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Chapter 3 The Economic, Social, and Regulatory Aspects of Advertising Identifies and explains the economic, social,
Chapter 3
The Economic, Social, and
Regulatory Aspects of Advertising
Identifies and explains the
economic, social, ethical, and
legal issues advertisers must
consider
Objectives Classify the two main types of social criticisms of advertising Employ an economic model to
Objectives
Classify the two main
types of social criticisms
of advertising
Employ an economic
model to discuss
advertising’s effects
Explain the difference
between social
responsibility and ethics
Understand how
governments regulate
advertising here and
abroad
Discuss court rulings that
affect advertisers’
freedom of speech
Define the roles state
and local governments
play in ad regulation
Describe how federal
agencies regulate
advertising
Discuss self-regulation
The Many Controversies About Advertising make us buy things Does advertising . we don’t need? make
The Many Controversies About
Advertising
make us buy things
Does advertising
.
we don’t need?
make us more
affect product value?
materialistic?
discourage
affect us subliminally?
competition?
affect art?
influence consumer choice?
increase prices?
debase
language?
affect demand?
 

The Many Controversies About

Advertising

 
 
   

Economic

 

Societal

make us buy things

make us more

we don’t need?

materialistic?

affect product value?

affect art?

discourage

affect us subliminally?

competition?

influence consumer choice?

increase prices?

debase

language?

affect demand?

 
 

Economic Impact of Advertising

 
Economic Impact of Advertising
Economic Impact of Advertising
Economic Impact of Advertising value of products prices competition demand . . . Effects on

Economic Impact of Advertising

value of products

prices

competition

demand

.

. .

Effects on

Economic Impact of Advertising value of products prices competition demand . . . Effects on
Economic Impact of Advertising value of products prices competition demand . . . Effects on
Economic Impact of Advertising value of products prices competition demand . . . Effects on
Economic Impact of Advertising value of products prices competition demand . . . Effects on
Economic Impact of Advertising value of products prices competition demand . . . Effects on

Economic Impact of Advertising

Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
  • Consumer choice

Business cycle

Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle
Consumer choice Business cycle

demand

Primary demand Secondary demand

Economic Impact of Advertising Consumer choice Business cycle demand Primary demand Secondary demand . . .

.

. .

Effects on

Economic Impact of Advertising Consumer choice Business cycle demand Primary demand Secondary demand . . .
Abundance Principle: The Economic Impact of Advertising in Perspective Complete information Self-interest Abundance Principle
Abundance Principle: The Economic
Impact of Advertising in Perspective
Complete information
Self-interest
Abundance
Principle
Social Impact of Advertising Short-term manipulative arguments Deception in advertising Subliminal advertising myth
Social Impact of Advertising
Short-term manipulative
arguments
Deception in advertising
Subliminal advertising myth
 

Social Impact of Advertising

 
 
 

Long-term macro arguments

 
 

Proliferation of advertising

Offensive ads

Advertising’s social impact in

perspective

Use of stereotypes in ads Effect of advertising on

values

Social Responsibility and Advertising Ethics Ethical advertising Social responsibility Advertiser’s social responsibility Ethics of advertising
Social Responsibility and Advertising
Ethics
Ethical advertising
Social responsibility
Advertiser’s social responsibility
Ethics of advertising
How Government Regulates Advertising Federal Legislative Executive Judicial State Legislative Executive Judicial Local Legislative Executive Judicial
How Government Regulates Advertising
Federal
Legislative
Executive
Judicial
State
Legislative
Executive
Judicial
Local
Legislative
Executive
Judicial

Government Restraints on International

 

Advertisers

   
Government Restraints on International Advertisers Children Tobacco Premiums and product placements
 
Government Restraints on International Advertisers Children Tobacco Premiums and product placements

Children

Puffery

Tobacco

Tobacco
Tobacco
 

Premiums and product placements

 

Current Regulatory Issues Affecting

U.S. Advertisers

 
Virginia State Board of

Virginia State Board of

Pharmacy v. Virginia Citizens

Consumer Council

Freedom of commercial speech

Central Hudson Gas v. Public Service Commission

 

Current Regulatory Issues Affecting

 

U.S. Advertisers

   
Consumer
 
Consumer

Consumer

 
Current Regulatory Issues Affecting U.S. Advertisers Consumer Tobacco advertising Privacy Advertising to children

Tobacco

advertising

Privacy

 

Advertising to

children

 
Federal Regulation of Advertising in North America Federal Trade Commission (FTC) Defining deception Comparative advertising Defining
Federal Regulation of Advertising in
North America
Federal Trade Commission (FTC)
Defining deception
Comparative advertising
Defining unfairness
Investigating violations
Federal Regulation of Advertising in North America Federal Trade Commission (FTC) Defining deception Comparative advertising Defining
Federal Regulation of Advertising in
North America
Federal Trade Commission (FTC)
Defining deception
Comparative advertising
Defining unfairness
Investigating violations
Substantiation
Endorsements
Affirmative disclosure
Federal Regulation of Advertising in North America Federal Trade Commission (FTC) Defining deception Comparative advertising Defining
Federal Regulation of Advertising in
North America
Federal Trade Commission (FTC)
Defining deception
Comparative advertising
Defining unfairness
Investigating violations
Remedies for unfair or
deceptive advertising
Consent decree
Corrective advertising
Cease-and-desist
order
 

Federal Regulation of Advertising in

North America

 
 
 

Food and Drug Administration (FDA)

 

Nutritional

Labeling and

 
 

Federal Communications

 

Education Act

Commission (FCC)

 
 
 

Patent and Trademark Office and Library of Congress

 

Trademark

Copyright

U.S. Patent and Trademark Office

State and Local Regulation Regulation by state governments Regulation by local governments
State and Local Regulation
Regulation by
state
governments Regulation by
local
governments
Nongovernment Regulation Better Business Bureau National Advertising Review Council (NARC) NAD NARB Regulation by media Newspapers
Nongovernment Regulation
Better Business Bureau
National Advertising Review Council (NARC)
NAD
NARB
Regulation by media
Newspapers
Magazines
Radio
TV
Regulation by consumer groups
Self-regulation by advertisers
Self-regulation by agencies and associations
Agencies
AAAA
AAF
ANA