, Proslim, which contrary to advertisedclaims is not of significant value in weight reduc-tion. The new consent order provisionally acceptedby the Commission would prohibit the name Pro-slim to designate a diet wafer or drink, but wouldpermit its use to describe a diet plan only if it isdisclosed that claimed weight reduction is due toa low-calorie diet or an exercise program, ratherthan the wafer.'"

A review of these decisions discloses that inthe Lite Diet case the Federal Trade Commissionconsidered deception to be inherent both in theobjective advertising copy and the subjectivesymbol, and the company was prohibited fromusing either the misrepresentive advertising orthe deceptive surrogate indicator. However, inthe more recent cases of Hi-C and Proslim theCommission seems to be basing its decisions onthe misleading advertising copy and not on thepotentially deceptive symbols. By requiring cor-rective advertising copy and "clear and conspicu-ous disclosure" of the limitations of the product,the Commission appears to believe that the po-tential deception in the sjinbolic trademark willbe eliminated.

As noted earlier, consumers evaluate productsthrough subjective as well as objective criteria.In the Lite Diet decision behavioral criteria wereconsidered, whereas in subsequent decisions theywere not. To assure a more consistent disposi-tion of cases involving the use of symbols toconvey product attributes, the following guidelinefor use by regulatory authorities is recommended:Where a symbol is used as a surrogate indicatorto attempt to prove a false product claim, its useshould be considered deceptive.

Endorsements

Communications research has disclosed that themore trustworthy, credible, or prestigious the

15. ITT Continental Baking Co., Inc., et al., 3 Trade Regu-lation Reporter (July, 1971), «19,539.

16. Coca Cola Co., et al., 3 Trade Regulation Reporter(April, 1971), #19,603.

17. J. B. Williams Co., Inc., et al., 3 Trade RegulationReporter (August, 1971), #19,734.

communicator is perceived, the less manipulativehis intent is considered by the audience and thegreater their tendency to accept his conclusions.'*Communications attributed to sources of lowcredibility, on the other hand, are considered morebiased and unfair than similar communicationsattributed to sources of high credibility. The audi-ence's perception of the source thus tends to in-fluence both the interpretation and acceptance ofits content.'^ In advertising, endorsements froma prestigious source may serve to improve recep-tion and acceptance of the advertising message.

However, attaching a false testimonial to aproduct may be misleading to consumers. It isdifficult to prove that testimonials are false, sincethey are often based on subjective preferenceswhich cannot be analyzed easily via objective cri-teria. For example, if a fzimous baseball playerstates, "I like Post Toasties," it is difficult toprove this statement false.

Recently the Federal Trade Commission has ap-proached this issue from two directions: (1) TheCommission has questioned the motives of theendorser; and (2) it has questioned the endorser'sexpertise. In a recent complaint the Commissioncharged that, contrary to the manufacturer's pro-motion, the National Football League and majorleague baseball teams did not select two brandsof sugar as their "official sugar" because of su-perior quality and nutritional value. Instead, theselection was based primarily on monetary con-sideration furnished to the leagues by the manu-facturer. An order proposed by the Commissionunder a consent order procedure would halt thealleged misrepresentation.-"

In a case against companies that sell toy racingcar sets to children, the Commission challengedthe endorsement of these toy sets by well-knownracing car drivers on the grounds that their back-ground has not given them experience in judgingchildren's toys. In an agreement reached by thetoy manufacturers and the Commission, endorse-ments of the worth, value, or desirability of atoy to a child by famous personalities would beprohibited unless they also have the experience,special competence, or expertise to form the judg-ment expressed in the endorsement.^'

The Commission has exhibited particular con-cern for potentially deceptive endorsements di-rected toward children. There are indications thata regulatory guideline will extend the prohibitionto all endorsements by famous personalities whodo not have the expertise which might qualifythem to form the judgments expressed.

