94

IS. Recently, many advertisers and agcncies al1ke have bech woTk ing on compensatine
10n
called pay-for-resules or ineentve-based compensation that base the agencysfee onthe achevement ofagreean,
results. FHistorically, agencics have not autced to be cvaluated on restilts e CASC Testults have often been

as key effects on sales are relatcd to factors otuEsiae th

sales. The such aswly
agencys control
cned the overall
marketing mix, not adProdu
is, just
Pcmg sttategy, and distribution programs (thhat levels, but more often (a
D ) . A agency may agree to be comnesated based on achievement of sales
awarencss, brand
identification, or brand feature oe
POp1ately), communications obiectives such as
criterla.
owledye
aniong target audiences will serve as the main results schemes weren t complicated enough. ler's
this long 1st of agencies and intricate compensation and what their agencies rel
Comp
s long list of cxternal taCilitators y on t
Cate
things a bit more and consider a fairly
create and execute promotional campa1gns.

External Facilitators.
advertisers often need to rely on sherial
offer clients many services and are adding more,
Even though agencies External facilitators re
and execut1ng promotional campaigns.
17ed external facilitators in planning. preparing, and agencies. The most impottant ot
to advertisers
orgaizations o r individuals that provide
specialized services
in the following sections.
external facilitators are discussced
these

the planning phase

and Adverhising Research Firms. Many firms rely on outside assistance during
Marketing Burke and Simmons can pertorm original
research for advertisers using
of advertis1ng. Research firms such as
assist in the potential market or consumeT perceptions of
understanding
focus groups, surveys, or experiments to collect data (trom grocery store
a product or services.
Other research firms, such as SRI Internatiomal, routinely
scanners, for example) and
have these data available for a fee.
ettectiveness atter a campaign has
Advertisers and their agencies also seek measures of promotional program
run. After an advertisement or promotion
has been running tor some reasonable amount of time, firms such
as Burke otfer
tests on print advertisements. Other firms such
as Starch INRA Hooper will run recognition
frms special1ze in nmessage testing to determine whether
day-after recall tests of broadcast advert1sements. Some
consumers find advertising messages appealing and understandable.

Consultants. A variety of consultants specialize in areas related to the promotional process. Advertisers can seek

out marketing consultants for assistance in the planning stage. Creative and communications consultants povide
nsight on issues related to message strategy and message themes. Consultants in event planning and sponsorsips
offer their expertise to both advertisers and agencies. Public relations consultants often work with top manage-
ment. Media experts can help an advertiser determine the proper nmedia mix and eticient media placement.
Three new types of consultan1s have emerged in recent years. One is a database consultant, who works with
both advertisers and agencies. Organizations such as Shepard Associates help tirms identity and then manage
databases that allow for the development of integrated marketing comnunications progranms. Diverse databases
from research sourcesdiscussed earlier can be merged or cross-referenced in developing efective comununications
programs. Another new type of consultant specializes in website development and management. These consultants
typxcally have the creative skills to develop websites and corporate hoe pages and the technical skills to advise
advertisers on manag1ng the technical aspects of the user ntertace. The third type of consultant works witl a
firm to integrate nnformation across a wide varicty of cuIStomer contacts ad to all this organize intormation
achieve customer relationsip managemem (CRM). Busines Objecrs is one sotiware firm that helps consultants
create effective progranns (http://www.businessobjects.com). (See Exhibit 2.14)
In recent years, trad1tional management consultants-such as TBM, Accenture, and McKinsey-have startcu d
to work with agencies on structure and business
strategy. These sorts of consultants can also advise On i g
strategy, market research procedure, and process and account planning. But the combination of traditional cou
sulting and advertisng has not always produced compellng results, and the typical role of consultants-tocusing
on marketing, creative, or technical issues-is the more
hkely role for consultants in the future.
50. Mathew Creamer, "March of the Management Consulunts," Advertising Age. June 5, 2006, 1, 53.
 The Structure of the Advertisung ond Promation industry 95

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Our ináustry sandard business Intelipgence vstvee

mins ouomer informwbon froon adpr ypes-ss n ec more than 240 cmgeris ry
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an miegatod ew d cachi and every astoner Rhaps yos shonki too.

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BUSINESS OBjECTS

ExIIT 2.14 Business Objects is the world's leading business intelligencesoftware company. Business inteligence encbles
onganizations to track, understand, and manage enterprise performance. The company's solutions leverogetheintcrmaicn
that is stored in an array of corporate databases, enterprise resource planning, and customer rektionship management
(CRM systems. http://www.businessobjects.com
Produchion Facilítators. External production facilitators offer essential services borh during and ater the
where advertisers and their agencies rely heavly on external
process. Production is the area
most
production
facilitators. All forms of media advertising require special expertise that even the largest rull-service agency, much
less an advertiser, typically does not retain on statt. In broadcast production, directors, production managers
songwriters, camera operators, audio and l1ghting techicians, and pertormers are all esential to prepar1ng i pro-

fessional, high-quality radio or provide the physacad tacilhtes, nchading sets,

television ad. Production houses can

for broadcast production. Simmlarly, in prepary prun advertsng, brochures,

stages, equipment, and crews, needed
and producers may be hired trom outsde
and direct mail pieces, graphic artists, photographers, models, directors,
m preparing advertisements.
the advertising agency or firnm to provide the specCializcd skills and tacilhties» needed
In-store promotions and trade show b0oths are other areas where desngng and producng materials requres

the skills of a specialty organi7ation.

The specific activities pertormed by external tacilitators and the techniques enployed by the personnel n

these firms will be covered in greater detaul m Part 5 ot the text. For now, t utticient to recogmze the role
these firms play in the advertising and promotions nduustry.
s that ot
offware Firms. An interestjng and complex
new catcgory ot tac1l1tator m advertising and promotuon
so rapidly that
neW media technology. has expanded
software firms. The technology in the mdustry, particularly
Sone ot tlhese firms are well established and
well known, such
a
Variety of software firms facilhtate the process.
are new to the scene. These.
Microsoft, Novell, and Oracle. But othecrs, such as Hyperion (see Exhibit 2.15),
as and analysis of Websurter behavior to
brwadband streaming
urms provide software ranging from the gathermg
 96

is it:

G:n5n

Ans*y4:4 S:ait, pa't

vha's t i y vs]tng

Sg r y i s A Soiral&uide
wpaperor ca i-888-952.8843

sterd i4enaA ef Menen soki0s

s k e . a h a s olng en ue ademaks ol Hypeon 0D ****

in the areas of audience analysis

advertisers with key assistance
Software firms like Hyperion providing are
customer data from website visits.
ExHIIT 2.15 in gathering and analyzing
online
communications. Hyperion specializes
orbroadband
http://www.hyperion.com

provide the kind of expertise that is

with trade partners. These firms
audio and video to managing relationsh1ps to seek their assistance.
advanced full-service or e-commerce agency would have
so esoteric that
even the most

5 Media Organizations.
in Exhibit 2.16, comprises meda avalable to advertisers. The
The next level in the industry structure, shown
and prnt media, are well known to most ot us sumply
media available for plac1ng advertising, such as broadcast which
Internet has created mediu organizations through
because we're exposed to them daily. In addition, the
advertisers can direct and distribue their advertising and promotonal messages.
Advertisers and their agencies turn to meda organizations that own and manage
the media access to con
sumers. In traditional media, major television networks such as NBC. and Fox, as well as national magazines
at
such U.S. Neus World
as Repont and People, proviede advertisers with tune and space for their nessages
considerable cost.
Other media options are more usetul for reachng narrowly defned target audiences. Specialty programmingS
on cable television, tightly focused direct mail picces, and a well-designed Internet caunpaignmay be better ways
to reach a specific audience. One of the new media options, broadband, ofters advertisers the chance to target
very specific audiences. Broadband allows Internet users to basically eustonie their programming by calhng on
only specific broadcasts from various providers. For exanple, The leedRoom (htp://www.feedroom.com) 1s an
interactive broadband television news network that allows Web users to custonmize what news broadcasts tney
receive. Advertisers can target different types of audiences using broadband for interactive broadcasts. The latest
 The Struchure of the Acvartising and Promotion Industry 97

Print

Magazines
Broadeast By geographig verage
y content

Television Direct Maif

Majot network Brochuras
independent station
Cable
Cataiogs
Videos
Broadband

Radio
Newspapers
Nationai
Network Statewide
Local Loca

Satellite
Specialty
Handb:ils
Prograrns
nteractive Banners

Online Computer Services

Home-Shopping Broadcasts edia

Interactive Broadcast
Outdoor
Entertainment Programming
Billboards
CD-ROMs Transit
Posters
Internet
Directories
Smartphones Yellow Pages
Electronic directories
e-readers
Premiumss
Keychains
Calendars
Logo ctothing
Pens
Multiple Media Combinations

Time Warner
Point-ot-Purchase Displays
Liberty Mediá
Film and Program Brand
Comcast
Walt Disney Co. Placement
Clear Channel
Hearst Corp
Event Sponsorship

trom
available to them. Notice that the choices range
media organizations
Ex
EAIBIT 2.16 Advertisers have an array of and media conglomerates.
broadband
aalional print and broadcast media to
 98

P n
broadband
communications is vircless
consumers (see Exhilbit
2.17). broadband. firms arc already eveo nology and ac.cew
f

SPEED
STILL WAiTIHG
IN1ERMETFOR
ACESS
HIG t JUST L0OK UP.

