Advertisement Ethics
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Chapter 4 Social, Ethical, and Regulatory Aspects of Advertising
Copyright © 2006 Thomson Business and Economics. All rights reserved.
Social Aspects of Advertising • Advertising educates consumers – Pro: Advertising informs – Con: Advertising is superficial
• Advertising improves living standards – Pro: Ads lower the costs of products – Con: Ads are wasteful and help only some
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–2
Critics of advertising feel that advertising is superficial because many ads carry little actual product information. Do you think advertising is superficial?
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–3
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.
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–4
Critics feel advertising promotes materialism
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–5
Advertising: Demeaning and Deceitful, or Liberating and Artful? • • • • • •
Con: Pro: Con: Pro: Con: Pro:
Ads perpetuate stereotypes Advertisers are more sensitive now Ads are often offensive Ads are a source of liberation Ads deceive via subliminal stimulation Advertising is art
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–6
Do you think this ad perpetuates stereotypes?
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–7
Advertising’s Powerful Effect on Mass Media • Pro: Ads foster a diverse and affordable mass media that provide information • Con: Advertising affects and controls programming. – “Advertainment” has made matters worse
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–8
Ethical Aspects of Advertising • 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
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–9
Ethical Aspects of Advertising • Truth in Advertising – Deception is making false or misleading statements. – Puffery (commercial exaggeration) is legal. – Cannot legislate against emotional appeals
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–10
Ethical Aspects of Advertising • 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?
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–11
Ethical Aspects of Advertising • Advertising Controversial Products – Critics question the “targeting” of 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?
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–12
Regulatory Aspects of Advertising • Areas of advertising regulation: – Deception and unfairness
• Competitive issues – Vertical cooperative advertising – Comparison advertising – Monopoly power
• Advertising to children
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–13
Key Regulatory Agents • 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
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–14
Key Regulatory Agents–FTC • FTC Programs and Remedies – Advertising Substantiation Program – Consent Order – Cease and Desist Order – Affirmative Disclosure – Corrective Advertising – Control of Celebrity Endorsements
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–15
Key Regulatory Agents (cont’d) • Industry Self-Regulation – National Advertising Review Board (NARB)
• State and Local Better Business Bureaus • Ad Agencies and Associations • Media Organizations
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–16
Key Regulatory Agents (cont’d) • 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.
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–17
Key Regulatory Agents (cont’d) • Consumers as Regulatory agents – Consumerism: Grass roots consumer movements
• Consumers Organizations – Consumer Federation of America – Consumers Union – Consumer Alert – Commercial Alert
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–18
Regulation of Other Promotional Tools • Direct Marketing and e-Commerce – Privacy, Contests, Telemarketing – Spam=10 million messages/minute worldwide
Copyright © 2006 Thomson Business and Economics. All rights reserved.
• Sales Promotion – Premiums, Trade Allowances, Contests
• Public Relations – Privacy, Copyright Infringement, Defamation (slander and libel)
4–19
Copyright © 2006 Thomson Business and Economics. All rights reserved.
Social Aspects of Advertising • Advertising educates consumers – Pro: Advertising informs – Con: Advertising is superficial
• Advertising improves living standards – Pro: Ads lower the costs of products – Con: Ads are wasteful and help only some
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–2
Critics of advertising feel that advertising is superficial because many ads carry little actual product information. Do you think advertising is superficial?
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–3
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.
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–4
Critics feel advertising promotes materialism
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–5
Advertising: Demeaning and Deceitful, or Liberating and Artful? • • • • • •
Con: Pro: Con: Pro: Con: Pro:
Ads perpetuate stereotypes Advertisers are more sensitive now Ads are often offensive Ads are a source of liberation Ads deceive via subliminal stimulation Advertising is art
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–6
Do you think this ad perpetuates stereotypes?
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–7
Advertising’s Powerful Effect on Mass Media • Pro: Ads foster a diverse and affordable mass media that provide information • Con: Advertising affects and controls programming. – “Advertainment” has made matters worse
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–8
Ethical Aspects of Advertising • 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
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–9
Ethical Aspects of Advertising • Truth in Advertising – Deception is making false or misleading statements. – Puffery (commercial exaggeration) is legal. – Cannot legislate against emotional appeals
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–10
Ethical Aspects of Advertising • 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?
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–11
Ethical Aspects of Advertising • Advertising Controversial Products – Critics question the “targeting” of 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?
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–12
Regulatory Aspects of Advertising • Areas of advertising regulation: – Deception and unfairness
• Competitive issues – Vertical cooperative advertising – Comparison advertising – Monopoly power
• Advertising to children
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–13
Key Regulatory Agents • 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
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–14
Key Regulatory Agents–FTC • FTC Programs and Remedies – Advertising Substantiation Program – Consent Order – Cease and Desist Order – Affirmative Disclosure – Corrective Advertising – Control of Celebrity Endorsements
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–15
Key Regulatory Agents (cont’d) • Industry Self-Regulation – National Advertising Review Board (NARB)
• State and Local Better Business Bureaus • Ad Agencies and Associations • Media Organizations
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–16
Key Regulatory Agents (cont’d) • 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.
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–17
Key Regulatory Agents (cont’d) • Consumers as Regulatory agents – Consumerism: Grass roots consumer movements
• Consumers Organizations – Consumer Federation of America – Consumers Union – Consumer Alert – Commercial Alert
Copyright © 2006 Thomson Business and Economics. All rights reserved.
4–18
Regulation of Other Promotional Tools • Direct Marketing and e-Commerce – Privacy, Contests, Telemarketing – Spam=10 million messages/minute worldwide
Copyright © 2006 Thomson Business and Economics. All rights reserved.
• Sales Promotion – Premiums, Trade Allowances, Contests
• Public Relations – Privacy, Copyright Infringement, Defamation (slander and libel)
4–19
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