Research Proposal: Ethical Implications of Stealth Marketing

University Degree Business and Administrative studies

Abstract

Consumers’ increased awareness of firms’ conventional marketing tactics such as TV ads and print campaigns has lead many companies to divert their marketing efforts into new ways of targeting consumers. Firms hope to avoid having consumers look away or change channel when they see an ad, by using a technique called stealth marketing. This marketing practice is often seen as unethical and invasive. The goal of this proposal is to obtain research funding from the Advertising Standards Authority (ASA), as the aim of the research suggested in this proposal is to contrast consumers’ views with official views and guidelines on firms engaging in invasive, unethical or even illegal marketing practices in the form of stealth marketing. Another aim is to make more consumers aware of such firms’ practices in the hopes of reminding consumers of a more broad way of thinking when choosing products. Furthermore, the issue of what consumers think should be permitted in terms of stealth marketing will be investigated by conducting the focus groups research method. Individuals will be videotaped for data analysis. It is estimated that the length of the project will be around five months and maximum total costs will amount to £57500.

Contents

Abstract…………………………………………………………………………...p. 2

Overview…………………………………………………………………………p. 4

Literature Review…………………………………………………………………p. 5

Research Question………………………………………………………………p. 10

Methodology…………………………………………………………………….p. 11

Resources………………………………………………………………………..p. 12

References……………………………………………………………………….p. 13

Overview

While many individuals are aware of traditional marketing techniques such as billboards, press ads and on street promotions, when they see the ads they might decide to ‘tune’ them out, either by changing page or channel or by looking away. However, there is a marketing style on the up rise entitled ‘stealth marketing’. Stealth marketing is interesting because it provides marketers with a…

“…more subtle method of communicating a message to their consumers. Stealth marketing attempts to catch people at their most vulnerable by identifying the weak spot in their defensive shields. It loads a product or service with attractive features that make it “cool” or “in” and relies heavily on the power of word of mouth to encourage customers to feel they just “stumbled” upon the product or service themselves. The main objective is to get the right people talking about the product or service without it appearing to be company-sponsored” (Kaikati and Kaikati, 2004:6).

This research is important because it may make more consumers aware of malicious marketing attempts of firms, and could help them create a more unbiased state of mind when choosing products. Furthermore, not very much previous research exists and the Advertising Standards Authority (ASA) could use data gathered during this research to compare their views with public opinions and maybe adapt some of their policies. Therefore, I have chosen them as my target sponsor. I am personally interested in stealth marketing, because until recently, I myself had not heard about the concept. Although, I was aware of such techniques, because I had been targeted in the past by some firms and can now identify them more easily. I’m pursuing an MSc in Marketing and Strategy and stealth marketing is a rewarding research topic for me, as it is considered an intrinsic part of the future of advertising, which is my industry of choice for my future career.

Literature Review

Kaikati and Kaikati (2004) list six types of stealth marketing techniques:

Viral Marketing “describes any strategy that encourages individuals to pass on a marketing message to others, creating the potential for exponential growth in the message's exposure and influence” (Wilson, 2000). “Volkswagen is one of the most infamous cases, a viral for VW's Polo model featured a suicide bomber detonating a device while driving the car but the vehicle remaining intact. VW and its agencies denied all knowledge of the film” (Kilby, 2007:16). Boyer and Ashley (2007:38) mention the infiltration of blogs, Youtube and ...

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Literature Review

Kaikati and Kaikati (2004) list six types of stealth marketing techniques:

Viral Marketing “describes any strategy that encourages individuals to pass on a marketing message to others, creating the potential for exponential growth in the message's exposure and influence” (Wilson, 2000). “Volkswagen is one of the most infamous cases, a viral for VW's Polo model featured a suicide bomber detonating a device while driving the car but the vehicle remaining intact. VW and its agencies denied all knowledge of the film” (Kilby, 2007:16). Boyer and Ashley (2007:38) mention the infiltration of blogs, Youtube and Myspace as examples of viral marketing.

