CHAPTER 22 EVALUATING THE SOCIAL, ETHICAL, AND ECONOMIC ASPECTS OF ADVERTISING

Chapter Overview
Advertising is a very powerful and influential force in our society, and this text would not be complete without considering the various perspectives and criticisms regarding its social and economic effects. The first half of the chapter focuses on the various criticisms of advertising from an ethical and societal perspective. Attention is then given to appraising the effects of advertising on the economy including its effect on consumer choice, competition, and product costs and prices. Perspectives regarding the economic effects of advertising are summarized by considering two principal models or schools of thought: the Advertising = Market Power and Advertising = Information perspectives. It should be noted that the primary focus in this chapter is on social and economic aspects of advertising, as this is the promotional mix variable that is the subject of the most concern, controversy, and regulation.

Learning Objectives
1. 2. 3. To consider various perspectives concerning the social, ethical and economic aspects of advertising and promotion. To examine and evaluate the social criticisms of advertising. To examine the economic role of advertising and its effects on consumer choice, competition, and product costs and prices.

Chapter and Lecture Outline

I. INTRODUCTION Because of its high visibility and pervasiveness, along with its persuasive character, advertising has been the subject of a great deal of controversy and criticism. Various parties and scholars have attacked advertising for a variety of reasons including its excessiveness, the way it influences society, the methods used by advertisers, its supposed exploitation of consumers, and its effect on our economic system. The role of advertising in society is a controversial one and a discussion of the area would not be complete without considering the various criticisms regarding its social and economic effects as well as some of the responses to these charges. II. ADVERTISING AND PROMOTION ETHICS

While many laws and regulations determine what advertisers can and cannot do, not every issue is covered by a rule or guideline. In many situations, advertisers must make decisions regarding appropriate and responsible actions based on ethical considerations rather than what is legal or within industry guidelines. Ethics are moral principles or values that govern the actions and decisions or an individual or group. While a particular action or practice may be within the law, this does not necessarily mean it is ethical. Ethical issues must be considered in making integrated marketing communication decisions as a lapse in ethical standards or judgment can result in actions that are highly visible and can be damaging to a companys reputation and image. Advertising is subject to considerable criticism because it is judged by a variety of groups with different norms, values, and ethical standards. Arguments on both sides of controversial ethical and social issues
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will be presented in this chapter. However, students may have to draw their own conclusions as to which position is right or wrong. Professor Notes

III.

SOCIAL AND ETHICAL CRITICISMS OF ADVERTISING

Much of the controversy over advertising stems from the ways it is used by many companies as a selling tool and because of the impact advertising has on societys tastes, values, and lifestyles. There are a number of criticisms of specific techniques used by advertisers as well as charges against its impact on society in general. A. Advertising as Untruthful or DeceptiveOne of the major attacks against advertising is that many ads are misleading or untruthful and end up deceiving consumers. The issue of what constitutes deception is, as we discussed in Chapter 21, a very difficult one. However, a concern of many critics is the extent to which advertisers are deliberately untruthful or misleading in their advertising. Most large companies are unlikely to risk their reputation and image or subject themselves to prosecution by various regulatory groups by making overtly false or misleading advertising claims. Many of the companies involved in outright fraud or deception are often smaller, local companies or those using direct mail to advertise their products and services. However, national advertisers will often test the limits of various industry and governmental rules and regulations and make claims that may give their brands an advantage in highly competitive markets. Critics of advertising often question whether consumers are receiving proper information to make an informed choice since advertisers usually only present information that is favorable to their brands. Many critics feel that advertising should be primarily informative in nature and not be permitted to use puffery or embellished messages. Others argue that advertisers should have the right to present the most favorable case for their products and services. They note that most consumers can protect themselves from being persuaded against their will and that various regulatory bodies and mechanisms are sufficient to keep advertisers from deceiving or misleading consumers. Advertising as Offensive or in Bad TasteAnother common criticism of advertising, particularly by consumers, is that ads are offensive, tasteless, irritating, boring obnoxious, and so on. 1. Sources of distasteconsumers can be offended or irritated by advertising in a number of ways. Some are offended that a product or service is even advertised at all (such as contraceptives or personal hygiene products). A research study of prime time commercials found a strong product class effect with respect to the type of ads consumers perceived as distasteful or irritating. Another way advertising can offend consumers is by the type of appeal or the manner of presentation. Ads that use fear appeals or exploit consumer anxieties, such as fear of social rejection, are often the target of criticism. 2. Sexual appealsthe type of advertising appeals that have received the most criticism for being offensive or in poor taste are those using sexual appeals and/or nudity. These techniques are often used as ways of gaining consumers attention and in some cases may not

B.

