ADPR 3100 Chapter 24 Economic Social and Legal Effects of Advertising TEST ONE MATERIAL Advertising Criticisms 1 Era of exaggerated claims 2 Era of Public Awareness 3 Era of Social Responsibility buyer beware communication where any claim for a product was allowed Government regulators began to reject laissez faire unregulated economic system Companies must meet higher standard of social responsibility than simply providing literally truthful advertising Advertising as an Economic and Social Institution Economic Role Primary role of advertising is communication Debate over information in advertising o Persuasion vs Information persuade a consumer o Conclusion is advertising does both Economic Arguments in Favor of Advertising o Advertising provides necessary information a consumer needs to know to make an informed decision o Advertising provides consumers with little useful information and instead the goal is to Provides consumer with information to make informed decisions Supports largely unrestricted media that broadcast news and entertainment Encourages continuing product improvements and introduction to new goods and services Permits companies to achieve economies of scale in production that more than offset the per unit cost of production Increases overall economy Economic Arguments Against Advertising The intent of advertising is to persuade not inform Advertising money is wasted because it convinces consumers to switch from one product to another with no net economic gain to society ADPR 3100 Advertising doesn t lower the prices of products or services it just emphasizes emotional appeals so price comparison isn t emphasized High rate of advertising expenditures makes it difficult for new products to enter the market Social Role of Advertising Advertising bonds with consumers on an economic and cultural basis Does advertising shape and define culture or mirror an evolving society Advertising s inadvertent social role o Advertising conveys largely unintended messages that convey information about society in general o Sets a social agenda of what is expected o Creates a critical culture Advertising s overt social role o Special interest groups use advertising to promote their values and products Social Criticism of Advertising 1 Privacy Concerns o There is heightened awareness to this issue o Cookies phone spam email spam etc 2 Product Placement 3 Role in Obesity o Advertising products through movies or TV shows o Fast food chains leading to obesity as they target children Specific Areas of Social Criticism of Advertising Privacy Concerns Product Placement Advertising s Role In Obesity Specific Areas of Social Criticism Advertising Content Advertising of Certain Product Categories Themes and appeals o Ex Alcohol distilled spirits Condoms Advertising Children Excessive Advertising Directed toward television Advertising Unwanted Influences of Society when ad is contradicting best interest of consumer ADPR 3100 Advertising and Social Causes Advertising Council Advertising Council marshals the advertising industry to support a number of causes continues to be a means of distributing social messages which improve society in various ways Challenges getting volunteers finding animated topics Issue Advocacy Advertising Used to influence public opinion and legislation regarding a range of political issues Advertising and Cause Related Marketing purchase of a brand Transactional Programs programs where a company contributes to a cause based on consumer Message Promotions Links a brand with information about some cause Licensing Programs permits companies to use charities logos in their advertising Advertising Influence on Editorial Decisions Theory that by adopting advertising as the main source of media funding there is economic support spread out over numerous advertisers and ensures that no individual can exercise excessive influence over editorial content Withholding advertising as an attempt to control editorial decisions threat made by an advertiser to withhold advertising dollars unless a medium makes editorial decisions favorable to a particular company Advertiser financed productions Product Placement Most prevalent type of editorial promotion alliance Advertorials combination of an advertisement and an editorial viewpoint Advertisings Legal and Regulatory Environment Market Failure when untrue or misleading advertising is disseminated the implied relationship between the consumer and the advertiser is violated Laws and regulations of legally constituted bodies such as Congress and FCC Control by media through advertising accessibility guidelines Self regulation by advertisers and agencies using various trade practice recommendations and codes for conduct Chapter 1 Background of Today s Advertising ADPR 3100 Forces in the Rise of Modern Advertising Centralized Exchange System of trade and marketing through specialized intermediaries rather than the direct exchange of the goods between buyers and producers o Prospered as the Industrial Revolution swept across the US Economy in Which Supply Surpasses Demand need people to buy more than they need Advertising s Modern Era Research and Responsibility Missing in advertising in the 20th century o Ethical framework for creating promotional messages o Valid and reliable research to measure advertising effects Beginnings Early Advertising o Earliest known advertising is a Babylonian clay tablet dating back to 3000 BC for an ointment dealer a scribe and a shoemaker o Greeks relied on town criers earliest medium for public announcements in many European countries o Pompeii used stone or terra cotta advertisements o England 1614 One of the first laws pertaining to advertisin Prohibited signs from extending more than 8 feet out from a building Another law required signs to be high enough to give clearance to an armored Hoarding first printed outdoor signs forerunner of modern outdoor advertising man on horseback 1970 was the first Foundations of Modern Advertising o Premarketing Era Media was clay tablets town criers and tavern signs o Mass Communications Era From 1700 s to early 1900 s newspapers and magazines emerged with the printing press 1920 s radio and beginning of different brands o Research Era Early 1920 s techniques to reach and motivate audiences 1990 s to present More personalized nature of media with sophisticated techniques for identifying and reaching narrowly targeted audiences with messages prepared for specific groups