Innovation And The Process Of Creative Destruction

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Advertising Trends" Innovation and the Process of Creative Destruction George M. Zinkhan UNIVERSITYOF GEORGIA Richard T. Watson UNtVERSIT¥OFGEORGIA

The communications industry is vibrant and inventive. In the twentieth century alone, at leo.strive new forms of communication have been created and (at least partially) adopted by consumers: radio, broadcast television, cable television, video cassette recorders, and on-line media (e.g., the Internet, CompuServe, and other on-line services). At the same time, the advertising industry creates hybrids (e.g., commercials that look like TV shows and TV advertising in elementary schools). These innovations foment turbulence in society (e.g., layoffs for some employees and future shock for consumers) and also create puzzling ethical conflicts that are difficult to resolve. Here, the metaphor of creative destruction is introduced to describe the challenges that agency personnel and academic researchers face in the middle 1990s. © 1996 Elsevier Science Inc. j BUSN e.ES 1996. 37. 163-171

he advertising industry has a long history of creativity and innovation. Such innovation, by nature, leads to periods of dramatic change and restructuring. Some commentators (cf. Rust and Oliver, 1994; Stewart, 1992) argue that the ad industry has recently undergone a series of dramatic shifts that threaten its long-term vitality and viability. Other commentators (e.g., McGann, 1992) argue that new metaphors (e.g., relationship marketing, integrated marketing communications) are necessary to describe the present and future of advertising. This article reviews recent trends in advertising research and practice. Current trends are identified so as to forecast future directions and developments. Metaphors are introduced to describe advertising practice and to suggest future areas for research. Among the specific trends reviewed are:

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• the process of creative destruction; • the impact of the Internet and the World Wide Web (or

Address correspondence to George M. Zinkhan, Coca-Cola Chair of Marketing, Department of Marketing and Distribution, Terry College of Business, University of Georgia, Athens, GA 30602-6258. Journal of Business Research 37, 163-I 71 (1996) © 1996 Elsevier Science Inc. 655 Avenue of the Americas, New York, NY 10010

simply the Web) on marketing communication (as an illustration of creative destruction); • ethical issues raised by these new forms of communication; • emerging trends in advertising research and practice. Separate sections are devoted to the first three topics. The fourth topic (emerging trends) is discussed throughout and is integrated with other related material.

Creative Destruction: Innovation in the Ad Industry The fields of marketing and advertising both place a heavy premium on identifying what's new in the world and then exploiting this innovation. Advertising, an engine of economic change, involves a creative set of activities, and human ingenuity frequently invents new forms of advertising, which have the potential to evolve into new industries. The economist Joseph Schumpeter (1943) argues that capitalism is driven by a force of creative destruction. In Capitalism, Socialism, and Democracy (see the excerpt in Exhibit 1), he declares that capitalism encourages the creation of new markets, new technologies, and new forms of industrial organization. These innovations have the potential to increase the general standard of living and are quickly adopted by capitalistic economic systems. Simultaneously, these innovations drive out old forms of business. For example, the creation of the transistor made the vacuum tube obsolete, and in time, the transistor was replaced by integrated circuits. Some observers lament that organizations from outdated industries (e.g., buggy manufacturers) often do not make the transition to compete successfully in an emerging industry (e.g., automobiles). Thus, Schumpeter emphasizes that there is an inherent destruction that accompanies this engine of creation-capitalism. New industries and technologies replace the old, but there is upheaval, disruption, and displacement. Companies disappear, workers find themselves ISSN 0148-29631961515.00 PII S0148-2963(96)00066-5

