Part 1 Enduring Principles in Times of Turmoil Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-1

1. What is the social impact of brand communication? 2. What ethical and social responsibilities do communicators bear? 3. Why and how is advertising regulated? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-2

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-3

Demand Creation  Critics say advertising creates demand, driving consumers to buy products unnecessarily.  Proponents say companies invest in research to find out what consumers want.  Audiences can refuse to buy products they don’t need. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall3-4

Shaping versus mirroring  Does advertising create or reflect social values?  Critics say advertising abuses its influence on children and teenagers.  Critics say advertising creates social trends, dictating how people think, act. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-5

 Advertisers say they spot trends and develop messages that connect with them.  Advertising both mirrors and shapes values. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-6 The poster is an example of a message aimed at stimulating business after 9/11. Do you think messages like these impact social trends?

Overcommercialization  Does advertising lead people to be too materialistic?  Critics say advertising heightens expectations.  The lines between advertising, news, and entertainment have become blurred. As a class: What is your response to this criticism? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-7

Poor taste and offensive advertising  Viewer reaction may be affected by sensitivity to: ◦ the product category ◦ the timing ◦ whether the viewer is alone or with others ◦ the context For added perspective on this issue, review: “A Principled Practice: Pizza, Tacos, and Truck Parts: Sex in Advertising”. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-8

Poor taste and offensive advertising  Creating guidelines is difficult because “good taste” varies.  What is considered “offensive” changes over time. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-9

Sex appeals, body image  Advertising that portrays people as sex objects is considered demeaning.  Playing on consumers’ insecurities about their appearance can lead to dangerous practices.  Responsible advertisers now use models of normal size and weight to reduce pressure on young people. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-10

Diversity and stereotypes As a class: What is a stereotype? How would you define it? Answer: A stereotype is a representation of a cultural group that emphasizes a trait or traits that may or may not communicate an accurate representation. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-11

 Diversity and stereotypes  Gender stereotypes  Racial and ethnic stereotypes  Cultural differences in global advertising  Age-related stereotypes  Advertising to children Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-12 This ad was created by the Carson/Roberts agency in 1964 during debate over the Civil Rights Voting Guarantee Bill.

 Message-related issues  Misleading claims and puffery  Comparative advertising  Endorsements and demonstrations Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-13 Dunkin Donuts hopes to convince coffee drinkers to switch from Starbucks based on results from a national taste test.

Product-related issues  Marketers must carefully consider what they choose to produce and advertise.  Areas of concern: ◦ Controversial products ◦ Unhealthy or dangerous products Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-14

Emerging issues Social responsibility, branding, and integrity The Fourth Principle of IMC: “Integration equals integrity.” As a class: What does this quote mean to you? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-15

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-16

Ethical decisions involve complex, conflicting forces:  strategy vs. ethics  costs vs. ethics  effectiveness vs. ethics Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-17

Personal and professional ethics  In a Gallup poll, advertising practitioners ranked just above HMO managers and car salesmen.  The American Association of Advertising Agencies publishes a code of standards. As a class: For added perspectives on the issue of ethics, read and discuss “A Matter of Practice: Advertising Gets No Respect!” Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-18

International standards and codes  Singapore, Malaysia, the Netherlands, and Sweden have all established standards of professional behavior. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-19

Ethical decision-making tools  Codes of ethics can help guide your actions.  However, they are only broad statements, and do not explain how to handle every situation.  You must develop a strong personal and professional sense of right and wrong. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-20

Ethical decision-making tools… The TARES Test of Ethical Advertising Ask yourself: 1. Are the ad claims in the message Truthful? 2. Is the claim an Authentic one? 3. Does the ad treat the receiver with Respect? 4. Is there Equity between the sender and receiver? 5. Is the ad Socially responsible? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-21

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-22

Key advertising legislation 1. Pure Food and Drug Act (1914) 2. Federal Trade Commission Act (1914) 3. Wheeler-Lea Amendment (1938) 4. Lanham Act (1947) 5. Magnuson-Moss Warranty/FTC Improvement Act (1975) 6. FTC Improvement Act (1980) 7. The Telemarketing and Consumer Fraud Act and Abuse Protection Act (1994) How have each of these acts impacted the advertising industry? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-23

Trademark protection  A trademark is a brand, corporate or store name, or a distinctive symbol identifying a seller’s brand and differentiating it from other brands. ◦ Registering through the Trademark Office provides exclusive use, as long as it’s for a specific product. ◦ The Lanham Trademark Act of 1947 protects unique trademarks from infringement. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-24

