Evaluating the Social, Ethical , and Economic Aspects of Advertising and Promotion 2 2 McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Oct 30, 2014
Evaluating the Social, Ethical, and Economic Aspects of Advertising
and Promotion
Evaluating the Social, Ethical, and Economic Aspects of Advertising
and Promotion
22
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Advertising and Promotion Viewpoints
Creates consumer needs, wants Creates consumer needs, wants
Promotes materialism, insecurity, and greed
Promotes materialism, insecurity, and greed
More propaganda than informationMore propaganda than information
Provides informationProvides information
Creates jobs Creates jobs
Encourages higher standard of livingEncourages higher standard of living
Promotes competition Promotes competition Proponent argumentsProponent arguments
Critic arguments
Critic arguments
Helps new firms enter a marketHelps new firms enter a market
Ethics in Advertising and Promotion
Not all issues can be regulated
Not all issues can be regulated
A marketing or promotion action may be legal but
not ethical
A marketing or promotion action may be legal but
not ethical
Marketers must decide the
appropriateness of their actions
Marketers must decide the
appropriateness of their actions
Ethics: Moral principles and values that govern the actions and decisions of an individual or group.
Ethics: Moral principles and values that govern the actions and decisions of an individual or group.
Promoting Responsible Drinking
Benetton’s “Death Row” Ad Offensive
Advertising and Untruthful or Deceptive
General mistrust of advertising among consumers. Many do not
perceive ads as honest or believable
General mistrust of advertising among consumers. Many do not
perceive ads as honest or believable
Abuses involving sales promotions such as contests, sweepstakes,
premium offers
Abuses involving sales promotions such as contests, sweepstakes,
premium offers
Unethical and/or deceptive practices involving mail order, telemarketing and other forms of direct marketing
Unethical and/or deceptive practices involving mail order, telemarketing and other forms of direct marketing
Internet scams and abusesInternet scams and abuses
Advertising as Offensive or in Bad Taste
SexualappealsSexualappeals
Objectionable products
Objectionable products Shock adsShock ads
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 TV Watching Behavior
Children's TV Watching Behavior
Children ages 2-11 watch an average of 22 hours of TV per week and see 30,000 commercials per year
Children ages 2-11 watch an average of 22 hours of TV per week and see 30,000 commercials per year
80% of all advertising targeted to children falls in fourproduct categories:Toys, cereal, candy & fast food restaurants
80% of all advertising targeted to children falls in fourproduct categories:Toys, cereal, candy & fast food restaurants
Perspectives on Ads for Children
Advocates Argue That Children:Advocates Argue That Children:
Marketers Argue Children:Marketers Argue Children:
Lack the knowledge and skills to evaluate
advertising claims
Lack the knowledge and skills to evaluate
advertising claims
Cannot differentiatebetween programs and
commercials
Cannot differentiatebetween programs and
commercials
Must learnthrough socialization
Must learnthrough socialization
Must acquire skills needed to function in
the marketplace
Must acquire skills needed to function in
the marketplace
Do TV Networks Have a Double Standard?
Social and Cultural Consequences
Does advertising encourage materialism?
Does advertising encourage materialism?
Does advertising make people buy thingsthey don’t need?
Does advertising make people buy thingsthey don’t need?
Is advertising justa reflection of society?
Is advertising justa reflection of society?
Does advertising affect Society?
Advertising and Stereotyping
Portrayal of women to reflect their changing role
in society
Portrayal of women to reflect their changing role
in society
Portrayal ofwomen assex objects
Portrayal ofwomen assex objects
Ethnic stereotyping/
representation
Ethnic stereotyping/
representation
Gender stereotyping
Gender stereotyping
Sexual orientation
Sexual orientation
Criticisms of Advertising
With Regard to Stereotyping
Criticisms of Advertising
With Regard to Stereotyping
What is your opinion of this ad?
Is this woman portrayed as a sex object?
Is this woman portrayed as a sex object?
Does this ad containcues that are sexually
suggestive?
Does this ad containcues that are sexually
suggestive?
Does this ad present an image of sexual submissiveness?
Does this ad present an image of sexual 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 is the primary source of revenue for
newspapers, magazines, television and radio
Advertising is the primary source of revenue for
newspapers, magazines, television and radio
Advertisers may exert control over the media by biasing editorial content, limiting
coverage of certain issues, or influencing program content
Advertisers may exert control over the media by biasing editorial content, limiting
coverage of certain issues, or influencing program content
Media’s dependence on advertising for revenue makes them vulnerable to control by
advertisers
Media’s dependence on advertising for revenue makes them vulnerable to control by
advertisers
Do Advertisers Control the Media?
They must report the news fairly and accurately to retain
public confidence
They must report the news fairly and accurately to retain
public confidence
Advertisers need the media more than the media need
any one advertiser
Advertisers need the media more than the media need
any one advertiser
Media maintain separation between news and business
departments “The Wall”
Media maintain separation between news and business
departments “The Wall”
U.S. Government Discourages Drug Use
Role of Advertising in the Economy
Makes consumers aware of products and servicesMakes consumers aware of products and services
Provides consumers with information to use to
make purchase decisions
Provides consumers with information to use to
make purchase decisions
Encourages consumption, fosters economic growth
Encourages consumption, fosters economic growth
Economic Impact of Advertising
Effects on Consumer Choice• Differentiation • Brand Loyalty
Effects on Consumer Choice• Differentiation • Brand Loyalty
Effects on Product Costs and Prices• Advertising as an expense that
increases the cost of products• Increased differentiation
Effects on Product Costs and Prices• Advertising as an expense that
increases the cost of products• Increased differentiation
Effects on Competition• Barriers to entry • Economies of scale
Effects on Competition• Barriers to entry • Economies of scale
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 consumers’ tastesChange consumers’ tastes
Reduces competitionReduces competition
Lowers sensitivity to priceLowers sensitivity to price
Builds brand loyaltyBuilds brand loyalty
Advertising Equals Market Power
Advertising Equals Market Power
Leads to higher pricesLeads to higher prices
Leads to fewer choicesLeads to fewer choices
Results in higher profitsResults in higher profits
Summarizing Economic Effects
Provides useful informationProvides useful information
Pressure for lower pricesPressure for lower prices
Increases price sensitivityIncreases price sensitivity
Increases competitionIncreases competition
Advertising Equals
Information
Advertising Equals
Information
Forces inefficient firms outForces inefficient firms out
Pressure for high qualityPressure for high quality
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