Post on 03-Apr-2018
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ADV & SP
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The Evolution of Advertising
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WHAT WAS THE NEED FOR
ADVERTISING??
Manufacturers attempt to gain power over the
distribution channel by building brand demand.
Takes consumers focus away from Retailer and
Wholesaler. Mass Media telegraph enabled rapid communication,
spawned global interest and fostered a sense of
community.
this free communication is supported by
advertising.
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Evolution of Advertising
Pre-1800
Print media (news books, newsletters, then gazettes)
1800-1875 Circulation of dailies (newspapers) 1M/day Circulation increased by railroad expansion
1875-1918 Consumer culture breeds advertising as urbanization takes hold (self-reliance no
longer plausible)
The 1920s roaring twenties advertising was the work of the young, smart and sophisticated High standard of living A product for a cure for almost everything Ads became more visual than past
1929-1941 Advertising seen as villainous as millions starve Bye-bye pretty, hello ugly harsh-reality, attention-grabbing ads Radio takes hold as medium.
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1941-1960
Fear of motivation advertising research and subliminal ads
Start of the babyboomer generation and women join the workforce
1960-1972 (Peace, Love and Creative Revolution)
Advertising slow to keep pace with the cultural revolution
creative directors gain more control of copy and ads
1973-1980 Slowing economyads go back to hard sell
Regulators: ACT, FTC, NARB
1980-1992
Designer era Greed was good, more stuff was good
1993-2000
Prediction of Interactive media enabling audit of more accountable advertising
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1964 1969
BMW-ADVERTISEMENT IN 60S
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1972 1973
70S
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1980 1983
80s
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90s
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The 00s: More Hip Ads and More Technology (2001
present)
Ads seen as adsself-aware
Dot.bomb websites totally dependent on online ads forrevenue (However, stock value was in potential ad revenue not real productrevenue)
E-business selling real product online
Increase in web advertising
Branded Entertainment (and product placement)
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2005
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2007-Magazine Ad
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2010
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2010-Inspiring Designs Dont Always
Start On Paper
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Where our exploration ends,yours
begins
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HAVE A LOOK
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18
Advertising and Society:
Ethics, Regulation and SocialResponsibility
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Advertising and Society
Advertisings visible social role makes it atarget for criticism.
Some of todays consumers believe that agreat deal of advertising is unethical becauseit:
Adds to the price of products,
Is untruthful, Tricks people, or
Targets vulnerable people.
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Ethical Criteria
Accuracy
Subtle Messages Trouble Critics EspeciallyWhen Aimed At Groups Such as Children, the Elderly, or
the Disabled.
Acquisitiveness
Are We Persuaded That We Continually Need More andMore New Products? Consumers Make the Final
Decision.
Advocacy
Advertising Tries to Persuade the Audience to DoSomething; It is Not Objective or Neutral.
Numerous Advertising-Related Issues Are Left to the Discretion of the Advertisers and Are Basedon Ethical Concerns.
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The Problem of Being Ethical
Ethical
Decisions
Nonethical
Decisions
Company's
Mission Marketing
Objectives
Reputation
Available
ResourcesCompetition
Based On
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Puffery
Advertising Or Other Sales Representations, Which Praise
the Item to Be Sold With Subjective Opinions, Superlatives,
or Exaggerations, Vaguely and Generally, Stating No Specific
Facts.
Product
Categories
Taste
Issues
Taste and Advertising
Current
Issues
Ethical Issues in Advertising
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Stereotyping in Advertising
Controversial
Topic
Limits Set For
Amounts of
Advertising
Advertising to Children
3 Hours of
Educational
TV Per Week
Ethical Issues in Advertising
Women inAdvertisements
Racial & EthnicStereotypes
Gay & LesbianConsumers
SeniorCitizens
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Subliminal AdvertisingA Subliminal Message is One That is Transmitted in Such a
Way That the Receiver is Not Consciously Aware of
Receiving It.
Ethical Issues in Advertising
Tobacco Alcohol
Advertising Controversial Products
Gambling
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LegislationSocial
Responsibility/Self-Regulation
Advertisement
Organized
Groups
Audience
Protection
Media
Groups
Government
Agencies
Regulatory Factors Affecting
Advertising (Fig. 2.1)
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Federal Case Law Affecting Advertising
First Amendment Case Law
This Protection Applies to Commercial Speech, Which
is Speech That Promotes Commercial Activity.
That Protection is Not Absolute.
Privacy Case Law Developments:
Online AdvertisingLegal Issues of Data Collection Are Troubling
Consumers, Online Advertisers, and the Government.
