1. © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2. Chapter 3 The Economic, Social, and Regulatory Aspects of Advertising Identifies and explains the economic, social, ethical, and legal issues advertisers must consider

3. Objectives Classify the two main types of social criticisms of advertising Employ an economic model to discuss advertising’s effects Explain the difference between social responsibility and ethics Understand how governments regulate advertising here and abroad Discuss court rulings that affect advertisers’ freedom of speech Describe how federal agencies regulate advertising Define the roles state and local governments play in ad regulation Discuss self-regulation

4. The Many Controversies About Advertising affect product value? make us more materialistic? increase prices? discourage competition? affect demand? make us buy things we don’t need? affect us subliminally? debase language? Does advertising... influence consumer choice? affect art?

5. The Many Controversies About Advertising affect product value? make us more materialistic? increase prices? discourage competition? affect demand? make us buy things we don’t need? affect us subliminally? debase language? influence consumer choice? EconomicSocietal affect art?

6. Economic Impact of Advertising

7. Effects on... value of products prices competition demand

8. Economic Impact of Advertising Effects on... demand Primary demand Secondary demand Consumer choice Business cycle

9. Abundance Principle: The Economic Impact of Advertising in Perspective Abundance Principle Complete information Self-interest

10. Social Impact of Advertising Short-term manipulative arguments Deception in advertising Subliminal advertising myth

11. Social Impact of Advertising Long-term macro arguments Effect of advertising on values Proliferation of advertising Use of stereotypes in ads Offensive ads Advertising’s social impact in perspective

12. Social Responsibility and Advertising Ethics Ethical advertising Social responsibility Advertiser’s social responsibility Ethics of advertising

13. How Government Regulates Advertising Federal State Local LegislativeExecutiveJudicial LegislativeExecutiveJudicial LegislativeExecutiveJudicial

14. Government Restraints on International Advertisers Tobacco Children Puffery Premiums and product placements

15. Current Regulatory Issues Affecting U.S. Advertisers Freedom of commercial speech Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council Central Hudson Gas v. Public Service Commission

16. Current Regulatory Issues Affecting U.S. Advertisers Tobacco advertising Advertising to children Consumer Privacy

17. Federal Regulation of Advertising in North America Federal Trade Commission (FTC) Defining deception Defining unfairness Comparative advertising Investigating violations

18. Federal Regulation of Advertising in North America Federal Trade Commission (FTC) Defining deception Defining unfairness Substantiation Endorsements Affirmative disclosure Comparative advertising Investigating violations

19. Federal Regulation of Advertising in North America Federal Trade Commission (FTC) Defining deception Defining unfairness Comparative advertising Investigating violations Remedies for unfair or deceptive advertising Consent decree Cease-and-desist order Corrective advertising

20. Federal Regulation of Advertising in North America Food and Drug Administration (FDA) Nutritional Labeling and Education Act Trademark Copyright U.S. Patent and Trademark Office Federal Communications Commission (FCC) Patent and Trademark Office and Library of Congress

21. State and Local Regulation Regulation by state governments Regulation by local governments

22. Nongovernment Regulation Better Business Bureau National Advertising Review Council (NARC) NADNARB Regulation by media NewspapersMagazinesRadioTV Regulation by consumer groups Self-regulation by advertisers Self-regulation by agencies and associations AgenciesAAAAAAFANA