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Why a class on ethics and social responsibility is important
- learn different views on economic impact, legal and regulatory issues, the future of the industry.
- examine effects while detached.
- see advertising as an institution.
What is advertising as an institution and why is it important?
Definition: to see the cumulative effect of all ads on society. it allows us to see the bigger role advertising plays on society both positive and negative.
economic, societal norms and values
definition of ethics and and why its important for the individual and the institution
- Ethics: set of moral principles or rules that guide behavior.
- for the individual: acting morally is in ones self interest and is a neccesary condition for ones well being and happiness.
3 key areas influencing attitudes toward advertising and its effects on society
1) the way people interepret/see advertising depends on their ASSUMPTIONS. (both societal and individual)
2) Various types of advertising, goals and reactions to it exists. (types differ, goals difer, peoples reaction differs)
3)difficult to measure effects. cause and efect conclusions are not usually possible. awards based on liking not performance. external unknowns (rain?)
2 types of assumptions influencing the way people see advertising
1) individual- prior thoughts, beliefs, values and experiences
2) societal- Shared values, ideas, and assumptions of society during a time period. Perceptions about manipulative power of advertising.
reasons for wearing multiple hats
able to see the point of view/ attitudes of positions related to advertising like the consumer, the marketer, competition etc.
challenges can bring opportunity
main goals for this class and desired practical outcomes
- 1) open your eyes
- 2) build a foundation of knowledge to draw my own conclusions.
- 3) provide me with things to think about
outcomes: grow as individuals, have the mindset and tools to create more effective advertisements. BUILD A BETTER MORE RESPONSIBLE AND RESPECTED INSTITUTION OF ADVERTISING FOR THE FUTURE.
6 key players in assesing the efects of advertising on society.
- 1) advertisers
- 4)other institutions (gov, education, family, religion)
- 6) critics
three areas in society that advertising has power over
- 1. Economic
- 2. social
3 main roles of advertising according to sheehan
- 1. economic- helps sell products, creates competition
- 2. Information- one main source about products to help with purchase decision.
- 3. entertainment. 1 out of 5 people like ads. funny, makes you think, entertaining cool innovative creative
- 1) paid message
- 2) from an identifiable source
- 3) using a mass mediated channel
- 4) with the intent to persuade
Know the difference between intended and unintended effects
- Intended effects: awareness, market share, image associations
- unintended effects: advertising promotes materialism, alcohol, sexual behavior.Can be offensive, perpetuate stereotypes, controversialthese are influenced by a persons worldview
What is a worldview?
What sources help create it and why is it important?
- Worldview is an individuals knowledge, experiences, feelings and values
- Sources include family, religion, education and advertising.
- Important because our worldview impacts our beliefs about advertising andshapes whether we see humans as passive or active members of society. Passive means ads manipulate, active means consumers create meaning
of understanding the critics and their impact on brands, corporations and
institution as a whole.
- 1) need to know your consumers are satisfied with the
- offering in order to protect brand image and corporate image.
- 2) Beliefs can impact public policy decision which in turn determine the
- regulation of advertiseing
- Understanding the critics can in turn help us create better ads and make the
- institution better as a whole.
What are the 5 broad area where advertising receives
- 1. Role of consumers in the process (passive or active)
- 2. Amount of advertising (too much?)
- 3. Types of products (creates uneccesary needs?)
- 4. Mirror or molder of values (promotes a fantasy lifestyle or reflects currenttrends?)
- 5. Profanity, obscenity and indecencyAlso known as MART
6 areas to consider in evaluating criticism.
- (not all criticism is created equal!!)
- 1. Credentials (legitimacy)
- 2. Recency
- 3. Harm identified *
- 4. Reasoning used
- 5. Critics view of the role of the consumer (active or passive)
- 6. Usefulness of criticism
Tips on how to respond to criticism
- 1. Listen
- 2. Provide new info
- 3. Prepare a persuasive response
- 4. Pick your battles
- 5. Encourage open discussion and debate
Why and how are institutions created in society? What
functions do they perform?
- The shared ideas or assumptions of a society usually shape its institutions in that...
- institutions reflect cultural beliefs
- institutions help solve problems
- institutions provide "rules" for behavior.
3 main types of idea systems and describe their relationship with advertising
- 1. Tradition: relies on direction from the past. little room for advertising to grow
- 2. Authority: relies on direction from present/top/whoever is in power. Individual is controlled by few. advertising used to reinforce ideas like propoganda
- 3.classical liberalism: each individual is in control and part of process. they are self interested and rational and "sovereign" which means free and independent.
what led up to classical liberalism?
- scientific revolution- individual discovered.
