In the discussion that follows, this article draws on the concept of truth criteria to illuminate the types of truth claims proposed or opposed by auditors and advertising agents. In doing so, we avoid attributing truth theories to either professional group or to either of the two principal stakeholder groups with which they were communicating. The historical records that inform this analysis do not permit one to make further inferences.
TRUTH IN ADVERTISING
In the movie Miracle on 34th Street, there were actually two miracles. We learn that there really is a Santa Claus. More miraculous, however, was seeing the Macy’s managers tell customers the truth, the whole truth, and nothing but the truth. Truth has been an issue of concern in advertising for centuries and remains so today. However, a significant movement from within the industry for truth in advertising began with magazine publishers’ campaigns against patent medicine companies during the 1880s and culminated in the 1910s with efforts by the Associated Advertising Clubs of America (AACA) to enshrine truth in state legislation supported by an industry-organized police force of vigilance committees. By 1914, the movement had spread to Canada as the AACA became the Associated Advertising Clubs of the World (AACW), and the American strategy was largely mimicked in Canada.
By the late nineteenth century, fraudulent advertising was commonplace in North America (Wood 1958). Reputable manufacturers of branded products generally were truthful in their advertising. Some disreputable ones were relatively harmless, such as the mail-order company in the 1880s that offered a “Potato-Bug Eradicator” for ten cents and delivered two pieces of wood with instructions to place the potato bug between them and press together. However, many others were reckless and irresponsible, none worse than the patent medicine companies. Some of those “medicines” contained as much as 40 percent alcohol; others contained poisonous drugs. Brown’s Vegetable Cure for Female Weakness promised to cure “a dragging sensation in the groin, sparks before the eyes, hysteria, temple and ear throb, a dread of some impending evil, morbid feelings, and the blues” (Wood 1958, 331).
In 1892, the Ladies’ Home Journal announced that it would no longer accept advertising from patent medicines and followed with a long and bitter campaign of editorials and articles against the entire patent medicine industry. It even attacked other magazines that accepted and published patent medicine advertising. Lydia E. Pinkham became rich and famous during the 1870s for her cure-all Vegetable Compound. It was advertised as
a sure cure for Prolapsus Uteri, or Falling of the Womb …. Pleasant to taste, efficacious and immediate in effect. It is a great help in pregnancy and relieves pain during labor …. For all weaknesses of the generative organs of either sex. It is second to no remedy that has ever been before the public and for all diseases of the kidney it is the Greatest Remedy in the World. (Wood 1958, 327)
But for years after she died in 1883, the Pinkham company kept Mrs. Pinkham’s picture in their ads and invited women to write to her for advice. By 1904, the Ladies’ Home Journal had had enough and reproduced some of these ads together with a photo of Mrs. Pinkham’s gravestone showing that she had been dead for twenty years (Wood 1958,327). That juxtaposition of the actual circumstances with the statements in the ads clearly relied on the lack of correspondence between them to demonstrate rather dramatically the lack of truth.
What many of the publishers were really after was passage of food and drug legislation to drive the patent medicines from the market. In 1906, they were successful as the U.S. government passed the Food and Drug Act. Two years later, the Canadian government followed suit with the Proprietary Medicines Act. In both cases, the intent was to protect the public against unsafe food and drug products; false advertisements of such products came under the acts’ jurisdictions. Government wanted truth in advertising to protect consumers from harmful products; publishers wanted truth in advertising to create greater public confidence in advertising and generate more advertising business.
As early as 1888, there was concern from even deeper within the advertising industry over the issue of truth in advertising. Printers’ Ink (PI) was the first advertising industry trade journal. The first issue of PI featured an editorial that included the following:
It is no greater mistake for him that has something good and genuine to sell, to leave the public to find it out for themselves than to attract people by a “taking” advertisement that lacks the element of truth. In the profession of the law, the capable yet conscientious advocate makes use of all the address and skill of which he is possessed, to present his client’s case in its most favorable aspect or bearing, yet he never departs from the evidence. So with the advertiser–he should commend his wares or services to the public in the strongest and most skillfully arranged light they will bear; but the things commended should be the things he has at his disposal and he should never represent them as having properties they do not possess. (Quoted in “It’s Still Good” 1938, 31)
Advertisers were not expected to understate their claims, just to tell the truth. Here, truth meant using only properties that the product actually possessed. That appeal to correspondence criteria of truth would reappear in 1911, when PI joined forces with the AACA.