Brand Pushers…

…“are either hired or volunteer to generate buzz for a particular company’s product. For example, brand pushers may promote a certain alcoholic beverage at a bar by recommending it to friends and new acquaintances without appearing to be affiliated with the company (and you thought the attention was all about you)” (Cooney, 2005:10).

While most brand pushers are trained unknown novice actors, Grala (2005:150) talks about celebrity brand pushers like Pamela Anderson promoting Bratz dolls when she picked up a free sample at the 2005 MGA awards and paparazzi took pictures of her.

Celebrity Marketing is very common in the health care industry. Kaikati and Kaikati (2004:12) mention the fact that “stealthy celebrity endorsements allow pharmaceutical companies to bypass FDA [Food and Drug Administration] requirements that stipulate that all drug advertising messages should include cautions about a medication and spell out anticipated side effects”. Jessica Simpson for instance acted as a spokesperson for ProActiv by claiming that the acne fighting product helped her fight her skin problems, by showing before and after pictures. According to Kaikati and Kaikati (2004:12) celebrities also appear on talk shows and talk about health problems mentioning which drug helped them, without including the fact that they have financial ties with the drug producer.

Bait-and-Tease Marketing can be considered as one of the more moral and sensible marketing ploys, while the previous techniques are rather unethical. It basically tries to attract consumers through some form of advertising, for instance to click on a website where it is revealed who was responsible for the ‘cool’ advert, which ultimately might not have anything to do with the product at all. One such campaign was launched by Mercedes-Benz. The car maker managed to sneak in a ‘fake’ movie trailer with other real trailers in cinemas across the UK. This trailer featured its new SL model, but never mentioned the brand, asking consumers to find out more about the alleged movie online (Kaikati and Kaikati, 2004:13).

Marketing in Video Games involves the placement of products in such games by companies other than the game maker. The virtual community ‘Second Life’ now has a supermarket which sells ‘real’ products. Recently Kraft Foods Inc. launched more than 70 products in this virtual world (Enright, 2007:4). Fattah and Paul (2002:43) found that automakers were among the first industries to involve their product in a computer game. Specifically Mazda placed their RX-8 model in the game GT3 two years before the actual car was released to target potential buyers (Kaikati and Kaikati, 2004:14).

Marketing in Pop and Rap Music “involves embedding commercial messages in pop and rap songs” (Kaikati and Kaikati, 2004:15). “Artists Busta Rhymes and P Diddy collaborate on an infectious ode to a cognac brand, Pass the Courvoisier Part II. Courvoisier’s sales jump 20 percent. Courvoisier claims that it had no agreement with the artists prior to the release of the song. The keyword here is ‘prior’ ” (Sauer, 2003). While the previous case seems tolerable because no previous agreement existed, Sauer (2003) talks of songs which were created after a financial agreement between artists and a company wanting to pass a stealth advert [e.g. Jay-Z mentioning Motorola]. Nelson George (1999) calls rap music “an incredibly flexible tool of communication, quite adaptable to any number of messages,” thus “it has been so easy to turn every element of the culture associated with [it] into a product”.

Consumer and academical views:

Some consumers are concerned about stealth marketing as they are aware of most of the covert marketing techniques firms use today. Whole websites have been dedicated to the topic, for instance ‘The Viral Buzz and Marketing Association’ [www.vbma.net] which aims to connect academics, authors, consultants and others interested. Furthermore, there is the ‘Word of Mouth Marketing Association’ [WOMMA, www.womma.com] which has as its mission to promote ethical marketing, protecting consumers. Additionally, blogs have been dedicated to the topic, e.g. the ‘Church of the Customer Blog’ [www.churchofthecustomer.com] which is run by Ben McConnell (2007), who heavily criticises the stealth marketing techniques of today’s firms.

