Professional Documents
Culture Documents
s Economics
q The effects of advertising on our economy
&
s Ethics
q The effects of advertising on our society
s Regulation
q Our attempts to manage those effects
Power or Information?
Market Power
q Advertising q Persuades consumer to purchase one brand over another more often q Excess brand profits q Higher barriers to entry and more market power q More advertising leads to greater brand loyalty q Reduce quality/raise price q Reduced consumer sovereignty q Monopoly
Market Information
q Advertising q Increased consumer knowledge q More substitute products consumers can consider q Lower barriers to entry by new brands q Reduced market power for any individual brand q Better pricing/distribution more product innovation q Optimal brand profits, consumer choice, and price benefits
An Ethical Debate
s Ads destroy freedom of choice s Ads destroy democracy/media s Advertising warps social values s Ads give consumers more choices s Ads = freedom of speech s Ads simply reflect the real world
3 Ethical Issues:
1) Advocacy
q What does the advertising advocate?
2) Accuracy
q How accurate is the advertising? q Some of this depends on susceptibility of the audience (i.e., kids).
3) Acquisitiveness
q What is the overall effect? q Does it make us more materialistic?
5 Controversial Issues:
1) Puffery 2) Decency 3) Stereotyping 4) Children 5) Controversy "Nothing beats a Bud Sexual innuendo, violence Portrayals of housewives, seniors, racial groups Violence, dangerous acts, unhealthy habits Condoms, alcohol, fashion
5 FTC Concerns:
1) Deception 2) Comparisons 3) Endorsements 4) Demonstrations 5) Bait & Switch Must lead to material injury. Must substantiate with statistically significant data. Must be qualified; must use product. Must be accurately depicted. Product must be available.
6) Library of Congress
2 Industry Watchdogs
1) NAD (National Advertising Division)
- Part of Better Business Bureau
Big Questions
s What do you think is the biggest benefit of advertising? s What do you think is the biggest problem with advertising? s What do you think is the best example of bad advertising? s What do you think is the best example of good advertising?