Copyright protection  A copyright gives organizations exclusive rights to use or reproduce an ad or package design, for a period of time.  Copyright infringement occurs when a product is used in an ad without proper permission, including copycat ads. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-25

Marketing communication and the First Amendment  First Amendment protection extends to commercial speech, but not on an absolute basis.  The Supreme Court permits some restrictions on commercial speech.  Only truthful speech is protected – not misleading or deceptive statements. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-26

International laws and regulations  Legal and regulatory restrictions vary by country.  Some countries ban ads for certain products.  Thailand, Hungary, Hong Kong, and Malaysia have bans on certain types of tobacco advertising.  Contests, promotions, and direct mail are illegal in some countries. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-27

Federal Trade Commission (FTC)  Regulates deceptive and misleading advertising, focusing on: ◦ Unfairness ◦ Deception ◦ Violations  It also oversees advertising involving weight loss products, children and elderly people, telemarketing, and the entertainment industry. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-28

Food and Drug Administration (FDA)  Regulatory division of the U.S. Department of Health and Human Services.  Oversees package labeling, ingredient listings, and advertising for food and drugs.  Determines the safety and purity of foods, cosmetics.  It is also a watchdog for drug advertising. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-29

Federal Communications Commission (FCC)  Regulates radio and television broadcast communications (media, not advertisers).  Can issue and revoke licenses, ban deceptive messages or those in poor taste.  It responds to complaints but doesn’t initiate actions.  Works closely with FTC to eliminate false and deceptive advertising. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-30

Other regulatory bodies  Bureau of Alcohol, Tobacco, and Firearms (BATF) Regulates deception in advertising and establishes labeling requirements for the liquor industry.  U.S. Postal Service regulates direct mail and magazine advertising including the areas of obscenity, lotteries, and fraud.  The States’ Attorneys General regulate advertising at the state level. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-31

The FTC and children’s advertising  Children’s Advertising Review Unit (CARU) evaluates ads directed at children under 12.  The Children’s Television Advertising Practice Act (1990) placed ceilings on ads during TV programs.  As of 1996, all stations must air three hours per week of educational programming. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-32

Regulating deception  Deceptive advertising misleads consumers by making false claims, failing to fully disclose important facts, or both.  Current FTC policy contains three elements: 1.Misleading: representation, omission, practice 2.Reasonableness: “reasonable consumer” 3.Injurious: must cause material injury Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-33

Regulating substantiation  Does the advertiser have a reasonable basis to make a claim about product performance?  Factors considered: ◦ Type and specificity of claim made ◦ Type of product ◦ Possible consequences ◦ Degree of reliance ◦ Type and accessibility of evidence ◦ What substantiation is reasonable Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-34

Remedies for deception and unfair advertising  Cease and desist orders A process similar to court trial precedes the order.  Corrective advertising Advertiser runs messages correcting the false impressions.  Consumer redress Cancel or reform contracts, refund money, return property, pay for damages, or public notification. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-35

Remedies for deception and unfair advertising A question for you… Can the ad agency be held liable along with advertiser? Answer: Yes, when the agency is an active participant in preparing the ad and knows it is false or deceptive. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-36

 The media screens and rejects advertising that violate standards of truth, good taste.  The First Amendment allows publishers refuse to run ads. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-37

Self-Discipline  Organizations develop and use their own norms  Major advertisers and agencies utilize in-house procedures.  Several U.S. companies have their own codes of behavior and criteria for acceptable advertising. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-38

Industry Self-Regulation  National Advertising Review Council (NARC)  National Advertising Division (NAD)  National Advertising Review Board (NARB) Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-39

Self-Regulation by Public and Community Groups  Better Business Bureau Advises local businesses on legal aspects of advertising.  Consumer activist groups ◦ Action for Children’s Advertising ◦ Public Citizen ◦ Cultural Environment Movement Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-40

In Part II, we will:  Explore the basics of brand communication planning with chapters on: ◦ The consumer audience ◦ Strategic research ◦ Strategy and planning Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-41

“Häagen-Dazs Loves Honey Bees”  This campaign illuminated the honeybee crisis.  The honeybee issue was a natural fit with Häagen-Dazs.  The campaign also paid dividends for the brand. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-42

“Häagen-Dazs Loves Honey Bees” Key lessons:  Social responsibility is a part of good business.  Profits are only one measure of a brand’s success.  As a class: What others can you think of? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 3-43