1. Evaluating the Social,Ethical, and EconomicAspects of Advertisingand Promotion22McGraw-Hill/Irwin Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Advertising and Promotion ViewpointsPPrroovviiddeess iinnffoorrmmaattiioonnEEnnccoouurraaggeess hhiigghheerr ssttaannddaarrdd ooff lliivviinnggPPrroommootteess ccoommppeettiittiioonn ProponentargumentsCCrreeaatteess jjoobbssMMoorree pprrooppaaggaannddaa tthhaann iinnffoorrmmaattiioonnCCrreeaatteess ccoonnssuummeerr nneeeeddss,, wwaannttssPromotes materialism, insecurity,Promotes materialism, insecurity,and greedand greedProponentargumentsCriticCriticargumentsargumentsHHeellppss nneeww ffiirrmmss eenntteerr aa mmaarrkkeett 3. Ethics in Advertising and PromotionEthics: Moral principles and values thatgovern the actions and decisions of anindividual or group.Ethics: Moral principles and values thatgovern the actions and decisions of anindividual or group.Not all issues canNot all issues canbe regulatedbe regulatedA marketing orpromotion actionmay be legal butA marketing orpromotion actionmay be legal butnot ethicalnot ethicalMarketers mustMarketers mustdecide thedecide theappropriatenessof their actionsappropriatenessof their actions 4. Promoting Responsible Drinking 5. Benettons Death Row Ad Offensive 6. Advertising and Untruthful or DeceptiveGeneral mistrust of advertisingamong consumers. Many do notperceive ads as honest or believableGeneral mistrust of advertisingamong consumers. Many do notperceive ads as honest or believableAbuses involving sales promotionssuch as contests, sweepstakes,Abuses involving sales promotionssuch as contests, sweepstakes,premium offerspremium offersUnethical and/or deceptive practicesinvolving mail order, telemarketingand other forms of direct marketingUnethical and/or deceptive practicesinvolving mail order, telemarketingand other forms of direct marketingIInntteerrnneett ssccaammss aanndd aabbuusseess 7. Advertising as Offensive or in Bad TasteSexualappealsSexualappealsObjectionableObjectionableproducts SShhoocckk aaddssproducts 8. Test Your KnowledgeAdvertisers are using shock advertising to:A) Test their First Amendment rightsB) Get ads noticed in the midst of clutterC) Make a statement against self-regulationD) Test the ethics of the advertising industryE) Act as advocacy ads for company management 9. Advertising and ChildrenChildren's TVChildren's TVWatching BehaviorWatching BehaviorChildren ages 2-11watch an average of22 hours of TV perweek and see 30,000commercials per year80% of all advertisingtargeted to childrenfalls in fourproduct categories:Toys, cereal, candy &fast food restaurants 10. Perspectives on Ads for ChildrenAdvocates Advocates AArrgguuee TThhaatt CChhiillddrreenn::Lack the knowledge andLack the knowledge andskills to evaluateadvertising claimsskills to evaluateadvertising claimsCannot differentiatebetween programs andCannot differentiatebetween programs andcommercialscommercialsMMaarrkkeetteerrss AArrgguuee CChhiillddrreenn::Must learnMust learnthrough socializationthrough socializationMust acquire skillsneeded to function inMust acquire skillsneeded to function inthe marketplacethe marketplace 11. Do TV Networks Have a Double Standard? 12. Social and Cultural ConsequencesDoes advertisingDoes advertisingencourage materialism?encourage materialism?Does advertising makeDoes advertising makepeople buy thingsthey dont need?people buy thingsthey dont need?Is advertising justa reflection of society?Is advertising justa reflection of society? 13. Does advertising affect Society? 14. Advertising and StereotypingPortrayal of women toreflect their changing rolePortrayal of women toreflect their changing rolein societyin societyPortrayal ofwomen assex objectsPortrayal ofwomen assex objectsEthnicEthnicCriticisms ofAdvertisingWith Regard toStereotypingCriticisms ofAdvertisingWith Regard toStereotypingstereotyping/representationstereotyping/representationGenderstereotypingGenderstereotypingSexualorientationSexualorientation 15. What is your opinion of this ad?Is this woman portrayedIs this woman portrayedas a sex object?as a sex object?Does this ad containcues that are sexuallyDoes this ad containcues that are sexuallysuggestive?suggestive?Does this ad present anDoes this ad present animage of sexualsubmissiveness?image of sexualsubmissiveness? 