22

Evaluating the Social,

Ethical, and Economic
Aspects of Advertising
and Promotion

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Advertising and Promotion Viewpoints

Provides
Provides information
information
Encourages
Encourages higher
higher standard
standard of
of living
living
Proponent
Proponent
arguments Promotes
Promotes competition
competition
arguments
Helps
Helps new
new firms
firms enter
enter aa market
market
Creates
Creates jobs
jobs

More
More propaganda
propaganda than
than information
information
Critic
Critic Creates
Creates consumer
consumer needs,
needs, wants
wants
arguments
arguments
Promotes
Promotes materialism,
materialism, insecurity,
insecurity,
and
and greed
greed
 Ethics in Advertising and Promotion

Ethics:
Ethics: Moral
Moral principles
principles and
and values
values that
that
govern
govern the
the actions
actions and
and decisions
decisions of
of an
an
individual
individual or
or group.
group.

AA marketing
marketing or or Marketers
Marketers mustmust
Not
Not all
all issues
issues promotion
promotion action
action decide
decide the
the
can
can be
be regulated
regulated may
may bebe legal
legal but
but appropriateness
appropriateness
not
not ethical
ethical of
of their
their actions
actions
Promoting Responsible Drinking
Benetton’s “Death Row” Ad Offensive
Advertising and Untruthful or Deceptive

General
General mistrust
mistrust of
of advertising
advertising
among
among consumers.
consumers. Many
Many do
do not
not
perceive
perceive ads
ads as
as honest
honest or
or believable
believable

Abuses
Abuses involving
involving sales
sales promotions
promotions
such
such as
as contests,
contests, sweepstakes,
sweepstakes,
premium
premium offers
offers

Unethical
Unethical and/or
and/or deceptive
deceptive practices
practices
involving
involving mail
mail order,
order, telemarketing
telemarketing
and
and other
other forms
forms of
of direct
direct marketing
marketing

Internet
Internet scams
scams and
and abuses
abuses
Advertising as Offensive or in Bad Taste

Objectionable
Objectionable Sexual
Sexual Shock
Shock ads
ads
products
products appeals
appeals
 Test Your Knowledge

Advertisers are using shock advertising to:

A) Test their First Amendment rights
B) Get ads noticed in the midst of clutter
C) Make a statement against self-regulation
D) Test the ethics of the advertising industry
E) Act as advocacy ads for company management
 Advertising and Children

Children's
Children's TV
TV
Watching
Watching Behavior
Behavior

Children
Children ages
ages 2-11
2-11 80%
80% of of all
all advertising
advertising
watch
watch an
an average
average ofof targeted
targeted to to children
children
22
22 hours
hours of
of TV
TV per
per falls
falls in
in four
four
week
week and
and see
see 30,000
30,000 product
commercials product categories:
categories:
commercials per
per year
year Toys,
Toys, cereal,
cereal, candy
candy &&
fast
fast food
food restaurants
restaurants
 Perspectives on Ads for Children

Advocates
Advocates Argue
Argue That
That Children:
Children:

Lack
Lack the
the knowledge
knowledge andand Cannot
Cannot differentiate
differentiate
skills
skills to
to evaluate
evaluate between
between programs
programs and
and
advertising
advertising claims
claims commercials
commercials

Marketers
Marketers Argue
Argue Children:
Children:

Must
Must acquire
acquire skills
skills
Must
Must learn
learn needed
needed to
to function
function in
in
through
through socialization
socialization the
the marketplace
marketplace
Do TV Networks Have a Double Standard?
Social and Cultural Consequences

Does
Does advertising
advertising
encourage
encourage materialism?
materialism?

Does
Does advertising
advertising make
make
people
people buy
buy things
things
they
they don’t
don’t need?
need?

Is
Is advertising
advertising just
just
aa reflection
reflection of
of society?
society?
Does advertising affect Society?
 Advertising and Stereotyping

Portrayal
Portrayal of of women
women to
to
reflect
reflect their
their changing
changing role
role
in
in society
society

Criticisms Portrayal
Portrayal of
of
Gender
Gender Criticisms of
of women
stereotyping Advertising women as as
stereotyping Advertising sex
sex objects
objects
With
With Regard
Regard to
to
Stereotyping
Stereotyping

Ethnic
Ethnic
Sexual
Sexual stereotyping/
stereotyping/
orientation
orientation representation
representation
What is your opinion of this ad?