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even be appropriate to the product being advertised. Even if the sexual appeal is appropriate for the product, many people may still be offended. Advertisers who use nudity and sexual suggestiveness argue that their ads are not offensive and are consistent with contemporary values and lifestyles that are more accepting of this type of advertising. Another common criticism of sexual appeals is that they can be demeaning to women (and men as well) by depicting them as sex objects. Many advertisers are relying on shock advertising by using nudity, suggestiveness, and/or other startling images to gain consumers attention and shock them. Advertisers also complain about the double standard that exists for TV programs and commercials, noting that even the most suggestive commercials are bland compared with what is shown in many television programs. The networks argue, however, that they have to scrutinize commercials more carefully because they encourage people to imitate behaviors, whereas programs are merely meant to entertain. Because of the clutter problem, it is likely that advertisers will continue to use sexual appeals to gain the attention of consumers. C. Advertising and ChildrenOne of the most controversial topics advertisers must deal with is the issue of advertising to children. Sources have estimated that children between the ages of 2 and 11 watch an average of 21.5 hours of television a week and may see between 22,000 and 25,000 commercials a year. Concern has also been expressed over marketers use of other promotional vehicles and techniques such as radio ads, point-of-purchase displays, premium offers, and the use of commercial characters as the basis for television shows. Arguments can be presented on both sides of this controversial issue. First, arguments against advertising to children include: Children, especially young ones, are vulnerable to advertising because they lack the necessary experience and knowledge to understand and evaluate the purpose of persuasive advertising appeals. Children cannot differentiate between commercials and television programs, do not perceive the selling intent of commercials, and cannot distinguish between fantasy and reality. Children must be able to understand how advertising works and develop a skeptical or critical attitude to defend themselves against it. Advertising to children is inherently unfair or deceptive.

Arguments in favor of advertising to children: Advertising is a part of life and children must learn to deal with it as part of the consumer socialization process of acquiring the skills needed to function in the marketplace. Studies have shown that children are capable of perceiving persuasive intent and the inability to perceive such intent does not necessarily lead to incorrect beliefs about a product.

There is no evidence of a relationship between television advertising of sugared foods and tooth decay.

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Parents should be involved in helping children interpret advertising and can refuse to purchase products they feel are undesirable for their children. Advertisers have a right under the First Amendment to communicate with consumers who make up their primary target audience

Concern over advertising to children remains an important issue for consumer groups such as the Center for Science in the Public Interest and Commercial Alert. Advertising to children is likely to remain a controversial issue to which advertisers must remain sensitive. As discussed in Ethical Perspective 22-2, there is also a great deal of concern over the efforts of markets to reach children through marketing agreements with schools and the commercialization of the classroom. Professor Notes

D.

Social and Cultural ConsequencesConcern is often expressed over the impact of advertising on society, particularly with respect to its influence on values and lifestyles. Opinions regarding the value of advertising as an important social influence agent are often very negative and it is criticized for a number of reasons. 1. Advertising Encourages Materialismmany critics claim that advertising has an adverse effect on consumer values by encouraging materialism, which refers to a preoccupation with material things rather than intellectual or spiritual concerns. Advertising can create materialism in many ways such as: creating needs rather than showing how a product or service fulfills them surrounding consumers with the images of the good life and suggesting that acquisition of material possessions leads to contentment and happiness and adds to the joy of living suggesting that material possessions are symbols of status, success, and accomplishment and/or will lead to greater social acceptance, popularity, sexual appeal, and so on.

The criticism of advertising on the basis of creating materialism assumes that materialism is undesirable and done at the expense of nonmaterialistic goals. Even if one assumes that materialism is undesirable, there is still the issue of whether advertising is responsible for creating and encouraging these values. This brings up the classic argument as to whether advertising is a major force contributing to societys values, such as materialism, or whether advertising merely reflects or mirrors the values of society and does not mold or shape them. 2. Advertising makes people buy things they do not needanother common criticism of advertising is that it has the power to manipulate consumers and make them buy things they do not need. Persuasive advertising which plays on consumers emotions, anxieties, and social and psychological needs and desires is viewed as undesirable. This type of advertising is seen as going beyond basic needs or necessities in appeals to sell products and services.

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Only informational advertising, which reports factual, functional information such as price performance, and other objective criteria, is viewed as acceptable and desirable. Defenders of advertising offer a number of rebuttals to these criticisms. They argue that a substantial amount of advertising is essentially informational in nature and that it is difficult to separate desirable, informational advertising from undesirable, persuasive advertising. They also note that most lower-level needs in our society are satisfied and it is natural for consumers to be concerned with higher order needs, and for advertising to appeal to these wants and desires. They also note that advertising cannot make consumers do things against their will and they can defend themselves against advertising. Consumers do have a choice and can ignore ads for products and services that they do not really need. 3. Advertising and stereotypingadvertising is often accused of creating and perpetuating stereotypes thorough its portrayal of certain groups including women and ethnic minorities. a. WomenAdvertising has received a great deal of criticism for its stereotyping of women. Critics charge that advertising generally depicts women as being preoccupied with beauty, household duties, and/or motherhood or shows them as decorative objects or sexually provocative figures. Critics also argue that advertisers have failed to acknowledge the changing role of women in society. While sexism and stereotyping of women still exist, advertisings portrayal of women is improving in many areas as many ads recognize the changing role of women in our society and the importance of portraying them realistically. b. African Americans/HispanicsAfrican Americans and Hispanics are two ethnic groups that have also been the target of stereotyping in advertising. For many years advertisers ignored blacks and Hispanics as identifiable subcultures and viable markets and ads were either not targeted to them and the use of black or Hispanic models and spokespersons was very limited. In recent years, however, not only has the use of blacks and Hispanics in advertising increased, but so too has the depiction of their social and role status. Another trend is that the more ads are likely to be racially integrated such as the Ikea ad shown in Exhibit 22-13. c. Other groupsSome advertisers have been criticized for portraying senior citizens as feeble, foolish, inept, or in desperate need of help. It has become increasingly difficult for advertisers not to offend some segment of the public. However, advertisers must be sensitive to the portrayal of specific types of people in their ads. One area where changes are occurring is in advertising targeted to gay consumers. Many major advertisers have begun running ads with gay themes although they are generally confined to magazines and newspapers targeting the gay market. Exhibit 22-15 shows an ad for the Gay Financial Network, which became the first gay-oriented company to advertise in major U.S. news and entertainment publications. Professor Notes