The AACA was formed in 1905 when a dozen local advertising clubs in various U.S. cities organized themselves into a national association. By 1911, the AACA had more than 100 member clubs with thousands of members. In 1914, the name was changed to Associated Advertising Clubs of the World when the Toronto Advertising Club was added and the annual convention was held in Toronto. By 1916, AACW membership numbered more than 15,000. Although the original purpose of the local clubs may have been social, the AACA was formed “to advance the advertising profession through such activities as teaching professional skills, correcting abuses, exposing fraudulent advertising, and maintaining a bureau for the registration of advertising men” (Schultze 1982, 196). Its aim was thus the professionalization of the advertising industry.
Although formal education was a founding ideal for the association, its members were never able to agree on how to implement that ideal. Some believed that the industry should provide course materials and choose the teachers. Universities at that time were beginning to offer business programs, but many were unwilling to offer advertising; certainly most were unwilling to allow business to design their curricula. When universities did begin to teach advertising between 1900 and 1910, it came in two forms. Business schools taught the subject as part of the study of management and marketing. At some institutions, though, journalism departments taught advertising as part of newspaper publishing. Thus, there emerged two very contrasting approaches to instruction, and the advertising industry was largely powerless over the formal education it had hoped to control. As Schultze (1982, 206) concluded, “Although advertisers wished to create a profession, that was a dream that would not become a reality even with university instruction.”
Like Pinnochio, many advertisers believed they could become a real profession if only they told the truth. In its founding year (1905), the AACA resolved “to expose fraudulent schemes and their perpetrators,” described in the following ways:
1. Misleading statements, insinuations, and illustrations that give impressions of value or service not inherent in the product.
2. Suggestions of cures and palliatives, and lures of beauty and health building that are not founded on scientific fact.
3. Part truths of scientific information that imply a benefit not supported by science.
4. Claims of general underselling not capable of proof and untrue in their insinuations and impressions. (Kenner 1936, xvii-xviii)
The theme throughout these examples was a lack of correspondence between an advertised claim and the actual circumstances-and science was held as the ultimate arbiter of truth. Less clear in these early attempts to define truth were the industry’s motivations, beyond the wish for professional status.
A speech given at the 1911 AACA convention made the connection between truth and professional status in the following way. “If you are to become a profession, you must here and now formulate a code. That code need spell but the one word, Truth, and all other worthy things shall be added unto you” (quoted in Kenner 1936, 21). And another at the same meeting added,
[When] the goods advertised are exactly as described …. Such a state of affairs would make the advertising man a sort of auditor or expert accountant, whose one object is to present the truth of the case to his employer, who is not so much the man who pays the salary as the people at large whose buying power makes that salary possible. (Quoted in Kenner 1936, 22)
Again, the criterion of correspondence between the actual product and the advertised claim seemed to be the basis for truth. It is also interesting, as an aside, to note the citation of accountants as role models for professionalism in advertising. The idealized role of the auditor in this quotation, however, is one that the accounting profession debated throughout this period and ultimately rejected.
As early as 1907, the AACA endorsed in principle the use of legislation to penalize false advertising. However, its early efforts focused more on self-regulation. This came in the form of codes, statements of principles, and annual conventions that resembled religious crusades for truth in advertising. At the 1913 convention, the symbolism and ceremony that had come to characterize the AACA’s crusade became almost comical with the adoption of a truth emblem (see Figure 1) and the official slogan “truth in advertising.” There was even a truth trophy awarded that year and for several afterwards to the member club judged to have done the most work for truth over the preceding year (Kenner 1936, 39). These efforts were imaginative but not very effective because the association had little power to enforce truth in advertising. In addition, large numbers of small firms and individuals still had no enthusiasm for exercising control over the temptation to stretch the truth. Because of other regulations on antitrust issues that characterized the framework of government regulation in the United States, the groundwork was laid for greater future dependence on government regulation (Miracle and Nevett 1988).
As early as 1911, it was apparent to John Romer, editor of PI, that self-regulation was not working. Romer had covered the AACA convention that year for PI and recognized that while the association had aroused sentiment, it had no plan of action. “The time has arrived,” he said, “when we can do something more than talk about suppression of objectionable advertising” (quoted in “Truth and Consequences” 1938, 256). Soon afterward, Romer hired a New York lawyer, Harry Nims, to investigate existing laws against untruthful advertising (there were two state laws, but neither had ever been used) and to write a model state law directed at sponsors (rather than publishers). The PI model statute read in part as follows:
Any person, firm, corporation or association who… makes, publishes, disseminates, circulates, or places before the public… an advertisement of any sort regarding merchandise, securities, service, or anything so offered to the public, which advertisement contains any assertion, representation or statement of fact which is untrue, deceptive, or misleading, shall be guilty of a misdemeanor. (”Truth and Consequences” 1938, 257, emphasis added)
The declaration then elaborated on what constituted “untrue, deceptive, or misleading” by enumerating several practices, including the following:
1. false statements or misleading exaggerations;
2. indirect misrepresentations of a product or service through distortion of details, either editorially or pictorially;
3. pseudo-scientific advertising, including claims insufficiently supported by accepted authority or that distort the true meaning or application of a statement made by professional or scientific authority. (”Editorial” 1932, 52)
Of course, the theme here was the lack of correspondence between actual product characteristics and those claimed in an advertisement. Words such as exaggeration and distortion are particularly illustrative.
