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Social, Ethical, and Regulatory Aspects of Advertising

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Presentation on theme: "Social, Ethical, and Regulatory Aspects of Advertising"— Presentation transcript:

1 Social, Ethical, and Regulatory Aspects of Advertising
Chapter 4 Social, Ethical, and Regulatory Aspects of Advertising

2 Social Issues Advertising Educates Consumers
Advertising Improves Standard of Living Advertising Affects Happiness & Well-Being Advertising: Demeaning & Deceitful, or Liberating & Artful? Advertising Has a Powerful Effect on the Mass Media Copyright © 2006 Thomson Business and Economics. All rights reserved.

3 Social Aspects of Advertising
Advertising educates consumers Pro: Advertising informs Con: Advertising is superficial & intrusive Copyright © 2006 Thomson Business and Economics. All rights reserved.

4 Social Aspects of Advertising (cont’d)
Critics of advertising feel that advertising is superficial because many ads carry little actual product information. Do you think advertising is superficial? Copyright © 2006 Thomson Business and Economics. All rights reserved.

5 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. Copyright © 2006 Thomson Business and Economics. All rights reserved.

6 Advertising: Demeaning and Deceitful, or Liberating and Artful?
Con: Ads perpetuate stereotypes Copyright © 2006 Thomson Business and Economics. All rights reserved.

7 Stereotypes in Advertising
Who is stereotyped? Minorities (African Americans & Hispanics) Women Disabled & Elderly Gay Consumers Gender Stereotyping - Children Boys – more knowledgeable, aggressive, & active More boys than girls Male voice-overs Copyright © 2006 Thomson Business and Economics. All rights reserved.

8 Advertising: Demeaning and Deceitful, or Liberating and Artful?
Con: Ads perpetuate stereotypes Pro: Advertisers are more sensitive now Con: Ads are often offensive Copyright © 2006 Thomson Business and Economics. All rights reserved.

9 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 Copyright © 2006 Thomson Business and Economics. All rights reserved.

10 Subliminal Myth - Exposure
Lower/Absolute Threshold – the minimum amount of stimulus energy or intensity necessary for sensation to occur Stimulus must attain the lower/absolute threshold before it can be processed and impact us Subliminal – stimulus below lower threshold impact us Copyright © 2006 Thomson Business and Economics. All rights reserved.

11 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 Copyright © 2006 Thomson Business and Economics. All rights reserved.

12 Advertising’s Powerful Effect on Mass Media
Pro: Ads foster a diverse and affordable mass media that provide information Con: Advertising affects and controls programming. “Advertainment” has made matters worse Copyright © 2006 Thomson Business and Economics. All rights reserved.

13 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 Copyright © 2006 Thomson Business and Economics. All rights reserved.

14 Ethical Aspects of Advertising
Truth in Advertising Deception is making false or misleading statements. Puffery (commercial exaggeration) is legal. Cannot legislate against emotional appeals Copyright © 2006 Thomson Business and Economics. All rights reserved.

15 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. Copyright © 2006 Thomson Business and Economics. All rights reserved.

16 Advertising to Children
TV is an important source of information for children CON Lack experience & knowledge to understand purpose Preschool & below cannot differentiate b/w program & ads Gov’t should regulate PRO Adv is part of life Part of consumer socialization process Parents should regulate Copyright © 2006 Thomson Business and Economics. All rights reserved.

17 Ethical Aspects of Advertising
Advertising Controversial Products Critics question the “targeting” of minorities. Tobacco, alcohol, gambling and lotteries are product categories of greatest concern. Copyright © 2006 Thomson Business and Economics. All rights reserved.

18 Attempt to protect children from tobacco advertising
Banned outdoor advertisements Sponsorship of events with significant youth audience Prohibits the use of cartoon characters in ads Copyright © 2006 Thomson Business and Economics. All rights reserved.

19 Regulatory Aspects of Advertising
Areas of advertising regulation: Deception and unfairness Competitive issues Vertical cooperative advertising Comparison advertising Monopoly power Advertising to children Copyright © 2006 Thomson Business and Economics. All rights reserved.

20 Who Regulates Advertising?
Government Agencies Consumers Advertising Industry Media Organizations Copyright © 2006 Thomson Business and Economics. All rights reserved.

21 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 Copyright © 2006 Thomson Business and Economics. All rights reserved.

22 Key Regulatory Agents–FTC
FTC Programs and Remedies Advertising Substantiation Program Consent Order Cease and Desist Order Affirmative Disclosure Corrective Advertising Control of Celebrity Endorsements Copyright © 2006 Thomson Business and Economics. All rights reserved.

23 Who Regulates Advertising?
Government Agencies Consumers Advertising Industry Media Organizations Copyright © 2006 Thomson Business and Economics. All rights reserved.

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