Don’t Be Evil: Ethical Marketing for Small Businesses

Ethical marketing may seem like a paradox. The whole reason for marketing, after all, is to sell more products. It’s easy to cast aside the very real problems that marketing can create. Marketing deals with the intangible emotions of other people, pushing their buttons to make them take certain actions.

Just because you can be evil, though, doesn’t mean you have to be. Let’s talk about how to market effectively without being a snake.

Ethical Marketing for Small Businesses

1. Is marketing evil?
2. The Externality Problem
3. Dirty Marketing Strategies
4. Shady Marketing Research
5. Going After (or Scaring Off) Vulnerable Audiences
6. Sketchy Pricing: Fixing and Wars
7. Lies and Sleaziness in Advertising
8. Shilling and Astroturfing: Self-Promotion Gone Horribly Wrong
9. Hacking the Human Brain with Neuromarketing
10. Guidelines for Ethical Marketing

Ethical Marketing for Small Businesses

Is marketing evil?

First, let’s tackle the big question head-on. Is ethical marketing even possible? Some people believe that marketing is inherently evil. The argument is that marketing has to do at least one of the following:

1. Damage personal autonomy.
2. Harm competitors.
3. Manipulate social values.

At Weird Marketing Tales, we believe this is flawed. This is obviously not going to come as a surprise to you, so let’s make the case.

Obviously, harming competitors is wrong. Competition that is fair and meritocratic is, broadly speaking, not a problem. Price fixing, lying to customers or regulators to get ahead, corporate espionage, and so on are obviously very morally wrong.

Manipulating social values can be bad, too. The world is entirely too consumerist. We waste perfectly good products and we burn too many fossil fuels. In a rush to buy cheap products, we passively accept many horrible things. This is also true and tragic. Yet you can also manipulate social values to encourage healthier behavior (anti-smoking) or make fuel-efficient cars look attractive (ameliorating climate change).

It’s that first argument that we really push back on, though. Does marketing truly damage personal autonomy? Perhaps, especially in cases, where marketers lie or intend to deceive. Yet we say over and over again that it’s necessary to create a product with good product-market fit. Yes, you can sell people garbage if you have the upper hand – that’s why I’m still with Verizon – but most businesses cannot. Very, very few people are capable of selling something completely unwanted by the audience. For all the evils of consumer capitalism, leaving people without the autonomy to make choices is not among them.

The Externality Problem

In economics, an externality happens when someone completed unrelated to your transaction gains a benefit or pays a price. Some externalities are nice, like when restaurants open near your home and the property value appreciates. Other externalities are terrible, like a coal plant filling the air you breathe with billowing, black plumes of smoke. In those cases, the party affected by the externality does have their autonomy harmed.

A lot of the ethical marketing issues you’ll see below either deal with externalities or outright disregard for the consumer. We posit that the root problem is not the discipline of marketing, but rather power differentials between the businesses and individual members of society. With this in mind, we propose three golden rules for ethical marketing:

1. Avoid harmful externalities.
2. Be aware of power differentials and the harm they can cause.
3. Refrain from crass misbehavior such as lying or cheating.

Dirty Marketing Strategies

We’ve discussed the root cause of evils in marketing, so let’s talk about some marketing strategies that are fundamentally evil.

Anti-competitive business practices seek to reduce or eliminate competition entirely. At its core, capitalism – regardless of how you feel about the system at large – only really functions when companies compete. When a company accumulates too much power, it can toy with prices, tie products together, absorb competitors, lobby governments, and misuse intellectual property rights. As a small business, you’re not likely to be able to use anti-competitive practices, but perhaps certain other Amazons in the industry will.

Bait-and-switch involves advertising one thing and selling another. It’s simple, anyone can do it, and it’s ugly. It’s also illegal.

Planned obsolescence is by its very nature a dirty tactic. Everything breaks. Making things that break in order to sell more of them is wasteful and it costs both consumers and society at large.

Pyramid schemes and multi-level marketing. If your business model involves recruiting people, promising money to them, and never actually delivering a product; then congratulations – you’ve invented a pyramid scheme. Just like Bernie Madoff.

Subliminal marketing. By subtly exposing people to certain brands, such as through product placement, you can make people a little more likely to buy said brand. It’s not extremely effective, but it’s still dirty because it robs people of the chance to consciously make a choice.

Spam and SEO hijinks. In the early days of the internet, you could load web pages with all kinds of irrelevant information to boost your rank in Google. It doesn’t work so well anymore, but when it did, completely useless pages could outrank legitimately useful ones, wasting everybody’s time and potentially enabling more fraudulent practices.

Guns and Drugs – Marketing Ethics in Dicey Industries

Some industries are minefields for ethical marketing. In particular, the pharmaceutical and weapons industries come to mind. We certainly don’t want to live in a world without pharmaceuticals. A world without weapons – even just for self-defense – would not be considered desirable to most people. Yet to market a weapon requires glamorizing it or making it readily available, which could cause innocent people to be harmed. To market a pharmaceutical is to sway a doctor’s decision-making process, which can be evil as well.

Shady Marketing Research

At Marketing is the Product, we are big fans of marketing research. Performing marketing research, after all, can enable you to better understand the needs of your audience so that you may meet them to the best of your ability. Yet there are ways that marketing research can go horribly wrong.