The model statute was published in PI on November 11, 1911. Romer offered it to the AACA with the suggestion that its member clubs undertake the job of making the statute a working piece of legislation wherever it became enacted into law by watching for infractions, collecting evidence, and seeing that the cases were pressed. The AACA did this by forming a national vigilance committee, and in 1913, when the statute was first passed into law in the state of Ohio, the committee’s work began in earnest. Eventually, forty-three states passed the PI model statute into law, although many added the word knowingly to require proof of intent to mislead. This seriously weakened the legislation’s effectiveness. The AACA’s vigilance committees evolved into the Better Business Bureaus, and by 1938, there were fifty-six such bureaus guarding the American public against fraudulent advertising.
The Canadian counterpart to PI, a trade journal titled Economic Advertising (EA), waited until March 1913 to voice its support for the PI model statute, but like most in the industry, it had supported for years the principle of legislation to control untruthful advertising (”Straight Talks” 1913). Its endorsement of the PI model statute was backed by the opinion that such a law would protect the public and create public confidence in advertising. One year later, the Canadian government created the Fraudulent Advertising Act, which read, in part, as follows:
Every person who knowingly publishes or causes to be published any advertisement… containing false statement or false representation which is of a character likely to or is intended to enhance the price or value… shall be liable upon summary conviction to a fine not exceeding two hundred dollars, or to six months imprisonment or to both fine and imprisonment. (”Retailers Would Put Teeth” 1921, 190)
The Canadian government, in passing the Fraudulent Advertising Act, had followed some U.S. states in implementing a watered-down version of legislation requiring proof of intent to deceive. This, of course, made it very difficult to obtain convictions. Fifteen years later, the act had yet to be used and was soundly criticized by a Canadian lawyer writing in the retitled EA, now called Marketing. “It [the Fraudulent Advertising Act] serves only to bring law into general contempt; for though it proscribes lying in advertising, lying continues to flourish with impudent impunity” (Wilson 1929, 285).
Meanwhile, the American vigilance committees were not really having much success with the PI-modeled state legislation either. It was an inefficient way to deal with regional and national advertisers, and the number of those was growing rapidly. Since many states that had passed the PI statute had opted for the “knowingly” clause, prosecution in those states was almost impossible. When the Federal Trade Commission Act (FCTA) was passed in 1914, the association saw an important new ally in its fight for truth in advertising. Although the Federal Trade Commission (FTC) was formed to deal specifically with unfair competition (specifically section 5 of the FTCA), the AACW saw false advertising as just that. In 1915, a delegation of six officials from the association met with the FTC in Washington to see if the new federal legislation could be used against fraudulent advertisers.
What the AACW wanted, explained its president, was a “ruling or an expression of willingness to receive from us these interstate cases that are coming up constantly …. We believe that we are a natural ally to the Federal Trade Commission.” Another witness observed: “When it goes out that this Commission has taken the position that dishonest advertising is unfair competition, that that is the position of the federal government, there are a lot of these men who are going to stop and say, We had better be a little bit more careful; while the vigilance committees can make us some trouble, we can handle them, but we do not care to get mixed up with the federal government.” (Tedlow 1981, 47)
The FTC shifted the focus of regulation from the harm done to consumers by false advertising to the role of false advertising as unfair competitive practices among firms. It made no difference to the AACW if the net effect would be to stop false advertising practice. This approach was undermined in 1938 by the Wheeler-Lea Act that changed the focus again from the consequences for competition between firms to the material effects on the consumer by defining false advertising in this way:
The term “false advertisement” means an advertisement, other than labeling, which is misleading in a material respect; and in determining whether any advertisement is misleading, there shall be taken into account (among other things) not only representations made or suggested by statement, word, design, device, sound, or any combination thereof, but also the extent to which the advertisement fails to reveal facts material in light of such representations or material with respect to consequences which may result from the use of the commodity to which the advertisement relates under the conditions prescribed in said advertisement, or under such conditions as are customary or usual. (Section 15-a, quoted in Tedlow 1981, 53)