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mo ne g wwwSar@andcom ercad eli eee1-50-421-24

Exa 2.17 Broadband offers advertisers the ability to send audio and video through the Internet in a way that lets Web
Users customize their viewing andlistening experiences. To learn more about various streaming services and media-ich
conlent being developed for broadband, visit Akamai (htp://www.akamai.com htp://www.starband.com

Note the inclusion of media conglomerates in the list shown in Exhibit 2.17. This category is included
because organizations such as Viacom and Comcast own and operate companies in broadcast. print. and
interactive media. V1acom brings you cable networks such as Nickelodeon, VH1, and TV Land. Time Warner
and its sister company Time Warner Cable is one of the world's
largest media conglomerates and prov1des
broadcasting, cable, music, film, print publishing, and a dominant Internet presence.
The support media organizations listed in Exhibit 2.17 include all those places that advertisers want to put their
messages other than mainstream traditional or interactive media. Often referred to as out-of-home media, these
support media organizations include transit companies (bus and taxi boards), billboard organizations, specialzed
directory companies, and sports and performance arenas for sponsorsh1ps, display materials, and premum tems

Target Audiences.
The structure of the advertising and
pronmotion ndustry (check Exhibit 2.6 again) and the flow of communi-
cation would obviously be incomplete without an audience: no
audience, no communication. One interesting
thing about the audiences for promotional communications is that, with the exception of household
consumers
they are also the advertisers who use advertising and IBP communications. We are all familiar with the ype
or
advertising directed at us in our role as consumers: toothpaste, window cleaner, sport-utility vehicles, sot drinks,
insurance, and on and on.
But business and government audiences are key to the success of a large number of firms that sell oniy to
business and government
buyers. While many of these firms rely heavily on personal sell1ng, many aso
us
 4
Social, Ethical, and Regulatory
Aspects of Advertising and
Promotion

able to do the
about this chapter, you will be
After reading and thinking
following of advertising and promotion in a capitalistic society
1. ldentify the benefits
and problems
concerning their effects on society's well-being.
and debate a variety of issues
of advertising and BP
ethical considerations affect the development
2. how
Explain
campaigns. of advertiSing
and consumers in the regulation
agencies
3. Discuss the role of government
and promotion. and
for firms that develop use

4. Explain the meaning and importance of self-regulation

advertising and promotion.
techniques used in the lBP process.
5. Discuss the regulation of the full range of

INTRODUCTORY SCENARIO: WHo Do You Trusr?

have the
the world, you reallylike your Facebowk account. You
If youre ike about 400 millon other people m
thunk at
mOVIe's youve seen, lbooks you've read. and events vou
chance to share plhotos, places you've been, to let triethds
twect occasionally
also ike usng your Twuter account. You might
nteresting and fun. You iglht to see what they
are up
s o e t n e tollowung their Tweets
know wlhat you are up to and you might spend
tavorite snger or sports athlete ind even get pCeN
a
Then there's the clhance to follow the TIweets of your
snowboardung. hik
favorite blogs and wikis If you are into plhotography,
celebrity lifestyBes. What about your to go.And u
travel, cooking, or whatever, blogs are a great way to get
udeas abou gear, recipes to try, or places
and maybe eveu
there is your smartphone. What a grcat device. It's your
cell phone, your lnternet comection,
GPS.
 and Promotion 143
oCIal, Ethical, and Regulatory Aspects of Advertising
fun, and productive. ttere
Well all those things are great and no doubt nmake your life more interesting,
on wetbsites pop up
bubble biirst. You Came this doe to havmg vour Web searches and purchases
nmes the
musIC VIdcos, DOOKS,
Facebook pag¢ and then broadcast to all your connections-restaurants, hotels,
c o e

on vour where FaceboOK

osts-everything. That s what would have happencd with Facebook's Project Beacon,
blog have had to op-out
could redirect your activities back to your Facebook siteand you would
nartner sites but t nad Dec
from Facebook users and privacy advocates killed the proJect,
to make 1t
stop. iMaSSIve protest
inplemented and would have contiucd on witlhou the widespread outcry."
favorite celebrity was being paid >5,MN to
Now, about following those Tiweets. Wlhat if you knew that your the
Would it be as fun and interesting to follow them? Well, Greg Grunberg, polnce
$10,000 for every Tweet: +. 1) makes
from Celebrity Rehab (Exhibt
ofticer on Heroes imakes $7,000 to $10,000 per Tiweet; Dr. Drew Pinsky
$10,000 and up per lweet, and Samantha Ronson (SamRo) makes about S10,000 per Tweet as well. Companies
mention their brands
and these celebritics just happen to
ike Ad.ly in Beverly lHills set up deals with companies Tiweets of your favorite celebrity
for a little name dropping the next time you follow the
in their Twects-loOk brands on blog sites. At one point,
a
favorite blog. Yep, people are being paid to post comments about
Now. your tecns under contract
to mention the
goods had tens of thousands of women and
big. global-consumer company rules
of the U.S. government has
brands im blogs they frequented. Now, the Federal Trade Comnission
companys to voice their "opinions"
about brands, but the dsclosure
about making people reveal that they're really bemg paid

Rehab. What you

the cable show Celebrity
his radio show or his role on tweets on Twitter-or
Drew" from more) every time he
4. 1 You may know "Dr. about $10,000 (or
EXHIBIT is that Dr. Drew Pinsky
gets Drew on Twitter?
want to follow Dr.
probably don't know, though, 140-word Tweet! Does this make you
o u t $70 per word for a full

www.markeungyilgrinm.com
2009,
Pilgrinm. September 21.
Bows Ou" Marketung 18, 2010, www.abcuews.gcom
McCollum. "Facebook Beacon ABCNws.cn. January
oran Make for Twiuveruzing
C'elebriis
4
Alhn,"Prepare to Cry: W'hat
 144

pecialy ptommnent. And finally vour bekoved smartphone.You ve proaiy bec omr
ads that are
e bemg directed your way. Aftcr all, AdMob sends out ofthem
ALCistte
month
every
you're im front of lhe Gap and suddenly an ad for the billhon
the next tne Bir heai
ale at the (ap shrws ip oi your
sa a of yotir phone s operatimgphy no
4Ppen. Its called behavoral targetino based on the (PS Capabiltes
Tar, firis are
wary of gomg that far with their But, they still have contextial
on--that's a process where all vouttrackingsearchyour
of benav
to fall back ed
ked sso that companies can
to
Web behavO feel deteraat
post the next tme you sutf to a partic tular site--that probalbly makes yo better.
The above is all true. The nature of these sittuations and the ways you are being faollowed and subte
geted With communications hiphliehts that the soCial, ethical, and regulatory aspects ot advertising
brly Dei
aynamic and controversial as any ofthe stratcgic or creative clements ot the process. What is sIally reopeons
or irreyponsible, ethically acceptable, poltically correct. or legale As technology, cutural trends, and enaume
well. As a soCiety changes, so too do its persr
nge, the answers are constantly changing
as
* and promotion will attect and be affeesos
n g clse with social roots and implications, advertising ted
these changes.
ne history of advertising and promotion includes all sorts of social, cthical, and legal 15sues and ccns
also have their triumphs, mmoral as well as fnane
ersies1n0 doubt about it. But advertising and promotion inanc
in this chapter is that many critiCISms of advertising and promoticn c
n e important
thing vou will learn
consider the complex sOCial and legal environment n wch
unimfored, naive, and simplistic, often failing to
Dont get us wrong: sometimes the criticisms are rioh
Contemporary advertising and promotion operate.
because sometimes overzealous people in advertisng and promotion do produce overzealous advertisung and ne
p
motion programs. Other times, the criticisim comes from intuition and emotion not supported by facts or reahty
social, ethical, and legal 1ssues related to advertising the an
In this chapter, we will consider a wide range of
brand promotion, and we will do so in an analytical and straightforward fashion
many tools of integrated
tool that tends to get the most scrutiny because of its giobal p
will start with advertising-the promotional
the other promotional tools in IBP.
on to
enccand then we will move

THE SOCIAL ASPECTS OF ADVERTISING.

volatile. For those who feel that advertising is intrusive, cTass, and
The social aspects of advertising are often
the most fuel for heated debate.
manipulative, the social aspects usually provide and
in several broad areas that highlight both the positive
We can consider the social aspects of advertising
side, we 'll consider advertising's ettect on consumers
negative social aspects of advertising. On the positiveand ettects meiha
knowledge, standard of living, and feelings ofhappiness well-being, and potential positive
is on

of trom the charge that

On the negative side, we'll examine a variety of soCial criticisms advertising, rangng
advertising wastes resources and promotes materialism to the argument that advertis1ng perpetuates stereorypes.
critics and advertisers comnonly
Our approach is to offer the pros and cons on several issues about which
will have to
of opinion, with no clear right and wrong answers. You
argue. Be forewarned-these are matters
18sues and withour
draw your own conclusions. But above all, be analytical and thoughtful. These are important
understanding and contemplating these isstues, you really haven't studied advertisng and pronotion at al

Advertising Educates Consumers.

em?
contuse or entice
Docs advertis1ng provide valuable information to consumers, or does it seek only to e
Here's what the
experts on both sides have to say.

r AOverising Informs. Supporters of advertising argue that advertising educates consumers, equpp nd
with the information they need to make informed purchase decisions. By regularly assessn dalue of
advertising claims, consumers become more educated regarding the features, benetits. functiois
products. Further, consumers can become imore aware of their own tendencies toward Delng pe

3. Martini Giles."Search Me." The Economis1, The World in 2010, January 2010, pp. 12412.
 Social, Ethical, and Regulatory Aspects of Advertising and Promotion 145

product mformati
mtormation.
Historically. the very positive position has been offered that advertising is "clearly
of prodict
ypes
tCnsely powerful mstriment for the elimination of ignorance"" Now, that might be a litle bit overstated.
Codng to th1s argument.better-cducated consumers enhance their hfestyles and economic power through
marketplace deciston naking-can't argue with that (see the (Glohalization bex).
astte

