COMM 320 Exam 2 Notes Maryann Valentine 3 Introduction to Advertising Session 12 Social Ethical and Regulatory aspects of Advertising Full Service Agency Services Account services Marketing research services account planner Media planning and buying services Administrative services Creative and production services Agency compensation Commissions Markup charges fee systems and pay for results Focus Social Aspects Advertising educates consumers PRO advertising informs explicitly or not consumers become aware of product attributes cost of search is reduced CON advertising is superficial and intrusive pop ip 95 blogger affiliation with companies 72 problem is when there is no disclosure paid tweets blogs children s ads and programs Advertising improves living standards PRO ads lower the costs of products how economies of scale fixed costs over more units increases the chance of product success on mktplace increases the product quality by stimulating competition CONS ads are wasteful and help only some people Critics of advertising feel that advertising is superficial Social Aspects of Ad Advertising affects happiness and well being PRO Ads address a wide variety of basic human needs ads reflect societies priorities CON Ads create false needs ads promote materialism Model Self actualization esteem emotional safety Physiological Top of triangle to bottom SO you start with physiological needs then go up from there Least basic needs Most these we must meet first then we can go for other needs After basic needs are met we are preoccupied with others in order to achieve well being and be a well rounded individual and if they satisfy these needs they are happier So why blame advertising Self actualization means you have status you are appreciated by others an you are going to challenge yourself to do more to your fullest potential You feel fulfilled from these needs EX Commercial with the Chinese guy who keeps giving to little girl gives old lady bananas gives chicken to dog and they ask what does he get He gets happiness and emotions Clicker question shows pictures of doors with the ad over 2 500 changes to make a great first impression Which need does this satisfy Answer Esteem Clicker question Ad that shows people laughing and playing tug o war in an ocean looks like they are having fun and the ad is supporting NEWPORT cigs ad says Newport pleasure what need does it activate Answer Emotional KNOW for exam Social aspects of advertising PRO Ads are more sensitive now CON Ads perpetuate stereotypes Psychologically stereotypes are the best things for us if we didn t have stereotypes and categories we would have to stop and look at everything and ask ourselves what is this but because we can stereotype the category of desk or table we categorize it as that its how we are able to function as humans and not get stuck on a daily basis BUT we also stereotype humans this leads to error because not everyone in the categories has all the same characteristics so its when the process of stereotyping goes wrong n our everyday judgematics is when stereotyping goes wrong Clicker question Honey would you like more beer while watching the game Answer yes this is stereotyping Social aspects of advertising Ads have powerful effect on mass media PRO Access to diverse and affordable information and entertainment sources CON Ads ffect and control program content Brand entertainment Blurs entertainment and persuasion Ethics aspects of advertising Ethics the moral standards against which behavior id judged Truth in advertising Deception is making false statement but puffery exaggeration is legal Ex of deception price deception bait and switch advertising FTC comes down hard on any merchant who says a price and then makes the consumer paying a different price One of a kind but already gone they ll advertise a flavor or something and then you go there and its already sold out While supplies last limited stock financing claims are regulated catch only people with excellent credit qualify forzero financing actual item not pictured Cannot legislate against emotional appeals CLICKER QUESTION shows papa johns pizza ad and the ad says better ingrediants better pizza and said its fresh dough and fresh ingrediants etc Answer puffery because not lieing just exaggerating Question NISSAN shows an ad of a truck being pulled up a 90 degree angle hill ad wants to portray truck as strong Answer deceptive advertising because there was a string pulling the truck up truck couldn t do that itself REMEMBER how to judge it not what you think EX Mcdonalds commercial shows the ad of the big whopper and the actual whopper Is this deception or puffery Answer PUFFERY because this is legal they are not lieing about the ingrediants etc just showing the diff in size Ads to children issues Considered a vulnerable population they are easily influenced Promotion of materialism Creation of child parent conflict action for children s TV in 1990 min per hour of ads were dedicated to ads for kids 10 min in 1 hour rule Product categories of conern tobacco alc firearms etc Primary demand studies show that ads don t cause need for products RATHER they influence established customers to buy certain brands Areas of regulations Deception and unfairness representation or omission that can mislead judged from perspective of consumer misrepresentation must be material Competitive issues vertical cooperative advertising comparison advertising monopoly power Regulatory aspects of ads who regulates ads Federal government Industry self regulation States to a much lesser extent Most ads and promotions are Government regulation FTC fed trade commission wide range of regulatory programs and remedies FCC fed communications commission FDA food and drug admin US postal service FTC programs and remedies 1 Advertising substantiation program reasonable basis 2 Consent order agree to stop running ads and does not admit guilt 3 Case and desist order ad stopped within 30 days hearing Affirmative disclosure must include missing information Corrective advertising correct misinformation Control of celebrity endorsements testimonials and now blogging Industry self regulation National advertising review board NARB NAD NARB GOVT KNOW THIS CHART IN TEXTBOOK FOR TEST Most complaints come from competitiors The NAD can dismiss the complaint or appeal to the NARB NARB takes action and either the ad is changed discontinued or it is reffered to the federal government Two theories WILL