The Critical Role Ethics Plays in Modern Marketing

As much as it might be difficult to define what "ethics" is in relation to marketing, it's easy to define what it isn't.

Take, for instance, a product pricing landing page that gives incorrect information (or, hides the price entirely … ).

Alternatively, consider a social media advertisement that claims a product will do X, Y, and Z — but then, when you order it, you find it can only do X.

These types of disreputable, dishonest, and corrupt marketing strategies are what we mean when we say a company behaved unethically.

Ultimately, while unethical marketing can potentially succeed in the short-term, it's not a good long-term strategy. Over time, customers will distrust your brand as a whole, and you'll find it difficult to find brand advocates who are willing to spread awareness about your product or service through word-of-mouth marketing.

In short, unethical marketing will make your job as a marketer much harder in the long run, not easier.

Here, let's explore the critical role ethics plays in modern marketing (and leadership as a whole), and how you can ensure you're following best practices to create ethical solutions to all your marketing challenges.

The Role of Ethics in Leadership

To start, let's define what ethics means.

While it's easy to define ethics as "the difference between right and wrong", the truth is a bit more complex than that.

For instance, the concept of "right" and "wrong" is typically a relatively subjective one. What's "right" culturally in the U.S. might be frowned upon in Asia, and vice versa.

The Markkula Center for Applied Ethics defines ethics as two things: "First, ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues … Ethical standards also include those that enjoin virtues of honesty, compassion, and loyalty."

The Markkula Center for Applied Ethics adds, "Ethics [also] refers to the study and development of one's ethical standards. As mentioned above, feelings, laws, and social norms can deviate from what is ethical. So it is necessary to constantly examine one's standards to ensure that they are reasonable and well-founded."

In the context of marketing, then, ethics refers to the practice of promoting fairness, honesty, and empathy in all marketing activities.

One of the easiest ways to promote ethics in a business sense, of course, is to ensure it's instilled in your company's culture and values.

However, it's important to note, it's not enough just to have a set of values and mission statement. Truly ethical companies need to live out these values every day (as noted in this article about core values by HBR).

To further investigate what this means in practice, I spoke with Joan Harrington, the Director of Social Sector Ethics at The Markkula Center for Applied Ethics.

Harrington told me, "The key to integrating ethics in organizations is leadership. The leadership must set the example by living the organizational values and incorporating them into all aspects of the business. So having a code of ethics or a set of values in a handbook is not enough to shape an ethical culture."

Harrington adds, "Employees need to be trained on, or at least exposed to, how to make ethical decisions. Ethics is not about what you think is right versus what I think is right. It is how we — in all of our different relationships — ought to behave."

Harrington suggests in an ideal scenario, an entire organization will go through an ethical decision-making training — but, she adds, there are some areas of an organization that are higher-risk for ethical issues than others (like, for instance, engineers working on projects involving AI that might affect millions of people). For those higher-risk groups, these ethical decision-making trainings should be mandatory, not optional.

As Harrington told me, "This is not to say that there may be more than one ethical response, but it is not purely subjective. In training, people need to be exposed to real life situations, relevant to their jobs, so they can really work through how to identify, approach, and decide ethical issues."

To create a truly ethical culture, it's critical leaders model ethical behaviors and values, create a strong community, and design ethical systems in which all employees can thrive.

To do this, Ann Skeet, Senior Director of Leadership Ethics at the Markkula Center, advises leaders to "use goals, mission, and values to make decisions about compensation and other rewards, like promotions."

Ultimately, ethical leadership needs to be baked into the processes, not an "afterthought". This way, it isn't just one person's sole responsibility to raise her hand and say, "That doesn't seem fair to me." Instead, the very foundation of the organization should be built upon ethical pillars, including honesty and fairness, so that each business decision is made with these values top-of-mind.

Next, let's dive into how ethics plays into your role as a marketer.

The Role of Ethics in Marketing

Ethical marketing refers to a marketer's responsibility to ensure all marketing activities adhere to core ethics principles, including integrity, humility, and honesty — both internally, and externally.

To further recognize the difference between internal and external marketing ethics, let's consider an example.

Let's say your marketing team hires a design agency for a new marketing campaign. Halfway through the campaign, your team discovers the agency doesn't treat its workers fairly, and doesn't align well with your values in terms of environmental and social responsibility.

Even if your customers don't know about this alliance, it's still in your best interest to discontinue a working relationship with the agency as soon as possible, and re-align yourself with agencies that uphold the same standards you've set for your own team internally.

Equally importantly, of course, is the public-facing component of ethical marketing. This includes ensuring you don't stretch the truth or lie about your product or service (including pricing, functionality, release date, current customers, etc.) to try to attract new customers — lying about Beyonce's use of your product might seem like a good idea in theory, but it won't take long before you're caught out.

Additionally, ethical marketing also means treating workers fairly, using sustainable materials, and doing your part to support environmental or social causes that feel important to your brand.

For instance, consider the brand Toms, which gives away $1 for every $3 it makes, and has given nearly 100 million pairs of shoes to people in need since 2006.

As Harrington notes, "Marketing has its own, built-in, ethical issues. For non-profits, do they do 'storytelling' about their clients in an ethical way when they are engaged in fundraising, i.e., how are they representing their clients? Have they included clients in deciding how to present them? Are they operating from stereotypes?"

Harrington adds, "For all organizations, to figure out whether marketing is ethical, you'll want to ask whether marketers are operating transparently? Is the product accurately described? Is the marketing ahead of the actual product? And is there undue pressure on potential consumers?"

In 2020, ethical marketing is more important than ever.

Consider, for instance, that it costs five to 25 times more to acquire a new customer than to retain an existing one. Brand loyalty is critical for the long-term success of your company.

Additionally, did you know people don't trust businesses nowadays as much as they used to? In fact, 81% trust their friends and family's advice over advice from a business, 69% do not trust advertisements, and 71% do not trust sponsored ads on social networks.

Ultimately, there's only one long-term solution to the ever-growing problem of a distrustful customer base: ethical marketing.

Of course, it's important to remember, ethical marketing needs to influence every aspect of your marketing strategy, not just one or two areas. You need to show honesty, transparency, and integrity across the board — from the Instagram Stories you post, to the new product demos you promote.

To learn more about ethical marketing and how you might apply it to your own team, take a look at The Markkula Center's framework for ethical decision making.