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Exhibit 1. Creative destruction. Excerpted from: Schumpeter (1943), Capitalism, Socialism, and Democracy. The essential point to grasp is that in dealing with capitalism we are dealing with an evolutionary process. Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary. And this evolutionary character of the capitalist process is not merely due to the fact that economic life goes on in a social and natural environment. Nor is this evolutionary character due to a quasi-automatic increase in population and capital or to the vagaries of monetary systems. Economists are at long last emerging from the stage in which price competition was all they saw. But in capitalist reality as distinguished from its textbook picture, it is not that kind [price] of competition which counts but the competition from the new commodity, the new technology, the new source of supply, the new type of organization (the largest-scale unit of control for instance)-competition which commands a decisive cost or quality advantage and which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives. This kind of competition is much more effective than the other as a bombardment is in comparison with forcing a door. In the case of retail trade the competition that matters arises not from additional shops of the same type, but from the department store. the chain store, the mail-order house, and the supermarket, which are bound to destroy those pyramids sooner or later. The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation-if I may use that biological term-that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. Creative destruction is the essential fact about capitalism. It is what capitalism consists in, and what every capitalist concern has got to live in. Once we are dealing with a process whose every element takes considerable time in revealing its true features and ultimate effects, there is no point in appraising the performance of that process ex visu of a given point of time; we must judge its performance over time. as it unfolds through decades or centuries.

ill-suited for jobs in emerging industries, and consumers become dizzy with the wide array of new products and services introduced. Products may get more and more sophisticated over time, but consumers have less time to enjoy life, due partly to the time and energy it takes to he a consumer in the late twentieth century. On the one hand, academic observers struggle to keep up with the fast changing communications marketplace. New terms are invented (e.g., integrated marketing communications) and old terms (e.g., advertising) are assigned new meanings. On the other hand, industry practice evolves at an escalating rate, and marketing personnel race to keep up with emerging trends and technologies.

Integrated Marketing Communications (IMC) Krugman et al. (1994) define IMC as the coordination of communication tools for a brand. It may be necessary to expand this definition by including nonbranded products and applying it to situations when the object of communication is an idea (e.g., a proposition on a ballot) rather than a packaged good. Otherwise, their definition is adopted here. IMC involves coordinating communications. Schultz's (1995) model explains a wide variety of ways in which an organization may try to communicate its image (see Figure 1 for an adaptation of this model). Signs, advertising, and customer word of mouth, among other stimuli, all shape a corporate image. Of course, some of these processes (e.g., company services) are more controllable than others (e.g., news stories). In a later section, this model is used to demonstrate the process of creative destruction in the communications industry, as a

new technology (i.e., Web) creates simultaneously new communication options and makes older methods less valuable.

Creative Destruction: The Evolving Communications Industry The communications industry fits quite well into Schumpeter's paradigm of creative destruction. Consider the following, recent developments in advertising. Each is innovative, but each has a dark side as well.

Is It an A d o r Is It a T V S h o w ? A syndicated half-hour weekly television program, Main Floor, introduced in September, 1994 takes viewers into department stores to introduce them to the latest fashion and beauty trends. At the time, u n k n o w n to viewers, the show subtly steers customers to specific merchandise, which sponsors have paid to promote on the show. Viewers don't get a chance to learn who the official sponsors are until the credits appear at the show's conclusion (Agins, 1994). As with any new service, this one comes with a new name: the adversorial. Some critics don't approve and argue that it has the potential to deceive or confuse consumers. For example, Michael Jacobson, the founder of the Center for the Study of Commercialism, argues that advertisers are constantly trying to sneak promotional messages into all kinds of media and pretend that these are not advertising (Agins, 1994). Also, the marketing eftort doesn't stop at the end of the show. In keeping with the notion oflMC, viewers are presented with an opportunity to order a newsletter containing information on featured products. The editors of fashion magazines appear on the show to lend credibility to the new service and publicize topics in

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their publications (Agins, 1994). Thus, print and broadcast media are combined in unique ways to provide information but in the process create a potential for misuse and consumer confusion. Walt Disney Studios created a similar hybrid with the introduction of an ad campaign to promote its summer movies in 1994. Again, the commercials don't look much like an ad campaign. The ads last 60 seconds and feature an anchorman named Patrick Van Horn, who sits behind a news desk and hosts Movie News, an entertainment news show remarkably similar to the syndicated show Entertainment Tonight (King, 1994). At the very end of the commercial, it is announced (through the use of tiny letters, superimposed on screen) that the ad is "paid for by Buena Vista" (Disney's in-house filmdistribution company). Of course, the exact identity of Buena Vista is unknown to most comsumers. This represents an instance when o rganizations are pleased to have a company name or logo relatively unknown to the target audience. Such examples are rarely discussed in the academic literature or in the popular press. Both ABC and CBS refused to air the Buena Vista commercial spots nationally, In response, Disney bypassed the networks by running the ads on local stations, where they are not subject