Globalization
Match: Google vs.
A Giant Shoving China
when it comes to heavy weights, few are bigger or heavier than Google and China. On the one hand, there is Gocgle-r
and-pound gorilla of search engines: 70 percent of all search traffc in the United States (nearly 90 percert in mary p i s

of ropel revenues approaching $30 bllon a year and growing at about 17 percent annually, and af ary ore tre
is sitting on about S26 bilion in cash in its coffers. Then on the other hand is China-the
900-pound gorla ot growin
frm
200 millan to b u
economies: a population or 1.4 billion people; a "middle class" that is expected to grow rom about
the worid was
domestic product (GDP) growth from 9 to 11 percent annually (evern though the rest of
million by 2015; gross users (up
about 400 million current Internet
muddling through the Great Hecession of 2008-2009 with negative GDP); and
million in the year 2000) leaving a mere 800 million left to discover the Internet.
fom only 22 Chira is a
and benefit. Not exactly. You See,
Google and China. Seems like a match made in heaven for mutual growth citizens' use of the Internet
which means the government has restrictive and repressive rules about
highly controlled society, has complied with Chinese laws requinrg
access Youlube in China for example). From the beginning, Google
(vou can't even though these same
search
and socially sensitive issues be blocked from search results in China
that some politically discovered it had been
in other countries. But, a tipping point came in early 2010 when Google
results are readily available Gmail accounts)
broke into computers of at least 20 major U.S. companies (mosty
hacked from within China. The hackers to expose China's alleged human
personal information on human rights activists who have been working
and tried to gather and even then only subject ines rather
It only twO email accounts were actually accessed, though,
rights abuses. appears even though managers at Google
never said so directy.
content were viewed. Getting hacked is a bad thing. But, Chinese human
than
was suspected in the hacking-after
all, who else would care about
certainly the Chinese government search resuits
immediate reaction to the hacking: stop censoring
activists operating in the United States? Google's
rights
and threaten to pull out of the country
altogether. firm is not going to sufer
on China completely, the
follows through and pulls the plug
Some would say that if Google it's a distant second in China wnere
search engine is the runaway leader worldwide,
that much. Even. though Google's And, Google's Chinese operations
account

more than 60 percent of all search requests. Domain

homegrown Baidu.com captures Other firms are joining Google's camp.
of the firm's $30 bilion in annual revenue. China due
for "only" about $600 million for .cn (the China designation)
domains in
longer signing up people
announced it is no of ail
registrar GoDaddy has identification numbers, and physical copies
requirements, which include photo IDs,
to onerous Chinese government
are having their
signed documents. match. Socially, citizens in China
social, ethical, and regulatory shoving the Chinese
standpoint,
SO what we have here is a giant invaded. rom a regulatory
activists had their privacy
social rights on this social, ethical, and regulatory
eedom restricted. Ethically, lnternet. So, where do you stand
control over the
governnent is exerting widespread

"mashup? Internetworldstats.com,Michael Ledtke, GooglaStays

End China Censorship After Enmail
to or Gioas. Google Wasn't Winning in China
Breach"

Population Stats," Normandy Macddlen, "Whether

l March 20. 2010, at www
pcworkd.com
Internet Users and
uces: "World at
www.finance.yahoo.com/news,
Ihe Pot hnkens,
moWOrd.

a Press, January 13,

2010, "China-ioogle.
2010; Robert X. Cringely,
a y Advertising Age, January 18,

amount of tmme an individual

time-that 1s, the
and access to the Web. The
seach
educes product
is that advertising reduced because ot advertisng
to easily
services Is
assess
clated argument
products and and websites
allows consuners

Stosearch for desired advertiSIng from retail store to

available through time and ettort traveling
of information readily without spending
informatiunt
about the potential
value of brands
213 220
Eeomomy (June 1961),
Political
4. Information,"Journal of
George
uger, "The Economics of
 146
retail store aclvertisCment
"reduces drastcally
trymg to evaluate cach one. The mformaton Contamrd in an
Cost of search" the
of intorming the publhe has do vith the role advertising Can play comntinicating at
dSpect to
to promothig resprnsible drinkn
rtant sOCal isues. Miller Brewing devotes mllions of dollars a year wt
Otnprnt and televisiO) advertisements hke the one shown in Lx

Miler
MILLEN #REWING TO

18$5
LWABK##, wis. o1A

LUCK.
RELY ON
EVEN THE IRISH
NOT

DON'T DRIVE DRUNK.

PATRICK'S DAY.
DRIVER THIS ST.
DESIGNATE A

commkment to live responsibly.

and its distributors share à
MIler Brewng Company

Lhe Respoisilbly 2

social issues. Miller Brewing spends millions of

be used to inform the public about important
ExHIBIT 4.2 Advertising can
behavior. www.millerbrewing.com
dollars a year promoting
responsible drinking

argue Critics that advertising does not provide good product

and Intrusive.
Con: Advertising Is Superficial and ntrusive to daily life that it is impossible
to escape. The basie

information at all and that it is so pervas1ve that many ads dont carry
tocuses on the argument
to it beimg superficial
criticism of advertising
with respect Ads are rhetorical: there is
What it does rry is said to be hollow ad-speak.
enough actual product mformation. on, critics
in an ad is biased, limited,
and inherently deceptive. Continuing
information
no pure
"nformation."All tunctional teatures and
brands that relates strictly to
believe that ads should contain information on
of advertising
can be measured and tested
brand by brand (see Exhibit 4.3).
performance resultsthings that c o n s u n e r s are nterested
m nore thaun a phys1cal, tangible
instances,
Advertisers response that, in many
argue in
of a brand may be second-
features and purcly functional value. The finctional features
product with perfornmance Emotional and itestyle
to c o n s u n e r s in bothh the
mformation search and the choice process.
in mportance
ary
role n consumers' choices (see Fxhubit 4.4).
The advertisers position goes on to say
tactors play an nportant
benetits that c o n s u m e r s seck, mchudin
that critics often disImiss as unmportant ignore the totahty of brand
or

The relevant intormation being used by a buyer nmay

emotional, hedomc (pleasure-seeking), or aesthetic aspects. au
focus on crteria that are nonutilitarian or nonfincrional in
nature-but not irrelevant. Although the loyota
1n Exhibit 4.3 carries the type of information critics would prefer, advertisers would argue that the intormano
in the Honda ad in Exhibit 4.4 provides information that is just as relevant to consumers-cnotional/itestya

nformation.

5. Ibid. 220.
 nd Promtion 147
fthicol nd Pagintory AspertaAdvartiaing

TovOTA

wwwww w
wwwww ******

ExHIBITS 4.3 AND 4.4 Critics of that ads often carry litle, if any, product intormancn anc
advertising complain
wouic

ad in Exhibit 4.3. Do you think the Hondc ac Exniot

preter that all advertising be rich in "intormation" like the loyota
in

4.4 is devoid of "information"2

With respect to the mtrusive aspect of advertising. the argument is that audvertsng has becoe wwdespre u
to revolt In Planetteedback con survev where
critics view, ubiquitous) that consumers are startng
a
(in some
the stludy tound that than 5 pereent ot vonsum-
respondents expressed their annoyance with pop-up ads,
nare

"furious" over emaul spam and webste pop up as" Nmmlariv. consuners
ers considered themselves "angry" or
frustrated with brunds workung ther way mto and ntor entertanment
arc gettng increasingly concerned and
content bnd plueenn (like the Amerk an liol
cTOSSNCI
mation programming. The -called so cOmmerce

WIile abut brands but dout revel ther attilaton with

Coke cups from Chapter 2) and paid bloggers who
to becone lo0 pervaIVC Dy preenn vt onsuners survevcd
Companics-Was rated as allowng advertiSing
it WOuld seei that advertinees really arcnt paving uch ttention
Despite widespread c o n s u e r aggravation, lout and clear that aulvertisng gettmg jLISt too wdespread and
Is
On the one hand, consumers seem to be saying
the otler hand, bIg audvertners like Anerc Epress pushng to an are

ntruding on their lives and lifest yles. (Dn to make their brnds part of
than a mTe M)-SecOnd advertNng spor and
become more "relevant"to consumers
sad keynote speech to
that the chiet marketmg oftier at AneTN an Eapress
m a
Consumer hfestyles. So much so

laulw ape by thmkng not m day -parts [reterrmg

to
to he
large advertisng audience,"We need to adapt
new
a
We'll et you decude what you thnk of that one.
""

television advertising schedules| but to mndparts with the clutter and

But the advertisng industry should really
be payng autettOn to comsuers' aggravaton
easo1-clutter annd reduce the etkectiveness of
ntrus1veness

ntrlusiveness of advertising for very mportant

one

the ot to evein reuenber advertising 24 hours

comsuer

aavertising.According to one expert,"The abilhty

average

23, 2X1S, 1, 2
with Pop-Up Ads, Ahettny 4g. August
ack Neff, "Spam Research Reveals Disgust
Consumers," .Advetisng Ige. Januauy , 22*,
1. 19,
Clair Atkinson. "Ad Intrusion Up, Say 2, 2004, 1, 51.
8. Hank
Kim. "Just Risk It" Advertising Age, Fiebruary
 148

to work to
redtice clutter? Pr
later is at the lowest level m
not. Another id
the
he
history of our
our busncs,"" Is tlhe industry likely
deliver even more sattiration,du obabk
ot.Another mdustry expert suggests that "New media have more pore
d ntrusveness than traditional media,in which case the new nedia will only worSeTn marketing resistane

Advertising Improves the Standard of Living.

hotly debated.
pinons vary WIdely on this t

lowers the general standard of living

s
Whether advertising raises or of energy and resources
use o r a waste
18SUuC and go
right to the heart of whether advertising is a good
Products. Four aspects of
the nature of
adveti
he Economic Effects of Advertising lower the Cost of
rO
ng. supporters argue, help lower the cost of prociicts:
quantities), partly created
avertising's contribution to stimulating to produce products in
1arge by
scale costsdemand,
less products cost less than if there were no advertis1ng ar aed,
Du the econoies of (it
and administrative COsts per unit produCed
broad-based demand stimulation resultes in lower production
As
lower prices are passed on to consumers.
services because advertising increases the Drok
and
Consumers have a greater variety
of choice in products o r e products
that succeed, the fewer losses f .
ms
will succeed. The m

ability of success that n e w products make products cost less.

the end, this should
introductions. In
ncur trom failed product motivates firms to prod1
marketable brands
and the desire to have fresh,
T h e pressures of competition brands.
brands and introduce lower-priced
improved products and means that new
aids in the diffusion of innovations. This
T h e speed and reach of the advertising process Innovations succeed
a large. percentage
of the marketplace very quickly. ed
discoveries can be delivered to
their benetits to the customer.
when advertising communicates
the standard of l1ving and qual1ty of life in a societ
All four of these factors can contribute positively
to
an important role in demand
about these effects because it serves
Advertising may be instrumental in bringing
stimulation and customers informed.
keeping
Con: Adverising Wastes Resources and Raises the Standard of Living Only for Some. One of the traditional
criticisms of advertising is that it represents an inefficient, wasteful process that does little more than "shufflhing of
total demand." Advertising thus brings about
existing total demand," rather than contributing to the expansion of
economic stagnation and a lower standard of living, not a higher standard of living. Similarly, critics argue that
brand differences are trivial and that the proliferation of brands does not offer a greater variety of choice but rather a
meaningles waste of resources and confusion and frustration for the consumer. Finally, they argue that advertising
is a tool of capitalism that only helps widen the gap between rich and poor, creating strifë between social classes.

