1. Social, Ethical, and Regulatory Aspects of Advertising and Promotion4 1
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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 (How can this be?)
CON Ads are wasteful and help
only some
Is there
“information”
in this ad?
© Courtesy Apple Computers Inc.; Ad Agency TBWA Chiat Day,LA; Photographer: Matthew Welch, Model Emory Livers/LA Models 4

3. Critics of advertising feel that advertising is superficial because many ads carry little actual product information. Do you think advertising is superficial?
Courtesy, Sketchers USA, Inc.

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 4

5. Critics feel advertising promotes materialism.
Reprinted with permission from Hidesign

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 4

7. Do you think this ad perpetuates stereotypes?
© 1995 Lever Brothers Company "ALL" Laundry Detergent. Courtesy of Lever Brothers Company.

8. Do you think this ad perpetuates stereotypes
Do you think this ad perpetuates stereotypes? Or is this advertising as art?
©Courtesy of Lachman Imports

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. 4

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
Remember “primary demand?” (Chapter 1)
How has food become a “controversial product” in advertising? 4

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 4

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
But, what does the literature say about kid’s abilities to process persuasive information relative to the claims above? 4

13. 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? 4

14. Regulatory Aspects of Advertising
Areas of advertising regulation:
Deception and unfairness
Representation or omission that can mislead
Judged from perspective of consumer
Misrepresentation must be “material”
Competitive issues
Vertical cooperative advertising
Comparison advertising
Monopoly power
Advertising to children 4

15. Government Regulation
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 4

16. Government: FTC Programs and Remedies
Key Regulatory Agents
Government: FTC Programs and Remedies
Advertising Substantiation Program
Consent Order
Cease and Desist Order
Affirmative Disclosure
Corrective Advertising
Control of celebrity endorsements,
testimonials, and now blogging 4

17. Government: State Regulation
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 4 17

18. Industry Self-Regulation
Key Regulatory Agents
Industry Self-Regulation
National Advertising Review Board (NARB)
State and Local Better Business Bureaus
Ad Agencies and Associations
Media Organizations 4

19. Internet Self-Regulation
Key Regulatory Agents
Internet Self-Regulation
No industry-wide trade association has emerged to date, exceptions:
Anti-spam
COPPA
Some international organizations
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) 4

20. Consumers as Regulatory agents
Key Regulatory Agents
Consumers as Regulatory agents
Consumerism: Grass roots consumer movements
Consumers Organizations
Consumer Federation of America
Consumers Union
Consumer Alert
Commercial Alert 4

21. 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
Product/Brand Placement
Public Relations
Copyright Infringement
Defamation (slander and libel) 4

22. Check Your Understanding
An established cereal manufacturer is being investigated by the FTC for claims that its oatmeal can repair damaged arteries and prevent heart disease. Its executives are aware that if the claims are found to be false, the firm may receive the FTC’s most severe penalty, which involves
ordering corrective advertising.
issuing a cease-and-desist order.
ruling on advertising substantiation.
dissolving the corporation. 4

23. Check Your Understanding
Which of the following claims demonstrates puffery in advertising?
"Only Crest Earns the Dental Seal of Approval Among All Major Brands!"
"Ford Trucks Have Lower MPG than Chevy Trucks!"
"Tide Beats Cheer in Sales 8th Year in a Row!"
"World’s Best Cup of Coffee Served with a Smile Here!" 4