Relation to text This slide relates to page 750 and Exhibit 22-14 of the text. Summary Overview The advertising industry believes that advertising reflects society, not the other way around. This ad was part of a campaign to address the criticisms of advertising. Use of this slide Use this slide to present the advertising industry’s position advertising’s effect on society.
Relation to text This slide relates to material on pp. 745-749 of the text. Summary Overview One of the most controversial topics advertisers must deal with is the issue of advertising to children. The extensive amount of time children spend watching TV means they will be exposed to a great deal of advertising. This slide provides some statistics regarding children’s TV watching behavior. Children between the ages of 2-17 watch an average of 22 hours of TV per week, and may see 30,000 commercials per year The vast majority of advertising targeted to children falls in four product categories: toys, cereal, candy, and fast food restaurants Use of this slide This slide can be used to introduce the issue of advertising to children. The next slide will discuss two perspectives on advertising to children.
Relation to text This slide relates to material on pp. 745-749 of the text. Summary Overview Critics of advertising to children argue that it should be banned or severely restricted. However, marketers argue that advertising is a part of life and children must learn to deal with it. Legislation by the government and self-regulatory group agreements have provided some protection for children. This slide summarizes the two perspectives on advertising to children: Consumer advocates argue that children are vulnerable to advertising because: They lack the knowledge and skills to critically evaluate advertising claims They cannot differentiate between programs and commercials Marketers argue that children must: Learn through the socialization process Acquire the skills needed to function in the marketplace Use of this slide This slide can be used to discuss the two perspectives on advertising to children.
Relation to text This slide relates to material on p. 737 of the text. Summary Overview This slide shows the two views concerning the appropriateness and value of advertising. Proponents argue that advertising and promotion : Provide information Encourages a higher standard of living Creates jobs and helps new firms enter a market Promotes competition in the marketplace Critics argue that advertising and promotion : Creates needs and wants among consumers Is more propaganda than information Promotes materialism, insecurity, and greed Throughout the text, advertising and promotion has been discussed in the context of the business and marketing environment and from a perspective that these activities are appropriate. Critics argue that there are negative social and economic effects of advertising and promotion. Use of this slide This slide can be used to introduce the two different viewpoints regarding the value of advertising and promotion and the arguments for each.
Relation to text This slide relates to material on pp. 749-751 8 of the text. Summary Overview This slide shows some of the social and cultural questions related to advertising. Does advertising make people buy things they don’t need? Pro advertising Advertising provides essential information It is difficult to separate the desirable advertising from the undesirable Consumers are free to choose Critics of advertising Information advertising is acceptable, but persuasive advertising is unacceptable Persuasive advertising fosters discontent among consumers Does advertising encourage materialism? Pro advertising Materialism is an acceptable part of the Protestant ethic, which stresses hard work and individual effort Acquisition of material possessions has positive economic impact Critics of advertising Advertisers seeks to create needs Surrounds consumers with images of the good life and suggest material possessions will lead to happiness Material possessions will lead to greater social acceptance Is advertising just a reflection of society? Some argue that advertising is merely a visible manifestation, good and bad, of the American way of life. Others feel that advertising reflects cultural values on a selective basis, echoing and reinforcing certain attitudes, behaviors, and values more frequently than others. Use of this slide This slide can be used to discuss the social and cultural consequences of advertising and arguments both for and against advertising.
Relation to text This slide relates to material on pp. 756-757 of the text. Summary Overview This slide shows the arguments supporting the position that advertisers have control over the media. These include: Advertising is the primary source of revenue for newspapers, magazines, television, and radio Media’s dependence on advertising for revenue makes them vulnerable to control by advertisers Advertisers may exert control over the media by biasing editorial content, limiting coverage of certain issues, or influencing program content Use of this slide This slide can be used to discuss the position that advertisers control the media because a large part of their revenue is generated from advertising.
Relation to text This slide relates to material on pp. 757-758 of the text. Summary Overview This slide shows arguments against the position that advertisers do have control over the media. These include: They must report the news fairly and accurately to retain public confidence Advertisers need the media more than the media needs any one advertiser The media maintains separation between news and business departments. This separation is often referred to as “The Wall.” Use of this slide This slide can be used to discuss the reasons why advertisers do not control or have undue influence over the media despite the financial dependence that newspapers, magazines, and radio and television stations have on advertising.
Relation to text This slide relates to material on p. 760 and Exhibit 22-24of the text. Summary Overview Advertising plays an important role in a free market system. It informs customers of available goods and services, but also affects consumer choices, competition, and product/service costs and prices. This slide shows the role of advertising in the economy, which is: Making consumers aware of products and services Providing consumers with information to use to make purchase decisions Encouraging consumption and fostering economic growth Use of this slide This slide can be used to discuss the economic role of advertising.