As part of performing marketing research, you will likely come across very personal information. That includes age, gender, race, household income, browsing history, and much more. If you don’t come by that information honestly, ethical marketing becomes borderline impossible from the get-go.

Modern marketing, especially online, is particularly bad about invading consumers’ privacy. Facebook, for example, while being a great advertising system, has not historically been very open about how ads are being used. This can be used for grotesque purposes, such as when Russia bought ads on Facebook with the intention of sewing political turmoil in the US.

Going After (or Scaring Off) Vulnerable Audiences

Of the many Bond villain behaviors that marketing professionals can display, there is nothing quite as sinister as marketing to vulnerable audiences. For example, fast food companies can market their products to children, who see delicious food, but not potential health problems. Similarly, robocalls tend to go after the elderly, who are more likely to fall for the scam.

“So I won’t market my products to children or the elderly. Problem solved.” It’s not quite that simple. Vulnerability isn’t just about the cognitive abilities of your audience. Let’s return to the idea of power differentials. Loan sharks can take advantage of otherwise highly intelligent people because of their economic status. Perfectly logical people can make awful decisions when provided with nothing but misinformation.

It is also possible to denigrate audiences and make them vulnerable for business purposes. Some clothing stores refuse to make plus-size clothes, excluding an entire audience to make their brand seem more prestigious. The same principle can apply to ethnic minorities to – just look at this Wikipedia page called “shopping while black.” In some health systems, people with high expenses can be discouraged (but not outright turned away).

Sketchy Pricing: Fixing and Wars

Price is crucial to marketing – it is, after all, one of the 4 Ps. In a functional market, price is supposed to indicate the costs associated with creating and maintaining a product or providing a service. The buyer gets a great deal and the seller pockets enough money to make the enterprise worthwhile. It’s the glorious double thank-you of capitalism at its finest.

Until it breaks. Price fixing is a great example of an ethical marketing dilemma. When a small group of sellers controls an entire market, they can work together to set a fixed price. As long as everybody agrees not to drop below a certain price, the sellers can make money hand over fist at the expense of the consumer.

What about when the sellers are not cooperating? Pricing can still be used as a weapon by sellers, but instead of using it against consumers, it can be used against other sellers. For example, if an extremely large company wanted to establish market dominance early, they could sell their product at a loss, push everybody out, then raise the price. Large companies can even engage in price wars against each other, like Amazon and Walmart.

Lies and Sleaziness in Advertising

Advertising is what most people think of when they think of marketing. That’s unfortunate because the number of ways that advertising can go horribly wrong is incredible. Famously, old cigarette advertisements recommend smoking for health benefits.

Outright lying and fraud occur, but often the sleaziness is more subtle. For one, we can unnecessarily shoehorn sex into ads. One good example is Carl’s Jr., whose ads for breakfast food have been so racy that we won’t even link one here. These sorts of ads can be so overt in their sex appeal that it becomes a form of sexual harassment.

There are some products which are difficult to advertise no matter what. Tampons and condoms are good examples. They are necessary products but the mere act of advertising them can come across as tasteless.

Sometimes the most effective way to advertise is to denigrate your opponents. This is especially popular in the political arena. In fact, here is a tremendous but deeply upsetting example from the 1964 presidential election.

Shilling and Astroturfing: Self-Promotion Gone Horribly Wrong

In the age of the Internet, there has been an alarming uptick in shills, astroturfing, and native advertising. Shills pretend to be independent supporters of the marketer while actually being paid to comply. Astroturfing involves faking a grassroots movement until it begins to take a life of its own.

A lot of times, shills and astroturfing will show up as simple fake reviews on Amazon or similar sites. The basic idea behind these approaches is that pretending to have massive support will make customers more likely to purchase in order to fit in. It is disingenuous.

Hacking the Human Brain with Neuromarketing

Neuromarketing is a new discipline in marketing. It relies on clinical information about how the brain works in a consumer behavioral context. In short, neuromarketing means studying the brain so you know exactly how to sell to it.

In and of itself, neuromarketing is not necessarily evil. However, because we are finally starting to gain empirical insight into people’s biological responses to marketing materials, it could add further complexity to already ethically fraught situations. At its worst, it can be used to further invade privacy and manipulate others. At best, it gives us a few more tools to continue what we were already doing in marketing. Instead of looking at open/click rates on emails, we start looking at MRI scan data.

Guidelines for Ethical Marketing

Higher up in the text, we proposed three golden rules for ethical marketing:

1. Avoid harmful externalities.
2. Be aware of power differentials and the harm they can cause.
3. Refrain from crass misbehavior such as lying or cheating.

Now that we’ve covered the rest of the article, we’ll add seven more rules to make it a nice, even 10.

1. Accept that marketing can be used for evil.
2. Recognize evil marketing strategies when you see them.
3. Conduct research with permission and good intent.
4. Don’t go after vulnerable audiences.
5. Set prices fairly.
6. Don’t misrepresent your products or services.
7. Don’t pretend to be more popular than you are.

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Niccolo Machiavelli reportedly said, “I’d like to teach them the way to hell so they can steer clear of it.” Evil marketing exists, but so does ethical marketing. Small businesses can apply our simple principles to stay competitive without becoming monsters.