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Transcript of chapter Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin...
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Copyright © 2008 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinContemporary Advertising, 11e
Economic, Social, and Regulatory Aspects
of Advertising
Identifies and explains economic,social, ethical, and legal issues
advertisers must consider
Chapter
3
3-3
Chapter 3 Objectives
Classify two main types of social criticisms
Employ an economic model to discuss effects
Explain social responsibility and ethics
Understand how governments regulate
here and abroad
Discuss court rulings that affect freedom of speech
Describe how federal agencies regulate
Define the regulatory roles of state and local
governments
Discuss self-regulation
3-4
Controversies
Economic Societal affect product value?
make us morematerialistic?
increase prices?discourage
competition?
affect demand?
make us buy thingswe don’t need?
debase language?
affect art?
affect us subliminally?
influence consumerchoice?
Does advertising . . .
3-5Economic Impact:Principles
Self-interestComplete
information
Absence ofexternalities
Many buyers& sellers
3-6Economic Impact:Global
Bleustein-Blanchet:
Advertising expenditure is directly proportional to standard of living
Insert ex. 3-1, p. 58
Per capita ad spending
Position = 2.9” horiz., 1.5 vertical
Size = 4.6” TALL
Resolution: 300 dpi
3-7Economic Impact:Billiards Model
Insert ex. 3-2, p. 59, Advertising billiards
Position = centered horiz., 1.5” vertical
Size = 4.6” TALL
Resolution: 300 dpi
3-8Economic Impact:Four Affected Areas
ProductValue
-Communicates brand image
-Educates customers
-Associates w/ desirable image
3-9Economic Impact:Four Affected Areas
ProductValue
Prices & Competition
-Communicates brand image
-Educates customers
-Associates w/ desirable image
Increase:
-Branding
-Ad costs
Decrease:
-Competition
-Efficiency
3-10Economic Impact:Four Affected Areas
ProductValue
Prices & Competition
Consumer Demand
-Communicates brand image
-Educates customers
-Associates w/ desirable image
Increase:
-Branding
-Ad costs
Decrease:
-Competition
-Efficiency
Primary:
-Product Category
Secondary:
-Particular Brand
3-11Economic Impact:Four Affected Areas
ProductValue
Prices & Competition
Consumer Demand
Consumer Choice
-Communicates brand image
-Educates customers
-Associates w/ desirable image
Increase:
-Branding
-Ad costs
Decrease:
-Competition
-Efficiency
Primary:
-Product Category
Secondary:
-Particular Brand
Product differentiation
3-12Economic Impact:Abundance Principle
In an economy that produces more goods & services than can be consumed, advertising:
Self-interestComplete
information
Absence ofexternalities
Many buyers& sellers
Allows more-effective
competition
Stimulates competition
Keeps consumers informed
Self-regulates to keep market free & open
3-13Social Impact:Two Types of Criticism
Short-term manipulative arguments
Deception:puffery, nonproduct
facts, bias, inaccuracy
Proliferation Stereotyping Offensive
Social impact Impacts values
Long-term macro arguments
Subliminalmyth
3-14
Public service announcement from Abbott Mead Vickers BDDO
Insert photo 3.9, p.66
“Think! Slow down” PSA
Position = 2.7” horiz., 1.5” vertical
Size = 4.6” TALL
Resolution = 300 dpi
Social Responsibility and Ethics
3-15
Social Responsibility and Ethics
Promotewell-being
Promoteharmony &
stability
Influenceelections
Drawcrowds to
events
Responsibleadvertising
can . . .
Ethical:morally right
Socially Responsible:what society views as best
3-16
Public service announcement from the Brain Injury Association of America
Insert photo 3.13, p. 71
Towel snowboarding ad
Position = 2.9” horizontal, 1.5” vertical
Size = 5.7” WIDE
Resolution = 300 dpi
Social Responsibility and Ethics
3-17
Ethics of Advertising
Insert ex. 3.3, p. 73
Levels of Ethical Responsibility
Position = 0.4” horizontal, 1.5 vertical
Size = 8.2” WIDE
Resolution = 300 dpi
3-18
How Government Regulates
State:governor,
attorney general,
departments
Municipal:mayor,
city manager,
police chief
National:Legislative, Executive,
Judiciary
3-19
International Regulation
Ad from Air Tahiti Nui
Insert photo 3.14, p. 77
Air Tahiti line drawing ad
Position = 2.9“ horizontal, 1.5“ vertical
Size = 5.7” WIDE
Resolution = 300 dpi
3-20Current U.S.Regulatory Issues
Tobacco Controversy
Consumer Privacy
Supreme Court: “speech” or “commercial speech”
Advertising to Children
3-21Federal Regulation:Agencies
Nutritional Labeling & Education
Act (NLEA)
Broadcast media
licensing
Deceptive, unfair, &
comparative ads
FCCFTC FDA
Intellectual property
Patent & Trademark
Office
Copyrights “works of
authorship”
Library of Congress
3-22Federal Regulation:FDA Disclosure
This ad for Revolution, a topical Parasiticide for Dogs and Cats, has a long disclosure
Insert photo 3.19a
Relpax woman
Position = 2.8” horiz., 1.5” vertical:
Size = 2.75 WIDE
Resolution = 300 dpi
Insert photo 3.19b
Relpax disclosure
Position: 5.9” horiz., 1.5” vertical
Size = 2.75 WIDE
Res = 300 dpi
3-23State & LocalRegulation
“Little FTC” consumer protection acts
Local govt. regulation:city & county consumer
protection agencies
National marketers comply with states’
laws
3-24NongovernmentRegulation
Better Business Bureau (BBB)
National Advertising Review Council (NARC) National Advertising Division (NAD) National Advertising Review Board (NARB)
Regulation by the media
Regulation by consumer groups
3-25Self-Regulation:Agencies & Associations
Research and verify claims &comparative data before use
Liable for misleading or fraudulent claims
American Association ofAdvertising Agencies (AAAA)
Agency Responsibilities
Industry-WideAssociations
Some maintain in-house legal counsel
American Advertising Federation (AAF)
Association of National Advertisers (ANA)