Chapter 20

Question 1

Which of the following is a federal agency that controls advertising?
A. The National Advertising Review Board

B. The Better Business Bureau

C. The National Advertising Review Council

D. The Food and Drug Administration

E. The National Association of Attorneys General

Answer 1

The Food and Drug Administration

Question 2

Advertisers are often supportive of voluntary self-regulation because:

A. self-regulation is viewed as a way of limiting government interference in advertising.

B. all clients and agencies are affected by voluntary self-regulation.

C. self-regulation does not require interaction between an agency and a client.

D. self-regulation results in even more stringent regulations than what state and federal agencies want.

E. it is simple and less time consuming.
Advertisers see self-regulation as a way to limit government interference, which, they believe, results in more stringent and troublesome regulations.

Answer 2

A. self-regulation is viewed as a way of limiting government interference in advertising.

Question 3

Self-regulation begins with the interaction of client and agency when:

A. a consent order is signed.

B. a company is charged with a lawsuit for deceptive advertising.

C. there has been an omission of advertising substantiation.

D. creative ideas are generated and submitted for consideration.

E. ads are aired in foreign nations.

Answer 3

D. creative ideas are generated and submitted for consideration.

Question 4

In 1977, the _____ held that state bar associations’ restrictions on advertising are unconstitutional and that attorneys have First Amendment freedom of speech rights to advertise.

A. Federal Trade Commission

B. American Bar Association

C. U.S. Supreme Court

D. Better Business Bureau

E. American Marketing Association

Answer 4

C. U.S. Supreme Court

Question 5

Which of the following statements is true of advertising by members of professional associations?

A. Both government regulatory agencies and consumer groups are against advertising by members of professional associations.

B. Professional associations have always authorized advertising by their members on the basis that such promotional activities heighten members’ professional status.

C. Research has shown that consumers generally disfavor the use of professional advertising.

D. The Supreme Court has ruled that professionals, such as dentists and physicians, have the right to advertise.

E. Professional advertising is typically considered unethical and fraudulent.

Answer 5

D. The Supreme Court has ruled that professionals, such as dentists and physicians, have the right to advertise.

Question 6

Which of the following statements concerning advertising by attorneys is true?

A. A sizable faction within the American Bar Association blames the legal profession’s image problem on sleazy ads.

B. The U.S. Supreme Court does not permit lawyers to advertise if they earn more than $100,000 per year.

C. Ads soliciting personal injury victims help in enhancing the public’s perception of attorneys.

D. The American Bar Association recently removed all restrictions on the type of advertising attorneys can use.

E. Typically, traditional law firms are in favor of using advertising, particularly on TV, because they believe that it might boost a profession’s image.

Answer 6

A. A sizable faction within the American Bar Association blames the legal profession’s image problem on sleazy ads.

Question 7

A number of self-regulatory mechanisms have been established by the business community in an effort to control advertising practices, and among them, the largest and best known is the _____.

A. Federal Trade Commission

B. Federal Communications Commission

C. Better Business Bureau

D. World Trade Organization

E. Chamber of Deputies

Answer 7

C. Better Business Bureau

Question 8

The BBB is the largest and best known self-regulatory mechanism in the United States for controlling advertising practices that has been established by the business community. BBB stands for:

A. Board for Business Broadcasting.

B. Board of the Best Businessmen.

C. Board for Betterment of Broadcasting.

D. Better Business Bureau.

E. Best Business Bureau.

Answer 8

Better Business Bureau.

Question 9

Which of the following sentences is true of the Better Business Bureau (BBB)?

A. The BBB is a federal regulatory agency that controls advertising.

B. The BBB promotes fair advertising and selling practices across all industries.

C. The BBB was established to handle client complaints about regional business practices.

D. The BBB is regulated by the American Marketing Association.

E. Local BBBs are located in only two cities across America.

Answer 9

The BBB promotes fair advertising and selling practices across all industries.

