In the past the phrase would have implied the relaying of accurate facts, figures and statements about a product as a way of convincing the customer to make a purchase; today the term has come to mean the honesty of the company about the mechanisms which it employs in order to persuade people to buy a particular product.
e.g. Morgan Spurlock's corporate expose, "The Greatest Movie Ever Sold".
Jesus! This new McDonalds ad is saying that the only reason why I eat Big Macs is because my body is physically addicted to the artificial flavour enhancers they use! As much as I think the food sucks, that is honest advertising!
When a company, in the midst of a scandal, public backlash, massive recall, etc., tries to cover mistakes by paying actors to pose as normal people and lie in a desperate effort to approve their image.
Tom: Dude, I'm not eating at Taco Bell anymore. Their meat's nasty.
Eric: But I just saw a commercial where their meat's 100% natural.
Tom: That's appeasement advertising. Don't buy into it!
also false-advertising or false advertise n. Relates to instances on the internet (particularly, but not limited to gay culture) where non-desirable looking persons promote extremely favorable images of themselves, or others, in an effort to lead the viewer into believing that that is how the sender looks on a daily basis.
I went all the way across town to hook up with that guy last night because he wanted me really badly and looked really hot online, but when I got there that fugly slut opened the door and scared the crap out of me. I told him to stop false advertising and put up some pictures that looked like him and less like Ashton Kutcher, then I went home.
"every time i hear high heels I look up expecting to see an attractive woman, but you shoulda seen this heifer that walked in clapping the floor today... man that's false advertising"
When you see a woman from behind, who looks like she is very sexy, but when you catch up with her and realize she is very unattractive or might even be a man.
Friend #1 "Damn, that chick over there is smokin'"
Friend #2 "Nah, man, she has a butterface, because when get up close, you realize it was False Advertising from behind!"