Would the transparent ad works? Or still needs the information asymmetry?

Maybe the honest is better?

I'm thinking the question for some time...

What is a transparent ad??

U can say "Honest and franker".

When it comes to selling something(goods or services) to customer, there must be some information asymmetry. People are more willing to know the "Good side" of the product instead of knowing that there exist some "Bad side" of products. So that you should not blame for firms that hide something from you by advertising. However, firms shouldn't persuade customers with improper information of products, and it can emphasize products' advantages but not too exaggerated...

Thanks for Ian Chen. Now I got the point.

Thanks for Ian Chen. Now I got the point.

it's a nice question to discuss hope everyone can enjoy it!!!

The honest is always better, I guess. When customers find out the ad didn't work out for them, they will refuse buying the product the next time anyway.

More detail is good for cutomer to eliminate info asymmetry.
But an ad full of detail info won't attract me to pay attention on it.

Yap, but what if the ads mention only 10% of good side and hide the other 90% bad side?
They didn't lie, but it really causes misleading to consumers.
So the policy should restrain this kind of situations.
......

Yeah~ I got your point. But what I emphasized is that even though the ads mention only 10% of good side and hide the other 90% bad side there's no ethical or credit problems for advertising like this. Because this is what advertising suppose to be.

Yes the honest advert is better and customer will be more loyal to the brand. It is harder to get new customer than to keep existing one. So the transparency is all th time the good way to keep customers.

The information asymmetry always exists more or less no matter how honest the advertiser would be! For example, even a medicine ads discloses all side effects, it would hard for us to know “how terrible it would be?” Even if it reveals the probability, it’s still hard for us to “feel” how risky it is. Especially for financial case, we can not guarantee every people watching these ads having enough knowledge and education to make decision. However, after all, honest is still the better choice.

Honesty above everything

I think advertisements that use the honest approach and tell customers what is good and bad about their company will be better. If customers find out the company lied with false advertising, they will lose their credibility and have a hard time selling any more products after that. I think that most companies try to hide their bad side, but that might not always be the best choice, since most customers are prepared to know that there is a bad side to many of the things they buy, and having the company admit it instead of finding out the hard way would be a better option for the company in the long run. It allows the customer to trust the company a bit more. I kinda disagree with Ian when he says the customers would rather know only the good side. I think customers are willing to hear about both sides of a product, like medicines and their side effects. Of course I'm also not saying that a company should just talk about its bad parts either, just do both in an effective way that will allow the customers to understand the product better.

Honesty is the best, but how consumers know this is a honest ads?
There are too many ads hide the important information from consumers, and consumers are hard to distinguish which ads is honest or not in short time.

They will find out after using the product that it was a honest add And then they are most likely to buy it again.

yeah It is always good to be honest for consumers and company might have better image from the consumers when they do honest ads. But nobody knows whether it is right or not before purchasing goods. and I also think companies should not show their bad side of product. I think It is a suicidal act for the company. Is there any exapmles of success with showing their product bad??

As a consumer, of course we'd opt for companies to be completely truthful and provide us with a unbiased view of their product or service. We'd like to know that the perceived value is equal to the actual value. However, I agree with YongJing that if a company were to do this, it'd be suicidal. It's important to understand that the goal for companies to advertise is to sway your purchasing selections. Yes, they will provide information about their product or service and provide incentives that make it seem like you are getting a deal, but ultimately, companies have to earn profit. This is not to say that companies should out right lie or cheat consumers. I think the best way to reconcile the two point of views (consumers and companies) is to have a third party control and approve or disapprove of advertisements; an organization that is neither the consumer or suppler. An organization with the full understanding for both party's objectives and does their best to give the consumers what they want and give the companies the opportunity to make money.

From the customer's point of view, of course, we want all the ads to be 100% real and unbiased with concrete details; however, just like Young Jin and Lu Song mentioned above, it's not gonna happen.
So an ad which is telling the truth and not exaggerated too much sounds good enough for me.

i don't believe that there exists companies who show the whole details to their costomers or people.
Because when companies do their "very best" to put emphsize on the great side of their products, costomers will not notice that they have side-effect. And if their products have competitiveness, thier costomers increase.
Therefore, why companies have to do transparent ad?

When companies do transparent ad, they could build relationship of trust with customers. It's some kind of brand value, and is not easy to build and get profit with. But there are some success example. The founder of google said "Do no evil", and google do give me different feels from other companies.

It reminds me of the oath from the witness in the court: "To tell the truth, the whole truth, nothing but the truth."
Well, transparent ads may well tell the truth, but often not the whole truth, since companies needs to make their strengths more salient, and often they tell much more than the truth, transformational ads are good examples.
Besides, I think too much detail won't work because we would be overwhelmed by it, not able to see the whole picture and which information is important.

Well of course, honesty is the best policy. However, information asymmetry exists all the time. I think there is no so-called "transparent ads" since it's too hard for the company to disclose all pros and cons about the product only by ads. If a company reveals everything about its product, and its profit may drop. For example, if my competitor shows everything about its product, it is a good chance for me to beat them.