“Besides being morally right [sic], Andy Sernovitz [founder of WOMMA] also argues that disclosure is the only sensible choice”. "It would be idiotic [sic] for any brand to dare do stealth marketing," he says. "When you deceive consumers, when they find a recommendation that's supposed to be from a trusted source, a real person, but that ends up being from a marketer or a paid shill, they will hate your brand" (Benedictus, 2007).

Previous research from Calfee and Ringold (1994:228) suggests that…

… “six decades of survey data consistently indicate that about 70% of consumers think that advertising is often untruthful, it seeks to persuade people to buy things they do not want, it should be more strictly regulated”.

Goldman (2006:12) supports the need for disclosure of advertising with his statement: “(…)we should reconsider the universally recognized fact that consumers say that they want to know when content is marketing”.

Official views:

“Besides the ethics codes of WOMMA or the currently relaunching Viral and Buzz Marketing Association, the buzz marketing industry in Britain is almost totally unregulated. Stealth marketing, when it occurs, appears to be in breach of several articles of the Committee of Advertising Practice Code, such as 6.1: "Marketers should not exploit the credulity, lack of knowledge or inexperience of consumers"; or 22.1: "Marketers . . . should ensure that marketing communications are designed and presented in such a way that it is clear they are marketing communications. "But it remains rather hazy whether the Advertising Standards Authority or the Office of Fair Trading actually cover these practices”, which would certainly not include some of the cases mentioned. The issue is only academic, in any case, when one relies on consumers to complain about marketing that they do not even know is happening” (Benedictus, 2007).

“As the influence of advertising has dwindled, so the rise of PR and product placement [which the broadcasting regulator Ofcom seems to be preparing to allow on British television] has been unstoppable. It is safe to say that no newspaper, magazine or news programme released today will be altogether free of PR involvement - and yet none will disclose it” (Benedictus, 2007).

Research Question

The research question which arises from the literature review is: Should stealth marketing be permitted? “Members [of Consumer Alert, a consumer advocacy organisation] insist that it is not only unethical to deceive people (…), but it is also as intrusive as telemarketing” (Kaikati and Kaikati, 2004:19). Kaikati and Kaikati (2004:18) also state that “it is setting off alarms with consumer watchdog groups”. One such group, the ASA has rules on what is permissible and what not, but do consumers’ views differ from those rules? I hope to find out about consumers’ opinions on stealth marketing: Have they experienced it and how do they feel about it; what ethical and personal implications has it had for them?

Methodology

Bryman and Bell (2007:512) suggest the use of focus groups for testing responses to advertising initiatives. Therefore, I propose to carry out qualitative research through the use of the focus group method.

I will use probability sampling to select members of the population of consumers who have an opinion on stealth marketing and are willing to discuss it. The samples will have to give their consent on being video recorded before they take part in a focus group, as this is the proposed method of data collection. The samples will be selected from a number of individuals replying to newspaper ads and emails which I will send out. Focus groups will consist of both female and male individuals of different ages to provide a broad spectrum of opinions. The moderator will lead the discussion in a semi-structured manner. The recorded data will then be analysed using elements of discourse analysis and narrative analysis.

To make the coding of the data retrieved more efficient, a coding schedule and a coding manual will be devised. Bryman and Bell (2007:314) say this “is crucial, because it provides coders with complete listings of all categories for each dimension coded and guidance about how to interpret the dimensions”. To determine the validity of the data obtained; stability, internal reliability and inter-observer consistency will be taken into account. As criticism often stems from the reliability of a study, Fern (in Bryman and Bell, 2007:513) argues…

“that the generalizability of focus groups findings (…) depends on the scale of the sample. He also defends the reliability of focus groups, suggesting that representativeness can be achieved by stratifying the population and drawing random samples from each stratum”.

