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An advertising regulation is a rule or law that dictates how a product or service may be portrayed to the public. These regulations often dictate what may be advertised and how this may be done. There are commonly rules that address when and where certain products may be advertised. Such regulations vary from one jurisdiction to another, and they may be developed at the national or local level.
In most places, governments realize that advertising is an essential business tool. Companies spend significant amounts of money promoting what they have to offer because doing so often results in returns that are several times greater. Governments also realize that advertising is a powerful tool, and if it is not regulated there could be a wide range of negative effects. When this likelihood is seen, an advertising regulation is often implemented as a preventative measure.
In many countries, there is a national group or agency that develops some regulations. For example, Advertising Standards Canada (ASC) administers a code that outlines acceptable practices in that nation. Local governments, whether provincial, state, or county, also tend to have a substantial amount of authority to develop regulations for their jurisdictions.
Even within a jurisdiction, an advertising regulation may not be universal. There are some products and services that may be subject to special rules or stricter terms than others. This is often because certain products and services are appropriate for only certain individuals. It is common for most industrialized jurisdictions to have some types of rules and laws that limit children's exposure to advertisement for adult items, such as alcohol or erotic entertainment.
These rules are often imposed to discourage physical harm. The advertising of tobacco products tends to be heavily regulated because, although these products may be legal, their use is not encouraged. It is known that they have severe health consequences. This motivates nations to drastically limit advertising to help prevent new consumers from entering this market.
Preventing deception is also a primary aim of these regulations. The goal in these instances is generally to help consumers avoid financial harm. To achieve this goal, an advertising regulation may dictate the circumstances in which certain terms may be used, such as “pure,” “natural,” and “organic.” Another advertising regulation may prevent companies from making claims that cannot be verified, such as, “This product cures 99 percent of cases.” Without these restrictions, there are possibilities that consumers could spend considerable amounts of money and not receive what they believed they were buying.