Advertising Affects Happiness and General Well-Being.

Critics and supporters of advertising differ signmificantly in their views about how
advertising affects consumers
happiness and general well-being. As you will see, this is a complex 1ssue with multiple pros and cons.

Con: Advertising Creates Needs. A common cry among critics is that

people buy things they dont really need advertising creates needs and makes
The argument is that consumers are
or even want.
relatively
shiny bauble offered by marketers. Critics would say. for example, that aeasy t
seduce into wanting the next
of
examination any issue of Seventeen magazine reveals a qus
world to covet slim bodies and a magazine intent on teaching the young women
o
Spend from 15 to 30 cents from glamorous complexion. Cosmetics giants like Estée Lauder and Revlon
in search of the every dollar of sales to promote their brands as the typ
ideal
complexion. ultimate solution for
9. Matthew Creamer,
10. Ibid., 35. "Caught in the Clutter Crossfire: Your Brand,"
11. Richard
Advertising Age, April 2, 2007, 1, 35.
Caves, Amenican
Industry: Structure, Conduct, Perfomance
(Upper Saddle River, NJ: Prenice Hall. 1964), 102.
 Social, Ethical, and Regulatory Aspects of Advertising and Promotion 149

Pro: Advertising Addresses a Wide Variely of Basic Human Needs. A uneful and informative place to
start in discussng whether advertising can create needs or not is to consider the basic nature of human needs.
Abraham Maslow, a pioneer in the study of human motivation (and someone you probably read about in your
psychology or management class), conceived that human behavior progresses through the following hierarchy
of need states:2

Physiological needs: Biological needs that require the satisfaction of hunger, thirst, and basic bodily functions.
Safery needs: Tlhe need to provide sheter and protection for the body and to maintain a comfortable existence
Leve and belonging needs: The need for afiliation and affection. A person will strive for both the giving
and receiving of love.
Esteem needs: The need for recognition,status, and prestige. In addition to the respect of others, there1s
a need and desire for self-respect.
Self-actualization needs: This is the highest of all the need states and is achieved by only a small percentage
of people, according to Maslow. The individual strives for maximum fulfillment of indvidual capab1lities.
It must be clearly understood that Maslow was describing basic human needs and motivations, not consumer
needs and motivations. But in the context of an affluent society, individuals will turn to goods and services to sat
isfy needs. Many products are said to directly address the requirements of one or more of these need states. Food
and health care products, for example, relate to physiological needs (see Exhibit 4.5). Home security systems and
smoke detectors help address safety needs. Many personal care products, such as the skin care brand highlighted
in Exhibit 4.6, promote feelings of self-esteem, confidence, glamour, and romance.

wws.www -

EXHIBIT 4.5 This ad appeals to our physiological needs (protecting our health) in Maslow's hierarchy of needs.

12. A.H. Maslow, Moivation and Personality (New York: Harper & Row, 1970)
 150

he e treh

GUINOT

ExHIBT 4.6 "All you need is Guinot." In what sense might a person need Guinof? Does the Guinot site
(www.guinctusa.cmi
tie in to consumers' happiness and general wel-being Click around the site and identity message and design elements t
target consumers' various need states.

In the pursuit of esteem. many consumers buy products they pereeive to have status and prestige: expene
jewelryclothing, automob1les, and homes are examples.Although it may be difñicult to buy seli-actuialzanon the
highest level of Maslow's hierarchy), educational pursuits and high-intensity leisure activities (eg.extreme sports
and the gear t takes to pursue them) can certainly foster feelings of pride and accomplishment that conribue
to self-actual17ation. Supporters maintain that advertising may be directed at many diterent forms of need iulil
ment, but t 1s in no way powerful enough to create basic human needs

Con: Advertising Promotes Materialism. It is also clained that indiviuals' and aspiratious may be dis
wanes
torted by advertising. The long-standing argument is that n societies characterized by heavy advertisng, thereb
tendency for conformity and status-secking behavior, both of which are considered materialistic and superticul
Material goods are placed ahead of spiritual and intellectual pursuits. Advertising, which porttays brands as synhs
O starus, success, and happiness, contributes to the nateralism and superticialty in a society. lt creates wantsand
auu
praions that are artificial and self-centered. This, in turn, results m an overenphasis on the production ot prnae
goods, to the detrimcnt of public
goods (such
as schools, and
highways, parks, mtrastriucture)."

13. Vance Packard, The Status Seekers

(New York: David McKay, 1959).
n s argument was first offered by autlhors Georye Katwna, The Mass Consumption Society (New
Kennetn

Galbraith, The Afluent York: McGraw-Hill, Tos),

*
Soriety (Bosto: Houghton Miflin, 1958).
 Social, Ethical, and Regulatory Aspecs of Advertising and Promotion 151

: Advertising Onty Keecs Sociehy's

Priorities. Althoh adverrisang tundeably the busness teof s m

1TOg the goot ite. letcdets of advertismg argue that it did not creatc the Aneran emphass on
l s t o r exanpte.n the t e d States, major hohdays such as Chrismas (gifts). Thankgiving (tool). An
(andy and clothing) nave beeome festwals o f ceonsumptiom T his is the AmerIC a)WAY Fistorian and s c 1
S t e pStcphen
oerver hen ox conehides his treatise on the hhstory of American advertis1ng as tollows

me may bunld i onipeling tse that Ameian eulure isbeyond wdemption money-mad, hedonistic, upeti1il,
neshmg hecdiessly deuH d tanlnad t h k aalled Pmgress. Toaquerille and other obserners of the young republic de oribe'd
Amend m thhese teris in the early 1800s, decddes before the derclopment of mational advertising o blanne adrerti stg
n H r t h e s e nost Dustc tendencs m American history is to miss tlhe point.... The people uho h t e ceated niofern
adtisng ac not hndaden penuiden ushing our buttous in the senie of some malevolent purpose. They are just
produing an cspeitly tSTble manifestation,good nd bad, of the Amerian way of ife.

Although we clearly ive in the age of consumption, goods and possessions have been used by all cultires
throughout history t o mark Special events, t o play significant roles in rituals. and to serve as vessels of special
mcaning long betore there was modern advertising. Still, have ve taken it too far Is excess what we do best 1T

consumeT cultures?

Acvertising: Demeaning and Deceithul, or Liberating and Artful?

Without a doubt, advertisers are always on the lookout for creative and novel ways to grab and hold the atten-
tion of their audience. In addition, an advertiser has a very specific profile of the target customer in mind imore
about this in Chapter 6) when an ad is being created. Both of these fundamental propositions about how ads get
developed can spark controversy.

Con: Advertising Perpetuates Stereotypes. Advertisers often portay

people in advertisennents that look like members oftheir target audience
with the hope that people who see the ad will be more prone to relate
to the ad and attend to its message. Critics charge that this practice
vields a very negative effect-it perpetuates stereotypes. The portrayal
of women, the elderly, and ethnic mnorities are ot particular concern.
lt is argued that women are still predominantly cast as hommemakers
or objects of desire (see Exhibit 4.7), despite the fact that women
now hold top management positions and deftly bead households. The
elderly are often shown as helpless or ill, even though many active
seniors enjoy a rich lifestyle. Critics contend that advertisers' propensity
to feature African-American or Latin athletes im ads is siumply a more
Contemporary form of stereotyping.

Pro: Advertisers Are Showing Much More Sensitivity. Much the

stereotypngdescrilbed above is becoming part ofthe past.Advertisements
ot

Om prior generations do show vivid stereotyping problem.

a

Exhibit 4.8 slhows that women

But
can
m

be
VERSACE COUTURE
Oday's setting, the Dove ad in

aured as
strong and feminine in contennporary advertisilng. Dove ExHIBIT 4.7 What is the
ts "Campaign for Real Beauty" in September 2004 wuh n atverti
ser
ched claiming in this ade How about-a
naign featuring real w o m e n whose appearanc¢s do not contornn eVersace gown is the ultmate in chic
The ads
Stereotypical and relatively n a r r o w norms ot beauty. www.Velscce coM
Cd viewers to judee the women's looks (ersized? Outstundng
or Wrinkled? Wondediul?) and invited thenm to cast their votes l n jon t dieuston ot beauty Issties at www.

Campaignforrealbeauty.com. In addition, advertisers rangng tron tiuane tal sTVICes, to retuemem connunities,
to
Cruise lines now show seniors in fulilling, acve litesyles hurlly a
deneanung prtray al ot thut demographie
5 * O x , T he Nlinn A1ikers:A History of.Amencan Adientsg and lts (ealus (New YoIs Willaa Morrow. 1984), 33u
Stephen
 152

ad is a beautiful examole oi
consumers' lives. This Dove
ExHIBIT 4.8 Advertisers today realize the diverse reality of
advertisers' efforts to represent diversity. www.campaigntorrealbeauty.com

diverse world requires diversity

group. Advertisers are realizing that a construct. However,
in the social reality that ads represent and help
of change; the Body Shop ad in
1many renmain dissatisfied with the pace
Exhibit 4.9, promoting something other than the body of a supermodel
the
as a valid point of reference for women, is still the exception, not
rule.

