This document discusses various perspectives on the social, ethical, and economic aspects of advertising and promotion. It addresses arguments from critics that advertising creates unnecessary consumer wants and promotes materialism, as well as counter arguments from proponents that advertising provides useful information to consumers and encourages economic growth. The document also examines issues relating to ethics in advertising, advertising to children, offensive or deceptive advertising practices, and concerns about stereotyping. It explores views on the role of advertising in the economy and its effects on competition, prices, and consumer choice.

1. Evaluating the Social,
Ethical, and Economic
Aspects of Advertising
and Promotion

2. Advertising and Promotion Viewpoints
Creates consumer needs, wants
Promotes materialism, insecurity,
and greed
More propaganda than information
Provides information
Creates jobs
Encourages higher standard of living
Promotes competition
Proponent
arguments
Critic
arguments
Helps new firms enter a market

3. Ethics in Advertising and Promotion
Not all issues can
be regulated
A marketing or
promotion action
may be legal but
not ethical
Marketers must
decide the
appropriateness
of their actions
Ethics: Moral principles and values that
govern the actions and decisions of an
individual or group.

4. Promoting Responsible Drinking

5. Benetton’s “Death Row” Ad Offensive

6. Advertising and Untruthful or Deceptive
General mistrust of advertising
among consumers. Many do not
perceive ads as honest or believable
Abuses involving sales promotions
such as contests, sweepstakes,
premium offers
Unethical and/or deceptive practices
involving mail order, telemarketing
and other forms of direct marketing
Internet scams and abuses

7. Advertising as Offensive or in Bad Taste
Sexual
appeals
Objectionable
products
Shock ads

8. Test Your Knowledge
Advertisers are using shock advertising to:
A) Test their First Amendment rights
B) Get ads noticed in the midst of clutter
C) Make a statement against self-regulation
D) Test the ethics of the advertising industry
E) Act as advocacy ads for company management

9. Advertising and Children
Children's TV
Watching Behavior
Children ages 2-11
watch an average of
22 hours of TV per
week and see 30,000
commercials per year
80% of all advertising
targeted to children
falls in four
product categories:
Toys, cereal, candy &
fast food restaurants

10. Perspectives on Ads for Children
Advocates Argue That Children:
Marketers Argue Children:
Lack the knowledge and
skills to evaluate
advertising claims
Cannot differentiate
between programs and
commercials
Must learn
through socialization
Must acquire skills
needed to function in
the marketplace

11. Do TV Networks Have a Double Standard?

12. Social and Cultural Consequences
Does advertising
encourage materialism?
Does advertising make
people buy things
they don’t need?
Is advertising just
a reflection of society?

13. Does advertising affect Society?

14. Advertising and Stereotyping
Portrayal of women to
reflect their changing role
in society
Portrayal of
women as
sex objects
Ethnic
stereotyping/
representation
Gender
stereotyping
Sexual
orientation
Criticisms of
Advertising
With Regard to
Stereotyping

15. What is your opinion of this ad?
Is this woman portrayed
as a sex object?
Does this ad contain
cues that are sexually
suggestive?
Does this ad present an
image of sexual
submissiveness?

16. Dove Challenges the Norms of Beauty

17. Test Your Knowledge
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

18. Advertising Can Address Social Problems
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19. Do Advertisers Control the Media?
Advertising is the primary
source of revenue for
newspapers, magazines,
television and radio
Advertisers may exert control
over the media by biasing
editorial content, limiting
coverage of certain issues, or
influencing program content
Media’s dependence on
advertising for revenue makes
them vulnerable to control by
advertisers

20. Do Advertisers Control the Media?
They must report the news
fairly and accurately to retain
public confidence
Advertisers need the media
more than the media need
any one advertiser
Media maintain separation
between news and business
departments “The Wall”

21. U.S. Government Discourages Drug Use

22. Role of Advertising in the Economy
Makes consumers aware
of products and services
Provides consumers with
information to use to
make purchase decisions
Encourages consumption,
fosters economic growth

23. Economic Impact of Advertising
Effects on Consumer Choice
• Differentiation
• Brand Loyalty
Effects on Product Costs and Prices
• Advertising as an expense that
increases the cost of products
• Increased differentiation
Effects on Competition
• Barriers to entry
• Economies of scale

24. Test Your Knowledge
From an economic perspective, advertising might
lower the cost 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

25. The Economic Value of Advertising
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26. Summarizing Economic Effects
Change consumers’ tastes
Reduces competition
Lowers sensitivity to price
Builds brand loyalty
Advertising
Equals
Market
Power
Leads to higher prices
Leads to fewer choices
Results in higher profits

27. Summarizing Economic Effects
Provides useful information
Pressure for lower prices
Increases price sensitivity
Increases competition
Advertising
Equals
Information
Forces inefficient firms out
Pressure for high quality

28. Do you agree with Leo Burnett?
“It must be said that without
advertising we would have a far
different nation, and one that
would be much the poorer-not
merely in material commodities,
but in the life of the spirit.”
Excerpters is from a speech given by Leo Burnett on the American
Association or Advertising Agencies’ 50th anniversary, April 20,1967