- each person can speak to god
- shift from agricultural to industrial society
free and indpendent and act in their own self interest.
4 dimension of CL
- egoism (selfish): by nature are motivated by self interest
- intellectualism(smart): active individual. consumer that is rational and calculating and cant be manipulated. honest and complete information
- quietism (reward): apathetic individuals. need stimulation of a reward to enter market as buyers and to keep entering
- atomism: division of economic power among many ensure good of the whole. many producers, laborers and consumers neccessary
Under CL, how are resources allocated?
the aggregate of all individual decisions determines the priorities (resources) of society.
- individuals controlled the flow of resources because they were:
- Stimulated to put forth effort. (quietism)
- To puruse their own self interest. (egoism)
- deliberate and calculating in their pursuit (intellectualism)
- and there were a sufficient numbers of buyers and sellers to keep the market competitive. (atomism)
3 economic questions asked in all societies (based on CL)
What will be produced?
Whatever sovereign individuals want to buy/ is in demand.
- To whome will it be distributed?
- Those who have marketable skills to earn money
- How will the work of society get done?
- Rational individuals who are lured by gain (quietism) will do they tasks sciety believes are important. this assumes mobility.
what are the roles that advertising fullfills (CL idea)?
- advertisings role is
- to make rational decision which
- maintains/encourages a competitive marketplace
what are some examples of american institutions that have been created from CL ideas?
Market system economy (a way to allocate resources where the aggregate of all individual decisions determine the priorities of society
Trial by Jury
Freedom of Speech/press
What does it mean to say the market is self correcting as if by an invisible hand?
- as long as theire are rational and active conumers as well as many buyers and sellers there should be a self correcting market economy (long run)
- these two factors ensure no one person is exploited
what 2 dimensions naturally control the marketplace?
Intellectualism and competitive market (atomism)
- The natural market controls over egoism by means of intellectualism and a
- competitive market. These two factors ensure no one person is exploited
- because sovereign individuals acting in their self interests would naturally result in the good of society.
what is the great flaw of market system economy?
- There is no direct incentive for social responsibility.
- self interested to whats best for their own monetary gain.
(market is self correcting etc)
how is egoism controlled naturally in CL?
the market should be self correcting and self perpetuating as long as there are rational and active conumers and there are many buyers and sellers.
what are changing assumptions about the CL dimensions that caused ppl to question the markets ability to maintain the natural good of the whole
CL assumes there are enough buyers and sellers and also assumes that people have the ability to make rational and caluclating decisions. realistically deicisons are based on both rational (economic) factors AS WELL AS psychological/symbolic (non economic) factors.
examples of observations that led society to believe that the invisible hand wasnt working so well
inequalities, social and moral decay, image advertising...
what is the distinction between decision making that is based on economic reasons vs. non economic reasons
Rational individuals make decisions based on economic reasons. deicisons based on economic reasons satisfy functional needs and beliefs like prize, quality, size etc.
decisions based on non econmic reasons are meant to satisfy a psychological or symbolic need like status, image, or group association. these decisions have a potential for greater consumer manipulation
what are potential results of changing assumptions?
- skepticism rises over who is in control.
- Uncertain about ability of invisible hand to turn self interested acts into socially beneficial act
- increasing desire for government regulation
- to help get CL back on track.
- increasing desire for socially responsible business
- hire minorities, help community, enviro friendly acts
how does viewing consumers as active or passive differe on the Neo liberal continuum
active conumers are considered less vulnerable because thye are more rational and see advertising as a mirror where the ads are persuasive, while passive conumers are considered more vulnerable because they see advertising as a molder that uses ads to manipulate
what are the different views about advertisings role in society?
1. does advertising create needs or provide want satisifers for preexisting needs?
molder of society vs mirror
- 2. what tyype of information should be provided?
- must be honest but should it include functional and symbolic products?
4. who should provide the information?
- 3. how much information should be provided?
- enough to make rational decisions but ration is subjective.
Why is understanding the effects of advertising important to the brand, corps and insititutions?
Advertising institutions influence (public policy decisions in) advertising which influences brand.
- concern what current and potential customers think can impact corporate/brand levels.
- assumptions influence public policy decisions which in turn influence institutional and/or industry level
economic truths about advertising
advertising influences allocations of resources
advertising increases our standard of living
it creates jobs, pay for our media system
conributed to 2.3% to the GNP
What are the 3 imitations of economic studies in advertising and why are they important to understand?
- 1. assumption that adv is working in isolation.
- like other marketing mix elements (4 p's)
- 2. fail to account for external factors.demographic, economic, political, legal,sociocultural
- 3. Neccessary data is unavailable.
- can only get it 10 years later. companies dont want to give it out.
what are the 2 dominant competing views regarding advertisings role in teh economy and the assumptions driving each?