to network standards (King, 1994). On the one hand, Disney is simply trying to distinguish itself from the flood of summer movie ads. On the other hand, such ads create a new form of television advertising-a form that has the potential to deceive, or at least confuse, viewers as Disney's slick production values and graphics make it difficult for many viewers to distinguish the commercial message from a program of entertainment. There is no question that creativity is an important part of promotion. But, each new form of business practice raises important, and sometimes difficult to resolve, ethical conflicts.

Advertising in Cyberspace Onqine services (e.g., CompuServe, Prodigy, and America Online) have created a new communications medium. Computers are relatively cheap, and modems are fast. In a recent 12-month period, America Online increased its subscriber list by more than 200% (Elmer-Dewitt, 1994). By offeringhundreds of news and information sources, thousands of databases, and tens of thousands of free computer programs, the three big onqine services may become the shopping mails of cyberspace. At the same time, there are as many as 40,000 small local and regional on-line systems (Elmer-Dewitt, 1994). Predictably, advertisers are quick to notice this trend, and

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commercial messages have begun to appear on-line. In 1993, America Online bragged that its service contained ~no annoying advertising." However, in 1994, it actively sought advertisers (Sandberg, 1994). For example, users who want to read Time magazine on America Online have to click past a window which announces "Sponsored by Compaq." Specialized bulletin boards offer the opportunity for precise targeting, and on-line services offer advertisers an opportunity to receive immediate, direct, on-line, responses from consumers. When Prodigy included an ad for Dreyfus on its Money Talk bulletin board, approximately 30,000 users were exposed to the ad, and 3,000 ordered Dreyfus' brochures (Sandberg, 1994). Using a similar strategy, Fidelity Investments offers investment tips to users who cruise financial bulletin boards. Currently, it costs about $34 to reach 1,000 households using on-line advertising. In contrast it costs only about $10 to reach 1,000 homes with a prime-time TV ad. But, precise targeting and the opportunity for immediate customer feedback may make the extra investment worthwhile. Some purists object to the appearance of advertising in cyberspace. But, it is a tribute to the innovativeness of advertisers and their agencies that they quickly recognized and exploited a new communications opportunity. The Internet and the Web (the multimedia portion of the Internet) are discussed in more detail in a later section of the paper.

The "What's Newt." Pavilion Another new service, introduced at U.S. shopping malls, affords consumers the opportunity of touching, playing with, and learning about new products. The What's New! Pavilion, designed to be a permanent attraction in malls, was designed to create "a new media empire" (Elias, 1994). The business plan called for advertisers to pay for the service, which has the potential to serve both as a communication medium and a research setting. Among ad agencies interested in this service were Ogilvy & Mather, Leo Burnett, Grey, and Saatchi & Saatchi. Unfortunately, this particular service tried to expand too fast, and the What's New! Pavilion recently went out of business. Because the service combined elements of both relationship marketing and IMC, it is predicted that new and improved versions will re-emerge.

Channel One Channel One, a satellite-TV service that beams current-events programs and commericals into 12,000 schools, is another example of a marketing invention with the potential to create a new industry. On one hand, it provides a valuable educational service and helps students learn. On the other hand, some critics object to the appearance of commercials in the school environment. The issue of advertisirlg to children has long been considered a prime area of ethical concern. Advertising on Channel One raises these same concerns, but, in addition, is controversial since it beams commercial messages to a captive audience in a learning environment. Presently, Channel One

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offers schools the option of paying a fee to obtain an advertisingfree version of its programming. To date, no schools have elected to adopt this version. Nonetheless, due to ethical concerns, some school systems may elect to forego the service altogether.

