4
Social, Ethical, &
Regulatory Aspects
of Advertising
Objectives
To Understand:
1. Advertising & Well-Being
2. Ethical Campaign Development
3. Role of Government Agencies
4. Self-Regulation
5. Regulation of IBP Techniques
Is Advertising Full of Double
Standards?
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 & help only some
Critics of advertising feel
that advertising is
superficial because many
ads carry little actual
product information. Do
you think advertising is
superficial?
Advertising Affects
Happiness & 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
Addresses Social Problems (and dogs
too.)
Critics feel advertising
promotes materialism
Advertising: Demeaning & deceitful, or
liberating & artful?
Con: Ads perpetuate stereotypes
Pro: Advertisers are more sensitive now
Con: Ads are often offensive
Pro: Ads are a source of liberation
Con: Ads deceive via subliminal stimulation
Pro: Advertising is art
Do you think this ad
perpetuates stereotypes?
Advertising has a
powerful effect on
mass media
Pro: Ads foster a diverse & affordable
mass media that provides
information
Con: Advertising affects & controls
programming. “Advertainment”
has made matters worse
Ethical Aspects of Advertising
Ethics are the moral standards against
which behavior is judged. Key areas of
debate regarding ethics & advertising are:
• Truth in advertising
• Advertising to children
• Advertising controversial products
Ethical Aspects of Advertising
Truth in Advertising
• Deception is making false or misleading statements, but
puffery (commercial exaggeration) is legal.
• Cannot legislate against emotional appeals
Ethical Aspects of Advertising
Advertising to Children—Issues
• Advertising promotes superficiality & materialism in
children
• Children are inexperienced & easy prey
• Persuasion to children creates child-parent conflicts
• What does the literature say about kid’s abilities to process
persuasive information?
Mommy, why is Ronald McDonald
being arrested?
Ethical Aspects of Advertising
Advertising Controversial Products
• Critics question “targeting” minorities
• Tobacco, alcohol, gambling & 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?
Controversies in Cigarette Advertising
(they find ways around the laws).
Alcohol Advertising…to Cats?
Or by Frogs.
Regulatory Aspects of
Advertising
Areas of advertising regulation:
• Deception & unfairness
• Competitive issues
– Vertical cooperative advertising
– Comparison advertising
– Monopoly power
• Advertising to children
Key Regulatory Agents
Government Regulation
• Federal Trade Commission (FTC)
– Wide range of regulatory programs & remedies
• Federal Communications Commission (FCC)
• Food & Drug Administration (FDA)
• U.S. Postal Service
• Bureau of Alcohol, Tobacco, & Firearms
Not Following Advertising Law Can
Bring a Big Company Down
Key Regulatory Agents--FTC
FTC Programs & Remedies
• Advertising Substantiation Program
• Consent Order
• Cease & Desist Order
• Affirmative Disclosure
• Corrective Advertising
• Control of Celebrity Endorsements
Key Regulatory Agents (con’t)
Industry Self-Regulation
• National Advertising Review Board
(NARB)
• State & Local Better Business Bureaus
• Ad Agencies & Associations
• Media Organizations
Consumers as Regulators too
Key Regulatory Agents (con’t)
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
Key Regulatory Agents (con’t)
Consumers as Regulatory agents
• Consumerism: Grass roots consumer
movements
• Consumers Organizations
– Consumer Federation of America
– Consumers Union
– Consumer Alert
– Commercial Alert
– www.adbusters.com
Regulation of Other Promotional
Tools
• Direct Marketing & e-Commerce
– Privacy, Contests, Telemarketing
– Spam=10 million messages/minute
worldwide
• Sales Promotion
– Premiums, Trade Allowances, Contests
• Public Relations
– Privacy, Copyright Infringement, Defamation
(slander & libel)
Review/?s
1. Advertising & Well-Being
2. Ethical Campaign Development
3. Role of Government Agencies
4. Self-Regulation
5. Regulation of IBP Techniques
Mom Jeans
EXAM 1
Covers Content up to This Point.
Read & Review Class Notes
Professor Close