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4. Advertising and the mediathe fact that advertising plays such an important role in financing the media has led to concern on the part of many that advertisers can influence or even control the media. a. Arguments supporting advertiser control of the media: The medias dependence on advertising revenue makes them susceptible to various forms of influence such as exertion of control over editorial content, biasing editorial opinions, limiting coverage of controversial topics or stories, and influencing the program content of television. Newspapers and magazines receive 70 percent of their total revenue from advertising, whereas commercial television and radio derive nearly all of their income from advertising. Thus, the media may be reluctant to carry stories detrimental to companies who purchase large amounts of advertising time or space. There have been several situations where advertisers have brought pressure to the media and influenced content or programming decisions. Some of these situations have been in response to pressure or the threat of boycotts from consumer groups opposed to program content.

b. Arguments against advertiser control: It is in the best self-interest of the media that advertisers not influence them too much. To retain public confidence, they must report the news fairly and accurately and not be perceived as biased or attempting to avoid controversial issues. Media executives point to the vast amount of topics they cover and the investigative reporting they do as evidence of their objectivity. It can be argued that advertisers need the media more than the media need any individual advertiser, particularly when the medium reaches a large audience or does a good job of reaching a specific market segment.

The media in the U.S. are basically supported by advertising and allow consumers to enjoy them for a fraction of what it would cost without advertising. Although not perfect, a system of advertising-supported media provides us with the best option for receiving information and entertainment and is probably more desirable than the alternatives of paying higher subscription costs, pay-per-view, or having government-supported media. E. Summarizing the Social Effects of AdvertisingNegative opinions regarding advertising have been around just as long as the field itself, and it is very unlikely that they will ever disappear. It is important that the advertising industry remains cognizant of, and continually addresses the various issues and concerns over, the effects of advertising on society. Advertising is a very powerful institution, but it will only remain so as long as consumers have faith and trust in the ads they see and hear every day. It is important to note that advertising and other integrated marketing communication tools, such as direct marketing and public relations, are also used to promote worthy causes and to deal with problems facing society such as drunk driving, drug abuse, and the AIDS crisis.

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Professors Notes

IV.

ECONOMIC EFFECTS OF ADVERTISING

Considerable attention has been given to examining the economic impact of advertising. Advertising plays an important role in a free-market system such as that found in the US and other countries by making consumers aware of products and services and providing them with information that can be used to make purchase decisions. However, advertisings economic role goes beyond this basic function of information provision, as it is a very powerful force that can affect the functioning of an entire economic system. It is viewed by many as a positive force that encourages consumption and fosters economic growth. On the other hand, many critics of advertising view it as having detrimental economic effects, by not only failing to perform its basic function of information provision adequately, but also adding to the costs of products and services and discouraging competition. A number of major issues regarding the economic effects of advertising are considered. A. Effects on Consumer ChoiceSome critics argue that advertising has a negative effect on consumer choice, as large advertisers use their power to limit our options to a few well-advertised brands. Economists argue that advertising is used by large national advertisers to achieve differentiation and brand loyalty, usually at the expense of smaller brands. These large companies often end up charging a higher price and are able to achieve a more dominant position in the market than smaller companies that cannot compete against their large advertising budgets. When this occurs, advertising restricts choices and becomes a substitute for competition based on price or product quality. Defenders of advertising argue that it does not create brand monopolies and reduce the opportunities for new brand or product introduction. The opportunity to advertise gives companies the incentive to develop new brands and improve existing ones. Advertising is instrumental in helping companies inform consumers about their new products. Effects on CompetitionOne of the most common criticisms economists have with advertising concerns its effect on competition. They argue that large firms with huge advertising budgets create a barrier to entry, which makes it difficult for other firms to enter the market. This in turn leads to less competition and higher prices. Large advertisers enjoy certain competitive advantages such as economies of scale in advertising, particularly with respect to factors such as media costs. While advertising may have an anticompetitive effect on a market, there is no clear evidence that advertising alone reduces competition, creates barriers to entry and thus increases market concentration. Defenders of advertising note that it is unrealistic to attribute a firms market dominance solely to advertising as there are a number of other factors to consider such as price, product quality, distribution effectiveness, production efficiencies, and competitive strategies. While market entry against large established competitors is difficult, companies with a quality product offered at a reasonable price find that advertising actually facilitates their market entry by make it possible to communicate with consumers. Effects on Product Costs and PricesA major area of debate among economists, advertisers, consumer advocates and policymakers concerns the effects of advertising on product costs and prices. Critics offer several reasons why advertising results in higher prices:
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B.