Is
Is this
this woman
woman portrayed
portrayed
as
as aa sex
sex object?
object?

Does
Does this
this ad
ad contain
contain
cues
cues that
that are
are sexually
sexually
suggestive?
suggestive?

Does
Does this
this ad
ad present
present an
an
image
image ofof sexual
sexual
submissiveness?
submissiveness?
Dove Challenges the Norms of Beauty
 Test Your Knowledge

Groups such as the National Organization for Women

(NOW) are critical of advertising that:
A) Portrays women in traditional sexist roles
B) Contributes to violence against women
C) Is insulting to women
D) Stereotypes women
E) Does any of the above
Advertising Can Address Social Problems

*Click outside of the video screen to advance to the next slide

Do Advertisers Control the Media?

Advertising
Advertising isis the
the primary
primary
source
source ofof revenue
revenue forfor
newspapers,
newspapers, magazines,
magazines,
television
television and
and radio
radio

Media’s
Media’s dependence
dependence on on
advertising
advertising for
for revenue
revenue makes
makes
them
them vulnerable
vulnerable toto control
control by
by
advertisers
advertisers

Advertisers
Advertisers maymay exert
exert control
control
over
over the
the media
media byby biasing
biasing
editorial
editorial content,
content, limiting
limiting
coverage
coverage of of certain
certain issues,
issues, or
or
influencing
influencing program
program content
content
Do Advertisers Control the Media?

They
They must
must report
report the
the news
news
fairly
fairly and
and accurately
accurately to to retain
retain
public
public confidence
confidence

Advertisers
Advertisers need
need the
the media
media
more
more than
than the
the media
media need
need
any
any one
one advertiser
advertiser

Media
Media maintain
maintain separation
separation
between
between news
news and
and business
business
departments
departments “The
“The Wall”
Wall”
U.S. Government Discourages Drug Use
Role of Advertising in the Economy

Makes
Makes consumers
consumers aware
aware
of
of products
products and
and services
services

Provides
Provides consumers
consumers with
with
information
information to
to use
use to
to
make
make purchase
purchase decisions
decisions

Encourages
Encourages consumption,
consumption,
fosters
fosters economic
economic growth
growth
Economic Impact of Advertising

Effects
Effects on
on Consumer
Consumer Choice
Choice
•• Differentiation
Differentiation
•• Brand
Brand Loyalty
Loyalty

Effects
Effects on
on Competition
Competition
•• Barriers
Barriers to
to entry
entry
•• Economies
Economies of of scale
scale

Effects
Effects on
on Product
Product Costs
Costs and
and Prices
Prices
•• Advertising
Advertising as
as an
an expense
expense that
that
increases
increases the
the cost
cost of
of products
products
•• Increased
Increased differentiation
differentiation
 Test Your Knowledge

From an economic perspective, advertising might

lower the cost of a product by:
A) Creating barriers to entry for less efficient
firms
B) Moving consumers to the consumer
socialization stage of the buying process
C) Making it possible for firms to realize
economies of scale through expansion
of sales volume
D) Allowing firms to advertise at high levels
along with competitors
E) Doing none of the above
The Economic Value of Advertising

*Click outside of the video screen to advance to the next slide

 Summarizing Economic Effects

Change
Change consumers’
consumers’ tastes
tastes
Advertising
Advertising
Equals
Equals Lowers
Lowers sensitivity
sensitivity to
to price
price
Market
Market
Power
Power Builds
Builds brand
brand loyalty
loyalty

Results
Results in
in higher
higher profits
profits
Reduces
Reduces competition
competition
Leads
Leads to
to higher
higher prices
prices
Leads
Leads to
to fewer
fewer choices
choices
 Summarizing Economic Effects

Provides
Provides useful
useful information
information
Advertising
Advertising
Equals Increases
Increases price
price sensitivity
sensitivity
Equals
Information
Information
Increases
Increases competition
competition

Pressure
Pressure for
for high
high quality
quality
Pressure
Pressure for
for lower
lower prices
prices
Forces
Forces inefficient
inefficient firms
firms out
out
 Do you agree with Leo Burnett?

“It must be said that without

advertising we would have a far
different nation, and one that
would be much the poorer-not
merely in material commodities,
but in the life of the spirit.”

Excerpters is from a speech given by Leo Burnett on the American

Association or Advertising Agencies’ 50th anniversary, April 20,1967