Resources

The critical path of the project will be timetabled on a Gantt chart. “It will show the chain of sequential activities to determine the minimum time required for the project” (Dewar, 2006). From the date of emailing out invitations to potential participants and posting newspaper ads, it is estimated that to provide my sponsor with results of the study, around five months are required. It is anticipated that, not all individuals invited, even if they agreed to come, will actually attend to the focus groups. A reply to ads and emails is expected within a week of posting them. A second mailing will be done the next month. Furthermore, the focus groups will be held fifteen times in two months to increase reliability. Additionally, to analyse and code the data, volunteers will be used, but again there is a chance of absenteeism, therefore, two months will be taken into account to produce results. Finally, in favour of time and budget, where possible I will try to make the timetable shorter.

In terms of budget, funds will be needed for the newspaper ads, which will range from £10 to £50 pounds per ad. Individuals attending focus groups will be compensated for travel costs, which could range from £10 to £150 per individual depending on type of transport used. Per focus group 10 individuals will be invited in the hope of having 6-8 people attending on the day. Per session a moderator will be required [estimate £1000] and a venue [estimate £1000] as well as computer equipment [estimate £200]. In the hope of making the focus group feel as comfortable as possible catering will be provided [estimate £100]. The overall estimated maximum cost for the project is £57500. Finally, I hope that this project will be deemed feasible and in turn this proposal will fulfil its aim, which is to obtain funding from the ASA.

References

Benedictus, L. (2007). ‘Psst! Have you heard?’. [Online]. (http://www.guardian.co.uk/media/2007/jan/30/advertising.marketingandpr). The Guardian. (accessed 29.11.2007).

Boyer, C. and Ashley, R. (2007). ‘Spies Like Us’. Electronic Gaming Monthly. 213, pp. 38-40.

Bryman, A. and Bell, E. (2007). Business Research Methods. 2nd edition. Oxford: Oxford University Press.

Calfee, J.E. and Ringold, D.J. (1994). ‘The 70% Majority: Enduring Consumer Beliefs About Advertising’. Journal of Public Policy & Marketing. 13(2), pp. 228-238.

Cooney, J. (2005). ‘First word’. License!, 8(2), p. 10.

Dewar, R. (2006). ‘MSc Project Planning & Timetabling’. [Online]. (http://www.macs.hw.ac.uk/~monica/GradCertIT/RM/Docs/L1ProjectPlanningAndTimetabling.pdf). Graduate Certificate in Information Technology. (accessed: 1.12.2007).

Enright, A. (2007). ‘Get ‘em where they live - virtually’. Marketing News. 41(10), p. 4

George, N. (1999). Hip Hop America. New York: Penguin.

Goldman, E. (2006). ‘Stealth Risks of Regulating Stealth Marketing: A Comment on Ellen Goodman’s Stealth Marketing and Editorial Integrity’. Texas Law Review, 85(11), pp. 11-15.

Grala, A. (2005). ‘Celebrity Brand Pushers’. License!, 8(5), pp.146-150.

Kaikati, A. M. and Kaikati, J. G. (2004). ‘Stealth Marketing: How To Reach Consumers Surreptitiously’. California Management Review, 46(4), pp. 6-22.

Kilby, N. (2007). ‘Viral: the final frontier’. Marketing Week, 30(35), pp. 16-17.

McConnell, B. (2007). ‘Exposing Stealth Marketing’. [Online]. (http://customerevangelists.typepad.com/blog/2005/01/exposing_stealt.html). Church of the customer blog. (accessed: 29.11.2007).

Sauer, A. D. (2003). ‘Can Hip Hop Cash In?’. [Online]. (http://www.brandchannel.com/features_effect.asp?id=162#more). Brandchannel.com. (accessed: 29.11.2007).

Wilson, R. F. (2000). ‘The six simple principles of viral marketing’. [Online]. (http://www.wilsonweb.com/wmt5/viral-principles.htm). Web Marketing Today, 70. (accessed: 27.11.2007).

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