MKT 440 Week 4 Ethics in Digital Marketing Example

Reviews, Disclosures and Customer Data: Ethical Questions in the Online Presentation of an Omaha Heating and Cooling Company

[Student Name]

University of Phoenix

MKT/440: Fundamentals of Digital Marketing

Week 4 Assignment

[Instructor Name]

[Date]

Kessler Comfort Systems and all details are composites written for a model paper.

The composite contractor at the center of this course, Kessler Comfort Systems, has spent the past two months building a digital marketing program, as described in Weeks 1 to 3. Its map listing, website and paid search ads now bring in most new customers. The speed of the change created a problem the owner did not foresee: staff are making marketing decisions with no written policy. During one fall season, four decisions reached owner Ruth Kessler's desk, each raising an ethical question about how the company presents itself online. This paper analyzes those decisions using research and federal guidance and proposes a short code of conduct.

A Framework for the Analysis

Each case is judged by three questions. Is the information honest, meaning both true and not misleading in its overall impression? Is it fair to the people affected, including customers and competitors? Does it respect customers' control over information about themselves? Martin and Murphy (2017) argue that marketing ethics in the digital age depends heavily on trust, because customers cannot see how firms collect and use information about them. The framework follows that logic.

Case 1: Gift Cards for Five-Star Reviews

A dispatcher suggested sending a $25 gift card to every customer who posts a five-star review. The idea seems harmless, since the customers are real. But reviews are valuable because readers believe they reflect honest experience. Luca and Zervas (2016) studied reviews that the Yelp platform's filter flagged as suspicious and found that about 16 percent of restaurant reviews were filtered. Restaurants were more likely to commit review fraud when their reputation was weak or recently damaged and when they faced more competition. A paid five-star program is a milder version of the same distortion.

The practice also conflicts with federal rules. A rule on consumer reviews and testimonials (Federal Trade Commission, 2024) prohibits offering compensation or other incentives conditioned on a review expressing a particular sentiment, along with fake reviews, undisclosed reviews by company insiders and review suppression.

Kessler may still ask every customer for a review, and it may thank them, as long as the request does not depend on what they say. The ethical and legal answer is the same: ask everyone, reward no particular rating and respond publicly to criticism.

Case 2: The Blogger's Free Tune-Up

A popular Omaha home improvement blogger received a free $189 tune-up and then posted a glowing account of Kessler's service with no mention of the gift. Readers would reasonably assume she paid like any other customer. Boerman et al. (2017) studied sponsored posts on Facebook and found that a clear disclosure from a celebrity helped readers recognize the post as advertising, which affected how they responded to it. Without disclosure, readers cannot apply the skepticism they would bring to an ad. The fix is simple: the blogger should add a plain statement at the top of the post that the tune-up was free, and Kessler should require that statement in any future arrangement.

Case 3: Customer Data From Service Calls

Kessler's service software stores names, addresses, phone numbers, photos of equipment and notes such as furnace age and family members at home. A lead broker offered to buy the records of customers with systems older than 15 years, to sell to replacement companies. Customers gave this information to receive service, not to be marketed to by strangers. Goldfarb and Tucker (2011) found that European privacy rules limiting data use reduced the effectiveness of online ads, which shows that data has real commercial value; that value is exactly why customers expect firms to protect it. Selling the records would violate customers' reasonable expectations even if the contract fine print allowed it. Kessler should refuse, state in its privacy notice that it does not sell customer data and limit staff access to service notes.

Case 4: The From Price

A newspaper and website ad advertised new furnaces from $2,995. In the past year, only 3 of 211 furnace installations cost that little; the median was $5,240. The statement is technically true but leaves an overall impression that most homeowners will pay around $3,000. This fails the honesty test. Better practice is to show a typical range and explain what drives cost, such as home size and ductwork.

A claim can be literally true and still mislead, and customers judge a company by the impression its words leave.

The Business Case

Each shortcut would have produced short-term gains: more five-star reviews, a cheaper endorsement, cash from the broker and more calls from the ad. But Kessler's business depends on homeowners trusting its technicians inside their houses. A single news story about bought reviews or sold data would cost more than any of these gains, and the gap between the advertised and actual furnace price would create angry customers at the moment of sale. Technicians would bear the cost of that anger in kitchens and basements, explaining a quote that no longer matches the ad. Honest practice also makes the company's good reviews more persuasive, because readers who see a mix of ratings and thoughtful replies tend to believe the praise. Over a decade of repeat tune-ups and referrals, trust is worth far more to Kessler than a quarter of inflated numbers.

A One-Page Code for Staff

Kessler should adopt five rules. Ask every customer for an honest review and never reward a particular rating. Require clear disclosure of any free service or payment given to anyone who posts about the company. Never sell or share customer data for others' marketing, and say so publicly. Advertise prices that represent what typical customers pay. Send any new marketing idea involving reviews, endorsements, data or pricing to the owner before launch. Office staff and technicians should review the code each spring.

Conclusion

The four cases show that ethical questions in digital marketing arise in ordinary decisions made quickly by well-meaning staff. Research on review fraud, disclosure and privacy, along with federal rules on reviews, points to the same conclusion as the framework: honest, fair and respectful presentation of information protects both customers and the reputation on which Kessler's business rests.

References

Boerman, S. C., Willemsen, L. M., & Van Der Aa, E. P. (2017). "This post is sponsored": Effects of sponsorship disclosure on persuasion knowledge and electronic word of mouth in the context of Facebook. Journal of Interactive Marketing, 38, 82-92. https://doi.org/10.1016/j.intmar.2016.12.002

Federal Trade Commission. (2024). Trade regulation rule on the use of consumer reviews and testimonials. https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-465

Goldfarb, A., & Tucker, C. E. (2011). Privacy regulation and online advertising. Management Science, 57(1), 57-71. https://doi.org/10.1287/mnsc.1100.1246

Luca, M., & Zervas, G. (2016). Fake it till you make it: Reputation, competition, and Yelp review fraud. Management Science, 62(12), 3412-3427. https://doi.org/10.1287/mnsc.2015.2304

Martin, K. D., & Murphy, P. E. (2017). The role of data privacy in marketing. Journal of the Academy of Marketing Science, 45(2), 135-155. https://doi.org/10.1007/s11747-016-0495-4