Transcript Advertising Ethics
Today, we can discuss and debate the material in Chapter 3.
Economics
The effect of advertising on our economy
Ethics
The effect of advertising on our society
Regulation
Our attempts to manage those effects
The American Economy Three Unique Influences:
“Caveat Emptor”
Commerce is a two-way street
Tolerance
Philadelphia Quakers
Immigration of people and ideas
The Marketplace of Ideas
Competition is OK
This includes the media
Power or Information?
Market Power
Advertising Persuades consumer to purchase one brand over another more often
Excess brand profits Higher barriers to entry and more market power
More advertising leads to greater brand loyalty Reduce quality/raise price Reduced consumer sovereignty
Monopoly Market Information
Advertising Increased consumer knowledge
More substitute products consumers can consider
Lower barriers to entry by new brands
Reduced market power for any individual brand
Better pricing/distribution more product innovation
Optimal brand profits, consumer choice, and price benefits
What do you think?
Advertising = Market Power
Advertising = Market Information
Or both?
Some Economic Questions:
How does advertising affect the price of a new car?
How does advertising affect the price of a latté from Starbucks?
How does advertising affect the way that you spend your money?
Some Economic Questions:
Can ads make people buy things they don’t want or need?
Can ads make people more materialistic?
Are the benefits of advertising worth the annoyance?
An Ethical Debate
Ads destroy freedom of choice
Ads give consumers more choices
Ads destroy democracy/media
Ads = freedom of speech
Advertising warps social values
Ads simply reflect the “real world”
3 Ethical Issues:
1) Advocacy
What does the advertising advocate?
2) Accuracy
How accurate is the advertising?
Some of this depends on susceptibility of the audience (i.e., children) 3) Acquisitiveness
What is the overall effect?
Does it make us more materialistic?
No single ad, but ads overall.
5 Controversial Issues: 1) Puffery 2) Decency 3) Stereotyping 4) Children 5) Controversial Products "Nothing beats a Bud” Sexual innuendo, violence Housewives, women, seniors, racial groups Violence, dangerous acts, unhealthy habits, overall materialism Condoms, alcohol, fashion consumer credit
An Ethical Thought:
“All of us
use the who professionally
mass media
are
shapers
brutalize
of society
. We
can
it . Or we can
help lift
it onto a
higher level
.
”
-Bill Bernbach
Controversy as Opportunity
Puffery vs. Irony
Stereotyping as Context
Social Tension gets Attention
Anti-Tobacco Marketing
The Story Behind “Truth”
Puffery vs. Irony
HULU “Alec Baldwin”
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Stereotyping as Context
Dove “Real Beauty”
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Social Tension Gets Attention
Nike “If You Let Me Play”
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The Story Behind “Truth”
The Tobacco Industry’s “Don’t
“Don’t smoke ‘till you’re an adult.”
What’s a big reason teens smoke?
Right. Pretty clever, hm?
Legal agreement said “Ads can’t
The tobacco industry knew this could
be effective strategy.
CP+B got the account - and…
The Story Behind “Truth”
Truth “Bodybags”
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Regulation - 2 Main Purposes Regulation - 3 Main Areas
Purpose for advertising regulation
To protect competition
To protect consumers from economic or physical harm
Regulations are concerned with
Deceptive or unfair content
How advertising is delivered
Protection of susceptible groups (kids, etc.)
Regulatory Power From Low to High: 5. Private Policy
Companies regulating their own behavior 4. Governmental Regulation
States, FTC, Legislation, Supreme Court 3. Media/Self-Regulatory Forces
Media Forces, NAB, Industry Groups 2. Organized Market Forces
Boycotts, bad publicity, media pressure 1. Natural Market Forces
If no good, consumers won’t buy it again
5 FTC Concerns:
1) Deception 2) Comparisons 3) Endorsements
Must lead to "material injury” Must substantiate with statistically significant data Must be qualified, must use product
4) Demonstrations
Must be accurately depicted
5) “Bait & Switch”
Product must be available
4 Possible Remedies for Deceptive Ads: 1) Consent Decree
FTC asks advertiser to stop
2) Cease & Desist
FTC gets court order to force advertiser to stop
3) Corrective Ads 4) Consumer Redress
FTC mandates new ads to correct false perceptions FTC mandates reimbursement
6 Government Regulatory Groups: 1) FDA
Packaging and labeling
2) FCC 3) Postal Service 4) ATF 5) Patent Office 6) Library of Congress
Broadcast advertising Magazines, direct mail Liquor labeling, advertising Trademarks Copyrights
2 Industry Watchdogs 1) NAD (National Advertising Division) - Part of Better Business Bureau 2) National Advertising Review Board - Represents advertisers and agencies - A division of the NAD
Compliance is strictly voluntary
Questions on Regulation
Does regulating advertising mitigate the negative effects it has on our economy?
On our society?
Did the TV ban on liquor have a positive effect?
1996 “gentlemen’s agreement” ended Now, broadcast media looking for more revenue
Does regulating advertising extend the benefits it has on our economy?
On our society?
Who should do the regulating?
Big Questions
What do you think is the biggest benefit of advertising?
What do you think is the biggest problem with advertising?
What do you think is the best example of bad advertising?
What do you think is the best example of good advertising?
One More Question…
What do you think of this advertising?
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