Transcript Chapter 4 - Stephanie Larkin

Social, Ethical, and
Regulatory Aspects of
Advertising and Promotion
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©2012
©2012
Cengage
Cengage
Learning.
Learning.
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MayMay
not not
be scanned,
be scanned,
copied
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or duplicated,
or duplicated,
or posted
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to atopublicly
a publicly
accessible
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website,
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or inorpart.
in part.
Social Aspects of Advertising
PRO
CON
Advertising informs
Advertising is superficial
and intrusive
Advertising improves
living standards
PRO
CON
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Is there
Ads lower the costs
of products (How can this be?) “information”
in this ad?
Ads are wasteful and help
only some
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
© Courtesy Apple Computers Inc.; Ad
Agency TBWA Chiat Day,LA; Photographer:
Matthew Welch, Model Emory Livers/LA
Models
Advertising Educates Consumers
Social Aspects of Advertising
Advertising Affects Happiness
and Well-Being
CON
PRO
CON
PRO
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Ads create needs
Ads address a wide variety of basic
human needs
Ads promote materialism
Ads reflect society’s priorities
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Social Aspects of Advertising
Advertising: Demeaning and
deceitful, or liberating and artful?
CON
Ads perpetuate stereotypes
PRO
Advertisers are more sensitive now
CON
Ads are often offensive
Ads are a source of liberation
PRO
CON
PRO
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Ads deceive via subliminal stimulation
Advertising is art
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Social Aspects of Advertising
Advertising has a Powerful Effect
on the Mass Media
Ads foster a diverse and affordable mass
media that provides information and
PRO
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
– Remember “primary demand?” (Chapter 1)
– How has food become a “controversial
product” in advertising?
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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
• But, what does the literature say about
kid’s abilities to process persuasive
information relative to the claims above?
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Ethical Aspects of Advertising
Advertising Controversial Products
• Critics question “targeting” minorities
– Aren’t there positive aspects of targeting?
• 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?
– Doesn’t the government advertise gambling
through state lotteries?
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Regulatory Aspects of
Advertising
Areas of advertising regulation:
• Deception and unfairness
Representation or omission that can mislead
o Judged from perspective of consumer
o Misrepresentation must be “material”
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• Competitive issues
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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
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• 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
Government: FTC Programs and
Remedies
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Advertising Substantiation Program
Consent Order
Cease and Desist Order
Affirmative Disclosure
Corrective Advertising
Control of celebrity endorsements,
testimonials, and now blogging
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Key Regulatory Agents
Government: State Regulation
• No extensive policing powers
• Most ads and promotions are
“inter-state” not “intra-state”
• State Attorney Generals office is
main office for regulation
• States rely mainly on federal
agencies
for regulation of advertising and
promotion
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Key Regulatory Agents
Industry Self-Regulation
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National Advertising Review Board (NARB)
State and Local Better Business Bureaus
Ad Agencies and Associations
Media Organizations
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Key Regulatory Agents
Internet Self-Regulation
• No industry-wide trade association has
emerged to date, exceptions:
• Anti-spam
• COPPA
• Some international organizations
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Global Business Dialogue on
Electronic Commerce (GBDe) is
emerging as a governing body
Little progress has been made to
address consumers’ complaints on
on privacy (e.g. Facebook)
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Key Regulatory Agents
Consumers as Regulatory agents
• Consumerism: Grass roots consumer
movements
• Consumers Organizations
Consumer Federation of America
Consumers Union
o Consumer Alert
o Commercial Alert
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Regulation of Other Promotional Tools
Direct/Mobile Marketing and e-Commerce
• Privacy
– Behavioral targeting, GPS tracking
• Spam = 30 million messages/minute, 100 billion/day worldwide
– “Phishing” as insidious spam
• Contests/Sweepstakes
• Telemarketing
Sales Promotion
• Premiums, Trade Allowances
• Contests/Sweepstakes
• Product/Brand Placement
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Public Relations
• Privacy
• Copyright Infringement
• Defamation (slander and libel)
©2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.