1. What is ethical internet marketing? Laura Rogan
Introduction
While the development of the internet as a marketing vehicle has expanded significantly since the
advent of the internet, there are many ethical issues that continue to develop without any clear
guidelines as to what is acceptable internet marketing behavior from an ethical perspective. As a result
of the advanced speed with which changes online occur; at a speed that is unprecedented in history, as
a society, we have had little time to absorb the significance of these changes for our lives (Palmer,
2005). Thus, online techniques are transforming the nature of the relationship between marketers and
consumers (Palmer, 2005). This paper contends to determine whether the concept of ‘ethical internet
marketing’ actually exists, whether online advertising practices can be clearly defined as ethical and
unethical or whether an expanding ‘grey’ area lies between ethical and unethical internet marketing
practices.
This will be done firstly by defining the concept of ethical marketing generally, as well as what is meant
by ‘online’ internet marketing, as well as ‘offline’ marketing. Secondly, it will compare and contrast
offline marketing ethical issues versus online marketing ethical issues to determine whether any new
ethical issues exist, or whether the degree of existing ethical issues with offline marketing has simply
increased or been magnified with online marketing. Finally, the paper will examine whether it is possible
to overcome any gap that exists in the current landscape or do changes need to be made: will the ethical
framework required for the internet evolve naturally with the fast paced environment of the internet,
are we waiting for the ethical framework to eventually ‘catch-up’ or are government intervention and
regulations required?
Theory
Ethics can be defined generally as a means of systemizing how individuals should live in a manner of
goodwill towards each other by conceptualizing what is right and what is wrong (Kraut, 2010).
Marketing or advertising ethics can be more specifically defined as “what is right or good in the conduct
of the advertising function. It is concerned with questions of what ought to be done, not with what
legally must be done” (Cunninghan, 1999). However, this is a definition of ethics in the context of
traditional advertising and marketing practices that was published over 10 years ago when the internet,
and its marketing potential and capabilities, were in their infancy. It can be argued that there is currently
a gap in the literature for a specific definition for advertising or marketing ethics in the context of the
internet, rather traditional definitions are currently being applied to the internet context, and whether
this is appropriate. Therefore, the terms ‘online’ and offline’ marketing will be explained in order to
distinguish between the different applications of this definition. For the purpose of this paper, ‘online’
marketing shall refer to all marketing and advertising practices conducted via the internet; be they
directly through company websites, blogs, viral marketing, email or pop-up advertisements or indirectly
through passive devices such as adware, cookies, spyware and web bugs. ‘Offline’ marketing shall be
defined as all marketing and advertising practices conducted by any other means apart from the
internet; whether they are traditional means (newspaper, radio or television advertising) or non-
traditional means (product placement, guerilla advertising, celebrity endorsement or direct marketing).

2. What is ethical internet marketing? Laura Rogan
Discussion
Though the advent of new technology has enabled new media to explode (Drumwright and Murphy,
2009), this has been done through augmenting traditional mass media advertising approaches with non-
traditional approaches. While there have been many changes with the arrival of new technology in the
marketing world, there are many similarities that exist. While Huang (2009) argues that the internet
allows advertisers to disguise advertisements online as other forms of messages so that consumers are
not aware they are being advertised to; which is reiterated by Turow et al (2008) who state “consumers
are more vulnerable with respect to online marketing than they are traditional marketing channels”,
Milne et al (2009) explain that “the fact that marketers have found stealth ways to communicate with
consumers is not new, however, the online context creates new possibilities to interact with consumers
in a non-transparent manner”. This paper argues that both perspectives are correct to an extent;
however a distinction needs to be made between the marketing capabilities and techniques that the
online environment provides and the regulation (or lack thereof) that controls its content and practices.
Capabilities and techniques
It is evident that there are many marketing techniques that remain consistent across both the online
and offline marketing environments. As Drumwright and Murphy (2009) explain many of the concerns
and criticisms of advertising have persisted through many decades and into the twenty first century.
Practices seen to be ethically questionable such as product placement, celebrity endorsement,
disguising advertisements as news stories, feeding the media info using PR, bribing journalists and
guerilla advertising techniques can be seen in different forms across both in both online and offline
contexts, supporting Drumwright and Murphy’s argument that many of these strategies are not more
ethical offline than they are online, however while these issues may remain consistent in kind,
Drumwright and Murphy claim that ‘new’ issues in business and advertising ethics differ in degree rather
than kind.
This can be illustrated when looking at the ethical issues of transparency and security. There are
numerous offline practices that can be considered ethically questionable in terms of transparency.
Covert marketing, which involves making efforts not directly linked to the marketer by the consumer
(Kaikati and Kaikati, 2004) is a tactic that originally began with product placements (Balasubramanian,
1994). Beginning in the 1930s, Proctor & Gamble broadcasted on the radio its "soap operas" featuring
its soap powders. Also, television and film were used by the tobacco companies to lend glamour and the
"right attitude" to smoking (Williams et al, 2011). Furthermore, celebrity endorsements in an offline
setting can be seen by consumers as marketers not being transparent. “When an advertisement does
not look like an advertisement, consumers can easily be misled” (Feinman, 2011). By the late 1930s,
celebrity endorsements were widespread among the stars of the screen, radio and stage, for example
General Mills used photos of athletes on Wheaties boxes to sell products (Feinman, 2011). When we
compare this to practices online, such as the “surreptitious” used by companies to gather consumer
information by posing as customers and users on online blogs, forums an chat rooms (Milne et al, 2009)
it may be argued that consumer trust has been broken equally in both settings: the message presented
is not that of the messenger, when the consumer is lead to believe that it is. “The internet is more

