Economic effects of advertisements and disadvantages

1. Economic Effects
of AdvertisingPresented by
Amlin David

2. What is Advertising
• Advertising is a form of communication used to persuade
an audience (viewers, readers or listeners) to take some
action with respect to products, ideas, or services.

3. Definitions of Advertising
• Any paid form of non personal presentation and
promotion of ideas of goods and services by an identified
sponsor (Philip Kotler 2006)
• Paid non personal communication from an identified
sponsor using mass media to persuade or influence an
audience ( Wells, Burnett and Moriaty 1998)

4. Economic reactions of
Advertising
• Generates a net gain in direct sales due to promotion of
the industries products and services
• Generates indirect sales and jobs among the first level
suppliers to the industries that incur advertising
expenditures
• Generates indirect sales and jobs among all other levels
of economic activity as the sales ripple through the
economy

5. Effects of Advertising on
Economics
• Consumer information
• Competition
• Consumer Manupulation

6. Effects of advertising in a
free economy
• Creating a market
• Its about brand
• Pop culture
• Influence on Children
• Consumerist society

7. Social problems of
Children in Advertising
• Child Obesity
• Materialistic Habits
• Violence/Harmful

8. Side A
(Proposed government regulation)
General Parties:
• Some parents
• Some pediatricians &
health care professionals
• Most child psychologists
• Consumer protection
groups
Specific Parties:
• Advertising Educational
Foundation (AEF)
• American Academy of
Pediatrics
• Children’s Advertising
Review Committee
(CARU)
• Emily Roberts (Treaty
Oak Psychotherapy –
Austin)

9. Side A
Issues and Arguments
• “Childhood obesity is quickly becoming a global health
concern as figures reach epidemic proportions” (*Source: Advertising to
Children 2).
• “Children create and begin to model a lifestyle based on
the advertisements they view” (*Source: Wright 51).
• “Advertisers expose too many negative and potentially
harmful advertisements to children (*Source: Gunter, Oats, & Blades 81).

10. Side B
(Opposed government regulation)
General Parties
• Some advertising
agencies
• Some global economists
• Some parents
• Some television stations
Specific parties
• American Association of
Advertising Agencies
(AAAA)
• Child’s Play
Communications
• Children’s Food & Beverage
Advertising Initiative
• Hilary Fox (LatinWorks
Advertising Agency)

11. Side B
Issues and Arguments
• “It is the parents or guardians responsibility to monitor
what their children view” (*Source Toops 3).
• “Since we live in a capitalistic society, advertising is a
business that sustains a way of life and economic success
for the U.S.” (*Source: United States 4).
• People rely on it to work, businesses rely on it to sell their
products, and consumers rely on it to choose products
they identify with” (*Source: United States 9).

12. Analysis of Side A’s
Arguments
Values
• Health, family, self-esteem, fairness, & education
Obligations
• Protecting their children, pushing for more gvnt. regulation
Consequences
• Statistics will begin to show the decrease of child obesity,
the fall of child/adolescent violence, and less materialistic
habits

13. Analysis of Side B’s
Arguments
Values
• National & global economy, the right to freedom of speech,
currency, competition, fairness, and education
Obligations
• To distribute their informative ad campaigns to children & parents
to sell their goods and create awareness of their brand
Consequences
• The national economy will suffer tremendously as advertising is a
billion dollar industry

14. Solutions for influences
of Children Education
• Educating children about advertisements, what the effects
are, and the different ways we can change how current
messages are sent out.
• Both sides to merge together in effort to agree that
organizations like CARU will serve as a review
committee that will have experts from areas such as:
education, communication, child development, child
mental health, marketing and nutrition.

15. Disadvantages of
advertising
• Misleading claims
• Encourage Monopoly
• High prices
• Disconnection to business
• Misuse of advertising
• Creating unrequired desire
• Buying problems

16. Miscellaneous objection
• Inferior quality of goods are introduced in the market to deceive the
consumers.
• The new firm having limited resources cannot compete with a
already established big firms, with the help of advertising.
• A large firm can divert demand from one product to another with the
help of advertisement.
• Consumer's choice is greatly injured by the advertisement.
• As advertising is a comparatively new art so certain media of
advertisement is ineffective and inefficient than it could be.

17. THANK YOU