Database Marketing There is a close link between advertising and direct marketing. To some extent, the domains of these terms overlap. In the same way, the intersection of direct marketing and advertising may well describe the emerging metaphor of relationship marketing, as it applies specifically to consumer relationships and not relationships among channel members. In the 1990s, direct marketing is quite likely to be linked to the development of an evolving database, but advertising, as conceived from an IMC perspective, also could be used to generate and update a sophisticated marketing database. Relationship marketing, as applied to end consumers, is concerned with tracking buyer behavior and characteristics over a long period, and, as such, it is particularly concerned with issues such as repeat purchase and brand loyalty. In brief, database marketing has a dark side (Rosenfield, 1994). It is possible that technology can be overemphasized when creating marketing plans. Personalizing the marketing process (e.g., putting a customer's name on a direct mail item) potentially raises both the risk and the reward associated with promotion. Sending the right message to the right person at the right time can result in a marketing success. However, a failure on any one of these dimensions (e.g., communicating at the wrong time), can cause increased customer annoyance (Rosenfield, 1994). As an example of this principle, it is found that consumers complain a lot more about irrelevant junk mail than they do about irrelevant TV commercials (Rosenfield, 1994). To summarize, IMC provides the potential to target consumers with great precision. However, new industries created by the application of technology raise the specter of Orwell's Big Brother-always watching, lurking in the shadows. New technologies, by their very nature, create new, possible difficult to resolve, ethical problems. At the very least, database marketing has the potential to violate consumers' privacy. As a partial solution, relationship marketers should consider obtaining a customer's permission if they plan to sell or provide information to third parties. For instance, it may be inappropriate for American Express to sell its database to interested restaurants and hotels. It is quite likely that such a sale would cause considerable discomfort and concern among American Express customers. Is this any way to build a relationship?

Brief Summary of Industry Trends The trends described here are still evolving. Both academics and marketing managers struggle to understand what these changes mean. Which inventions will spawn new industries, and which are only fads? Time will be the final arbiter.

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Table 1. Summary of !nternet Facilities and Their Major Use Service Communicatmn Electronic mail List server and Usenet Usenet Computer and file access Telnet FTP Information structuring and retrieval Gopher World Wide Web Information searching Archie Veronica WAIS Entertainment MUDs

By all accounts, the information highway, of which the Internet is but one lane, is here to stay. The following section describes how innovation related to the Internet create new methods of communication.

Revised Model of Communication A traditional model of marketing communication is shown in Figure 1. The process of creative destruction implies that traditional communication media will evolve as new technologies are invested and adopted. The basic model remains valid (i.e., no new links need to be shown), but evolving technology (e.g., the Web) changes the way information flows along communication channels. In many cases, the communicating firm loses power, whereas consumers gain influence and independence. Some of the communication processes illustrated in Figure 1 are described so as to highlight the ways in which the Internet revolutionizes the advertising industry from within.

Internet Facilities lnternet facilities can be classified into five general categories (see Table 1). A more recent development, the Web extends the text orientation of Gopher to multimedia and also integrates many Internet facilities (e.g., Gopher, FTP, and telnet). Early users of the Web are adapting and changing current marketing practice (see Figure 1), because the Web provides organizations with new ways for communicating with customers, and these new ways are revolutionizing the advertising industry. Specific instances are now discussed.

Service Computer firms struggle to solve hardware and software problems for a multitude of customers. This is a problem that can easily spiral out of control. One approach is to let customers solve each other's problems. As sure as there is one customer

Use

Personal electronic communication Group electronic communication Group electronic communication Accessing a remote computer Transferring files between Internet connections Navigating the Internet and retrieving information Navigating the Internet and retrieving information Searching for files across anonymous FTP sites Searching Gopher sites by words in document titles Searching WAIS libraries for words embedded in the text Game playing and virtual space

with a problem, there is another who has solved the problem or who would love the opportunity to tackle a puzzler. If customers can be convinced to solve each other's problems, this creates two opportunities: (1) lowering the cost of customer service and (2) raising customer satisfaction levels. Thus, the real task is to ensure that the customer with the problem finds the customer with the solution. Apple has developed a simple system for improving customer service by creating virtual groups who support each other, reducing the number of people that Apple has to support. In December 1994, Apple established two lists, one devoted to Macintosh Internet client software and the other to server software, and announced them in a weekly dectronic newsletter reaching 140,000 Macintosh users. The lists have roughly 1,500 and 1,000 subscribers respectively, and each averages 14 messages per day (Von Rospach, personal electronic communication). Typically, a problem will receive several responses within a few hours.

