2. The Ad Industry… Internet advertising revenue surpassed newspaper advertising for the first time in 2010 Mobile advertising has caught the eye of the advertising industry—next biggest thing Ads are everywhere; One-half of a daily newspaper and consumer magazine According to research, the average American comes into contact with 5,000 forms of advertising each day

3. The Early Years… Advertising dates back to 3000 B.C., when shop owners would place carved wood or stone signs outside their stores to attract customers Town criers in 900 A.D would inform villages of incoming ships and deals at stores 1704: Boston News-Letter—ran first ads in colonial America (announced land deals and ship cargoes) Early magazines refused to carry advertising to distinguish themselves from newspapers but by mid- 1800s, most magazines contained advertisements --80% of all advertising consisted of land sales and transportation (ship schedules and arrivals) and runaways (slaves that fled)

4. Ad Agencies in the U.S. National ads didn’t start in the United States until the 1850s First American ad agencies: Newspaper Space Brokers 1841: Volney Palmer’s Ad Agency 1869: N.W. Ayer and Son-first full-service modern ad agency

5. Advertising in the 1800s a.Trademarks and Packaging Product differentiation associated with brand-name packaged goods represents the single biggest triumph of advertising b. Patent Medicines and Department Stores By the end of the 1800s, patent medicines and department stores accounted for half of the revenue taken in by ad agencies c.Advertising’s Impact on Newspapers By the early 1900s, more than half of the space in daily newspapers was devoted to advertising

6. Promoting Social Change U.S. advertising contributed to major social changes in the 20 th Century: 1. Significantly influenced transition from a producer-directed to a consumer-driven society (advertising spread the word) 2. Promoted technological advances by showing how new machines (vacuum cleaners, cars, washing machines) can improve daily life 3. Encouraged economic growth by increasing sales (influenced quantity of products made due to demand from ads)

7. Appealing to Female Customers Advertisers and ad agencies believed that women controlled more household purchasing decisions, and they were 70-80% of the readership of newspapers and magazines, so ads catered to female stereotypical appeals to attract women

8. Dealing with Criticism……  WWII fueled a rejuvenation in advertising. Govt. purchased a lot of ad space to promote U.S. involvement in the war  Advertising industry was criticized as it appeared to begin dictating values and creating “needs” that consumers didn’t known that they had  To promote a better image, The War Advertising Council was created by the advertising industry that organized war bond sales, blood donor drives and rationing of scarce goods  Changed to The Ad Council post war, which develops PSAs (Smoky the Bear and forest fires), continues to produce them for contemporary topics

9. Early Ad Regulation  1913: The Better Business Bureau (BBB) was created to prevent deceptive advertising, has over 100 branch offices in the U.S. today  1914: The Audit Bureau of Circulation (ABC) was formed by publishers for advertisers to track newspaper readership and measure audience, and ensured that ad agencies and their clients were not overcharged by newspapers  The Federal Trade Commission (FTC) was also created in 1914, mainly to help monitor advertising abuses but is the regulation of the ad industry

10. Shaping the Modern Ad Industry Until the 1960s, most ads were defined by a slogan—the phrase that attempts to sell a product by capturing its essence with words but with television and multimedia devices, visual style became dominant in U.S. advertising and ad agencies

11. Trends in Online Advertising Earliest form of online advertising: banner ads Other formats have emerged: video ads, sponsorships, and “rich media” like pop-up ads, pop-under ads, flash multi-media ads, interstitials, classified ads and e-mail ads Spam (unsolicited commercial e-mail) now accounts for more than 85% of e-mail messages Paid search advertising has become the dominant format of Web advertising By 2011, Internet advertising was projected to be a $31 billion industry and in the U.S., Internet advertising accounts for about 9 % of all ad spending Search ads make up about 50% of Internet advertising revenues, display/banner advertising accounts for 35%, and the rest of the revenue is generate by online classifieds, sales leads generation, and e-mail

12. Online Marketing Cookies and online surveys Impressions (how often ads are seen) and “click- throughs” (how often ads are clicked on ) Third and fourth screen advertising is very appealing : offers effective targeting to individuals and can tailor to a specific geographic location or the user demographic (since wireless cos. already have this information) Advertising has invaded social media : Can send targeted ads that might interest users, who then rate the ad and give feedback

13. Persuasive Techniques in Modern Ads Famous-person testimonial Plain-folks pitch Snob-appeal approach II Snob-appeal approachII Band-wagon effect Hidden-fear appeal Irritation advertising The Association Principle

14. FTC Takes on Puffery and Deception Puffery: ads featuring hyperbole and exaggeration FTC plays an investigative role in substantiating claims of various advertisers Ads become deceptive with misleading statements or information (ex. “The best, “#1 Rated”, “Preferred by Dentists”), so FTC requires scientific evidence to back up claims Deceptive ad: Truck pulling the spaceshipTruck pulling the spaceship 2003: Ephedra claims of instant weight loss and caused high blood pressure, strokes, and heart attacks—U.S. banned ephedra in 2004 When the FTC finds ads deceptive, they make companies change or remove them; can also impose monetary penalties for consumers and occasionally require that they run corrective ads against the original deceptive ads (Truth Ads)Truth Ads

15. Political Advertising Political Advertising: use of ad techniques to promote a candidate’s image and persuade public to adopt a particular viewpoint TV broadcasters earned $400 million in 1996 and more than 1.5 billion in 2004 presidential and congressional elections, $2.6 billion in 2008 2012: $1.1 billion of the $6.28 billion spent on all elections went to local broadcast TV stations 2016: $4.4 billion (About ½ to network and cable TV)

16. Future of Advertising Even though blamed for excessive commercialism and pervasiveness, growth of the industry has not diminished Many consumers buy media (magazines) or watch (Superbowl—advertising’s big show!) just for the ads In 2012, $140 billion was spent on U.S. advertising It’s a love-hate relationship—ads are annoying and pervasive, yet are infiltrated into our culture and keep our media free or at a reduced cost Still, we need to be critical about what they represent and promote – Do we all need pills to make us function better? – Should people be forced to open stores on Thanksgiving thanks to our consumer culture?