Chapter 4 Social Ethical and Regulatory Aspects of Advertising 2006 Thomson South Western Social Aspects of Advertising Advertising Educates Consumers Pro Advertising informs Con Advertising is superficial Advertising improves living standards Pro Ads lower the costs of products Con Ads are wasteful and help only some 2006 Thomson South Western Ch 4 Ethics Regulation 2 Critics of advertising feel that advertising is superficial because many ads carry little actual product information Do you think advertising is superficial 2006 Thomson South Western 1 Advertising Affects Happiness and Well Being Con Ads create needs Pro Ads address a wide variety of basic human needs Con Ads promote materialism Pro Ads reflect society s priorities 2006 Thomson South Western Ch 4 Ethics Regulation 4 Critics feel advertising promotes materialism 2006 Thomson South Western Advertising Demeaning and deceitful or liberating and artful Con Ads perpetuate stereotypes Pro Advertisers are more sensitive now Con Ads are often offensive Pro Ads are a source of liberation Con Ads deceive via subliminal stimulation Pro Advertising is art 2006 Thomson South Western Ch 4 Ethics Regulation 6 2 Do you think this ad perpetuates stereotypes 2006 Thomson South Western Advertising has a powerful effect on mass media Pro Ads foster a diverse and affordable mass media that provides information Con Advertising affects and controls programming Advertainment has made matters worse 2006 Thomson South Western Ch 4 Ethics Regulation 8 Ethical Aspects of Advertising Ethics are the moral standards against which behavior is judged Key areas of debate regarding ethics and advertising are Truth in advertising Advertising to children Advertising controversial products 2006 Thomson South Western Ch 4 Ethics Regulation 9 3 Ethical Aspects of Advertising Truth in Advertising Deception is making false or misleading statements but puffery commercial exaggeration is legal Cannot legislate against emotional appeals 2006 Thomson South Western Ch 4 Ethics Regulation 10 Ethical Aspects of Advertising Advertising to Children Issues Advertising promotes superficiality and materialism in children Children are inexperienced and easy prey Persuasion to children creates child parent conflicts What does the literature say about kid s abilities to process persuasive information 2006 Thomson South Western Ch 4 Ethics Regulation 11 Ethical Aspects of Advertising Advertising Controversial Products Critics question targeting minorities Tobacco alcohol gambling and lotteries are product categories of greatest concern How does the concept of primary demand provide insights here What does the literature say about advertising s impact on these product categories 2006 Thomson South Western Ch 4 Ethics Regulation 12 4 Regulatory Aspects of Advertising Areas of advertising regulation Deception and unfairness Competitive issues Vertical cooperative advertising Comparison advertising Monopoly power Advertising to children 2006 Thomson South Western Ch 4 Ethics Regulation 13 Key Regulatory Agents Government Regulation Federal Trade Commission FTC Wide range of regulatory programs and remedies Federal Communications Commission FCC Food and Drug Administration FDA U S Postal Service Bureau of Alcohol Tobacco and Firearms 2006 Thomson South Western Ch 4 Ethics Regulation 14 Key Regulatory Agents FTC FTC Programs and Remedies Advertising Substantiation Program Consent Order Cease and Desist Order Affirmative Disclosure Corrective Advertising Control of Celebrity Endorsements 2006 Thomson South Western Ch 4 Ethics Regulation 15 5 Key Regulatory Agents con t Industry Self Regulation National Advertising Review Board NARB State and Local Better Business Bureaus Ad Agencies and Associations Media Organizations 2006 Thomson South Western Ch 4 Ethics Regulation 16 Key Regulatory Agents con t Internet Self Regulation No industry wide trade association has emerged to date Global Dialogue on Electronic Commerce GBDe is emerging as a governing body Little progress has been made to address consumers complaints 2006 Thomson South Western Ch 4 Ethics Regulation 17 Key Regulatory Agents con t Consumers as Regulatory agents Consumerism Grass roots consumer movements Consumers Organizations Consumer Federation of America Consumers Union Consumer Alert Commercial Alert 2006 Thomson South Western Ch 4 Ethics Regulation 18 6 Regulation of Other Promotional Tools Direct Marketing and e Commerce Privacy Contests Telemarketing Spam 10 million messages minute worldwide Sales Promotion Premiums Trade Allowances Contests Public Relations Privacy Copyright Infringement Defamation slander and libel 2006 Thomson South Western Ch 4 Ethics Regulation 19 7