Product The Web has become a popular medium for the distribution of product information. When Dell (http://www.dell.com/) announced a new range of notebook computers, its Web server received 16,000 hits in one day. Compaq has installed a server to provide customers with technical support, free software patches, and upgrades (Vijayan, 1994). Offering product support through the Web provides several advantages. First, it's a 24-hour, global service. Regardless of geographic location, all customers with Web access can use the service. Second, it's low cost. Customers serve themselves to the information they want. Third, customers can tailor their search to meet their needs, providing the supplier has a rich, structured Web site. Fourth, information can be easily updated as required. There are no out-of-date brochures.

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Employees E-mail and lists have become effective methods of communicating with employees, particularly for highly distributed, global organizations. Problems can be swiftly pushed up the hierarchy and decisions distributed quickly throughout the organization. As a result, a marketing problem in Hong Kong can be solved by an executive in Germany, and within minutes of a decision distributed to all relevant employees. Effective use of electronic communication permits rapid problem detection. Furthermore, because decisions can be distributed inexpensively and instantly, the organization can gain a high degree of consistency in its communications with employees and other stakeholders. Consistent internal communication is a necessary prerequisite of consistent external communication with customers, suppliers, shareholders, and other parties.

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Litter on the Internet The discarded Big Mac wrapper blowing across the highway does little for MacDonald's corporate image. On the Internet, an advertisement arriving along with other e-mail may be perceived by some readers as electronic pollution. An Arizona lawyer who sent an ad to millions of Internet users aroused considerable ire. The avalance of e-mail complaints to him crashed his Internet service supplier's computer 15 times (Lewis 1993). The reaction spawned a program, based in Finland, that seeks out mass postings and deletes them (Sandberg, 1994). Of course, this raises the issue of who has the right to decide what advertising, or any other message for that matter, should be censored. Also, do some countries become havens for electronic terrorists whose programs wander the Internet destroying what they consider offensive? Unsolicited advertising can turn into poor public relations. But what is reasonable Internet advertising? Does it have to be purely passive with the customer seeking out information, or can the corporation be more active and direct messages to target customers? The Internet is a new medium with a new set of expectations of acceptable behavior.

Figure 2. Alberto's nightclub.

Alberto's can go further. It could add a video clip of the dance floor crowd and include some dance music. These additions, which are likely to come with greater Internet bandwidth, will further develop the atmosphere of a night at Alberto's.

News Stories Traditionally, organizations have relied on news media and advertisements to transmit their story to the customer. Naturally, the use of intermediaries can pose problems. For example, news stories, not reported as envisaged, can result in the customer receiving a distorted, unintended message. When dealing with the Pentium hullabaloo, Intel CEO Groves used the lnternet to communicate directly with customers (Clark, 1994).

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Atmospherics Retailers are very interested in atmospherics or the ambiance of their stores. The Web provides an opportunity for customers to experience a retail establishment, without traveling there in person. For example, Alberto's nightclub in Mountain View, California (bttp://albertos.com/albertos/) stimulates interest by creating an aura of excitement and action. The visual on its home page exudes the ethos of the club (see Figure 2). An accompanying photo of the nightclub shows a crowded dance floor of young people. Customers reluctant to visit Alberto's because they can't dance the Salsa, can step into the virtual ballroom where the dance step is displayed and voice instructions, male or female steps, and other dances (see hgure 3). If personal lessons are desired, the customer can view a photo of the attractive instructor. Alberto's also provides a map for finding the nightclub.