C.

The large sums of money spent on advertising and promotion are an expense that is passed on to consumers in the form of higher prices Advertising increases product differentiation and adds to the perceived value of the product in the mind of the consumer, which allows advertised brands to command premium prices There are often large differences in prices between national brands and private label brands that are physically and functionally similar, which is evidence of the added value created by advertising. Consumers pay higher prices for this added value.

Proponents of advertising offer several counter-arguments to the claim that advertising increases prices: Price insensitivity and brand loyalty can be created by a number of nonadvertising factors such as product quality, packaging, favorable usage experience and market position Advertising can actually result in lower costs by helping firms achieve economies of scale in product and distribution and helping stimulate demand among mass markets Advertising can make a market more competitive, which often leads to greater price competition. Several studies have found lower consumer prices in markets permitting advertising for a product versus those that did not. D. Summarizing Economic EffectsEconomists perspectives regarding the effects of advertising can be divided into two principal models or schools of thought, each of which makes different assumptions regarding the influence of advertising on the economy: 1. Advertising = Market PowerThis model reflects traditional economic thinking and views advertising as a way of changing consumers tastes, lowering their sensitivity to price, and building brand loyalty among buyers of advertised brands. This results in higher profits and market power for the large advertiser, reduces competition, and leads to higher prices and fewer choices for consumers. Proponents of this viewpoint are generally negative in their assumptions regarding the economic impact of advertising. 2. Advertising = InformationThis model takes a more positive viewpoint of advertisings economic effects, as it views advertising as providing consumers with useful information, increasing their price sensitivity, which moves them toward lower-priced products, and increasing competition in the market. Advertising is viewed as a means of communicating with consumers and telling them about a product and its major features and attributes. More informed consumers put pressures on firms to lower prices and improve quality. Proponents of this model assume that the economic effects of advertising are favorable and view it as contributing to efficient and competitive markets. These two perspectives take very divergent views regarding the economic impact of advertising as shown in Figure 22-3. It is unlikely that the debate over the economic effects of advertising will be resolved soon. Many economists will continue to take a negative view of advertising and its effects on the functioning of the economy, while advertisers will continue to view it as an efficient way for companies to communicate with their customers and an essential component of our economic system. Professor Notes
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Teaching Suggestion
In this final chapter we evaluate advertising from a societal, ethical and economic perspective. Advertising is a very powerful institution in this country and has been the target of considerable criticism regarding its social and economic impact. Much of the criticism of advertising concerns the specific techniques and methods used by advertisers, as well as advertisings effect on societal values, tastes, lifestyles and behavior. We examine these various criticisms of advertising along with the responses of advertisers to these attacks. It is important to recognize that there are usually two sides to each of these issues and we try to recognize the arguments of the critics as well as of the advertising industry. For example, one of the classic debates over the social impact of advertising concerns the issue of whether advertising is responsible for creating undesirable consumer values, such as materialism, or whether advertising merely reflects or mirrors the values of society rather than molding or shaping them. Arguments can be made on both sides of this issue and it makes an interesting topic for student discussion. A very good exchange of arguments regarding this issue can be found in articles by Richard W. Pollay, The Distorted Mirror: Reflections on the Unintended Consequences of Advertising, Journal of Marketing, April 1986 and Morris B. Holbrook, Mirror, Mirror on the Wall, Whats Unfair in the Reflections on Advertising, Journal of Marketing, July 1987 and a rejoinder by Pollay, On the Value of Reflections in The Distorted Mirror, which also appeared in the July 1987 issue of JM. Stephen Foxs book, The Mirror Makers: A History of American Advertising and Its Creators (New York: Morrow 1984) also provides an excellent discussion of arguments concerning the impact of advertising on society. Numerous controversial issues regarding advertising are raised in this chapter and can be used as a basis for discussion or debate. These include the issues of targeting promotional programs to schools; advertising to children; advertisings portrayal of women as well as various ethnic groups; the ability of large advertisers to exert influence on, or even control over, the media; and the economic impact of advertising. You may want to have your students visit web sites or advertising watchdog organizations such as Commercial Alert (www.commercialalert.org) to learn more about how this group works to keep advertising and other commercial activities within their proper sphere.

