Economic effects of advertising

Economic Effects of AdvertisingPresented by

Amlin David

What is Advertising

• Advertising is a form of communication used to persuade an audience (viewers, readers or listeners) to take some action with respect to products, ideas, or services.

Definitions of Advertising

• Any paid form of non personal presentation and promotion of ideas of goods and services by an identified sponsor (Philip Kotler 2006)

• Paid non personal communication from an identified sponsor using mass media to persuade or influence an audience ( Wells, Burnett and Moriaty 1998)

Economic reactions of Advertising

• Generates a net gain in direct sales due to promotion of the industries products and services

• Generates indirect sales and jobs among the first level suppliers to the industries that incur advertising expenditures

• Generates indirect sales and jobs among all other levels of economic activity as the sales ripple through the economy

Effects of Advertising on Economics

• Consumer information• Competition• Consumer Manupulation

Effects of advertising in a free economy

• Creating a market• Its about brand• Pop culture• Influence on Children• Consumerist society

Social problems of Children in Advertising

• Child Obesity

• Materialistic Habits

• Violence/Harmful

Side A(Proposed government regulation)

General Parties:•Some parents

• Some pediatricians & health care professionals•Most child

psychologists•Consumer protection

groups

Specific Parties:• Advertising

Educational Foundation (AEF)• American Academy of Pediatrics• Children’s Advertising Review Committee (CARU)• Emily Roberts (Treaty Oak Psychotherapy – Austin)

Side AIssues and Arguments

• “Childhood obesity is quickly becoming a global health concern as figures reach epidemic proportions” (*Source: Advertising to

Children 2).

• “Children create and begin to model a lifestyle based on the advertisements they view” (*Source: Wright 51).

• “Advertisers expose too many negative and potentially harmful advertisements to children (*Source: Gunter, Oats, & Blades 81).

Side B(Opposed government regulation)

General Parties•Some advertising

agencies• Some global

economists•Some parents•Some television

stations

Specific parties• American Association of

Advertising Agencies (AAAA)

• Child’s Play Communications

• Children’s Food & Beverage Advertising Initiative

• Hilary Fox (LatinWorks Advertising Agency)

Side BIssues and Arguments

• “It is the parents or guardians responsibility to monitor what their children view” (*Source Toops 3).

• “Since we live in a capitalistic society, advertising is a business that sustains a way of life and economic success for the U.S.” (*Source: United States 4).

• People rely on it to work, businesses rely on it to sell their products, and consumers rely on it to choose products they identify with” (*Source: United States 9).

Analysis of Side A’s Arguments

Values• Health, family, self-esteem, fairness, & education

Obligations• Protecting their children, pushing for more gvnt. regulation

Consequences• Statistics will begin to show the decrease of child obesity,

the fall of child/adolescent violence, and less materialistic habits

Analysis of Side B’s Arguments

Values• National & global economy, the right to freedom of speech,

currency, competition, fairness, and education

Obligations• To distribute their informative ad campaigns to children &

parents to sell their goods and create awareness of their brand

Consequences• The national economy will suffer tremendously as advertising is

a billion dollar industry

Solutions for influences of Children Education

• Educating children about advertisements, what the effects are, and the different ways we can change how current messages are sent out.

• Both sides to merge together in effort to agree that organizations like CARU will serve as a review committee that will have experts from areas such as: education, communication, child development, child mental health, marketing and nutrition.

Disadvantages of advertising

• Misleading claims• Encourage Monopoly• High prices• Disconnection to business• Misuse of advertising• Creating unrequired desire• Buying problems

THANK YOU