4

Social, Ethical, & Regulatory Aspects of Advertising

Objectives
To Understand: 1. Advertising & Well-Being 2. Ethical Campaign Development 3. Role of Government Agencies 4. Self-Regulation 5. Regulation of IBP Techniques

Is Advertising Full of Double Standards?

Social Aspects of Advertising

Advertising Educates Consumers
Pro: Advertising informs Con: Advertising is superficial

Advertising improves living standards

Pro: Ads lower the costs of products Con: Ads are wasteful & help only some

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

Advertising Affects Happiness & Well-Being

Con: Ads create needs Pro: Ads address a wide variety of basic human needs Con: Ads promote materialism Pro: Ads reflect societys priorities

Addresses Social Problems (and dogs too.)

Critics feel advertising promotes materialism

Advertising: Demeaning & deceitful, or liberating & 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

Do you think this ad perpetuates stereotypes?

Advertising has a powerful effect on mass media

Pro: Ads foster a diverse & affordable mass media that provides information Con: Advertising affects & controls programming. Advertainment has made matters worse

Ethical Aspects of Advertising

Ethics are the moral standards against which behavior is judged. Key areas of debate regarding ethics & advertising are:
Truth in advertising Advertising to children Advertising controversial products

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

Ethical Aspects of Advertising

Advertising to ChildrenIssues
Advertising promotes superficiality & materialism in children Children are inexperienced & easy prey Persuasion to children creates child-parent conflicts What does the literature say about kids abilities to process persuasive information?

Mommy, why is Ronald McDonald being arrested?

Ethical Aspects of Advertising

Advertising Controversial Products
Critics question targeting minorities Tobacco, alcohol, gambling & lotteries are product categories of greatest concern How does the concept of primary demand provide insights here? What does the literature say about advertisings impact on these product categories?

Controversies in Cigarette Advertising (they find ways around the laws).

Alcohol Advertisingto Cats?

Or by Frogs.

Regulatory Aspects of Advertising Areas of advertising regulation:

Deception & unfairness Competitive issues
Vertical cooperative advertising Comparison advertising Monopoly power

Advertising to children

Key Regulatory Agents

Government Regulation
Federal Trade Commission (FTC)
Wide range of regulatory programs & remedies

Federal Communications Commission (FCC)

Food & Drug Administration (FDA) U.S. Postal Service Bureau of Alcohol, Tobacco, & Firearms

Not Following Advertising Law Can Bring a Big Company Down

Key Regulatory Agents--FTC

FTC Programs & Remedies
Advertising Substantiation Program Consent Order Cease & Desist Order Affirmative Disclosure

Corrective Advertising
Control of Celebrity Endorsements

Key Regulatory Agents (cont)

Industry Self-Regulation
National Advertising Review Board (NARB) State & Local Better Business Bureaus Ad Agencies & Associations Media Organizations

Consumers as Regulators too

Key Regulatory Agents (cont)

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

Key Regulatory Agents (cont)

Consumers as Regulatory agents
Consumerism: Grass roots consumer movements Consumers Organizations Consumer Federation of America Consumers Union Consumer Alert Commercial Alert

www.adbusters.com

Regulation of Other Promotional Tools

Direct Marketing & e-Commerce
Privacy, Contests, Telemarketing Spam=10 million messages/minute worldwide

Sales Promotion
Premiums, Trade Allowances, Contests

Public Relations
Privacy, Copyright Infringement, Defamation (slander & libel)

Review/?s
1. Advertising & Well-Being

2. Ethical Campaign Development

3. Role of Government Agencies 4. Self-Regulation 5. Regulation of IBP Techniques Mom Jeans

EXAM 1 Covers Content up to This Point.

Read & Review Class Notes
Professor Close