Advertising Society Economics The effects of advertising on our economy Ethics The effects of advertising on our society Regulation Our attempts to manage those effects Power or Information Market Power Market Information Advertising Persuades consumer to purchase one brand over another more often Excess brand profits Higher barriers to entry and more market power More advertising leads to greater brand loyalty Reduce quality raise price Reduced consumer sovereignty Monopoly Advertising Increased consumer knowledge More substitute products consumers can consider Lower barriers to entry by new brands Reduced market power for any individual brand Better pricing distribution more product innovation Optimal brand profits consumer choice and price benefits What do you think Advertising Market Power Advertising Market Information Or both Some Economic Questions How does advertising affect the price of a new car How does advertising affect the price of a latt from Starbucks How does advertising affect the way that you spend your money Some Economic Questions Can ads make people buy things they don t want or need Can ads make people more materialistic Are the benefits of advertising worth the annoyance An Ethical Debate Ads destroy freedom of choice Ads give consumers more choices Ads destroy democracy media Ads freedom of speech Advertising warps social values Ads simply reflect the real world 3 Ethical Issues 1 Advocacy What does the advertising advocate 2 Accuracy How accurate is the advertising Some of this depends on susceptibility of the audience i e kids 3 Acquisitiveness What is the overall effect Does it make us more materialistic 5 Controversial Issues 1 Puffery Nothing beats a Bud 2 Decency Sexual innuendo violence 3 Stereotyping Portrayals of housewives seniors racial groups 4 Children Violence dangerous acts unhealthy habits 5 Controversy Condoms alcohol fashion Regulation 2 Main Purposes Regulation 3 Main Areas Purpose for advertising regulation To protect competition To protect consumers from economic or physical harm Regulations are concerned with Deceptive or unfair content How advertising is delivered Protection of susceptible groups kids etc 5 FTC Concerns 1 Deception Must lead to material injury 2 Comparisons Must substantiate with statistically significant data 3 Endorsements Must be qualified must use product 4 Demonstrations Must be accurately depicted 5 Bait Switch Product must be available 4 Possible Remedies for Deceptive Ads 1 Consent Decree FTC asks advertiser to stop 2 Cease Desist FTC gets court order to force advertiser to stop 3 Corrective Ads FTC mandates new ads to correct false perceptions 4 Consumer Redress FTC mandates reimbursement 6 Government Regulatory Groups 1 FDA Packaging and labeling 2 FCC Broadcast advertising 3 Postal Service Magazines direct mail 4 ATF Liquor labeling advertising 5 Patent Office Trademarks 6 Library of Congress Copyrights 2 Industry Watchdogs 1 NAD National Advertising Division Part of Better Business Bureau 2 National Advertising Review Board Represents advertisers and agencies A division of the NAD Compliance is strictly voluntary Big Questions What do you think is the biggest benefit of advertising What do you think is the biggest problem with advertising What do you think is the best example of bad advertising What do you think is the best example of good advertising
View Full Document
Unlocking...