Con: Adverhising ls Often Offensive. A long-standing criticism of

advertising is that it is often offensive and the in poor taste.
appeals are
We certainly saw some of that in Chapter 3 from advertising eras gone
by. Moreover, some would say that the trend in American advertising is
to be rude, crude, and sometimes lewd, as advertisers
struggle to grab blion women
the attention of consumers who have learned to tune out the avalanche
of advertysing messages they are confronted with each day. Of course. epermodes
taste is just that, a donly8whode
personal and nherently subjective evaluat1ion. What
IS offensive to one
person is merely satiric to another. What should we
call an ad prepared for the Australian nmarket
that shows the owner of
an older I Honda
Accord admiring a newer model? The owner's
tion of the new car admira-
spurs the old version to lock its doors, rev its motor,
and drive off a chff-with
the owner still inside. Critics EXHIBIT 4.9 The Body Shop (www.
trivializing suicide-an acute problem among decry the ad as
also the target market young people, who are bodyshop.com is bucking trends by
for this ad. protesting the "supermodel" imagery
10. often used in men's magazines such
Normnandy Madden, "Honda Pulls Suicide Car Ad
September 22. 2003. 3. from Australian TV Market, Advertisung Age Playboy and Maxim, which triumphany
display airbrushed "perfection.
 Social, Ethical, and Regulatory Aspects of Advertising and Promotion 153

But not all afvertising eemed ofensive has to be as extreme as these examples Many times, advertisers get
caught in a irestorini ot contrOversy because certam, and somctimmes relatively wnall, segments of the popula-
tion are oftedea. I he history of advertisimg is loaded with examples An AlDS prevention campngn run by
the CentcTs tor iisCase o n t r o l and Preventon (CDC), a highly tespected governnient agency. has been criti-
Ized tor lbeg too cXplhct, A spokesperson for the 1l amily R e s e a r c dh Counal sand about the ads. " T hey re very

offenve thought i Was watehimg N\PD Bhue""A hglhly popular ad seen as contowersal by some was the
"People 1akng Dhet (Coke Break" ad (this ad was fcatured m xhbt 1.12 n (.hapter 1) In this television spot,
agroup ot feale otticc workers is shown eyeng a construction worker as he takes off his Tshirt and enjoysa
Dict Coke. Coca-Cola was cruicized for usng reverse sexIsm in this ad. Althogh (Coca C.ola and the (DG,may
have ventiurcf mto delhcate areas, consider the followng advertisers, wlo were caught completely by surprise
when ther ads were deemed offensive:

I n a putbhe service spot developed by Actna life & Castulty insurance for a measles vaccine. wicked
Witch with green skin and a wart was cause for a challenge to the firm's ad froma witches'r1ghts group

ANynex spot was criticized by animal-rights activists because it showed a rabbit colored with blue dye
A commereial for Black Hag bug spray had to be altered after a war veterans' group objected to the play-
ing of"Taps" over dead bugs.
Advertisers have long felt that they need to carefully consider the
tastefulness of their ads. Expect the unexpected. An unpretentious ad
ike that in Exhibit 4.10, featuring frank copy about mundane real1ties LADIES AND GENTLEMEN
of female life, could be expected to breach some consumers' sensibili- TM HAVING MY PERIOD
ties. However, the marketer in this case was willing to take the risk **** ****

in the hopes that the frank approach will get attention and ring true
with the target customer dlannM
nd t ** **
On the other hand, maybe hypersensitivity to consumer reaction is
not all that necessary GoDaddy.com is making a nice living running ******

risqué ads on the Super Bowl every year. In 2006, the Web firm had . A

its first 13 ad submissions to Super Bowl broadcaster ABC rejected as w.nptmpn ee t snds

"tasteless." The still-racy ad that finally ran created a 15-fold spike in

traffic to the firms website.
*****

In'the end, we have to consider whether advertising is offensive or

whether society is merely pushing the limits of what is appropriate
for freedom of speech and expression. The now infamous "wardrobe
malfunction" that plagued Janet Jackson during a Super Bowl halftime
show and incidents like shock radio DJs' profanity are drawing atten-
TAMPAX
.
tion not only from fed-up consumers but also from the U.S. Senatec
as well, which has approved a tenfold increase in fines for television EXHIBIT 4.10 Oddly, frank talk about
and radio stations that violate rules on airing profanity and sexually rea-lite issues is not all that common in
move to pro- advertising. Do you know anyone who
explicit materials." And even though government may would be put off by such frankness?
Vide a legal remedy to deter offensive broadcastswhether advertis-
fact is that what is acceptable and www.tampax.com
1ng messages or programming-the a culture.
What is offensive changes over time in

Pro: Advertising s a Source of Fulfilmentf and Liberation. Ou the other end ot the spectrun, some argue
that the consumption that advertising glorifies 1s actally juite good tor society. Most people sincerely appreci-
ate modern conveniences that liberate us trom the more toul tacets ot everyday lite, such as body odor, close
hand. Sone observers remnd us that when the Berlin Wall
COntact with dirty diapers, and washing clothes by

Seruunize Ads lor Poliucal orrec lunes, The Hal Steet Joumad, May 19, 1994. BI, B10.
Criical I:yes
Kevin Goldman, "From Witches to Anorexics, 2X06, 14t0.
April
Georgia Flight,"Hits and Misses," Business 2.0,Hike www.yahoo.reuters.com
in lndecency Fines,
Reulers News Service, May 18, 2000, aCcessed at

JEremy Pelofsky,"U.S. Senate Backs Ten Fold

on May 19, 2006.
 154 they ran to d
and
chuches
eh
rn
to
hbraries

gOods
was restricted
icial clas
Came down, those Last CGetmanv did not mmcdhately ot many
in
the
constption
(bscrvers argie
tiat thiere 13 a
1beratm
stores and shops. Before the modern c o n s u m e r age, Stiier age, the consn
go
ted and encouraged
" d e m o c r a t i z a t i o n o .

Modern advertising has helped brmigt1s a

qanty' to advertising and consumpton
that should be appree
s

via Subliminol Stimulahon.

Con: Advertisers Deceive
and almost a completc
lack of tunderstal
COntroversy, the thresno
C of sulbliminal (below there is s o
at pers8tS about the issiie
g.
Since 20

conmunication and advcrtising advcrtising

Consciousness) of sublininal of
siurrounding the issue mages
putting
nruston anything by a n ad.
b a c k g r o u n d of
sold
lct us clarify: No one ever the bored
in
1Ce cubes or
the word sex the very
brcasts 1 except such

o n e at an
advertising gency, dreamng up
Furthermore.110 sit around story.
retire, has time t o makes tor
a great
cager to it
r y We realize work to get
anyone
the Erhics box). doesn't
things (see other pictures e v i d e n c e for
s o m e types

pictures in and
Dut hiding there is
some
short-ived
Although etfects are very
anything. has
to ubuyn c o n s c i o u s ad
processing,
these
hocus-pocus
that
Svengali-type rumors

ot laboratories.
The exist.
"
If the
only in does n o t
mythology sin1ply
sublminal
tound to use
b e c o m e advertising actually trying conclude
a d v e r t i s e r s are would
are true
that s o m e research on the topic
the best
messages
in their ads,
their money
wast1ng
that theyre
that one of the
Some argue
Democratic Art. move-
ls The pop art
Pro: Advertising is its
art1stic
nature.

and New
best aspects
of advertising particularly
in London
and 1960s. culture
late 195Os commercial
ment of the characterized by
with
a
fascination
s1multaneously
culture and
York, was
consumer

ExHIBIT 4.11
Artist Andy Warhol
Some of this
art critiqued himiselr a 4.1 1), most accessible
Above all, Andy Warhol (see Exhibit the demonstrated that the
celebrated it.
demonstrated that
art was for peopie and advertising. BMW (Z4
paintings
commercial illustrator, Art was not restricted to art was

(butterflies) have both used

art was advertising. and Microsoft
that the most accessible candy rolls, their advertising
and tine art in
LiteSavers
cans,
walls; it was o n Campbell's soup widely contemporary
anti-elitist, pro-democratic,
museum

Brillo pads. Advertising and Coke:

and America, democracy,
said this about
essentially the
accessible art. Warhol
tradition where the richest c o n s u m e I s buy
the the President drinks
about this country is
that America started and you can kuow that
What's great TV and see Coca-Cola,
Coke and no amount of money
same things as
the poorest. You can be watching too. A Ceke is a
can drink Coke, s a m e and all
the
drinks Coke, and just think, you Al the (Cokes are the
Coke, Liz 1iaylor the bum on the comer is drinking. "2
better Coke than the one and you know it.
canget youa Lis knous it, the bum kows it,
knous it, the President
Cokes good. Taylor
ae
Has a Powerful Effect on the Mass Media.
Advertising the mass mmeala
of advertising's influence on
and their critics debate is the
matter
One final issue that advertisers
of viewpoints.
Here again, we find a very wide range

Resonate Today" Aianketing News, 5,9 March 15, 2007, Soal

20. Don E. Schulz."Subliminal Ad Noions Sull
and

Affect: Combined Effects of Priming and Exposure." Jounal of Personality

21. Murphy, Monahan, and Zajonc, "Additiviry of
Nonconscious

Pycholegy, vol. 69 (1995), 589 602. E. Moore

38-47:; Timothy
22. Timothy E. Moore, "Subliminal Advertising: Get." Jounal of Marketing, vol. 46 (Spring 1982),
What You See Is What You
"The Case Against Subliminal Manipulation." Psychology and Marketing,
vol. 5, no. 4 (Winter 1988), 297-317.
101.
York: Harcourt Brace Jovanovich. 1975).
25. Andy Warhol, The Philosophy of.Andy Wahol: From A to B and Bark Again (New
 Social, Ethical, and Regulatory Aspects of Advertising and Promotion 155

ETHICS
Subliminal Advertising: A Really Bad ldea
Fvery few years, a story wIl suiface claiming that an adyertiser tried to sell a brand by puttinig subliminal (beHCW Ine
Every

conscious threshold ol awaleness) imessages orimages in an ad. To set the rec.ord straight, subirinal acyortis9irg d0esnt

work and youl get in a lot of trouble if you try it.