Question 10

Local Better Business Bureaus (BBBs):

A. receive and investigate complaints from consumers regarding advertising in their area.

B. are located in small cities throughout the United States with population less than 200,000.

C. are government-aided agencies.

D. follow a standard operating procedure for handling complaints as implemented by the Federal Trade Commission.

E. are funded by the Council of Better Business Bureaus.

Answer 10

receive and investigate complaints from consumers regarding advertising in their area

Question 11

Better Business Bureaus (BBBs) provide effective control over advertising practices at the _____ level.

A. local

B. national

C. global

D. industry-wide

E. international

Answer 11

A. local

Question 12

The Council of Better Business Bureaus plays a major role in controlling advertising practices at the _____ level.

A. national

B. local

C. manufacturer

D. international

E. regional

Answer 12

A. national

Question 13

The _____ plays a major role at the national level as the third-party administrator of the advertising industry self-regulatory system.

A. National Advertising Review Board

B. Council of Better Business Bureaus

C. American Marketing Association

D. Federal Trade Commission

E. National Advertising Review Council

Answer 13

B. Council of Better Business Bureaus

Question 14

Policies and procedures for self-regulation of the advertising industry are established by the _____.

A. National Association of Broadcasters

B. Vision Council of America

C. National Advertising Review Council

D. Independent Business Alliance

E. Association of American Publishers

Answer 14

National Advertising Review Council

Question 15

Which of the following is the appellate unit of the Advertising Self-Regulatory Council?

A. The National Advertising Division

B. The Independent Business Alliance

C. The National Advertising Review Board

D. The American Marketing Association

E. The National Association of Broadcasters
Which of the following is the appellate unit of the Advertising Self-Regulatory Council?

Answer 15

C. The National Advertising Review Board

Question 16

Which of the following statements is true of policies and procedures established for industry self-regulation by the Advertising Self-Regulatory Council (ASRC)?

A. The Children’s Advertising Review Unit (CARU) reviews advertising directed to children between the age of 12 and 16.

B. The National Advertising Division of the Council of Better Business Bureaus (NAD) examines advertising claims in direct-response advertising.

C. The Electronic Retailing Self-Regulation Program (ERSP) examines all advertising claims excluding infomercials and home shopping channels.

D. The National Advertising Division of the Council of Better Business Bureaus (NAD) is staffed primarily by attorneys.

E. The Electronic Retailing Self-Regulation Program (ERSP) reviews advertising claims that are local in scope.

Answer 16

D. The National Advertising Division of the Council of Better Business Bureaus (NAD) is staffed primarily by attorneys.

Question 17

The _____ was formed by three advertising associations and the Council of Better Business Bureaus to sustain high standards of truth and accuracy in national advertising.

A. National Advertising Board

B. National Advertising Review Council

C. American Association of Advertisers

D. Ad Council

E. Board of Advertising Ombudsmen

Answer 17

B. National Advertising Review Council

Question 18

The _____ of the Council of Better Business Bureaus focuses on areas that include product performance claims, superiority claims against competitive products, and all kinds of scientific and technical claims made in countrywide advertising.

A. National Advertising Division

B. National Review Board

C. National Association of Attorneys General

D. American Marketing Association

E. Federal Trade Commission

Answer 18

A. National Advertising Division

Question 19

The _____ examines advertising claims in direct-response advertising, including infomercials and home shopping channels.

A. Children’s Advertising Review Unit

B. Vision Council of America

C. National Association of Broadcasters

D. Electronic Retailing Self-Regulation Program

E. Independent Business Alliance

Answer 19

D. Electronic Retailing Self-Regulation Program

Question 20

Which of the following statements is true of the National Advertising Division (NAD)?

A. The NAD’s advertising monitoring program only reviews complaints from local Better Business Bureaus.

B. Advertisers that disagree with the NAD’s findings have an automatic right to appeal the NAD’s decision to the National Advertising Review Board.

C. The NAD has no authority to direct an advertiser to stop running an ad in case the required substantiating evidence does not support the advertiser’s claim.

D. Lawyers at the NAD usually seek help from local advertising agencies to find misleading advertisements.

E. The NAD does not deal with complaints that come from marketers who are threatened by comparative advertising.

Answer 20

Advertisers that disagree with the NAD’s findings have an automatic right to appeal the NAD’s decision to the National Advertising Review Board.