16. Dove Challenges the Norms of Beauty 17. Test Your KnowledgeGroups such as the National Organization for Women(NOW) are critical of advertising that:A) Portrays women in traditional sexist rolesB) Contributes to violence against womenC) Is insulting to womenD) Stereotypes womenE) Does any of the above 18. Advertising Can Address Social Problems*Click outside of the video screen to advance to the next slide 19. Do Advertisers Control the Media?Advertising is the primarysource of revenue fornewspapers, magazines,Advertising is the primarysource of revenue fornewspapers, magazines,television and radiotelevision and radioMedias dependence onMedias dependence onadvertising for revenue makesthem vulnerable to control byadvertising for revenue makesthem vulnerable to control byadvertisersadvertisersAdvertisers may exert controlover the media by biasingeditorial content, limitingcoverage of certain issues, orinfluencing program contentAdvertisers may exert controlover the media by biasingeditorial content, limitingcoverage of certain issues, orinfluencing program content 20. Do Advertisers Control the Media?They must report the newsfairly and accurately to retainThey must report the newsfairly and accurately to retainpublic confidencepublic confidenceAdvertisers need the mediamore than the media needAdvertisers need the mediamore than the media needany one advertiserany one advertiserMedia maintain separationbetween news and businessdepartments The WallMedia maintain separationbetween news and businessdepartments The Wall 21. U.S. Government Discourages Drug Use 22. Role of Advertising in the EconomyMakes consumers awareof products and servicesMakes consumers awareof products and servicesProvides consumers withinformation to use tomake purchase decisionsProvides consumers withinformation to use tomake purchase decisionsEncourages consumption,fosters economic growthEncourages consumption,fosters economic growth 23. Economic Impact of AdvertisingEffects on Consumer Choice Differentiation Brand LoyaltyEffects on Consumer Choice Differentiation Brand LoyaltyEffects on Competition Barriers to entry Economies of scaleEffects on Competition Barriers to entry Economies of scaleEffects on Product Costs and Prices Advertising as an expense thatincreases the cost of products Increased differentiationEffects on Product Costs and Prices Advertising as an expense thatincreases the cost of products Increased differentiation 24. Test Your KnowledgeFrom an economic perspective, advertising mightlower the cost of a product by:A) Creating barriers to entry for less efficientfirmsB) Moving consumers to the consumersocialization stage of the buying processC) Making it possible for firms to realizeeconomies of scale through expansionof sales volumeD) Allowing firms to advertise at high levelsalong with competitorsE) Doing none of the above 25. The Economic Value of Advertising*Click outside of the video screen to advance to the next slide 26. Summarizing Economic EffectsCChhaannggee ccoonnssuummeerrss ttaasstteessLLoowweerrss sseennssiittiivviittyy ttoo pprriicceeBBuuiillddss bbrraanndd llooyyaallttyyRReessuullttss iinn hhiigghheerr pprrooffiittssRReedduucceess ccoommppeettiittiioonnAdvertisingAdvertisingEqualsMarketPowerEqualsMarketPowerLLeeaaddss ttoo hhiigghheerr pprriicceessLLeeaaddss ttoo ffeewweerr cchhooiicceess 27. Summarizing Economic EffectsProvides Provides uusseeffuull iinnffoorrmmaattiioonnIInnccrreeaasseess pprriiccee sseennssiittiivviittyyIInnccrreeaasseess ccoommppeettiittiioonnPPrreessssuurree ffoorr hhiigghh qquuaalliittyyPPrreessssuurree ffoorr lloowweerr pprriicceessAdvertisingAdvertisingEqualsEqualsInformationInformationFFoorrcceess iinneeffffiicciieenntt ffiirrmmss oouutt 28. Do you agree with Leo Burnett?It must be said that withoutadvertising we would have a fardifferent nation, and one thatwould be much the poorer-notmerely in material commodities,but in the life of the spirit.Excerpters is from a speech given by Leo Burnett on the AmericanAssociation or Advertising Agencies 50th anniversary, April 20,1967