This is how SUiImInal communic ation (not advertising) works. Plesearch has shown that penpie can, irrlged, proOGASS
infomation that is tansmitted fo them below the level of conscious awareness, that is, subliminally What is not proven
is that you can send a fperstlasive message (ike advertising) subliminally, Ever since a crackpot allegetly nsered the
phrases "tat Popcorn' and "Drink Coca Cola" in a movie back in the 1950s, the world has been terrifed that unscrupulous
marketers Wil Use the technique to sell products. Well, you can rest easy Sublirninal adlvertising dresn't work, tiut it dres

make for some really interesting stories:

French 1V network M6 and its production house Expand got in hot water in 2001 with Frerch regulators over te alleged
nsertion of 85 Subiminal images of a Kodak disposable camera during the arng of an episcrde of a ht reaity TV show
called Popstars.
Russian TV netwonk ATN was puled off the air in 2000 when Russian officials discovered that tre broadcaster rad teern
insering the message "St and Watch Only ATN" into every 25th frame of its broadcasting during the summer ot 2000
The station was off the air for nearly two years.
During the 2000 presidential election campaigns in the United States, Democrats accused Repubicars of using
subiminal advertsing in the so-called "Ratsad, which attacked Democratic candidate Al Gore's prescrcton drug clen
The alegation charged that during the ads the word "bureaucrats" was reduced to the word "rats." visible tor a soit
second.

h none of these recent transgressions into subliminal messaging is there any evidence that the intended efects were
achieved. Recently, the issue has resurfaced as a research topic among neural scientists, but what they seem to be
"rediscovering" is that yes, you can communicate commercial messages to people below the conscious thresroidaof
awarenesS. But the next effect has never been discovered: convincing people to buy something. Simply. you cannat get
people to act on the information they may have received.
Whether Subliminal advertising works or not, it does provide some great entertainment. And as long as peODIe aS
Suspicious of advertising, claims will surface that subliminal advertising is being used on unsuspecting consumers.

Souroces TmothyE Moore SubliminalAdvertsing WhatYouSee ls What You Get Joumal ofMarketing. vol 46(Spring 1982). 3s- Tmothy E Moore
"The Case Against Subliminal Manipulation," Psychoíogy and Marketing, vol. 5, no. 4 (Winter 1988). 297-317. Lawrence J. Speer "Ot in a Fasn. AC Ace
Globa February 2002. 6: Bob Garfield, "Subliminal Seduction and Other Urban Myths, Advertising Açe. September 18. 2000. 41 Don E Schutz. "Sucimina
kd Notons Stil Resonate Today" Marketing News. March 15, 2007. 59.

Pro: Advertising Fosters a Diverse and Atordable Mass Media. Advertising tans argue chat auivertisng is
the best thing that can happened to an mformed democracy. Magazines, newspapers, televison, rado stations, and
websites are supported by advertising expenditures. In 2009, measured mass media advertisng expendrures in the
United States exceeded $140 bihon." Much of this spending went to support televisaon, rado, nnag1zmes, and
newspapers. If you include online advertising's support of websites, the number approaches s200 billhon. With
this sort of monetary support of the eda, crvens have acces toa variety of ntormation and entertamnment
sources at low coxt. Network televison and radao broadeasts would not he tree comnadties, anad newspapers and
magarmes would likely cost two to four times more n the absence of advering suupport. Now, as advertisers
urgently try to access consumers through1 socialmedu sues lhke lvitter and F accbook, suvil media are tinding
Support fronn advertisers as well. Honda and Dell use l'acebook and lvuter to connect to current and potential
Customers."

1 0 Leadiung National Advertisers."Adveatismg Age. June 22, 201, S1.

s Bernof."How to lweet Pruitably" Aluskrting Nus, January 0, 2010, 12 Michuel l eamonh."Waut 5t00 More Facebook Friends? Thatl! Be
S654.30," Advenising Age, September 2, 20009,.
 156
AnotheI aTgumcnt m suppot of adverts 1s that t ovde$ nValuable exposure

1noncomnercial organizatons (like soal seTVHe organizations) se Advertlsig, nembers of oiety When
ntormation
le of the noncommercial use of ? recewe
on mipontat s n al and al s i e ' s A drannatu
pohi eany
Working ) conjunction with the Partn
11g Was A mlteda anann amehed by the US gowenuent,
for a Drug available forDurin
Tre Amena, to temnd the AeiHan publ o t of nearly 40) ads was
teuse m
five years the canmpangn spendug aPpahed s1 bllon. A st 4.12, involved poWertul mesages about the
this comprelhensive campgn S o e ,hke the oe shown n

ultimate consequeie of dug abuse

Jim Merion 1943-1

a 19O1993

Jokn

America
Partnership for a Drug-Free

realization that drug

the viewer with the
to our fascination with celebrities and shocks that drug use
ExHIBIT 4.12 This ad both appeals for a Drug-free America hones its message
the Partnership
use can be fatal. Af www.drugtreeamerica.org,
anything but glamorouUs alth
media have an unne
(ritics argue that advertisers
who place ads in
Con: Advertising AHects Programming. contaned in the media.
And there are some pretty raa
the content of mformation
effect on shaping

Ads," Cininmati Enquire, July 10, 1998, A 1, A17.

26. B. G. Gregg, "Tax Funds Bankroll New Anú-Drug
 Social, Ethical, and Regulatory Aspects of Advertising and Promotion 157

sinlcs. The CEO of a firm headed for prosecution was accusecd of hiring a public relations ir to turi (ut
series of newTac arthcies syinpathetic to the C;EO% firm " Smdarly, there have been several nstances of
a ser
tealth yponsonhiot newpaper opmon edtorialk where the journalists werc beng paid by corporations who
"stca

were receinmg tavorable treatment in the editorials

Another chargeleveled at advertisers is that they purchase air tume only on prograns that draw laryge audvences
Crs argue that these mass market programs lower the quality of televisIOn because cultuural and educatonal
proyrams, whch draw snaller and more selective markets, are dropped in favor of mass market programs Watch a
of content 1s indeed
tew
cprsndes SuiY ridezlla and
or it's hard to argue
winning out over culture and education.
against
the proponition that shallow
In addtron, televiston programmers have a diticult time attracting advertisers to shows that may be valuable
yet addres controversal socialissues. Programs that deal with abortion, sexual abuse, or AlDS may have trouble
drawing advertINeTs who fear the consequences of any association with controversal 1ssues given the predictable
nublic reaction that would come from the religious right.

2 THE ETHICAL ASPECTS OF ADVERTISING

Many of the ethical aspectsofadvertising border on and interact with both the social and legal considerations
of the advertising proces. Ethics are moral standards and principles against which behavior is judged.Fionesty
integrity,farnes, and sensitivity are all incuded in a broad definition of ethics. Much of what is judged as ethical
or unethical comes down to personal judgment. We will discuss the ethical aspects of advertising in three areas
truth in advertisng, advertising to children, and advertising controversial products.

Truth in Advertising.
Although truth in advertising is a key legal issue, it has ethical dimensions as well.The most fundamental ethi-
cal issue has to do with deception-making false or misleading statements in an advertisement. The dificulty
regarding this issue, of course, is in determining just what is deceptive. A manufacturer who cla1ms a laundry
product can remove grass stains is exposed to legal sanctions if the product cannot perform the task. Another
manufacturer who claims to have "The Best Laundry Detergent in the World," however, is pertectly within its
rights to employ superlatives. The use of absolute superlatives such as "Number One" or "Best in the World" is
called puffery and is considered completely legal. The courts have long held that superlatives are understood
by consumers as simply the exaggerated commercial language otf advertising and are interpreted by consumners
as such.
We also need to be aware that various promotional tools are often challenged as beng deceptive. The "small
print" that accompanies many contests or sweepstakes is often challenged by consuners. Siuularly, the appeal of a
"free" gift for listening to a pitch on a resort time share often draws a harsh reaction from consumers. Now, a con-
sumer watchdog group is challenging brand placements in television shows as deceptive. The group Comnercial
Alert argues that television networks are deceiving consumers by not disclosung that they are takng money for
highlighting brands within shows and films."
Another area of debate regarding truth in advertising relates to emotional appeas. lt is likely imposuble to
legisate against emotional appeals such as those made about the beauty- or prestige-enhancing qualttes of a
brand, because these claims are unquantifiable (take another look at Exhibrs 4.6 and 4.7). Sunce these types of
appeals are legal, the ethics of such appcals fall into a gray area. Beauty and prestge, it s argued, are n the eye

O the beholder, and such appeals are neither illegal nor unethcal.
s you can see, there is nothing clear cut about the isstie ot ethics m advertisng. Showng beutitul, slim,
Cessful people in an ad is completely legal and puts a brand m a tavorable settmg do you thnk that is unethical?
If a newspaper or magazine features a brand n an edtoral do you thunk that is unethwal? The challenge is

2. Jauary 20, 2000.

29
Jay eeves, "Scrushy Said to Pay for Positive Stories," Associated Pes), January T9, 2000, 4CCessedt al www.news.yahoo.col on

