chapter 04
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© 2009 South-Western, a part of Cengage Learning
Chapter 4
Social, Ethical, and Regulatory Aspects of Advertising and
Promotion
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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?
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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?
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Ad in Context Example
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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
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Critics feel advertising promotes materialism.
Critics feel advertising promotes materialism.
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Ad in Context Example
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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
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Social Aspects of Advertising
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Do you think this ad perpetuates stereotypes?
Do you think this ad perpetuates stereotypes?
Ad in Context Example
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Do you think this ad perpetuates stereotypes?
Do you think this ad perpetuates stereotypes?
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Ad in Context Example
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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.
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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
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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
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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?
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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?
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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
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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
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Key Regulatory Agents--FTC
FTC Programs and Remedies Advertising Substantiation Program
Affirmative Disclosure
Consent Order– Cease and Desist Order– Affirmative Disclosure
Corrective Advertising
Control of Celebrity EndorsementsPPT 4-16
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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
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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
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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
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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)
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