Advertising as MARKET COMPETITION
- Advertising is a MARKET POWER
- assumption: consumers are passive
assumption: consuemrs are active
what is the idea behind market power and what are the flaws?
- Static in one point in time
- ads manipulate and change tastes due to image ads and psychological messages that
- establish loyalty
- lower compeitition (high barrier to entry when an established brand makes it harder for others to enter) this is also known as first mover advantage or economies of scale.
- also higher prices to consumer
- and higher profits for advertiser.
- believes adv. causes concentration.
Flaws include advertising is sole cause of loyalty and effects are permanent.
What is the idea behind advertising as a market competition? what are 2 flaws?
- In this view ads provide info for its active consumers about subsititues. these ads are persuasive.
- it increases price sensitivity
- it increases compeittion
- it lowers price and search costs for consumers.
- in terms of economies of scale, theres not a barrier, adv actually reduces risk of entry.
- cost of doing business is equal in long run.
- not concentrated, it may be that concentration causes adv.
flaws assume that consumers seek out and weigh all options. also that consuemrs are good judges
what is economies of scale
production increases from higher demand leading to costs being spread across a larger volume of goods.
why do firms advertise from MP and MC standpoint?
from market power: to manipulate and control the market/convince ppl they need something to fit in
- from market comp: provide info on subs
- to let consumers know they exist
- may reach new customers
- consumers want adv (for active consumers)
why consumers want adv?
- consumers have diff tastes
- may want tastes changed/spice it up
- lowers search costs and resources
Full price= price of product and resources search cost.
what is social responsibility theory?
the press must operate for the social good of society. the press must provide an open forum for diverse ideas
what are the 6 functions that mass media perform for the benefit of society and why is it important?
- 1. serve the political system
- 2. provide for an informed public for self government
- 3. serve as a watchdog of the government
- 4. serve the economic system -bring buyers and sellers together
- 5. provide entertainment
- 6. maintain own financial self sufficiency
what is the meaning of the chinese wall in relation to adv and mass mesia as well as the origin of the concept?
Describes the ideal yet serperate relationship between mass medias functions of providing content and revenue.
Conflict arises between values of informing the public while making $ in the process. (50-80% of revenue generated by media is from advertising
What is advertisings influence on mass media?
- News can be biased because of financial concerns.
- (TV entertainment programming choices altered and mags consider advertisers in decisions...
cam create advertorials
- blur advertising and editorial content.
- you think someone is writing an editorial about a product they like but really its just a spot ad for advertisers.
it can confuse consumers and create higher "Credibility: for "ad" mssg.
What is mass medias influence on advertising?
- Mass media is a screen for ads.
- MM outlets can accept or reject any ads.
- 1.airwaves are scarce, so broadcasters have an added responsibility to operate in the public interest.
- 2. content of programs and ads cant be known by audiences prior to viewing.
- economic interests can also impact decisions.
what are the 5 mass media factors/theories that can limit the free flow of information?
- 1. media concentration (vertical and horizontal integration)
- 2. media as gatekeepers (media mgmt decides our best interest)
- 3. agenda setting (media tell you what to think about like value, norms features etc).
- 4. Spiral of silence (similar options get discussed while differing views become silenced)
- 5. Cultivation process
Who can limit free speech?
- 1. government
- -nonprotected speech regulations: child porn, false adv
- -content neutral regulations: no viewpoint is favored, but time and place restrictions exist
- -viewpoint or topic restrictions: gov needs a avery compelling reason to restrict
- 2.societal agreements
- 3. media
what are the types of protected speech? what is the govt tryign to accomplish when the govt sets limits on commercial speech?
Non commercial: news, politics, opinions are most protexted.
commercial: speaker has economic intent
in establishing the rights of the advertiser to interact with the public the "good of the people" must be considered.
What are the dates of the early days of law in the U.S?
- 1300s- laws interpreted by god
- 1776-declaration of independence
- 1787- US constitution seperated church and state
- 1791: bill of rights introduced with the first 10 amendments to constitution
first 150 years not much attention paid to the first amendment (1942)
important commercial speech cases
1942 valentine v. chrestensen: 1st distinction between speech and commercial speech
1964 new york times v. sullivan: advertising protected as free speech i an editorial adv. within the boundaries of time place manner restriction
1975 bigelow v. virginia: adv.of a legal service is ok if it serves public interest. cases to be assessed on a case by case basis.
1976 virginia state pharm v. virginia citizens consumer.(drug prices) commercial speech is indispensable to the proper allocation of resources and to the formation of intelligent opinions
- 1977 bates v.state bar of arizona:
- lawyers can advertise