28. Eamor
a v e r s , "This Opinion Brought to You By..." Business bWeek, Jamuary 30, 2006, 35
29. Claire October o, 2003, 12.
CLKinson, "Watchdog Group IHius TV Product Placement," Adventising Age,
 158
to
develop
your own cthial standardis will jdge yourseu Ancd the

organizaton for whuh

and values aganst whch
y ACts e
aCtkas aty
imay you work.
Advertising to Children.
m i d n are vieed as vulnerable cousuets and-the desire to restrict advertisiig anned at children is
cd that children between 2 and 11
base
" C Tange of concerns, not the least of which is that it is estin14teu ta 11 year
superticiality and Creates
old see around 25,0600 ads in a year." One c o n c e r n is that advertising proiotcs valie
consumers and
that children arc inexpcrienced
is
TOulled material goods and consuption. Anotlher and as such, advertising
influcnces children's demathd.
ands f
n i s t t a t e d persuasions of advertiscrs, an environment
or child-parent conf
in t u r , create
Trom toVs to snack foods. These demands,
g and over again to
children whose
(desires are piqued by effect
ertsg
rehts . Add
tmd to that, haviny
themsclves the historical
to sav view held by child psychologists whO cOntend that advertising advo
n o ovet uction ate
learing skills,
and results in a destrs
creates a
breakdown in carly
VIoler
e, 1s responsible for child obesity,
of parcmal authority. comnercials
at children constitute program-length
also c o n c e r n that many
programs aimed commer
at the time were based
on
t such
products as He-Man, the Surfs,
critics argued
and the Muppets. There have that 70 programs airing
been several attempts by special-inte.
1Cations
in 1990 when
began erest
Ovemet
date, the Federal Communics
programming
aimed at children, but, to
rOups strictly reulate this type of to
tO
continue. One of the ear. rliest might see.
ommission pernmits such programning
children
of advertis1ng
the lelevision that helped oer
amount
restrict
to Childrens
T here have been Action tor
movements

due to the efforts of the special-interest group on chidren's progranmne

restrictions
This regulation restricts advertising
was

Act passed n 1990. Most recently, big food and be.

the Children's Telev1sion miunites per hour on weekdays."
hour on weekends and 12 the Children's Food and Beveraoe
10.5 minutes per and General Mills-signed
marketers-ike McDonalds, Kraft, Pepsi, tirms to address the
issue of obesity amone
erage
The initiative is a voluntary
commitinent
by their advertisino
Advertising Initiative. 1arketers will devote half of rtising
is that food and beverage
children. A key element of the agreement alternatives.*
healthier eating
dollars to ads directed at promoting ethical debate is the argument
that clhildren grow up n
to children,
On the other side of the advertising the rules of "commerce" ear and
a part of everyday
hte. As such, they learn
1s
a system where consunption seem to support that proposition.
are trying to sell
them "stutf. Research would
understand full well that people 15, gain a healthy skepticism
children understand what advertising
Rescarch has found that at a fairly young age
t s intent."
for advertising, and clearly recognize

Advertising Controversial Products.

and services, such s
the advertis1ng of controversial products
Some people question the
wIsdom of allowing that tobacco and alcohole
gambling and lotteries, and fircarms. Critics charge
tobacco, alcoholic beverages, and addictive producs
adolescents with advertising and with making dangerous
beverage firms are targeting
medical journals have published survey
research that clams
This ndeed, a complex issue, Many
appealng * is,
alcohol consumption-particularly among teenagers."
that advertising "caused" c1garette and contradict research conducted
since the

is essential to note, however, that these recent studies completely

It
communications, psychology, and
econoics researchers-includung assessiniens
1951s carried out by marketng,
Cominission Report, released June 1, 2007, www.ttc.gov
30. "Children Not Seeing More Food Ads Television, Federal Trade
on

31. Richad Liuneu. "Psychologists Protest Kids' Ads," Adrentising.Agr, September

11.2000, 4
Sheridan, "FCC Sets Childrens Ad Limis, 1990 ujvmaion
Aress Compuny, vol. 119, no. 20 (190), 33.
32. Patrick J.
33. aura Bird. "NBC Is (One Long Prime-Time
Special
The Wall
Ad. Stvert Joundl, January 21, 1994, B1, B4.
20. 2006. I. 29,
Deal Not Sucha Big Concession." Advestising 4ge. November
34. Stephanie Thompson and Ira Teinowiu. "Big Foods Big ializaaou
The Research," Commeaal Communications, July 1998, 4-7,Tina Mangelburg and Terry Bristol. 0c
35. J. Goldstein. "Children and Advertising
and Adolescem's Skepucisn Toward Advertis1ng,"Junal of.Advetising, vol. 27, ino. 3 (Fall i1998). I1 21
December 11. 1991, BI, B6.
36. Katlhleen Deveny. "Joe Camel Ads Reach Children. Research Finds." The Wall Street Journal, the Amenn
et al.. "RJR Nabisco's Cartoon Camel Promotes Camel Cigarettes to Children."Jounmal of
37. See. for example.Joseph R.
Di Franza
Assexiationm, vol. 266, no. 22 (1991). 3108-3153.
 and Promotion 159
ocial, Ethical, and Regulatory Aspects of Advertising
(as well as several (rallup poils
r ll
t
thetheav alable resC at¢ h by the lederal Tlrade Commission hese carly studies
19993) tound that family, frends, and peersnot advertis1ng are the primary intiience on the use
reattirmed the
and alcohol products. Stndies published the late 1990s and early in this decade have
tobacco
ottob
n
tobacco
hdngs of this
carler research." early age can, ndeed, recognize
Although children at a very advertis
tiniharaters l1ke "Joe (ael," they also recognize as eas1ly the Encrgizer Bunny (batteries), the Jolly reen
with adult products. Kids are
1ant (anncd vegctabies). and Snoopy (life insurancc)all characters associated
(Gian
Research in Europe
caiuse disease and know that they are intended as an aduit product.
also aware that cigarettes and alcoholj
conclision: "Every stuudy on the subject fof advertising cffects on the use of tobacco
otfers the same
finds that children are more mtlucnced by parents and playmates than by the mass media.
Why doesn t advertisSing cause people to SImoke and drink? The simple answer is that advertising just 1stn t
would
no new products
that powertul. Eight out of 10 new products fail and if advertising were so powerful,
Categor ies.
fal.The more detailcd answer Is that advertising cannot create primary demand in mature product ith
an entire product category (recall the discussion
from Chapter 1). W
demand 1s demand tor
Primary isn t powertul enough
mature milk, automobiles, toothpaste, cigarettes, and alcohol-advertising
products-ike does not create
to have
that ettect. Research across several decades has demonstrated repeatedly that advertising
of stimulating
for tobacco or alcohol or any other product category." Advertising is only capable
primary demand
is the result of social and cultural trends,
demand for a brand within a product category. Product category demand consumers' needs and litestyles.
economic conditions, technological change, and other
broad influences on
for maybe that glass ot Wine with dinner.)
No one has ever said that smok1ng or drinking is good for you. (Except
in a complex soCial context, and
That's not what we re say1ng here, either. The point is that these behaviors emerge
the vast weight ot research evidence throughout 50 years suggests
that advertising is not a signiticant causal intu-
its most important role in consumers
ence on nitiation
behavior (eg, smoking, drinking). Rather, advertising plays
have decided to use a product category (eg.. C1garettes. beer).
after
choice of brands (e.g., Camel, Coors) consumers
area with respect to advert1si1ng.
w hat
Gambling and state-rün lotteries represent another controversial product
and lottery players ot the chotces of games
1s the purpose of this advert1sing? Is it meant to inform gamblers
brand) demand stimulation. Or is such advertising des1gned
to
and places to This would be selective
play? (i.e.
demand stimulation. What about
stimulate demand for engag1ng in wagering behavior? This would be primary the placement
compulsive gamblers? What is the state's obligation to protect "vulnerable" citizens by restricting
or content of lottery advertising?
the basis for the claim of vunerabilhty can become com-
When the term "vulnerable" is used, questions as to

side of the among the

1ssue argue that gamblers as an audience are
plex and emotionally charged. Those on one
out intormation from a wide range ot
sources. Those
"information poor."That is, they are not prone to seek1ng
And a
*information poverty demeaning. patronzing. and paternahstic.
on the other side find such claims of
to be a tast and easv wav
new era of gambling emerged when
onl1ne gambling became widespread and proved
as onlne
to lose their life savings.
Stories of out-ot-control onlne gamblng were widespread."Then
tor people
and the lak ot a .eauoshap beween adiveros-
issue ol alcohol and cigarette adverasiing
lian 60 artucles that address the
38. For summary of more
Abuse, Bureau ot Economies. Federal Irade
a
and
Frankena et al., "Alcohol, Consumpuo,
alcohol industry demand, see Mark
ng and agarette and conchusions Were dtawtu diring congresiOl hearns on the topic
of research arucles wliere the
same
Commission. Maich 5, 1985. For a similar listüng bwrounent. C'ouunitee on Energy aud Counierce. House
Health and ttie
Hearings belore the Subconuitlee on
see"Adverusing Tobacco of Products,"
No. 99 167.
18 alnd August I, 1986,
o
Kepresetlaüves, 99h Congress.July ratlier tthati adver tisitig As the basus tor sinoking
maudon, see Charles R. Iavlor
that realfirm peers and tauly
9. For examples of the more recent studies BehaviorS Ot Asaan Aolescens, Jounad of.tdrertusng Reseach (Decen1ber
Media and the Smoking-Related
and P Greg Bonner, "Comment on American
Intluences on Sinoking aud Drinking Auong
Early Atolescens." Jounal f Heulth Eduecstion and
"Peer and Parent
2003), 419 430, Bruce Simons Morton, littuet'e Adokscents to
Swke Jound of Consumer . Afhaurs,
vol. 33, n .
Snih and Mary Ann Suulz, "Tactos hat
Behaior (February 200); and Karen 1.
2 (Winter 1999), 321-357 (ildrens Perreptions ot Cigarette Brand Adverising Awarenes,
Atlect
for eXample, Lucy . Henke, "Young berweeu Cartoon
40. with regard to cartoon characters see,
+ (Winter 1995), 13 27,
and Richutd Mizersk. "The Relaüonship
ldenufication" Joumal of Adventising, vol. 24, n,
(OCwber 1995), 58-70. The
evidence in Europe is
dld larget Market
toward the Product alegory.
Jounnal of ALukelig.
vot. 59

ade Character Recognition and Auiude 1998, 4 8.

