Social, Ethical, and Regulatory Aspects of Advertising and Promotion Marketing 3344

Social Aspects of Advertising Advertising Educates Consumers Pro: Advertising informs Con: Advertising is superficial and intrusive Advertising improves living standards Pro: Ads lower the costs of products Con: Ads are wasteful and help only some Is there “information” in this ad?

Ad in Context Example Critics of advertising feel that advertising is superficial because many ads carry little actual product information. Do you think advertising is superficial?

Social Aspects of Advertising Advertising Affects Happiness and Well-Being Con: Ads create needs Pro: Ads address a wide variety of basic human needs Con: Ads promote materialism Pro: Ads reflect society’s priorities

Ad in Context Example Critics feel advertising promotes materialism.

Social Aspects of Advertising Advertising: Demeaning and deceitful, or liberating and artful? Con: Ads perpetuate stereotypes Pro: Advertisers are more sensitive now Con: Ads are often offensive Pro: Ads are a source of liberation Con: Ads deceive via subliminal stimulation Pro: Advertising is art

Ad in Context Example Do you think this ad perpetuates stereotypes?

Ad in Context Example Do you think this ad perpetuates stereotypes?

Social Aspects of Advertising Advertising has a Powerful Effect on the Mass Media Pro: Ads foster a diverse and affordable mass media that provides information and exposure on important issues. Con: Advertising affects and controls programming. “Branded Entertainment” blurs entertainment and persuasion. And, controversial issues do not attract advertisers.

Ethical Aspects of Advertising Ethics are the moral standards against which behavior is judged. Key areas of debate regarding ethics and advertising are: Truth in advertising Advertising to children Advertising controversial products

Ethical Aspects of Advertising Truth in Advertising Deception is making false or misleading statements, but puffery (commercial exaggeration) is legal. Cannot legislate against emotional appeals

Ethical Aspects of Advertising Advertising to Children—Issues Advertising promotes superficiality and materialism in children Children are inexperienced and easy prey Persuasion to children creates child-parent conflicts What does the literature say about kid’s abilities to process persuasive information?

Ethical Aspects of Advertising Advertising Controversial Products Critics question “targeting” minorities Tobacco, alcohol, gambling and lotteries are product categories of greatest concern How does the concept of “primary demand” provide insights here? What does the literature say about advertising’s impact on these product categories?

Regulatory Aspects of Advertising Areas of advertising regulation: Deception and unfairness Representation or omission that can mislead Judged from perspective of consumer Competitive issues Vertical cooperative advertising Comparison advertising Monopoly power Advertising to children

Key Regulatory Agents Government Regulation Federal Trade Commission (FTC) Wide range of regulatory programs and remedies Federal Communications Commission (FCC) Food and Drug Administration (FDA) U.S. Postal Service Bureau of Alcohol, Tobacco, and Firearms

Key Regulatory Agents--FTC FTC Programs and Remedies Advertising Substantiation Program Affirmative Disclosure Consent Order Cease and Desist Order Corrective Advertising Control of Celebrity Endorsements

Key Regulatory Agents (con’t) Industry Self-Regulation National Advertising Review Board (NARB) State and Local Better Business Bureaus Ad Agencies and Associations Media Organizations

Key Regulatory Agents (con’t) Internet Self-Regulation No industry-wide trade association has emerged to date Global Dialogue on Electronic Commerce (GBDe) is emerging as a governing body Little progress has been made to address consumers’ complaints

Key Regulatory Agents (con’t) Consumers as Regulatory agents Consumerism: Grass roots consumer movements Consumers Organizations Consumer Federation of America Consumers Union Consumer Alert Commercial Alert

Regulation of Other Promotional Tools Direct Marketing and e-Commerce Privacy, Contests, Telemarketing Spam=30 million messages/minute, 50 billion/day worldwide “Phishing” as insidious spam Sales Promotion Premiums, Trade Allowances, Contests/Sweepstakes Public Relations Privacy, Copyright Infringement, Defamation (slander and libel)