Answers to Discussion Questions

1. The opening vignette discusses how branded content and advertainment are the wave of the future. Discuss what is meant by these two concepts and why they are becoming popular among marketers. Why are many consumer watchdog groups such as Commercial Alert concerned over this trend? Branded content refers to the practice of creating various forms of entertainment into which brands can be integrated such as music, movies, short films, and videos. The practice goes beyond traditional product placement as it seeks to make brand a more integral part of the entertainment. Advertainment refers to the concept of marketers producing advertising messages that are designed more to entertain than deliver a selling messages. The short films that companies such as BMW and Skyy Spirits show on their web sites are examples of advertainment. These concepts are becoming popular among marketers for several reasons. Many companies feel that traditional TV commercials are losing their effectiveness and are looking for new ways to reach consumers. They are also realizing that with advances in technology such as TiVo and Replay TV personal video recorders,

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audiences will be able to skip over ads and they must make find more entertaining genres of advertising in order to capture and hold the attention of consumers. Groups such as Commercial Alert are concerned over the use of branded content as they feel that movies and television shows are being corrupted by commercialization that goes beyond mere product placement and now includes the altering of scripts to integrated advertising and branding messages into films and television shows. Consumer groups are also concerned over the impact that advertainment and branded content will have on children who cannot identify or properly process advertising messages that are embedded into movies and TV shows. Critics also argue that consumers should have places in their lives that are free from advertising and marketing messages rather than being constantly persuaded by marketers. 2. Discuss the role of ethics in advertising and promotion. How do ethical considerations differ from legal considerations in developing an integrated marketing communications program? While many laws and regulations determine what advertisers can and cannot do, not every issue is covered by a rule or guideline. Ethics involve the use of moral principles and values in evaluating a decision or action. Ethical considerations are very important in advertising as the use of a particular type of ad or the targeting of a specific group may be legal but may not be ethical. Ethical issues must be considered in making advertising and promotion decisions as a lapse in ethical standards or judgment can result in actions that are highly visible and often very damaging to a companys image or reputation. Ethical considerations differ from legal considerations in that ethics involves individual or group moral principles or values and can be very subjective while legal considerations are generally much more objective. Legal considerations can be enforced through the regulatory process while ethical problems can only be remedied by voluntary actions of those who are responsible for the unethical actions. 3. What is meant by shock advertising? Evaluate the arguments for and against the use of shock advertising by marketers. Shock advertising refers to ads in which companies use nudity, sexual suggestiveness, violence, or some other startling images to capture consumers interest and intention. One of the primary goals of the shock-vertising used by companies is to break through the clutter and ensure that consumers notice their advertising. Most of these ads use various amounts of nudity and/or sexually provocative images that will capture the attention and imagination of readers of their magazines or catalogs. These companies feel that it is necessary to push the envelope and take some risks with their ads. They are very aware that their ads shock and even offend may people, but they feel will argue that most of the younger consumers they are targeting have no problems with the ads. Moreover, the strong visuals used in the ads are seen as a way of creating images for their brands as well as attracting attention to them. Critics of these ads argue that they are offensive and in poor taste. They are particularly concerned with the fact that many of these ads and catalogs are moving beyond various forms of nudity and using themes such as sadomasochism, bestiality, compromising poses, and pornography stars in their messages. It is very likely that these ads are effective in breaking through the clutter and capturing the attention of readers. However, it may be difficult for these companies to develop a strong brand image and sustainable competitive advantage using this type of advertising. Consumers may eventually become bored with these images over time and the brands they will lose their appeal. 4. Ethical Perspective 22-1 discusses the clearance process used by the standards and practices departments of the four major television networks. Evaluate the effectiveness of this process from the perspective of the networks as well as the advertisers.

