Social, Ethical, & Regulatory Aspects of Advertising

4

Objectives

To Understand:1. Advertising & Well-Being2. Ethical Campaign Development3. Role of Government Agencies4. Self-Regulation5. Regulation of IBP Techniques

Is Advertising Full of Double Standards?

Social Aspects of Advertising

• Advertising Educates Consumers– Pro: Advertising informs– Con: Advertising is superficial

• Advertising improves living standards– Pro: Ads lower the costs of products– Con: Ads are wasteful & help only some

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

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

Advertising Affects Happiness & Well-Being

Con: Ads create needsPro: Ads address a wide variety of basic human

needsCon: Ads promote materialismPro: Ads reflect society’s priorities

Addresses Social Problems (and dogs too.)

Critics feel advertising promotes materialismCritics feel advertising promotes materialism

Advertising: Demeaning & deceitful, or liberating & artful?

Con: Ads perpetuate stereotypesPro: Advertisers are more sensitive now

Con: Ads are often offensivePro: Ads are a source of liberation

Con: Ads deceive via subliminal stimulationPro: Advertising is art

Do you think this ad perpetuates stereotypes?Do you think this ad perpetuates stereotypes?

Advertising has a powerful effect on

mass media

Pro: Ads foster a diverse & affordable mass media that provides

information Con: Advertising affects & controls

programming. “Advertainment” has made matters worse

Ethical Aspects of Advertising

Ethics are the moral standards against which behavior is judged. Key areas of debate regarding ethics & 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 & materialism in

children• Children are inexperienced & easy prey• Persuasion to children creates child-parent conflicts• What does the literature say about kid’s abilities to process

persuasive information?

Mommy, why is Ronald McDonald being arrested?

Ethical Aspects of Advertising

Advertising Controversial Products• Critics question “targeting” minorities• Tobacco, alcohol, gambling & 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?

Controversies in Cigarette Advertising(they find ways around the laws).

Alcohol Advertising…to Cats?

Or by Frogs.

Regulatory Aspects of Advertising

Areas of advertising regulation:• Deception & unfairness• 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 & remedies

• Federal Communications Commission (FCC)

• Food & Drug Administration (FDA)

• U.S. Postal Service

• Bureau of Alcohol, Tobacco, & Firearms

Not Following Advertising Law Can Bring a Big Company Down

Key Regulatory Agents--FTC

FTC Programs & Remedies• Advertising Substantiation Program

• Consent Order

• Cease & Desist Order

• Affirmative Disclosure

• Corrective Advertising

• Control of Celebrity Endorsements

Key Regulatory Agents (con’t)

Industry Self-Regulation• National Advertising Review Board

(NARB)• State & Local Better Business Bureaus• Ad Agencies & Associations• Media Organizations

Consumers as Regulators too

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– www.adbusters.com

Regulation of Other Promotional Tools

• Direct Marketing & e-Commerce– Privacy, Contests, Telemarketing– Spam=10 million messages/minute

worldwide

• Sales Promotion– Premiums, Trade Allowances, Contests

• Public Relations– Privacy, Copyright Infringement, Defamation

(slander & libel)

Review/?s

1. Advertising & Well-Being

2. Ethical Campaign Development

3. Role of Government Agencies

4. Self-Regulation

5. Regulation of IBP Techniques

Mom Jeans

EXAM 1Covers Content up to This Point.

Read & Review Class Notes

Professor Close