3. What is ethical internet marketing? Laura Rogan
affordable than any other medium and makes it difficult for audiences to verify the real identities
behind the messages” (Grazioli and Jarvenpaa, 2003 as cited in Huang, 2009). This was illustrated by
Wal-Mart (Gillin, 2006 as cited in Huang, 2009), one of the biggest merchandising companies in the
United States, that was making use of the virtual environment and persuading bloggers to write positive
articles about the company whilst on a road trip by paying for the flights, the RV, gas, and the blog
entries, without that information being disclosed on the blog itself. The same ethical issue is present in
both the online and offline contexts, however it can be argued the degree to which the online
environment in unethical is greater due to the fact it is reaching a larger audience and information is
disseminated more quickly, but mainly due to the increased level of anonymity that the internet brings,
as well as the lack of disclosure it requires. When we compare this to other online techniques, such as
covert cookie collection (Miyazaki, 2008), it can be argued that lack of transparency in this setting has
more far reaching consequences due to the type of information that can be obtained. While marketers
may contend that “advertisers argue profiling [users] results in greater efficiency, because consumers
are only sent ads that interest them” (Stead and Gilbert, 2001), many would consider the trust that has
been broken in this setting to be far worse as individuals would not be comfortable with certain
confidential information being collected and compromised without their permission, particularly as
“currently, there are no legal limits on how cookies are used” (Stead and Gilbert, 2001). As Palmer
(2005) states “what we are finding is that businesses now have fundamentally new ways of interacting
with consumers that raise serious and largely new questions for our understanding of…[marketing]
ethics”. With matters of information and security it is evident that the degree of the effect and
therefore the degree to which the technique moves towards being unethical is far greater, as a result of
“the temptations [being] greater, and the risks and rewards are higher” (Drumwright and Murphy,
2009).
Regulation
While there are both similarities and differences in terms of content and technique across online and
offline contexts, there are distinct differences between the level of regulation in online and offline
contexts, with technologically driven new media characterized as a context in which the regulations,
guidelines, and controls of traditional media are absent (Drumwright and Murphy, 2009). However, we
can still see that “recent regulatory and legal activity are testament to the fact that ethical problems can
and do persist in traditional media…Constant vigilance in traditional media is warranted” (Drumwright
and Murphy, 2009). Therefore where does that gap lie between offline media and online media, if both
mediums present questionably ethical behavior? Why do some authors view the online setting as more
‘dangerous’ or ‘deceitful’ to consumers (Huang, 2009)? The question also remains as to whether or not
the internet can be regulated. “The internet differs from traditional information outlets. The barriers of
time and distance are minimized in terms of marketers’ ability to create databases and the consumers’
ability to selectively obtain information…These unique characteristics make the internet difficult to
regulate” (Cronin, 1994 as cited in Bush et al, 2000). Ogburn’s idea of “cultural lag” used to represent
the condition in which material culture advances more rapidly than non-material culture is applied by
Marshall and Swartwout (2006) to the internet to illustrate “the gap that exists between the new
technology and the development of ethics to guide its application, and thus the potential unethical, or at

