Download Social, Ethical, and Regulatory Aspects of Advertising and Promotion


Advertising Educates Consumers
› Pro: Advertising informs
› Con: Advertising is superficial and intrusive
Is there “information” in
this ad?

Advertising improves living standards
› Pro: Ads lower the costs of products
› Con: Ads are wasteful and 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 and WellBeing
› Con:
› Pro:
› Con:
› Pro:
Ads create needs
Ads address a wide variety of
basic human needs
Ads promote materialism
Ads reflect society’s priorities
Critics feel
advertising
promotes
materialism.

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
Do you think this ad
perpetuates stereotypes?
Do you think this ad
perpetuates
stereotypes?

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.
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
Truth in Advertising
 Deception is making false or misleading statements, but
puffery (commercial exaggeration) is legal.
 Cannot legislate against emotional appeals
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?
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?
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
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
FTC Programs and Remedies
 Advertising Substantiation Program
 Affirmative Disclosure
 Consent Order
– Cease and Desist Order
– Affirmative Disclosure
 Corrective Advertising
 Control of Celebrity Endorsements
Industry Self-Regulation
 National Advertising Review Board (NARB)
 State and Local Better Business Bureaus
 Ad Agencies and Associations
 Media Organizations
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
Consumers as Regulatory agents
 Consumerism: Grass roots consumer movements
 Consumers Organizations
–
–
–
–
Consumer Federation of America
Consumers Union
Consumer Alert
Commercial Alert
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)