CMA Marketing Ethics & Legal Compliance 2 — Questions and Answers
Question 1: What is 'data privacy' in the context of digital marketing?
- Keeping marketing campaign data confidential from competitors
- The responsible collection, storage, and use of consumer personal data in compliance with laws and ethical standards (Correct answer)
- Encrypting a company's internal financial data
- Protecting proprietary advertising creative from being copied
Correct answer: The responsible collection, storage, and use of consumer personal data in compliance with laws and ethical standards
Data privacy in marketing refers to handling consumer personal information responsibly, with transparency, consent, and compliance with privacy regulations.
Question 2: Which US state has the most comprehensive consumer data privacy law affecting marketing practices, often considered the US equivalent of GDPR?
- New York
- Florida
- California (CCPA/CPRA) (Correct answer)
- Texas
Correct answer: California (CCPA/CPRA)
California's CCPA (California Consumer Privacy Act) and its update CPRA give California residents rights over their personal data, affecting any company doing business with California residents.
Question 3: What is 'puffery' in advertising, and is it legal?
- Exaggerated, subjective claims that no reasonable consumer would take literally; it is generally legal (Correct answer)
- False factual claims about a product; it is illegal
- Comparative advertising mentioning competitors; it is restricted
- Advertising directed at children; it is heavily regulated
Correct answer: Exaggerated, subjective claims that no reasonable consumer would take literally; it is generally legal
Puffery consists of exaggerated, subjective boasts like 'World's Best Coffee' that are not verifiable and which no reasonable consumer takes literally, making them generally legal.
Question 4: What is the ethical concern with 'targeted advertising' based on sensitive personal data?
- It reaches too broad an audience
- It may exploit vulnerable populations, violate privacy, or lead to discriminatory outcomes (Correct answer)
- It is too expensive for small businesses
- It is not permitted under US law in any form
Correct answer: It may exploit vulnerable populations, violate privacy, or lead to discriminatory outcomes
Targeting based on sensitive data like health, race, or financial status raises ethical concerns around exploitation, discrimination, and privacy violations.
Question 5: What does 'informed consent' mean in the context of marketing data collection?
- Consumers must be lawyers to consent
- Consumers must be clearly informed about what data is collected and how it will be used before giving consent (Correct answer)
- Businesses must inform the government before collecting data
- Consent must be obtained after data collection is complete
Correct answer: Consumers must be clearly informed about what data is collected and how it will be used before giving consent
Informed consent means consumers are given clear, understandable information about data collection practices before agreeing to share their personal data.
Question 6: What ethical obligation do marketers have when advertising to children in the US?
- No special obligations apply to children's advertising
- Marketers must adhere to stricter standards including truthfulness, age-appropriateness, and limitations on exploitative techniques (Correct answer)
- Marketers are prohibited from advertising to anyone under 21
- Children's advertising is only regulated for food products
Correct answer: Marketers must adhere to stricter standards including truthfulness, age-appropriateness, and limitations on exploitative techniques
US marketers targeting children must follow stricter ethical and regulatory standards, including FTC guidelines and COPPA, to prevent exploitation.
CMA Marketing Ethics & Legal Compliance 2
What is 'data privacy' in the context of digital marketing?