Online Privacy Alliance Has Published Guidelines.
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Deception
Reasonable Basis for Making a Claim
Comparative Advertising
Endorsements
Demonstrations
Advertising and the Federal Trade
Commission
The Federal Trade Commissions (FTC) Main Focus, Regarding Advertising, is to Identify and
Eliminate Ads that are Deceptive or Mislead the Consumer. Key Areas that Concern the FTC:
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Deception
The current FTC policy on deception containsthree basic elements:
Where there is representation, omission, orpractice, there must be a high probability that itwill mislead the consumer.
The perspective of the reasonable consumer isused to judge deception.
The deception must lead to material injury.
This policy makes deception difficult to prove.
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Reasonable Basis for Making a Claim
Determining the reasonableness of a claim isdone on a case-by-case basis. In general the FTC
considers the following factors: Type and specificity of claim made
Type of product
Possible consequences of the false claim
Degree of reliance by consumers on the claims
The type and accessibility of evidence available formaking the claim.
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Comparative Advertising
The FTC considers comparative advertisingdeceptive unless:
1. The comparisons are based on fact.
2. The differences advertised are statisticallysignificant.
3. The comparisons involve meaningful issues.
4. The comparisons are to meaningful competitors.
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Endorsements
An endorsement or testimonial is anyadvertising message that consumers believereflects the opinions, beliefs, or experiences of
an individual, group, or institution. Endorsers must:
Be qualified by experience or training to make
judgments, and They must actually use the product.
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Method 1. Consent Decrees
Method 2. Cease-and-Desist Orders
Method 3. Corrective Advertising
Method 4. Substantiating Advertising Claims
FTC Deceptive and Unfair Advertising
Remedies
Method 5. Consumer Redress
Method 6. Hold Advertising Agency Legally
Responsible
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Advertising and Other Regulatory
Agencies
In Addition to the FTC, Several Other Federal Agencies
Regulate Advertisers and Their Agencies.
Food and DrugAdministration
FederalCommunication
Commission
Additional FederalRegulatoryAgencies
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Social Responsibility
Level Two
Advertiser isEngaged in
Prosocial
Messaging
Level One
Being SociallyResponsible is a
BusinessPhilosophy
Organizations Task is to Determine the Needs,Wants, and Interests of Target Markets and to
Deliver the Desired Satisfactions More EffectivelyAnd Efficiently Than Its Competitors in a Way that
Preserves or Enhances the Consumers andSocietys Well-Being. (48) by Phillip Kotler.
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Self-Discipline
An OrganizationDevelops,
Uses, and
Enforces Norms
By Itself
Pure
Self-Regulation
The Industry
Develops,
Uses and
Enforces
Norms
Co-opted
Self-Regulation
Industry VoluntarilyInvolves Nonindustry
People in theDevelopment,
Application, andEnforcement of Norms
Different Levels of Self-Regulation
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Economic Effects of Advertising
Effects onconsumer choice
Differentiation
Brand loyalty
Effects on competition
Barriers to entry
Economies of scale
Effects on product costs and prices
Advertising as an expense
Increased differentiation
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Economic Effects of Advertising
Advertising = Market Power Advertising affects consumer preferences and
tastes, changes product attributes, anddifferentiates the product from competitiveofferings.
Consumers become brand loyal and less pricesensitive and perceive fewer substitutes foradvertised brands.
Potential entrants must overcome establishedbrand loyalty and spend relatively more onadvertising.
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Economic Effects of Advertising
Advertising = Market Power
Firms can charge higher prices and are not aslikely to compete on quality or price
dimensions. Innovation may be reduced. High prices and excessive profits accrue to
advertisers and give them even moreincentive to advertise their products. Outputis restricted compared with conditions ofperfect competition.
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Economic Effects of Advertising
Advertising = Information
Advertising informs consumers about productattributes but does not change the way they
value those attributes. Consumers become more price sensitive and buy
best value.Only the relationship between priceand quality affects elasticity for a given product.
Advertising makes entry possible for new brandsbecause it can communicate product attributes toconsumers.
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Economic Effects of Advertising
Advertising = Information
More informed consumers pressure firms to
lower prices and improve quality; new
entrants facilitate innovation.
Industry prices decrease. The effect on profits
due to increased competition and increased
efficiency is ambiguous.
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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 thespirit.
These excerpters are from a speech given by Leo Burnett on the American Association
or Advertising Agencies 50th anniversary, April 20,1967