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The standards and practices departments of the four major television networks play a very important role in policing the content of TV commercials and determining what is approved for airing. A major concern of the censors is the accuracy and truthfulness of the claims made in commercials. However, they the network censors also concern themselves with the tastefulness of the ads they review. Ad are reviewed very carefully with respect to areas such as sex, violence, adult language, morbid humor, unsafe or antisocial behavior and controversial political opinions. The networks feel that this selfregulatory process is an effective way to ensure that the ads that are shown on their programs are truthful, tasteful and appropriate for the viewing audience. In some cases, ads considered inappropriate for children or teenagers, may be approved for shows aired later in the evening when the audience consists primarily of adults. Advertisers argue that the clearance process used by the networks is sometimes adversarial in nature and can be arbitrary and unfair. They are often frustrated by the lack of consistency in the decisions across the major networks, as commercials accepted by reviewers at one network are not always accepted by the other networks. Advertisers also complain about the double standard that exists for commercials versus TV programs, noting that even the most suggestive commercials are bland compared with the sex and violence that appears in many television programs. They argue that the networks should be more willing to accept commercials that use techniques such as partial nudity or suggestiveness, given what appears in the programs. The networks argue that they have to scrutinize commercials more carefully because advertising encourages people to imitate behaviors, whereas programs are merely meant to entertain. Network executives also note the complaints of parents who are concerned about their children seeing certain ads, since they cannot always be there to change the channel or turn off the set when a suggestive or provocative ad comes on TV. 5. Ethical Perspective 22-2 discusses how many companies are targeting their promotional programs o schools as a way of reaching the youth market. Do you think schools should allow companies to reach students through programs such as Channel One or by granting pouring rights to soft-drink bottlers? Evaluate the arguments for and against these programs. The opening of school doors to various advertising and promotional programs by companies such as Channel One or ZapMe Corp. or the granting of pouring rights to soft drink companies has created a major controversy. Supporters of these programs argue that the demand technology in classrooms is greater than ever with the emergence of the Internet. However, many schools do not have the funds available to upgrade their computers, get free TV sets for classroom, satellite hookups, and provide students with Internet access. They see these programs as a way of ensuring that students will have access to critical learning tools, particularly in cash-strapped public schools. Opponents of these programs are opposed to providing companies access to students in a place where they are supposed to be learning English and math rather than seeing ads and other forms of promotion for companies products. They argue that these programs are not dedicated to improving education but rather are about providing marketers with yet another way of reaching the lucrative teen market. They also fear that the commercialization of the nations classrooms will continue as more companies find creative ways to provide products and services to schools in exchange for the opportunity to market to this captive audience. The granting of pouring rights to soft drink companies has been criticized because of the lack of nutritional value of soft drinks and concerns over youth obesity. The soft drink companies offer alternative beverages such as fruit juices, juice drinks and bottled water to alleviate this concern. However, critics still argue that our schools are not a proper venue for any types of commercial messages and that school administrators should not have to strike marketing deals with companies to fund education programs. This is a very controversial issue with valid arguments on each side and can be used as the basis for an interesting class discussion.

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6. A common criticism of advertising is that it stereotypes women. Discuss the ways this might occur. Do you think the Airwalk ad shown in Exhibit 22-6 is suggestive and symbolizes sexual submission? Advertising has received a tremendous amount of criticism for stereotyping women. Critics argue that advertising generally depicts women as being preoccupied with beauty, household duties and/or motherhood and has failed to acknowledge the changing role of women in society. Another concern is that many ads portray women as decorative objects or sexually provocative figures. The Airwalk ad shown in Exhibit 22-6 has been criticized by some womens groups who argue that it shows a submissive and sexually available woman. A critic argued that the ads contain a number of symbolic cues that are sexually suggestive and combine to reinforce an image of the womans sexual submission to the man. Some of these cues include the heart shaped box indicating love; the color red which symbolizes romantic passion; the heavy lipstick which is sexually suggestive as is the tight slinky red dress. A more detailed interpretation of the ad can be found in an article by Aaron C. Ahuvia in the Journal of Advertising, Spring 1998 on p. 150. You might want to ask students their opinions of the ad and then read them the interpretation to them. 7. Discuss the arguments for and against advertiser influence and/or control over the media. How might a newspaper or magazine avoid being influenced by advertisers? There are a number of reasons why critics argue that advertisers have influence over the media and that the advertising and financial side of the publishing business controls or influences the editorial content of magazines and newspapers. The main factor in support of this position is that the media are either totally or highly dependent upon advertising revenue. Television and radio networks and stations receive nearly all their revenue from advertising, while newspapers and magazines receive nearly 70 percent of their total revenue from the ads they sell. Smaller, less financially secure media are the most prone to influence and pressure from advertisers, particularly companies who account for a large amount of the mediums advertising revenue. Thus, they may be reluctant to print an unfavorable story about a company or industry that accounts for a large percentage of their advertising revenue. There is concern that some magazines and newspapers may be lowering The Wall which separates their news and business departments in their search for new ways to increase readership and revenue as competition from the Internet and other media increases and their audience or circulation numbers decline. The lowering of the Wall has serious implications for the media as journalists argue there must be not be any pressure from the advertising and financial side of the business so they are free to cover any story and be objective in their reporting. They argue that decisions on the writing, editing, and publishing of stories should be made on their journalistic merit rather than whether they will attract or repel advertisers. There are several arguments against advertisers ability to control the editorial content of media such as television stations, magazines and newspapers. First, it is in the best self-interest of the media that they not be influenced too much by advertisers. To retain public confidence, they must report the news fairly and accurately and not be perceived as biased or attempting to avoid controversial issues. Many TV stations, magazines and newspapers also note the vast amount of topics they cover and the investigative reporting they often do on companies as evidence of their objectivity. They also note that the advertiser needs the media more than they need an individual advertiser, particularly when the medium has a large audience or reaches a specific market segment. Many television stations, newspapers and magazines have a very broad base of advertising support and can afford to lose an advertiser who might attempt to exert too much influence or control over them. 8. IMC Perspective 22-3 discusses the advertising campaign developed by the U.S. Office of National Drug Control Policy linking drug use with the support of terrorism. Do you think these ads are an effective way of dealing with the drug problem? Why or why not?

