ADV 205 EXAM 1 Review Exam 1 Study Guide This information was found in class lectures and in the readings Chapter 1 What makes an ad effective Characteristics of effective ads o Strategy o Creativity o Execution o Advertising must be goal directed Free market economy 4 assumptions of free market economics o Self Interest People all want more for less o Complete information buyers and sellers have access to all information at all times about what products are available at what quantity and at what prices This leads to greater quantities needed and lower prices o Many buyers and sellers Many sellers means that buyers will likely find one company that suits their needs Many buyers means someone will buy a sellers product o Absence of externalities social costs Certain products could hurt people other than who is buying the product ex cigarettes therefor the government puts extra taxes on these products Preindustrial advertising Wood carved signs advertising what they sold in the store Invention of the printing press allowed for signs newspapers handbills etc Beginning of recorded history to the start of the nineteenth century J Guttenberg and his invention 1440 s printing press was invented in Germany Most important invention in the history of advertising Advertising and the great depression On October 29 1929 the stock market crashed and the Great Depression began Advertising expenditures plummeted This market a time where advertising industries needed to prove their effectiveness o Marketing research started to pick up Advertisers paid more attention to public opinion to cater to what they wanted and needed Late 1800 s advertising patent medicine Dawning of responsibility Advertising starts to become more regulated and people start to question current advertisements 1892 Ladies home journal bans patent medicine advertising Volney Palmer 1843 He was the first advertising representative started first service he worked for the media not the client Sold newspaper spaces to clients Rosser Reeves USP product differentiation used the same information and repeated it to grab customers attention In the 1960 s Reeves techniques began to fail new ways of advertising were starting to become popular and people were realizing you don t need to just hammer the same info into peoples heads because it gets annoying David Ogilvy Used imagery and story appeal British approach o Wanted to show himself in ads to make them seem more honest and sincere o Always wanted to hit every ad out of the park Leo Burnett 1955 Used language and imagery by using honesty and humor to draw people in Created the jolly green giant William Bernbach 1960 He used positioning feelings and emotions Introduces the creative team approach of combining a copywriter with an art director Post WW I advertising Products focus on production Consumer packaged goods increase Heavy national brand advertising Radio 1920 s Age of science Product differentiation Demarketing This was a term coined during the energy shortage of the 1970 s and 1980 s when advertising was used to slow the demand for products People were asked not to run their dishwashers during the day when the need for energy peaked Chapter 2 FTC Federal Trade Commission the major regulator of advertising for products sold in interstate commerce They ensure the nation s markets function competitively and are vigorous efficient and free of undue restrictions Wheeler Lea o Wheeler Lea Amendment This gave the FTC the power to regulate advertising o FTC unsuccessful with trying to regulate advertising because it wasn t trade o Changed FTC to give power to regulate unfair methods of competition and unfair or deceptive acts or practices Stereotypes The use of in advertising Negative or limiting preconceived beliefs about a type of person of a group of people that do not take into account individual differences Puffery Exaggerated often subjective claims that cant necessarily be proven true or false Ex the best or the only way to fly Ethics Ethical advertising Doing what the advertiser and the advertiser s peers believe is morally right in a given situation Deceptive advertising According to the FTC any ad in which there is misrepresentation omission or other practice that can mislead a significant number of reasonable consumers to their detriment Subliminal advertising Advertisments with messages usually sexual supposedly embedded in illustrations just below the threshold of perception st 1 Amendment commercial speech and court cases First amendment freedom of expression Speech vs Commercial Speech o Commercial speech is hardier driven by profit harder to quiet than personal opinions Valentine vs Christensen 1942 can t deliver hand message unless it has a political message He wanted to hand out a message for his subs He made an advertisement with his ad on one side and a political argument against the law banning ads on the back o This lead to commercial speech is not protected by the first amendment Bigelow vs Virginia Commercial speech deserves a degree of protection Virginia State Board of Pharmacy vs Virginia Citizens Council 1976 Medication should be aloud to advertise so people are getting correct safe products Bates vs St Bar of Arizona 1977 Now everyone can advertise Comparative advertising Advertising that claims to be more superior that its competitors in some way Unfairness According to the FTC advertising that causes a consumer to be unjustifiably injured or that violates public policy Affirmative disclosure Advertisers must make known their products limitations or deficiencies Consent decree Consent decrees consent order need to change misleading information o If consent is signed and then broken people will go to jail because legal document was broken Cease and desist Means the advertisement needs to stop Corrective advertising A period of time in their new ad to explain and correct their previous offending ads FCC Federal Communications Commission o Deals with communications such as radio and TV o Can issue and revoke licenses to broadcasting station FDA o o o Indirect control over broadcast They control licenses can take away and grant very easily Can ban messages that are deceptive or poor taste The Food and Drug Administration o Oversees package labeling ingredient listings and advertising for food and drugs o Watchdog for drug advertising o YAZ contraceptive they were accused of doing inadequate advertising FDA got involved and made them issue statement Self