Relation to text This slide relates to material on pp. 760-764 of the text. Summary Overview This slide summarizes the economic impact of advertising on consumer choice, competition, and product costs and prices. The impact of advertising includes: Effects on consumer choice: differentiation and brand loyalty Effects on competition: barriers to entry and economy of scale Effects on product costs and prices Advertising is an expense that increases the cost of products Increased differentiation The economic effect can be divided into two schools of thought. The “Advertising equals market power” perspective views advertising as a way to change consumers tastes, lower their sensitivity to price, and build brand loyalty. However, this results in higher profits, higher prices, reduced competition, and fewer choices. The “Advertising equals information” perspective views advertising as providing consumers with useful information, increasing price sensitivity, and increasing competition. Proponents of this view believe the economic effects of advertising are favorable and it contributes to a more efficient and competitive market. Use of this slide This slide can be used to discuss the economic impact of advertising on consumer choice, competition, and product costs and prices.
Relation to text This slide relates to material on pp. 764-765 and Figure 22-3 of the text. Summary Overview Some believe that advertising equals market power. This reflects traditional economic thinking, which views advertising as a way to: Change consumers’ tastes Lower their sensitivity to price Build brand loyalty This, in turn, results in: Higher profits Reduced competition in the market Higher prices and fewer choices for consumers Use of this slide This slide can be used to discuss the “advertising equals market power” position on advertising.
Relation to text This slide relates to material on pp. 764-765 and Figure 22-3 of the text. Summary Overview Some believe that advertising equals information, which is a more positive view of advertising’s economic effects. The believe that advertising: Provides useful information Increase price sensitivity, which moves consumers toward lower-priced products Increases competition in the market This, in turn, results in: Pressure from consumers for high-quality products at lower prices Less efficient firms being forced out of the market, which makes room for new entrants Use of this slide This slide can be used to discuss the “advertising equals information” position on advertising.
Relation to text This slide relates to material on p. 766 and Figure 22-4 of the text. Summary Overview This slide shows an excerpt from a speech given by Leo Burnett summarizing the perspective of most advertising people on the economic effects of advertising. Many advertising and marketing experts agree that advertising and promotion play an important role in helping to expand consumer demand for new products and services and in helping marketers differentiate their existing brands. Use of this slide This slide can be used to discuss the positive economic effects of advertising. You might ask your students if they agree with the legendary adman regarding the positive effects of advertising.
Relation to text This slide relates to material on pp. 751-756 of the text. Summary Overview Advertising is criticized for portraying various gender and ethnic groups in ways that are unflattering. Critics also argue advertising does not stay contemporary and reflect the changing roles of women. Despite the recognition that advertisers must be sensitive to the portrayal of specific types of people, ad agencies are finding it increasingly difficult not to offend some segment of the public. This slide shows the various forms of stereotyping that advertising is often accused of creating and perpetuating. These include: Gender stereotyping Portrayal of women to reflect their changing role in society Portrayal of women as sex objects Ethnic stereotyping/representation of minorities Gay-specific ads Use of this slide This slide can be used to discuss stereotyping in advertising.
Adds Value: How does advertising affect the value of product.( Making product better known- Desirable to consumer-thus adds value) Value to both consumer and advertiser(focusing on self interest)
Advertised product cost more than non advertisedII. Completion lowers price(Criticism)III. Adv is element of mass distribution system- which in turn lowers cost of product.IV. Subject to Government price regulation –no effect on priceV. In retailing ,price is prominentVI. In national advertisers stresses features
It do effect But very small n newcomers cannot compete with very large firms(immense budget) Some firms eliminated from advertising who work less effectively
II. Adv affect aggregate consumption.III. Give info n increase primary demandIV. Freedom to advertise-more sellers- give more choices What effect does it have on consumer choice and overall business cycle. Relationship of adv and GDP Maintaining consumer demand adv sustain employment and income Adv helps to maintain business cycle(recession- adv works)
Cock of bottle include about a penny for advertising $20,000 include $400 Adv informs consumer(Complete info) Allows companies to compete more effectively (Self Interest) Competition results in lower price and better products Advertising must meet consumers approval
Does advertising make us more materialistic Deception: Little PUFF OK---Puffery Manipulating psychologically Consumers are captured prey-helpless in jaws of marketing predators Does it force us buy things we don’t need How does it affect the art and culture of society Does advertising debase our language
It gives consumer wider choice Encouraging mass production-lowers price Encourages acceptance of new product n technology-development Promote healthy competition Promote standard of living-subsidize arts Disseminate public info on heath n social issues Adv create externalities that interfere media n their editorial statement Self interest of both consumer n marketer
Childrens TV Watching BehaviorChildren ages 2-11 watch 80% of all advertisingan average of targeted to children falls22 hours of TV per week in fourand see 30,000 product categories:commercials per year Toys, cereal, candy & fast food restaurants
Advocates Argue That Children: Cannot differentiateLack the knowledge and skills between programs andto evaluate advertising claims commercials Marketers Argue Children:Must learn Must acquire skills needed tothrough socialization function in the marketplace
Provides information Encourages higher standard of livingProponentarguments Promotes competition Helps new firms enter a market Creates jobs More propaganda than information Creates consumer needs, wantsCritic arguments Promotes materialism, insecurity, and greed
a) Economic Benefits of Advertising Informing people about the availability of rationally(Realistically) - improvements helping them to make informed prudent consumer decisions, contributing to efficiency and the lowering of prices stimulating economic progress via expansion of business and trade-creation of new jobs, higher incomes
Does advertisingencourage materialism?Does advertising make peoplebuy thingsthey don’t need?Is advertising justa reflection of society?