18. Same reference as footnote 2, at p. 537.19. Same reference as footnote 2, at p. 538.20. Amstar Corp. et al., 3 Trade Regulation Reporter

(July, 1971), #19,696.21. Mattel, Inc., and Topper Corp., 3 Trade Regulation

Reporter (August, 1971), #19,729.

14 Journal of Marketing, July, 1972

Magnitudes

Judgments of magnitude are made within aframe of reference established by the total rangeof relevant stimuli.^^ Thus, a stimulus will bejudged in relation to the temporal series of whichit is a member. People develop an "adaptationlevel" with respect to given stimulus magnitudes(e.g., light intensity, size of cars) based on therange of values that has been present in the rele-vant series.^'' For example, if an individual isasked to rate a series of unmarked weights as"heavy" or "light," he develops an adaptation levelso that some of the weights actually feel heavyand others light. In a series of weights rangingfrom 200 to 400 grams, a 300 gram weight willbe judged as heavy. Adding a new stimulus out-side the previous range will shift the adaptationlevel and, in turn, will shift judgments of specificstimuli. If a 600 gram range were added, the300 gram weight that felt heavy in the originalseries now becomes light. Thus, it becomes pos-sible to alter judgments of magnitude by adjust-ing the frame of reference.

The Federal Trade Commission has issued acomplaint against the Borden Company for de-ceptively representing magnitudes in its televisionadvertising for Kava Instant Coffee. To comparethe acidity of Kava with other unnamed brands ofcoffee, the commercials show a pH meter whoseneedle swings to the extreme right of center whenmeasuring Kava's acidity and to the extreme leftof center when measuring the acidity of otherbrands. The advertisements are considered mis-leading because they depict an "expanded scale"of the pH meter—that is, a two pH unit segmentis expanded to cover the entire 14 unit pH seg-ment.2< Since perception is determined by rela-tionships among stimuli rather than their absolutevalue, the expanded scale of the pH meter tendsto exaggerate the difference in acidity betweenBorden's and other brands.

The manufacturer of Schick Krona ChromeRazor Blades used a television commercial tocompare the blade corrosion that occurs after fiveshaves using a Schick Krona Chrome blade witha stainless steel blade. The visual portion of thecommercial shows a greatly magnified side-by-sidephotograph of sections of two blades each ofwhich have been subjected to five shaves. Thecomplaint charged that although corrosion wasmore apparent in the stainless steel blade, thedifference would have no material effect on itsshaving performance.^^

22. Same reference as footnote 2, at p. 117.23. Same reference as footnote 2, at p. 119.24. Borden, Inc., 3 Trade Regulation Reporter (December,

1970), #19,399.25. Eversharp, Inc., 3 Trade Regulation Reporter (April,

1970), #19,219.

Similar complaints have been issued againsttwo toy manufacturers which used special cameratechniques to exaggerate the appearance and per-formance of toy racing car sets. In a recentlyaccepted consent order, the toy manufacturersand their advertising agencies have agreed notto use camera techniques that present visual per-spectives misleading to a child.^^ In judgingwhether such misrepresentation exists, considera-tion will be taken of the level of knowledge,sophistication, maturity, and experience of theaudience.

Since magnification or diminution of stimulican result in a misinterpretation of the judgmentof magnitudes, such potential misinterpretationsshould be considered in the evaluation of pos-sible deception in advertising. As a guideline tothe regulatory authorities it is recommended thatwhere a frame of reference has been adjusted toprovide objective proof of a nonexistent productbenefit, such magnification or diminution of stim-uli may be considered deceptive.

Sunnnfiary and Conclusions

A reduction in the extent of false and mis-leading advertising requires the Federal TradeCommission to monitor the validity of both ob-jective and subjective product claims. A majorarea of possible subjective deception involves theuse of surrogate indicators.

Behavioral science research has noted that con-sumers evaluate products in terms of their per-ceptions of them. These perceptions are oftendeveloped on the basis of surrogate indicatorswhich sometimes are created by marketers andbear little reasonable relationship to product per-formance. This is a danger to which regulatoryagencies must be more alert.

