Evaluating the Social, Ethical, and Economic Aspects of Advertising and Promotion

Advertising and Promotion: Two Viewpoints Proponents Proponents Argue Argue That That Advertising Advertising and and Promotion: Promotion: Provides Provides Information Information

Encourages Encourages AA Higher Higher Standard Standard Of Of Living Living

Creates Creates Jobs Jobs and and Helps Helps New New Firms Firms Enter Enter aa Market Market

Promotes Promotes Competition Competition in in The The Marketplace Marketplace Critics Critics Argue Argue That That Advertising Advertising and and Promotion Promotion Creates Creates Needs Needs and and Wants Wants Among Among Consumers Consumers

Is Is More More Propaganda Propaganda Than Than Information Information

Promotes Promotes Materialism, Materialism, Insecurity Insecurity and and Greed Greed

Ethics in Advertising and Promotion

Ethics: Ethics: Moral Moral principles principles and and values values that that govern govern the the actions actions of of and and individual individual or or group. group.

Not Not All All Issues Issues Can Can Be Be Regulated Regulated

AA Marketing Marketing or or Promotion Promotion Action Action May May Be Be Legal Legal but but Not Not Considered Considered Ethical Ethical

Marketers Marketers Must Must Make Make Decisions Decisions Regarding Regarding the the Appropriateness Appropriateness of of Their Their Actions Actions

Advertising and Promotion as Untruthful or Deceptive General General Mistrust Mistrust of of Advertising Advertising and and Among Among Consumers. Consumers. Many Many Do Do Not Not Perceive Perceive Ads Ads As As Honest Honest or or Believable Believable Abuses Abuses Involving Involving Sales Sales Promotions Promotions Abuses Involving Sales Promotions Abuses Involving Sales Promotions Such As Contests, Sweepstakes, Such As Contests, Sweepstakes, Such Such As As Contests, Contests, Offers Offers Offers Offers Unethical Unethical And/or And/or Deceptive Deceptive Practices Practices Involving Involving Mail Mail Order, Order, Telemarketing Telemarketing and and Other Other Forms Forms of of Direct Direct Marketing Marketing Internet Internet Scams Scams and and Abuses Abuses

Advertising and Children Children's Children's TV TV Watching Watching Behavior Behavior

Children Children between between ages ages 2-11 2-11 watch watch on on average average 21.5 21.5 hours hours of of TV TV per per week week and and may may see see 22,000 22,000 commercials commercials per per year year

Television Television is is an an important important source source of of information information for for children children about about products products

Perspectives on Advertising to Children Consumer Consumer Advocates Advocates Argue Argue That That Children Children Are Are Vulnerable Vulnerable to to Advertising Advertising Because: Because: They They Lack Lack the the Knowledge Knowledge and and Skills Skills to to Critically Critically Evaluate Evaluate Advertising Advertising Claims Claims

They They Cannot Cannot Differentiate Differentiate Between Between Programs Programs and and Commercials Commercials

While While Marketers Marketers Argue Argue That: That: Children Children Must Must Learn Learn Through Through the the Socialization Socialization Process Process

Need Need to to Acquire Acquire Skills Skills Needed Needed To To Function Function in in the the Marketplace Marketplace

Social and Cultural Consequences of Advertising Does Does Advertising Advertising Make Make People People Buy Buy Things Things They They Don’t Don’t Need? Need? Does Does Advertising Advertising Encourage Encourage Materialism? Materialism? Is Is Advertising Advertising Just Just A A Reflection Reflection of of Society? Society?

Advertising and Stereotyping Portrayal Portrayal of of Women Women to to Reflect Reflect Their Their Changing Changing Role Role in in Society Society

Gender Gender Stereotyping Stereotyping

Criticisms Criticisms of of Advertising Advertising With With Regard Regard to to Stereotyping Stereotyping

Portrayal Portrayal of of The The Elderly Elderly

Portrayal Portrayal of of Women Women As As Sex an Objects Sex an Objects Objects Objects

Ethnic Ethnic Stereotyping/ Stereotyping/ Representation Representation of of Minorities Minorities

Do rs Control the Media? Advertising Advertising Is Is the the Primary Primary Source Source of of Revenue Revenue for for Newspapers, Newspapers, Magazines, Magazines, and and Television Television and and Radio Radio Networks Networks and and Stations Stations The The Media’s Media’s Dependence Dependence on on Advertising Advertising For For Revenue Revenue Makes Makes Them Them Vulnerable Vulnerable To To Control Control by by rs rs rs rs May May Exert Exert Control Control Over Over The The Media Media by by Biasing Biasing Editorial Editorial Content, Content, Limiting Limiting Coverage Coverage of of Certain Certain Issues Issues or or Influencing Influencing Program Program Content Content

Do rs Control the media? They the News News They Must Must Report Report the Fairly and Accurately Accurately to to Retain Retain Fairly and Public Public Confidence Confidence rs rs Need Need the the Media Media More More Than Than the the Media Media Need Need Any Any One One r r The The Media Media Maintain Maintain Separation Separation Between Between News News and and Business Business Departments Departments “The “The Wall” Wall”

Role of Advertising in the Economy

Making Making Consumers Consumers Aware Aware of of Products Products and and Services Services Providing Providing Consumers Consumers With With Information Information to to Use Use to to Make Make Purchase Purchase Decisions Decisions

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Encouraging Encouraging Consumption Consumption and and Fostering Fostering Economic Economic Growth Growth

Economic Impact of Advertising Effects Effects on on Consumer Consumer Choice Choice •• Differentiation Differentiation •• Brand Brand Loyalty Loyalty Effects Effects on on Competition Competition •• Barriers Barriers to to entry entry •• Economies Economies of of scale scale Effects Effects on on product product costs costs and and prices prices •• Advertising Advertising as as an an expense expense that that increases increases the the cost cost of of products products •• Increased Increased differentiation differentiation

Advertising Helps New Competitors Enter the Market

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Do You Agree With Leo Burnett? “It must be said that without advertising we would have a far different nation, and one that would be much the poorer-not merely in material commodities, but in the life of the spirit.”

These excerpters are from a speech given by Leo Burnett on the American Association or Advertising Agencies’ 50th anniversary, April 20,1967