Advertising is the primary source ofrevenue for newspapers, magazines,television and radioMedia’s dependence on advertising forrevenue makes them vulnerable tocontrol by advertisersAdvertisers may exert control over themedia by biasing editorial content,limiting coverage of certain issues, orinfluencing program content
They must report the news fairly andaccurately to retain public confidenceAdvertisers need the media more thanthe media need any one advertiserMedia maintain separation betweennews and business departments “TheWall”
Makes consumers aware ofproducts and servicesProvides consumers withinformation to use to makepurchase decisionsEncourages consumption,fosters economic growth
Effects on Consumer Choice• Differentiation• Brand LoyaltyEffects on Competition• Barriers to entry• Economies of scaleEffects on Product Costs and Prices• Advertising as an expense that increases the cost of products• Increased differentiation
. Each economic system has an interesting relationship with the social system (unequal distribution of wealth) , political system (international politics-by influencing)and cultural value.(vice versa)
a) Economic Harms of Advertising More often, though, advertising is used not simply to inform but to persuade and motivate — to convince people to act in certain ways: buy certain products or services, patronize certain institutions. This is where particular abuse can occur.
"brand"-related advertising can raise serious problems. advertising may attempt to move people to act on the basis of irrational motives ("brand loyalty," status, fashion, "sex appeal," etc.) instead of presenting differences in product quality and price as bases for rational choice.
It is true that a judicious use of advertising can stimulate developing countries to improve their standard of living. serious harm can be done them if advertising and commercial pressure become so irresponsible The result of this is that they waste their resources and neglect their real needs, and genuine development falls behind."16
Advertising also can be, and often is, a tool of the "phenomenon of consumerism," as Pope John Paul II delineate it when he said: "It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better when it is directed toward ?having rather than ?being, and which wants to have more, not in order to be more but in order to spend life in enjoyment as an end in itself."14
From an economic perspective, advertising might lower thecost of a product by: A) Creating barriers to entry for less efficient firms B) Moving consumers to the consumer socialization stage of the buying process C) Making it possible for firms to realize economies of scale through expansion of sales volume D) Allowing firms to advertise at high levels along with competitors E) Doing none of the above
Change consumers’ tastesAdvertisingEquals Market Lowers sensitivity to pricePower Builds brand loyalty Results in higher profits Reduces competition Leads to higher prices Leads to fewer choices
Provides useful informationAdvertisingEquals Increases price sensitivityInformation Increases competition Pressure for high quality Pressure for lower prices Forces inefficient firms out
“It must be said that without advertisingwe would have a far different nation, andone that would be much the poorer-notmerely in material commodities, but in thelife of the spirit.”Excerpters is from a speech given by Leo Burnett on the AmericanAssociation or Advertising Agencies’ 50th anniversary, April 20,1967
Political advertising can support and assist the working of the democratic process, but it also can obstruct it. This happens when, for example, the costs of advertising limit political competition to wealthy candidates or groups, or require that office-seekers compromise their integrity and independence by over- dependence on special interests for funds.
Such obstruction of the democratic process also happens when, instead of being a vehicle for honest expositions of candidates views and records, political advertising seeks to distort the views and records of opponents and unjustly attacks their reputations. It happens when advertising appeals more to peoples emotions and base instincts — to selfishness, bias and hostility toward others, to racial and ethnic prejudice and the like — rather than to a reasoned sense of justice and the good of all.
Political advertising can make a contribution to democracy so political advertising can make its contribution by informing people about the ideas and policy proposals of parties and candidates, including new candidates not previously known to the public
In the competition to attract ever larger audiences and deliver them to advertisers, communicators can find themselves tempted — in fact pressured, subtly or not so subtly — to set aside high artistic and moral standards and lapse into superficiality, tawdriness and moral squalor.
Some advertisements are instances of popular art, with a vivacity (liveliness) and élan (elegance) all their own.
advertising contributes to the invidious stereotyping of particular groups that places them at a disadvantage in relation to others. This often is true of the way advertising treats women; and the exploitation of women, both in and by advertising, is a frequent, deplorable abuse. "How often are they treated not as persons with an inviolable dignity but as objects whose purpose is to satisfy others appetite for pleasure or for power? How often is the role of woman as wife and mother undervalued or even ridiculed? How often is the role of women in business or professional life depicted as a masculine caricature, a denial of the specific gifts of feminine insight, compassion, and understanding, which so greatly contribute to the ? civilization of love?
Portrayal of women to reflect their changing role in society Criticisms of Portrayal ofGender women asstereotyping Advertising Beauty objects With Regard to Stereotyping Ethnic stereotyping/ representation
Groups such as the National Organization for Women (NOW)are critical of advertising that: A) Portrays women in traditional sexist roles B) Contributes to violence against women C) Is insulting to women D) Stereotypes women E) Does any of the above