1. Social, Ethical, and Regulatory Aspects of Advertising and Promotion
Marketing 3344

2. 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?

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

4. 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

5. Ad in Context Example
Critics feel advertising promotes materialism.

6. 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
Pro: Ads are a source of liberation
Con: Ads deceive via subliminal stimulation
Pro: Advertising is art

7. Ad in Context Example
Do you think this ad perpetuates stereotypes?

8. Ad in Context Example
Do you think this ad perpetuates stereotypes?

9. 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.

10. 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

11. 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

12. 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?

13. 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?

14. 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

15. 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

16. Key Regulatory Agents--FTC
FTC Programs and Remedies
Advertising Substantiation Program
Affirmative Disclosure
Consent Order
Cease and Desist Order
Corrective Advertising
Control of Celebrity Endorsements

17. 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

18. 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

19. 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

20. 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)