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The goal of the drugs-and-terror campaign developed for the campaign sponsored by the ONDCP was to link drug use with the support of terrorism by suggesting that illegal drug sales are a major source of money for terrorists. The ads implied that the weapons and other supplies used by terrorists were paid for by the money they get from drug sales. The idea behind the campaign was that people would be less likely to use illegal drugs if they understood that by using them they might be supporting terrorism. The campaign was launched five months after the September 11, 2001 terrorist attacks and was designed to use the publics outrage over the terrorist attack as part of the effort to fight drug abuse in the United States. A second part of the campaign was designed to refute the notion that illegal drug use is a victimless crime and shifted the focus from terrorism to terror with ads suggesting that the purchase of drugs supported drug-cartel attacks on innocent people. The campaign was very controversial and was criticized by many different groups. Some were critical of the governments effort to draw a connection between drug money and terrorism, arguing that it was not fair to blame nonviolent drug users for the actions of terrorists or drug cartels. Other groups such as the National Organization for Marijuana Legalization argued that the campaign created a false impression that terrorism is caused by drugs rather than the illegality of drugs. Groups such as NORML argued legalization of some drugs is the answer to the problem rather than trying to discourage drug use. The Partnership for a Drug-Free America was also opposed to the campaign, as it did not agree with the strategy behind the ads. The Partnership feels that the best way to deal with the problem is to promote drug resistance techniques, positive alternatives to drug use and parental involvement. The ONDCP decided to stop running the controversial campaign in May of 2003. The reason given for the decision was that the campaign put the ONDCP in a battle with the Partnership for a Drug Free America since the ads were produced outside of the Partnership by the drug offices agency, Ogilvy & Mather. The ONDCP wanted to present a more united front with the Partnership to Congress which has to vote to extend the anti-drug campaign. The drug office announced that it would be directing more of its money toward youth oriented media and focus its effort on halting drug use among kids rather than trying to deter them from starting to use drugs. 9. Discuss how advertising can affect product costs and the prices consumers pay for products and services. Arguments that advertising increases the costs of products and services include the fact that the large sums of money spent on advertising constitute a business expense that must be covered and thus is passed on to consumers in the form of higher prices. Advertising can also result in higher prices by increasing product differentiation and adding to the perceived value of the product in the mind of the consumer. Brands that have achieved high levels of differentiation or perceived value can command a premium price. Proponents of advertising argue that it can actually result in lower costs of products and services by helping firms achieve economies of scale in production, distribution and marketing by stimulating demand among mass markets. Advertising can also lead to lower prices by making a market more competitive, which usually leads to greater price competition. Studies of several industries have shown that advertising results in lower consumer prices. Some critics argue that advertising has a negative impact on consumer choice, as large advertisers use their power to limit consumers options to a few heavily advertised brands. They argue that advertising is used to achieve differentiation and brand loyalty, which occurs at the expense of smaller brands. Defenders of advertising argue that it does not create brand monopolies and reduce opportunities for new companies and/or brands to enter the market. The opportunity to advertise gives companies the incentive to introduce new brands and improve existing ones. Advertising is viewed as playing a critical role in informing consumers about new products and making it possible for new companies to enter the market. Thus, it helps expand consumer choice rather than limiting it.

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10. Discuss the two major perspectives of the economic impact of advertising: advertising = market power and advertising = information. The Advertising = Market Power perspective reflects traditional economic thinking and views advertising as a way of changing consumers tastes, lowering their sensitivity to price, and building brand loyalty among buyers of advertised brands. This results in higher profits and market power for large advertisers, reduces competition in the market, and leads to higher prices and fewer choice alternatives for consumers. High prices and excessive profits give advertisers even more incentive to advertise their products and output is restricted compared with conditions of perfect competition. Proponents of this model are generally negative in their perspective regarding the economic impact of advertising. The Advertising = Information perspective views advertising as providing consumers with useful information, increasing their price sensitivity which moves them toward lower-priced products, and increasing competition in the market. Advertising is viewed as a means of communicating with consumers and telling them about a product and its major features and benefits. More informed and knowledgeable consumers will put pressure on companies to provide high quality products at lower prices, and efficient firms remain in the market, whereas inefficient firms leave as new entrants appear. Proponents of this model assume that the economic effects of advertising are favorable and view it as contributing to more efficient and competitive markets.

Additional Discussion Questions (not in text)

11. Evaluate the arguments for and against advertising to children. Do you feel restrictions are needed for advertising and other forms of promotion targeted to children? There are numerous arguments that are offered by those individuals or groups opposed to advertising to children. They argue that children, especially young ones, are vulnerable to advertising because they lack the necessary experience and knowledge to understand and evaluate critically the purpose of persuasive advertising appeals. They also argue that many preschool children cannot differentiate between commercials and television programs and do not perceive the persuasive, selling intent of commercials, and cannot distinguish between reality and fantasy. It has also been argued that advertising directed toward children creates materialism, stifles creativity, creates conflict between the parent and child, and hinders the development of moral and ethical values. In addition to advertising, marketers use various other forms of promotion to target children such as premium offers and entertaining web sites on the Internet. As discussed in Chapter 21, the self-regulatory groups as well as government agencies have passed guidelines and legislation to ensure that control the use of these promotional tools in marketing toward children. Numerous arguments can be offered in favor of advertising to children. It can be argued that advertising is a part of life and children must learn to deal with it as part of the consumer socialization process. Advertising serves as an information source and teaches children the consumption skills necessary to function in the marketplace. It is also argued that it is the responsibility of the parents to help children interpret advertising, to monitor the shows their children watch and ultimately to decide whether or not to purchase a particular product for their children. It is also argued that restrictions on advertising to children would violate advertisers freedom of speech, which is guaranteed under the First Amendment. These arguments for and against advertising to children can be used as a basis for evaluating the proposals put forth by the FTC to restrict advertising to children. A major consideration in evaluating the FTC proposal was the First Amendment rights of advertisers to communicate with consumers in their target audience. It can also be argued that children are protected from negative influences of television commercials by network censors and industry self-regulatory groups.