Research, (Comimeeal Commuicatons, July
the North-Holland.
"Children and Adverising (Aumsterdun and London:
lded by Jeffrey Goldstein, several decades, see Richard
Schmalensee, The bcommics of Alvvtising
Waterson, "Adverüsing and Tobacco
41. House, 198); and Michael J.
or research on this topic
across
(Contnoversy (Boston: Auburn Charles R. Taylor,
The Advertising L. Capella,
Mark S. Albion and Paul W Michael
Farris, 59-72,
Debate, lternativnal Jvumal of
Adrvelising, 9 (1990),
2008). 7-18.
Cons Analysis of the Two Major Aspects ofthe Meta-Analysis,"Joumal fldrertismg. vol. 37, no.2 (Summer
puon:An Bans on Consumpuon.A
Advert.sing
nthia Webster,"The Effect of Cigarette
and
2, 20K12, 67 74.
Underground Web," BusinesWeek, Septenuber
g e r et al.,"The
 160

Baming revenues
gambling in the approached $1 billion dollars, the US took the bold move ot bannin ali
The United States m October governnet
issue of
in the of advertising 2006.can
controýersial products
g Controvcrsial
"controv products" products can ndeed
ndecd
be conplex. One wd not normally
caused them to category. But, as people began sung claning that
ther ad T
other food
eat
unhealthy food and made them
fatwe, sudden there is a adverti
controversy. Mc)onald
"made themcompanies had to defend themselves
themsclves against
against lawsuits from people who are claimng food
fat."The food industry has lawsiEs that kids are tat because ot prowid
parents, underfunded school systenis thatcountercd withh physical
have dropped the activity programs, and sedentary unc.oncer
enterts
like home video merr
games."
This isse is troublesome enough that the U.S. governinent had to pAs icgislation barring people from

s
" nicknamed
Sdon
for ther obesity. In March 2004, the U.S. House
the "Cheeseburgcr Bill" that would block lawsuits blaming the food industry for ma
of Representatives overwhelmingly aDme
POie tat. During the debate on the bill.one of the bill's sponsors said it was about common sense and pero
focus on this goDal neaitn problem. The chte
esponsitbility."** Many marketcrs are worticd about the intenseheel 1s the discussion about obesity. It dihites
e
oficer of Coca-Cola Co. put it this way: "Our Achilles Our
ave have entered ine
issue."** And, as you read earlier, advertisers
dketing and works against us. It's a huge, huge ad dollars to promoting healthy tood alternatives to chilt
ntary agreement to devote 50 percent of their into some reasonable categoriey-truth in adver
Although we can group thése ethical issues of advertising not as easy to make detinitive statemer
and advertising controversial products-t 1s TeTt
ing. advertis1ng to children,
be matter of personal values and personal internrer
about the status of ethics in advertising, Ethics will always
a
ethics problems n advertising just
in the world, there will be
as long as there are unethical people
tion.And
in every other phase of business and life.

THE REGULATORY AsPECTS OF ADVERTISING.

3
mind government scrutiny and control of the advertising process,
Thé term regulation immediately brings to
themselves and several differene
do regulate advertising. But
consumers

Indeed, various government bodies

as government agencies. Three primarr
much regulatory power over advertising
industry organ1zations exert as
advertising m the truest sense.
groups-consumers, industry organ1zations, and government bodies-regulate consumers and
on legal restrictions, while
shape and restrict the process. The government relies
Together they can be
Like the other topics in this chapter, regulation of advertising
industry groups use less-formal controls. doesn't need to be regulated can be highly
variable.
controversial, and opinions about what does and

Areas of Advertising Regulation.

issues.
untairness n advertis1ng, competitive
There are three basic of advertising regulation: deception and
areas

and advertising to children. Each area is a focal point for regulatory action.

in advertising is unacceptable. The prod-

Decephion and Untairness. Agreement is widespread that deception as it i8 from
lem, of course, is that t is as difficult to determine what is deceptive from a regulatory standpoint
ethical standpoint. The Federal Trade CCommission's (FTC'%) policy statement on deception is the authoritate
Source when it comes to defining deceptive advertising. It specifies the following three elennents as esentuu

declaring an ad deceptive:7

43. Bloomberg News, "Frank Eyes Restoring Web Gaming," March 17,2007, accessed at www.boston.com/news on May 30, ZU0/.

44. Mercedes M. Cardonu. "Marketers Bite Back as Fat Fight FHares Up" Advestising Age. March 1. 2004, 3, 35. .yahoo
45. Rep. Ric Keller (R-Horida). quoted i n Joanne Kenen, "U.S. House Backs Ban on (Obesity L.awsuits," Reuters, published on the i n c

com/rc/040310/congress_obesity_3.hunl on March 10, 2004, accessed Mareh 14, 2004.

46. Stephanie Thompson and Kate MacArthur, "Obesity Fear Frenzy Grips Food Industry," Adertising Age. April 23, 200/, 1, +0: nens

4, One ot the best discussi ons of the FTC's debnition of deception was offered many years ago by Gary T. Ford and John E. Calfee, "Recent De

in FTC Poicy on Deception." Journal of Marketing, vol. 50 (luly 1986). 82-103.

 Social, Ethical, and Regulatory Aspects of Advertising and Promotion 161

the consuimer,
1 There nust bC a fepfesCntation, onmmssion, or practce that is likely to mislead
of a consumer acting rea-
2. This representatiO1), Oiisson, or practice must be judged from thc perspective
sonably n the circmstance.
is whether the act
3 The representatiOn, practice mist be a "material" one. The basic question
Oiss1On, or
to the product or service.
or the practice is likcly to attect the consumer's conduct or decIsion with regard
consumers are likely to have
Ifso, the Practice is 1material annd thercfore consumer harm is likcly because
chosen d1tferently if ot for the deception.
detinition
that's because it is. It is also a

If this detmition of deception sounds like carcfully worded legal jargon, lite. Fortunately, the
to advertisementsin real
that can lead to dnerse interpretations when it is actually applied
make an ad deceptive (go to www.ttc.gow/
FTC now provides highly practical advice for anticipating what can is that both implied
claims
bep/guides/gundes.him). One critical point about the FTC'% approach deception
to

the FTC expects any explicit claim

and missing intormat1ion can be bases for deeming an ad deceptive. Obviously, or
deceive through allusion and innuendo
made in an ad to be truthful, but it also is on the lookout for ads that
ads that deceive by not telling the whole story. defini-
about what constitutes deception, the
Although the FTC and the courts have been reasonably specific
In 1994. Congress ended a long-running dispute
tion of untairnes in advertising has been left relatively vague. "acts or
and in the advert1is1ng industry by approving legislation
that defines unfair advertising as
in the courts
avoidable by
consumers, which is not reasonably
that cause or are likely to cause substantial injury to
practices or competition. Ihis
consumers themselves, and not outweighed by
the countervailing benefits to consumers
costs of advertising,
and.rules out reckless acts on the
definition obl1gates the FTC to assess both the benefits and
be rendered that an advertiser has been unfair.
part of consumers, betore a judgment can

advertising may foster inequities

that lhterally can
Competitive lssues. Because the large dollar
on
amounts spent
to maintàining fair competition
are regulated. Among
destroy competition, several advertising practices relating
these practices are cooperative advertising, comparison
advertising, and the use. of monopoly power
whereby a manufacturer and dealer (either
a

Wertical cooperative advertising is an advertising technique used in reNonal or locl

of advertising. This technique is commonly
wholesaler or retailer) share the expense dealers (recall
wants a brand to benetit
tron a special promotion run by local
markets where a manufacturer this practice and n is ised
in Chapter 1). T1here is nothing illegal, per se, about
the co-op advertising example
regularly. dealers (especially since the advent of irst
the process, however, 1s that
The competitive threat nherent
n
c n be given bogus
now mega retailers
like Walmart, Target, and Home Depot)
department store chains and T hese allowances require l1ttle or no ettort or expendi-
allowances from manutacturers. are a tormm of
cooperative advertising hidden price concessions. As such. they
of the dealer/retailer and thus represent
ture on the part to a dealer. that dealer
must
deemed illegal. It an advertising allowance is granted
unfair competition and are

demonstrate that the funds are applied

specitically to advert1sing.
usc comparI8on ads mappropriately
unfair competition it they
exists for firms to engage in berween the tirms brand
The potential advertiser makes a comparison
those in which anare
Comparison
advertisements
the copettion. Agan, comparison
or ay not explicitly udentity
brands. The comparison may and tyjpically an cttective technique.
and competitors' all sorts of orgnizations
are used trequently by such
ads are completely and legal connparison advertisng. But,
of straighttorward and completely legal
an example and the long-running
The ad in Exhibt 4.13 is over 5G coverage maps
aggressive-Al&Ts
battle
with Verizon
Campaigns get quite
can
attract regulatory serutny."
and could is am untair c o m -
vs. PC ads are examples is not tair, ten there
Apple in such a way
that the comparison
carried out ot gudelines, shown in
If an advertisement is of AdvertISng AgencIes (4As) has isstucad a set
American Association t'TC. may requre a
tirm usng comparison to
petitive efect. The als. F'urther, the
of conparison
Exhibit regarding the use
4.14,
detiiüon of
1994+ tor tlituonal
discussion ot the FTCs
1ge, August, no 2 (1995).
318-321.

Fisher,"How Congress Broke Unlair Ad lnupasse, 1eisintg of 1Ses, Junal Pubiki Polucy uvd NMuketing,
vol. 14,
Claims
6.
Christy Developmets in l'i Adverusing
AsesS1Ietut ot lndhrect Comparaive Adverasing
1alness, see lvan
Preston,"Unfairness
Rose. nd Kenueth
C, Mannung, "A Futther
W. Miniard. Michael J. Barone, Randall L. 35, 4 (Winter 2006),
53-64.
Paul f.Adventising,
vol. n0,

periority Over All Compettors," Jumal Adventisng Age. Perenmber 14, 200, 28.

Comparative Caupaig1s,
nly Bryson York. "Nasty