Question 21

If an advertiser refuses to comply with rulings made by the National Advertising Review Board (NARB), the NARB is most likely to:

A. order the advertiser to stop running the ad.

B. refer the case to an industry trade association.

C. refer the matter to an appropriate federal agency.

D. impose a fine.

E. lodge a class action suit for customers who have been in some way negatively affected by the ad.

Answer 21

refer the matter to an appropriate federal agency.

Question 22

Which of the following statements is true of the Electronic Retailing Self-Regulation Program (ERSP)?

A. The mission of the ERSP is to discourage advertising and marketing in the electronic retailing industry that contains comparative advertising.

B. The majority of claims reviewed under the ERSP program are for online advertising, including search media optimization and social media marketing.

C. ERSP works under the scope of the Electronic Retailing Association (ERA) to create a predisposed self-regulatory system.

D. Spam e-mails along with Internet pop-up ads that lead to further e-commerce are in the ERSP’s purview as well as advertising on TV shopping channels.

E. ERSP is an initiative of the Federal Trade Commission (FTC) to work toward the self-regulation of electronic retailing.

Answer 22

D. Spam e-mails along with Internet pop-up ads that lead to further e-commerce are in the ERSP’s purview as well as advertising on TV shopping channels.

Question 23

The _____ is a self-regulatory program implemented by the Advertising Self-Regulatory Council (ASRC) that regulates online behavioral advertising (OBA) across the Internet.

A. Internet Advertising Review Board

B. Internet Retailing Self-Regulation Program

C. Council of Better Business Bureaus

D. Internet-Based Advertising Accountability Program

E. Information Technology Act

Answer 23

Internet-Based Advertising Accountability Program

Question 24

Which of the following statements is true of online behavioral advertising (OBA)?

A. OBA permits only those advertisements that provide detailed information about an advertiser’s products and services.

B. Companies engaged in OBA are monitored by the Federal Trade Commission (FTC).

C. OBA is based on the seven Self-Regulatory Principles for Electronic Retailing.

D. OBA uses information collected across multiple unaffiliated websites to predict a user’s preferences.

E. OBA is regulated by the Electronic Retailing Self-Regulation Program (ERSP).

Answer 24

D. OBA uses information collected across multiple unaffiliated websites to predict a user’s preferences.

Question 25

45. Which of the following statements is true of the National Advertising Review Council (NARC)?

A. Cases brought to NARC are subject to extensive publicity as compared to the cases brought to court.

B. It is very expensive to get a case solved through NARC.

C. The NARC takes longer to solve a case when compared to the Federal Trade Commission (FTC).

D. The NARC can handle cases at a lower cost as compared to a court.

E. The NARC is a government agency regulating advertising agencies.
Cases brought to NARC are handled at a fraction of the cost (and with much less publicity) than those brought to court and are expedited more quickly than those reviewed by a government agency such as the FTC.

Answer 25

D. The NARC can handle cases at a lower cost as compared to a court.

Question 26

The _____ is a major trade association of the advertising business in the United States and has established standards of practice and its own creative code.

A. Vision Council of America

B. Independent Business Alliance

C. American Association of Advertising Agencies

D. Federal Trade Commission

E. National Association of Broadcasters

Answer 26

American Association of Advertising Agencies

Question 27

Which of the following statements describes the media’s role in the self-regulation of advertising?

A. The media must accept all the advertising campaigns they receive because of the First Amendment that guarantees the freedom of speech.

B. The media cannot refuse to accept advertising for an entire product class such as hard liquor.

C. The media can refuse to accept individual ads they find offensive or objectionable.

D. The media is expected to reject ads that are targeted toward children and older adults.

E. The broadcast is required by law to reject political ads.

Answer 27

C. The media can refuse to accept individual ads they find offensive or objectionable.

Question 28

Certain magazines regularly test the products they advertise and offer a “seal of approval” and refunds if the products are later found to be defective. They do so in order to:

A. enhance the credibility of the publication.

B. encourage advertisers to buy more media space.

C. eliminate puffery in their ads.

D. discourage comparative advertising.

E. avoid questionable advocacy advertising.

Answer 28

enhance the credibility of the publication.