Recent activities by the Federal Trade Commis-sion suggest that it has become aware of thepotential for deception in this area. However,activities have been conducted on a case-by-casebasis, and the FTC has yet to prepare a set ofneeded guidelines. A general rule that does ap-pear to be emerging from a review of FederalTrade Commission cases is that a surrogate indi-cator which attempts to prove a false productclaim will be considered misleading and thereforeunacceptable.

In a number of recent cases, the Commissionhas suggested that it may evaluate subjectiveproduct claims under a concept enunciated asan "implied uniqueness claim." The Commissionnoted that such a claim may be deceptive andincluded the following stipulation in a consentorder. "A statement as to the qualities or attri-butes of a product can amount to an implieduniqueness claim if it is made in a context which

26. Same reference as footnote 19.

Surrogate Indicators and Deception in Advertising 15

conveys an impression of uniqueness for theproduct."-^

It is not clear at this time how this stipulationwill be interpreted. The Commission noted thata statement of "uniqueness" will not constitutea violation solely for the reason that it could bemade with respect to similar products. It ap-pears, however, that a claim implying that aproduct is unique may be subject to careful re-view and adequate documentation. It is possiblethat color, scent, endorsements, and other surro-gate indicators used to suggest that one productis superior to another may be subject to the re-quirements of objective proof. For example, anadvertiser may be required to provide objectiveproof that adding the colors of blue or green,-**combining chicken fat with cooking oil,-® orblending gasolines of different octane ratings willprovide a product with unique qualities not foundin other brands.^o

However, widespread application of a unique-ness claim stipulation may arouse a great dealof criticism, since this is essentially what adver-

27. Same reference as footnote 11.28. Same reference as footnote 9.29. Same reference as footnote 11.30. Sun Oil Co., et aL, 3 Trade Regulation Reporter (De-

cember, 1971), #19,856.

tisers strive for in developing advertisements todifferentiate their clients' products from theircompetitors'. A more useful approach might bethe preparation of a set of guidelines definingacceptable and unacceptable surrogate indicators.Behavioral science concepts concerning the natureof perception can be helpful in constructing theseguidelines.

Some recommended guidelines are as follows:1. Where color is used as a surrogate indicator

to suggest the existence of a product benefit,such a claim should be capable of demonstrationthrough objective proof.

2. Where a symbol is used as a surrogate indi-cator to attempt proof of a false product claim,its use should be considered deceptive.

3. Where advertisements are directed to seg-ments of the society that may require specialprotection such as children, the poor, the elderly,or the less informed, endorsements by famous per-sonalities who do not have expertise which mightqualify them to form the judgments expressedmay be prohibited.

4. Where a frame of reference has been adjustedso as to provide objective proof of a nonexistentproduct benefit, such magnification or diminutionof stimuli may be considered deceptive.

-MARKETING MEMO-

The Future of Consumerism . . .In spite of all the current anxiety, I don "t believe that the consumer movement

can ever develop the organization and power of labor unions. Work involvesface-to-face human relationships sustained through common activity and dis-cussion of the task. Consumption rarely involves discus.sions beyond the immedi-ate family. Work for any person is a rather comprehensive acti\'ity towardwhich he has a certain outlook, complex as this may be. There is no parallel tothis in consumption. Picking up the morning paper, making the weekly trip tothe supermarket, paying the monthly electric bill, ?oing downtown to buy aspring suit, deciding to buy a new car—all represent acts of consumption, butnone of these acts are linked together in people's minds.

The term "consumerism" lumps together a diverse ^oup of activities andcriticisms which the puhlic is apt to perceive as distinct and separate issues. Itis hard to find any common basis on which people can react to issues that involveconsumption per se. In fact, it is hard to find a functional group with a commoninterest in the subject. Consumerism is salient for the businessman but invisibleto the consumer himself.

—Leo Bogrart, "Customjers, Not 'Con-sumers'," The Conference Board Rec-ord, Vol. IX, No. 5 (May, 1972), pp.34, 35, 36, 37, at page 37.