ADPR 3100TEST ONE MATERIAL Chapter 24: Economic, Social, and Legal Effects of AdvertisingAdvertising Criticisms:1. Era of exaggerated claims- "buyer beware" communication where any claim for a product was allowed2. Era of Public Awareness- Government regulators began to reject laissez-faire, unregulated economic system3. Era of Social Responsibility- Companies must meet higher standard of social responsibility than simply providing literally truthful advertisingAdvertising as an Economic and Social Institution: Economic Role:- Primary role of advertising is communication- Debate over information in advertisingo "Persuasion vs. Information"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 persuade a consumero Conclusion is advertising does bothEconomic Arguments in Favor of Advertising:- 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 societyADPR 3100- Advertising doesn't lower the prices of products or services it just emphasizes emotional appealsso price comparison isn't emphasized- High rate of advertising expenditures makes it difficult for new products to enter the marketSocial 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 roleo Advertising conveys largely unintended messages that convey information about societyin general o Sets a social agenda of what is expectedo Creates a "critical culture"- Advertising's overt social roleo Special interest groups use advertising to promote their values and products Social Criticism of Advertising 1. Privacy Concernso There is heightened awareness to this issueo Cookies, phone spam, email spam, etc2. Product Placemento Advertising products through movies or TV shows 3. Role in Obesity 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 ObesitySpecific 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 consumerADPR 3100Advertising 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- Transactional Programs- programs where a company contributes to a cause based on consumerpurchase of a brand - 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 AdvertisingADPR 3100Forces 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 needAdvertising's Modern Era: Research and Responsibility- Missing in advertising in the 20th century o Ethical framework for creating promotional messageso Valid and reliable research to measure advertising effectsBeginnings- Early Advertisingo Earliest known advertising is a Babylonian clay tablet dating back to 3000 BC for an ointment dealer, a scribe, and a shoemakero 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 man on horseback  Hoarding - first printed outdoor signs; forerunner of modern outdoor advertising(1970 was the first)- Foundations of Modern Advertising o Premarketing Era : "Media" was clay tablets, town criers and tavern signso 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 brandso Research Era : Early 1920's  techniques to reach and motivate audiences 1990's to present: More