Advertising class presentation for advertising and marekting professionals.

1. AdvertisingAdvertising
MKTMKT00350035

2. Chapter 2:Chapter 2:
Economic, Social &Economic, Social &
Regulatory Aspects ofRegulatory Aspects of
AdvertisingAdvertising

3. Advertising’sAdvertising’s
ControversiesControversies

4. Advertising’s Controversy
 Cause for consumer distrust.
 People will say ANYTHING to sell stuff.
 People don’t rely exclusively on
advertisers for information, product
comparisons, facts, features & benefits.
 Expands/fosters/creates MATERIALISM.
 US Advertising 2% GDP highest in world.
 Makes products cost more? Or less???
 Reduces competition?

5. Economic ImpactEconomic Impact

6. ““Abundance”Abundance”
PrinciplePrinciple

7. In an economy that produces more
goods and services than can be
consumed, advertising plays 2 crucial
roles: 1) Keeps consumers informed
of their alternatives (complete
information) and: 2) Allows companies
to compete more effectively for
consumer dollars (self-interest.)
Abundance Principle

8. Social ImpactSocial Impact

9. PufferyPuffery

10. From pyffanpyffan, old English word
meaning “blow in short bursts” or “to
inflate; make proud or conceited.”
Puffery

11. “Advertising, by its
very nature, is not
complete information.
It is biased in favor of
the advertiser.”
Puffery

13. SubliminalSubliminal
AdvertisingAdvertising

14. Subliminal Advertising
 Placing hidden messages in ads to
influence consumer behavior at a
subliminal (subconscious) level.
 Fear that advertisers mess with our
heads.
 Wilson Bryan Key: to seduce consumers,
advertisers intentionally create ads with
sexual messages hidden in the
illustrations.

17. Social ImpactSocial Impact

18. Social Impact
 Advertising lowers our collective values
by promoting hedonistic, materialists
way of life.
 Continuous proliferation in ad messaging
that bombards consumers.
 Per Nielsen, 16-21 minutes of an hour’s
TV programming is advertising.
 Stereotypes played out through
insensitivity to women, minorities, the
disabled, elderly, and others.

21. Social Impact
 Advertising’s negative impact on
CHILDREN.

22. Yeah Perhaps But…Yeah Perhaps But…

23. Don’t consumers have theDon’t consumers have the
FINAL say in whetherFINAL say in whether
advertising is successful?advertising is successful?

24. Social Responsibility & Ads
 Laws control what advertisers say but
there’s a large amount of leeway.
 Ethics and corp. social responsibility play
a role.

25. What ETHICALWhat ETHICAL
OrganizationsOrganizations
Look LikeLook Like

29. HowHow NOTNOT to Actto Act

30. Hall of ShameHall of Shame

33. Advertiser Responsibilities
 Participate in civic events.
 Support local enterprises.
 Improve local, regional and national
economies.
 4A & Ad Council.

34. RegulatoryRegulatory
ConsiderationsConsiderations

35. Regulatory Factors
 Supreme Court distinction between FREEFREE
speech & “CommercialCommercial” speech.
 1980 Supreme Court case: “Central Hudson
Gas…” presented 4 key considerations for
advertising:
• Does the commercial speech at issue concern a
lawful activity?
• Will the restriction of commercial speech serve
the asserted Gov’t interest substantially?
• Does the regulation directly advance the Gov’t
interest asserted?
• Is the restriction no more than necessary to
further the interest asserted?

36. Regulatory Factors
The current Supreme Court is EXTREMELY
PRO-business.

37. The Regulators
 FCC.
 FTC.
 FDA.
 USPTO.
 Library of Congress.

38. Terms
 DECEPTION: Any ad that contains a
misrepresentation, omission or any other
practice that can mislead a significant #
of reasonable consumers to their
detriment
 UNFAIRNESS: Occurs when a consumer
is “unjustifiably injured” or there is a
“violation of public policy.”

39. Self-Regulation
 Advertising agencies regulate
themselves.
 Most have “In-house” legal counsel.
 4A, Amer. Advertising Federation, Assn.
of National Advertisers and the BBB.

40. ResourcesResources

41. Resources