4. What is ethical internet marketing? Laura Rogan
least controversial, uses that may spread”. Therefore, we can conclude that while there is a gap
between what is considered ethical and unethical in the minds of consumers and advertisers in both an
online and offline context, the gap in an offline context is smaller due to established norms and
expectations, as well as government regulations and advertising standards boards. The gap in an online
setting appears to be wider, due to a “cultural lag”, with which technology has moved at such as pace
that an ethical framework, norms and expectations have not had a chance to catch up with technology.
Thus, will it be possible to overcome any gap that exists in the current landscape or do changes need to
be made? As Stead and Gilbert (2001) argue, “When [ethical issues] emerge, the internet spotlights
them immediately. So we may conclude that some ethical issues will get swiftly resolved because of
both the actual or perceived exposure and reaction from the public or market” (Stead and Gilbert,
2001). However, given the degree to which ethical issues may be exacerbated online, will leaving ethical
issues to the democracy of internet users be too late, particularly if secure or confidential information
has already been comprised? Furthermore, as the paper has highlighted, the online marketing
environment presents issues of anonymity and that messages online may not be that of the messenger.
Whilst the role of consumers has developed and increased in online marketing compared to that of
offline marketing through the possibility of user generated content (UGC), ultimately responsibility for
the ethics of internet marketing lies with marketers and marketing industry to effectively “control” or
“balance” these messages for the industry to remain self-regulated. If they do not, the integrity of
internet commerce and information generally on the internet, which is dependent on trust and
acceptance, will be compromised, and thus the effectiveness of online marketing will also be
compromised (Marshall and Swartwout, 2006). As noted by Cronin (1994, as cited in Bush et al, 2000)
above, given the nature of the internet, online marketing practices are difficult to regulate, and thus the
industry needs to impose appropriate self-regulation to reduce the gap between marketers and
consumers, finding a balance of what is considered ethical, in order to maintain the integrity and
therefore usefulness of online marketing practices.
This can be highlighted by through the case study of Spotify (Ju, 2010), whereby with changed consumer
expectations, companies can change and adapt to move into an ethical landscape rather than remaining
in the ethically questionable ‘grey’ area. P2P is a distributed network architecture which popularized by
file sharing. It changed the structure of human interaction and enable people to become both suppliers
and consumers of Internet resources. It is also changing the way of music distribution and enjoyment.
However, whether P2P technology breaks copyright law or brings benefits to the world has aroused
broad controversy. Previously applications such as Napster and Limewire drew criticism for breaching
copyright laws, however received praise from users for how it changed music distribution. “Spotify is the
initiator to legalize P2P technique. They have deals with all the major record labels to ensure that all
artists who have music on Spotify are properly paid. A cooperating pattern is built, which is allocating
profits reasonably between labels and artists”, as well as satisfying users expectations (Ju, 2010).

5. What is ethical internet marketing? Laura Rogan
This scenario can be applied to online marketing. Instead of working within a grey or unethical
landscape, because the demands and expectations of consumers have changed, develop and adapt your
approach to move within an ethical landscape.
Conclusion
In conclusion, it can be found that while many ethical issues remain the same between “offline” and
“online” marketing, there are specific ethical issues that arise in relation to internet marketing alone.
Due to the fast-paced, developing industry of internet marketing, there is no consensus on what is
ethical behavior online, which subsequently widens the gap between marketers and society and creates
a larger “grey” area than that which exists in an offline setting. Marshall and Swartwout’s (2006) use of
Ogburn’s (1964, as cited in Marshall and Swartwout, 2006) “cultural lag” explains why this gap exists.
However, while ethically questionable practices can be allocated to this gap, how do we overcome the
gap between marketers and consumers’ expectations regarding ethical internet marketing in order to
reach a consensus between the two parties as to what constitutes ethical internet marketing,
withdrawing the gap and defining ethical boundaries?
If the gap continues to widen and companies and marketers do not respond to this issue, we may expect
“growing public distrust, dissension amount internet commerce practitioners, and the likelihood of
increasing government intrusion and regulation” (Marshall and Swartwout, 2006). Therefore, as Spotify
has dealt with ethical issues online in relation to the music industry, it is up to marketers and companies
to increase their level of self-regulation in line with consumers’ expectations in order to maintain their
trust online and thus their business.

6. What is ethical internet marketing? Laura Rogan
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