chapter

2-1

The Evolution of Advertising

Explains about the Principles of Free-Market Economics, Functions and Effects of Advertising.

McGraw-Hill/Irwin Contemporary Advertising, 11e

Copyright 2008 by the McGraw-Hill Companies, Inc. All rights reserved.

Chapter 2 Objectives
Explain the role of competition in free-market economics
Identify milestones in advertising history

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Discuss the functions advertising performs in a free market

Discuss how the role of advertising has changed

Explore advertisings past, present, and future impacts on society

Economics: Principles of Free-Market Economics

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Self-Interest

Complete Information

Many Buyers & Sellers

Absence of Externalities

Economics: Functions and Effects of Advertising

Identify & Differentiate Products (Branding)
Communicate Product Features and Availability Induce Customers to Try Products & Suggest Reuse Stimulate Product Distribution

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Increase Product Use

Build Value, Brand Preference, & Loyalty Reduce Overall Sales Cost

Economics: Evolution of Advertising

Preindustrial pre-1800 Industrializing 1800-1900 Industrial 1900-1980

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Postindustrial 1980-present

Economics: Evolution of Advertising

Stage Waggons ad from the preindustrial age

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Economics: Evolution of Advertising

Preindustrial pre-1800 Industrializing 1800-1900 Industrial 1900-1980

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Postindustrial 1980-present

Economics: Evolution of Advertising

Uneeda Biscuit ad from the industrializing age

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Economics: Evolution of Advertising

Preindustrial pre-1800 Industrializing 1800-1900 Industrial 1900-1980

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Postindustrial 1980-present

Economics: Evolution of Advertising

Weavers of Speech ad from the industrial age

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Economics: Evolution of Advertising

Preindustrial pre-1800 Industrializing 1800-1900 Industrial 1900-1980

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Postindustrial 1980-present

Economics: Evolution of Advertising

American Legacy Foundation ad from the postindustrial age

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[Insert American Legacy Foundation ad (p. 46) here Position: 1.55 vertical, 3 horiz. Size: 5.7 wide]

Economics: Top Global Marketers

[Insert Exhibit 2-4 (p. 49) here Position: 1.55 vertical, 0.5 horiz. Size: 8 wide]

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Society and Ethics: Effects of Advertising

Ethical advertising can . . . improve standards of living, inform of availability of products, imbue products with personality, help us make personal statements, &

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foster the free press & nonprofits.

Society and Ethics: Effects of Advertising

On the other hand, advertising can: be dangerous if misleading, promote unhealthy products, encourage conformity, glorify conspicuous consumption,

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or target vulnerable markets.