The hyperlink, a key feature of the Web, permits a reader to jump to another Web site by clicking on a link. An advertiser can place hyperlink signs or logos at relevant points on the Web so that interested readers may be enticed to link to the advertiser's Web site. For example, Prentice Hall pays ISWorld Net (http://www.isworld.org/isworld.btml) to display prominently its logo on ISWorld Net's home page, which provides an entry point to Web resources for IS academics and protessionals. As a publisher of information systems textbooks, Prentice Hall anticipates that potential adopters willfollow the link to the Web site, where they can find details of relevant books, including sample chapters and support materials. Hyperlinks are the billboards of the information highway. They are most valuable when they appear on Web pages read by potential consumers. As it is very easy to record the number of links from one page to another, it will be simple for advertisers

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Personal Experience Customers often prefer to try products before buying, and some software providers take advantage of this preference. Qualcomm (http://www.qualcomm.com/) widely distributes a freeware version of Eudora, an e-mail package. Customers, who adopt the [reeware version, can easily upgrade to a commercial version, available for around $40, which offers some additional useful features. In Qualcomm's case, the incentive to upgrade is increased functionality. Another approach is taken by game maker Storm Impact, which distributes TaskMaker (ftp:wuarchive.wustl.edu: system/mac/info-mac/game/taskmaker-20.hqx) as freeware. The full functionality of the game is available to play the first two tasks, however, the next eight tasks require payment of $25 to receive by e-mail a code to unlock them.

Word of Mouth Gossip and idle chatter around the water fountain are now complemented by lists and usenet. The impact of these electronic media can be quite profound as Intel discovered when the flaw in the Pentium chip was revealed in an Internet message. The incident was quickly conveyed to millions of Pentium customers, who bombarded Intel with e-mail. Indeed, lntel's CEO fueled discontent by posting a message downplaying the problem and defending the company's decision to continue to produce defective chips (Clark, 1994). His Internet naivete (he used another executive's e-mail account to release the statement) was viewed negatively by the Internet community (Kimball, 1995). W o r d of mouth does not adequately describe the situation when a single electronic message can reach hundreds of thousands of peopte in a matter of minutes. It's more like a tsunami rapidly gathering momentum and crashing on the corporate

doorstep before managers have a chance to realize that there is a ripple of discontent. Corporations, such as Dell, are now monitoring lists and usenet groups that discuss their products and those of their competitors. As a result, they can quickly detect emerging problems and respond to statements that may be incorrect. Eavesdropping on customers' conversations is an important source of market intelligence, and it is becoming an important element of public relations.

sig.s Most organizations prominently display their logos and other identifying signs on their buildings, stationery, packaging, and other visual points of contact with customers. There has been a clear transfer of this concept to the Web. For instance, a corporate logo is frequently visually reinforced by locating it on each Web page. Organizations can be extremely creative in their use of signs. Reykjavik Advertising (http://www.arctic.is/MainSquare/), with a collection of pages for a variety of Icelandic clients, makes clever use of the puffin, Iceland's national bird. Reykjavik Advertisings so called traffic puffin is used to indicate on each page movement relative to a page hierarchy-back, up, or forward respectively (see Figure 4). It is an interesting alternative to the bland arrows of a Web browser. A new medium creates opportunities for reinventing signs.

Summary of the Web's Effects on Communication In the subsections above, some effects of the Web on traditional communication patterns have been demonstrated. In many

Figure 4. Innovative use of a sign.

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instances, it appears as if a new world has been created by the Web technology. Advertisers, alert to the possibility of destruction, are quick to adopt and exploit new opportunities offered by the Web. Not every link shown in the model in Figure 1 is discussed. For example, the effects of the Web through popular culture are not considered. It is a relatively recent phenomenon for orgnizations to attempt to organize and control brand impressions created by popular culture. Consider brand placement in films. Advertisers now pay money to film makers in order to ensure that their brands appear in both a prominent and positive light on the big screen. Brand names and personalities (e.g., the Michelin man) are popular cultural icons that can have a strong influence on customer impressions. Over time, personalities which emerge from computer technology (e.g., Microsoft's character Bob) could potentially have a strong influence on consumers' brand impressions. However, these popular culture influences will develop slowly.

