2018 has seen a series of unethical marketing practices and communication fails leading one to wonder what ethical marketing practices should be like? Beside driving away customers and revenue, marketing ethics are crucial for the long term company and brand sustainability. Companies should channel the universal values expected by the market so that negative environmental and social impacts of their business can be minimized. How can organizations avoid being on the unethical side of the market?
Marketing vs. or with Ethics
Sometimes considered as damageable to society and to the environment while pushing consumers to irresponsible buying habits and consumerism (targeting vulnerable consumers like children or excluding potential customers from the market) or stereotyping through market researches, the marketing discipline needs to deeply rebrand itself while adopting well-meaning and fair practices.
A number of studies have found evidence of advertising, branding, packaging and labelling in antiquity. Marketing has existed for centuries yet it has started to evolve for just a few years toward a different mindset and application: ethics have been incorporated into it. According to the 2017 Havas Media Meaningful Brands Study, 75% of global consumers expect brands to make more of a contribution to their well-being and quality of life, yet only 40% believe brands are doing so.
Marketing ethics represent the moral principles behind the operations and regulations of marketing. Ethics of advertising and promotion are common examples (including the respect of governmental business regulations, the standard of truth, product transparency, consumers’ fair treatment and data privacy like the EU General Data Protection Regulation) while there are other ways marketing should consider ethics at planning a solid business strategy:
Legal and socially responsible product design and environmental-friendly production
Ethical distribution chain, traceability and partnerships
Socially Responsible Investing (SRI) and fair pricing
The Genuine Ethical Intention
Now that we know marketing is compatible with ethics, the intention of an ethical marketing plan should be genuine (through honest) and planned marketing actions. Some corporate communications intend to channel ethical values while they are actually a misleading strategy like greenwashing: spending more time and money claiming to be “green” through advertising than actually implementing business practices that minimize environmental impact. The non-governmental environmental organization Greenpeace frequently reports greenwashing practices to avoid. These marketing mistakes strongly result in bad publicity.
By contrast, the Ethisphere Institute releases its World’s Most Ethical Companies Honoree List every year referencing companies driving ethical activities and positive change in the business community. Corporate Social Responsibility (CSR) defined as the organisation’s obligation to maximise its positive impact and minimize its negative impact on society, directly reflects on the organization’s marketing ethics.
Corporate behaviour that is not subject to legal penalties may still be unethical. For example, some companies do not pay taxes in the countries where they are located because of complicated tax structures. This is legal, yet not quite ethical. Non-ethical marketing strategies include:
Planned obsolescence
Price bait and switch
Anti-competitive practices
Viral and guerilla marketing
Deceptive and subliminal advertising
Selling Apples Without Breaking the Tree
The main blockers in the switch to ethical practices involve transition time and cost for companies. However, a smart marketing strategy should be thoroughly planned to forecast the profits out of this change. The marketer’s first function is to bring the market demand facts and figures to their organization’s stakeholders. It requires a business intrinsic change that marketing can trigger and reflect through responsible communication tactics. There is a growing demand for CSR from consumers and every marketing plan should be ethically-driven, based on proven facts and empowering statistics. Based on the 2016 Deloitte Millennial Survey, 87% of global millennials believe that the success of a business should be measured in terms of more than just its financial performance so brands are even expected to play a crucial role in social and environment improvement.
Businesses don’t have to be “all-consuming” in order to make profits and succeed. According to the 2017 Cone Communications CSR Study, 88% of U.S. consumers would be more loyal to companies that support social or environmental causes so a substantial market opportunity resides is going ethical. Based on the same criteria as the CSR’s universal values, companies’ business model and strategy should be flawlessly articulated around the UN Global Compact’s 10 Universally Accepted Principles, a dialogue platform for businesses that are committed to the areas of human rights, labour, environment and anti-corruption:
Protection of internationally-proclaimed human rights.
Not complicit in human rights abuses.
Freedom of association and effective recognition of the right to collective bargaining.
Elimination of all forms of forced and compulsory labour.
Effective abolition of child labour.
Elimination of discrimination in respect of employment and occupation.
Precautionary approach to environmental challenges.
Initiatives to promote greater environmental responsibility.
Development and diffusion of environmentally friendly technologies.
Against corruption in all its forms, including extortion and bribery.
The Honest Communication Vector
Once the strategic plan has turned ethic-friendly, the organization should optimize it through avoiding bad communication practices:
Misleading advertising or spamming
Contacting customers without consent
Triggering controversy with emotional exploitation
In the growing digital era with a large choice of brands, being ethical as a company will make the difference among competitors. The 2016 Global Strategy Group Report highlights 83% of U.S. consumers consider a brand’s values are an important factor when making their choice. Several marketing tactics can support this strategy such as cause-related marketing campaigns (involving the cooperative efforts of a for-profit business and a non-profit organisation for mutual benefit).
The mid-term change investment will be worth the long-term return on investment via a brand adaptation to the market. It is about standing out on ethics now to stand the test of time later on. Besides, the consequences of not adhering to marketing ethics could result in:
Fine & Litigation
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Negative Publicity
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Loss of Trust in the Brand
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Loss of Customers
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Loss of Staff
In a nutshell, marketing is compatible with ethics and is actually one of its top communication vectors.
Lena Baudo | Digital Marketing Nomad helping companies and non-profit organizations grow their business through marketing intelligence and actionable plans. My motto is to begin with the end: no data analysis = no effective decision.
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