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12. With which position do you agree? Advertising determines American consumers tastes and values and is responsible for creating a materialistic society. Advertising is a reflection of society and mirrors it tastes and values This question presents the classic dilemma of whether advertising is responsible for creating materialistic values in consumers or whether it merely reflects or mirrors the values of society rather than molding or shaping them. Those who agree with the first position argue that advertising encourages materialistic values by seeking to create needs rather than merely showing how a product or service fulfills them; surrounding consumers with images of the good life and suggesting that the acquisition of material possessions leads to contentment and happiness and adds to the joy of living; and suggesting that material possessions are symbols of status, success and accomplishment and/or will lead to greater social acceptance, popularity, sexual appeal and so on. Those supporting the second position argue that consumers values are defined by the society in which they live and value systems are the result of extensive long-time socialization or acculturation. They argue that advertisers develop ads in response to prevailing values and are thus reflecting tastes and values rather than molding or shaping them. 13. A common criticism of advertising is that it stereotypes women. Discuss how advertising might stereotype men as well. Find an example of an ad that does this. Advertising has received a tremendous amount of criticism for stereotyping women. Critics argue that advertising generally depicts women as homemakers or mothers and has failed to acknowledge the changing role of women in society. They also note that many ads portray women as decorative objects or sexually provocative figures. While advertising is often criticized for its depiction of women, critics argue that men are often portrayed negatively as well. Some ads poke fun at mens shortcomings while others use reverse sexism. Critics argue that men are often portrayed as insensitive, as chauvinists, as sexists and as narrow-minded. Several companies have been criticized for using ads that take slaps at men. For example a print ad for the clothing accessory Bodyslimmers used a headline that read While you dont necessarily dress for men, it doesnt hurt, on occasion, to see one drool like the pathetic dog that he is. Another example is a print ad for Liz Claiborne shoes that used the tagline, Arent there enough heels in you life? The American Floral Marketing Council was also criticized for using a negative image to portray men in its point-of-purchase ad campaign. A poster from the campaign featured a floral arrangement in front of some rocks, resting on nuts and bolts, with the tagline, Romancing a stone? Send him flowers. Students should be asked to find other examples of ads that might be portraying men in a negative manner. 14. What is your opinion of Benettons shock advertising campaign that featured portraits of death-row inmates such as the one shown in Exhibit 22-3? Do you agree with Benettons position that it was trying to raise social consciousness of controversial issues such as the death penalty or do you feel that the campaign was used to generate publicity for the company? Benetton has always been known for its controversial advertising, which the company has defended by arguing that it is trying to raise peoples awareness and consciousness regarding various social issues. However, the Death Row campaign is probably the most controversial of all the shock advertising used by company. Benetton argues that it was running the global campaign solely to spark debate on capital punishment. However, the ads outraged many people including victims advocates who accused Benetton of glamorizing murders while ignoring their crimes. Benetton appears to have pushed the envelope too far with its Death Row campaign as the company received a tremendous amount of negative publicity for running the ads. A lawsuit was also filed against the company by the state of Missouri claiming that Toscani and his collaborators lied to officials of the states Department of Corrections to gain access to the inmates. Various victims right groups have organized boycotts of the companys store. Sears canceled an exclusive contract to sell a line of Benetton clothes, calling the death row images terribly insensitive. In May 2000 Olivero Toscani,
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who had been overseen Benettons advertising since 1982, left the company as a result of the controversy created by the Death Row campaign. With Toscannis departure it is expected that Benetton will return to more traditional advertising that focuses on its colorful clothes rather than continuing to use the controversial shock ads.

IMC Exercise
Find several ads that you feel are examples of negative social consequences of advertising discussed in the text such as the following: Ads that are offensive or in poor taste because of the product or service they advertise, the type of appeal they or the manner of presentation used. Ads that use one of the shock-vertising techniques discussed in Ethical Perspective 22-1. Ads that may have an adverse effect on consumer values by encouraging materialism. Ads that encourage consumers to purchase a product that they really do not need. Ads that stereotype women, men, an ethnic groups such as African Americans, Hispanics, AsianAmericans or some other group such as the elderly.

Be prepared to explain why you feel these ads are examples of negative advertising. How do you think the advertisers might justify the use of the ads you have chosen?

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