Ethical Issues Moral dilemmas result because of conflicts between two or more individuals or groups. In a communications context, these conflicts could involve one or more of the following stakeholder groups: agency personnel, consumers, academic researchers, government regulators, watchdog organizations, or others. Ethical issues have been highlighted throughout this essay. Among those discussed to this point are: • Do new communication media (e.g., database marketing) threaten to interfere with customers' rights to privacy? • Do new forms of communication (e.g., adversorials) confuse or deceive consumers? • Given that new business practices are bound to create ethical conflicts, how should these conflicts be resolved? • What are the ethical limits associated with advertising to children? • Is it ethical to advertise in a learning environment (e.g., in elementary schools)? From these few issues, it is quite apparent that advertisers and their agencies are required to make many difficult moral choices. And, it is not always easy to know how to make these decisions. How can researchers and advertisers solve these ethical dilemmas? There are several possibilities, including religion, government and laws, and industry standards, including those sponsored by professional associations and those sponsored by individual companies.

Religion Advertising personnel make many decisions based upon the precepts and guidance of an organized religion. In addition,

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advertisers have to consider carefully the religious climate when they attempt to transfer an ad campaign abroad (Zinkhan, 1993). For example, many changes may have to be made in order to export an ad campaign to a Moslem nation. In turn, many organized religions make use of modern marketing and advertising techniques to communicate with their members or to expand their membership. This interaction between religion and advertising is largely ignored in the academic literature. There are only sporadic accounts in the popular press.

Government and Laws In the United States, the Federal Government serves as the main regulator of advertising practice; however, local governments sometimes get involved. In recent years, the Federal Trade Commission has shown an increased interest in using advertising research results (e.g., copytests) to provide legal evidence about the effects of advertising (including deception). Along these lines, there is some interest in codifying the precise copytesting or survey procedures which will be admissible for litigation (cf. Jacoby and Szybillo, 1995; Stewart, 1995). To date, advertising researchers are riot accustomed to settling their differences about research procedures in a court of law, but this may serve to sharpen and refine the methods and practices of advertising research.

Industry Standards and Company Standards Industry and company standards (for a code of ethics) can be formally written down or may be informal. As an example, the Association for Consumer Research does not have an explicit code of ethics or an ethics committee; and this absence has recently been the subject of some debate and controversy. The American Marketing Association does have a one-page Code of Ethics, but there is relatively little in this code about problematic advertising practices. The advertising industry is a creat3ve engine. New practices, technologies, media, and research methods are introduced frequently. Given this rapid rate of change, it is somewhat difficult for a code of ethics to remain current and relevant. So, this is an argument for an unwritten or an informal code. On the other hand, an informal code puts a special burden on those in the industry, either researchers or practitioners. If advertising personnel feel abandoned or neglected by an existing industry or company code, it is always possible to turn to another source (e.g., individual conscience, moral principles, or organized religion) for guidance.

Summary The vitality of the advertising industry is a boon to capitalist economies. New ideas and technologies spread rapidly in Western-style democracies, in part due to the advanced nature of the communication industry, including advertising. It may well be that advertising is beneficent, that it enhances life quality. At the same time, this rapid pace of change causes disruptions.

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The skills of some employees quickly become obsolete. There is no lack of critics to point out the maleficent effects of advertisi n g - including wasted resources, increased pollution, and confused consumers. Thus, the robust nature of the advertising industry creates ethical dilemmas for agency personnel, for ad researchers, and for society at large. Several approaches (e.g., creating comprehensive codes of ethics) have been proposed for thinking about and solving ethical conflicts. In addition, future directions for advertising research have been proposed. Agency personnel and academic researchers have to be innovative and creative to prosper within the climate of creative destruction characterizing the advertisingindustry in the late 20th century.

References Agins, T., Is It a TV Show? Or Is It Advertising? Wall Street Journal (August 10, 1994): B:1,6. Clark, D., Intel's Grove Airs Apology for Pentium over the Internet; but CEO, Defending Policy Not to Replace All Chips. Wall Street Journal (November 29, 1994): B:6. Elias, K, Why My Business Failed. Wall Street Journal (October 11, 1994): B:I. Elmer-Dewitt, P., Hooked Up to the Max. Time 144(13) (September 26, 1994): 58-60. Jacoby, J., and Szybillo, G. J., Consumer Research in FTC vs. Kraft: A Case of Heads We Win, Tails You Lose? Journal of Public Policy & Marketing 14(1) (1995): 1-14.

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