 Advertising Educates Consumers

› Pro: Advertising informs

› Con: Advertising is superficial and intrusive

Is there “information”
in
this ad?

 Advertising improves living standards

› Pro: Ads lower the costs of products
› Con: Ads are wasteful and help only some
Critics
Critics of
of advertising
advertising feel
feel
that
that advertising
advertising isis
superficial
superficial because
because many
many
ads
ads carry
carry little
little actual
actual
product
product information.
information. Do Do
you
you think
think advertising
advertising isis
superficial?
superficial?
 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
Critics
Criticsfeel
feel
advertising
advertising
promotes
promotes
materialism.
materialism.
 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
Do
Do you
you think
think this
this ad
ad
perpetuates
perpetuates stereotypes?
stereotypes?
Do
Do you
you think
think this
this ad
ad
perpetuates
perpetuates stereotypes?
stereotypes?
 Advertising has a Powerful Effect on the Mass
Media
› Pro: Ads foster a diverse and affordable mass media
that provides information and exposure on important
issues.

› Con: Advertising affects and controls programming.

“Branded Entertainment” blurs entertainment and
persuasion. And, controversial issues do not attract
advertisers.
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
Truth in Advertising
 Deception is making false or misleading statements, but puffery
(commercial exaggeration) is legal.

 Cannot legislate against emotional appeals

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?
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?
Areas of advertising regulation:
 Deception and unfairness
– Representation or omission that can mislead
– Judged from perspective of consumer
 Competitive issues
– Vertical cooperative advertising
– Comparison advertising
– Monopoly power
 Advertising to children
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
FTC Programs and Remedies
 Advertising Substantiation Program

 Affirmative Disclosure

 Consent Order
– Cease and Desist Order
– Affirmative Disclosure

 Corrective Advertising

 Control of Celebrity Endorsements

Industry Self-Regulation
 National Advertising Review Board (NARB)
 State and Local Better Business Bureaus
 Ad Agencies and Associations
 Media Organizations
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
Consumers as Regulatory agents
 Consumerism: Grass roots consumer movements

 Consumers Organizations
– Consumer Federation of America
– Consumers Union
– Consumer Alert
– Commercial Alert
Direct Marketing and e-Commerce
 Privacy, Contests, Telemarketing
 Spam=30 million messages/minute, 50 billion/day
worldwide
 “Phishing” as insidious spam

Sales Promotion
 Premiums, Trade Allowances, Contests/Sweepstakes

Public Relations
 Privacy, Copyright Infringement, Defamation (slander and
libel)