Ethics in Advertising What is advertising? Any paid form of non-personal presentation of ideas, goods and services by an identified sponsor. DAGMAR Difficulties Legitimate Legitimate Problems Problems Attitude Attitude -- Behavior Behavior Relationship Relationship Response Response Hierarchy Hierarchy Problems Problems Questionable Questionable Objections Objections Sales Sales Objectives Objectives Needed Needed Costly Costly and and Impractical Impractical Inhibits Inhibits Creativity Creativity Advertising and Promotion Viewpoints Provides Provides information information Encourages Encourages higher higher standard standard of of living living Proponent Proponent arguments arguments Promotes Promotes competition competition Helps Helps new new firms firms enter enter aa market market Creates Creates jobs jobs More More propaganda propaganda than than information information Critic Critic arguments arguments Creates Creates consumer consumer needs, needs, wants wants Promotes Promotes materialism, materialism, insecurity, insecurity, and and greed greed Ethical issues in Advertising ‘Ethics basically refers to what is right, good or consistent with virtue’. (Chris Hackley, 2005, Advertising and Promotion). It promotes overselling, exploitation of vulnerable groups, vulgarity, offending the public, promoting socially harmful values or behaviour and intrusion of privacy. Some issues…. where it abuses certain values and interests that are not universally agreed upon…(For example see these ads of Calvin Klein and Opium perfume from Yves Saint Laurent ) In Some countries the advertisers are required to conform to certain rulings about the content and mode of exposure… India banned tobacco and alcohol ads in TV and radio… Offensive advertising Advertising can offend consumers in several ways; The product itself A demonstration of the product Anxiety associated with a product Advertising as Offensive or in Bad Taste Objectionable Objectionable products products Sexual Sexual appeals appeals Shock Shock ads ads Advertising and Untruthful or Deceptive General General mistrust mistrust of of advertising advertising 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 such such as as contests, contests, sweepstakes, sweepstakes, premium premium 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 ages ages 2-11 2-11 watch watch an an average average of of 22 22 hours hours of of TV TV per per week week and and see see 30,000 30,000 commercials commercials per per year year 80% 80% of of all all advertising advertising targeted targeted to to children children falls falls in in four four product product categories: categories: Toys, Toys, cereal, cereal, candy candy & & fast fast food food restaurants restaurants Arguments against advertising to children Children, especially young ones, are vulnerable to advertising because they lack the necessary experience and knowledge to understand and evaluate the purpose of persuasive advertising appeals. Children cannot differentiate between commercials and television programs, do not perceive the selling intent of commercials, and cannot distinguish between fantasy and reality. Children must be able to understand how advertising works and develop a skeptical or critical attitude to defend themselves against it. Advertising to children is inherently unfair or deceptive. Slide 22-2 Arguments in favor of advertising to children: Advertising is a part of life and children must learn to deal with it as part of the consumer socialization process of acquiring the skills needed to function in the marketplace. Studies have shown that children are capable of perceiving persuasive intent and the inability to perceive such intent does not necessarily lead to incorrect beliefs about a product. Parents should be involved in helping children interpret advertising and can refuse to purchase products they feel are undesirable for their children. Advertisers have a right under the First Amendment to communicate with consumers who make up their primary target audience Slide 22-3 Do Advertisers Control the Media? Advertising Advertising is is the the primary primary source source of of revenue revenue for for newspapers, newspapers, magazines, magazines, television television and and radio radio 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 advertisers advertisers Advertisers Advertisers 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 Arguments For Advertiser Control of the Media The media's dependence on advertising revenue can make them susceptible to advertisers because advertisers can influence the media by: exerting control over editorial content biasing editorial opinion limiting coverage of controversial issues Slide 22-6 Arguments Against Advertiser Control of the Media It is in the best self-interest of the media to report the news fairly and accurately and not be perceived as biased to retain public confidence. It can be argued that advertisers need the media more than the media need any individual advertiser. Slide 22-7 Economic Effects of Advertising Consumer choice Competition Product costs and prices Slide 22-8 Role of Advertising in the Economy Makes Makes consumers consumers aware aware of of products products and and services services Provides Provides consumers consumers with with information information to to use use to to make make purchase purchase decisions decisions Encourages Encourages consumption, consumption, fosters fosters 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 Summarizing Economic Effects Advertising Advertising Equals Equals Market Market Power Power Change Change consumers’ consumers’ tastes tastes Lowers Lowers sensitivity sensitivity to to price price Builds Builds brand brand loyalty loyalty Results Results in in higher higher profits profits Reduces Reduces competition competition Leads Leads to to higher higher prices prices Leads Leads to to fewer fewer choices choices Summarizing Economic Effects Provides Provides useful useful information information Advertising Advertising Equals Equals Information Information Increases Increases price price sensitivity sensitivity Increases Increases competition competition Pressure Pressure for for high high quality quality Pressure Pressure for for lower lower prices prices Forces Forces inefficient inefficient firms firms out out Different Advertising Appeals Fear Humor Sex Music Rationality Emotions Scarcity
