Preface to the Module

Dear distance learner, I welcome you for this course--Advertising and Social
Marketing. The course deals with origin and developments of advertising as well
as principles and practices of advertising and marketing vis-a-vis the way the
media entertain the two. Hence contemporary definitions are given for
advertising and marketing. In addition, social and economic impacts of
advertising are dealt with. Moreover, interrelations among advertising, marketing
as well as the media are discussed giving much room to criticizing concepts
relating to ethics and social responsibility.

Therefore, you will learn what advertising is, what it involves in the process and
how it affects and is affected by the media. Furthermore, you will be making an
attempt to learn what social marketing is and its relation with advertising proper
putting media at the center of the two.

Thus at the end of the course, students will be able to:

 Define important concepts like advertising, marketing and social

marketing

 Comprehend the essence of and interrelations between advertising and

marketing

 Discuss the elements of a sound advertising piece

 Discuss the social and economic impacts of advertising

 Explain how advertisement and the media influence each other

 Discuss the social and ethical issues advertisers face

 Understand how advertising works (how audiences receive and make

sense of ad messages )

 Analyze possible means of regulating unethical and anti-social

advertisings

 Write a standard advertisement piece which satisfies local advertisers

 Analyze and critique some ads published in the local media

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The module will have five units. The first unit tries to introduce the course by
defining advertising, marketing and social marketing as well. Under this unit,
origin and development of advertising, nature and scope of advertising, types of
advertising, roles of advertising, functions of advertising and elements of
advertising are discussed in connection with the media.
The second unit deals with social aspects of advertising. This unit considers
important social and cultural impacts of practice of advertising. To be more
specific some important questions regarding various impacts of advertising are
debated, analyzed and thoroughly discussed.

The third unit is a continuation of the second unit. This unit tries to identify and
explain the economic, social, ethical, and legal issues advertisers must consider.
Thus, social and economic problems that will likely arise from irresponsible and
unethical advertising practices and their effects are discussed. Moreover, the
various roles to be played by government bodies, advertisers, the media and
consumers at large to curb excesses and ill-effects of advertising are considered.
In this unit, much emphasis is given to issues pertaining to ethics and social
responsibility.

Unit four concentrates on the nature of advertising practice in the different media.
More specifically the way advertising is practised in print, electronic and the new
medium is discussed broadly. Hence, merits and demerits of each medium are
examined. More over, the various types of advertising are treated under each
medium.

The fifth unit entertains some important points concerning how ad messages are
received and understood by audiences. In other words, the unit analyses some
psychological processes going on in audience’s minds.

Through out the module, the writer first introduces unit objectives and further
discusses and analyzes important details that fall under every unit. As much as
possible, each sub-topic (excluding those in unit four) is made to open up with
core question(s) that elicit from student’s prior knowledge or experience. If you

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attempt each question before you study the notes, the writer believes that you
benefit as your reading will be highly focused. So you are advised to attempt all
questions most preferably before reading the given notes.

Finally, I will advise you to make connections between the theoretical

discussions and the practise on the ground for a better understanding of the
course. I wish you a successful endeavour.

Unit One
Introduction

1.1 Towards Defining Advertising and Marketing

1.1.1 Advertising Defined
Activity 1: Dear distance student, I hope that you might have heard a lot about
advertising. How do you define it if you are asked to? What things in particular
should be included in the definition? Write some notes on the following space
before you proceed to read the definition given below. Compare your answer
with the note compiled below.
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Various individuals defined the term in various ways. However, I took the
following comprehensive definition forwarded by Wells, Burnnet and Moriarty
(2000). They emphasise on six important elements in defining advertising:

1. It is a paid form of communication except public service announcements

which use sponsored (donated) space and time.
2. The sponsor who pays for the message is identified.
3. Most ads try to influence or persuade consumers to do something with
the exception of those which are designed simply to make consumers

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 aware of the product or company.
4. The messages should be communicated through many different kinds of
mass media.

 Since it is a form of mass communication, it is non-personal.

5. The messages are meant for large audience of potential consumer.
Therefore, advertising is a paid non-personal form of communication from an
identified sponsor using mass media to persuade or influence an audience. Dear
student you must have included some of the mentioned elements in your own
definition I guess.

1.1.2 Defining Marketing

Activity 2: Dear distance student, what about marketing? What kind of
differences you think is there between marketing and social marketing? Try to
write down your own definitions once again before you begin reading the
following part.
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The American Marketing Association defines marketing as the process of
planning and executing the conception, pricing, promotion, and distribution of
ideas, goods and services to create exchanges that satisfy the perceived needs,
wants and objectives of the consumer and the organization.

Effective marketing is the process of finding, satisfying and retaining customers

while the business meets its goals.

Social marketing is a kind of marketing strategy which gives utmost emphasis to

the people (the service takers) than to the profit.

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Advertising is an integral but relatively small part of the marketing mix as shown
in the following diagram.

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Role of Advertising in the Marketing Mix

Product

Promotion Target Price

Audience

place

Fig.1 Elements of the Marketing Process

1.2 Interplay between Advertising and Marketing

Advertising is one part of the marketing communication called promotion. The
umbrella term marketing communication includes promotional activities like
advertisement, public relations, sales promotion, personal selling packaging,
point of sale and direct marketing. Advertising here is one of the several options.

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Advertising makes the following contributions to the marketing process:
1. can reach mass audience
e.g. A TV commercial broadcasted in the Ethiopian Idols show can potentially
reach millions of heterogeneous audiences.

2. Product introduction
e.g. Microsoft advertises the latest innovations of software and hard ware
technology.

3. Explain important changes

e.g. DKT recently began advertising extra features of the new sensation condom-
'ribbed for extra comfort and satisfaction!'

4. Remind and reinforce

e.g. Pepsi Cola has been advertising its product over the last 50 years and it is
still doing that to reinforce its customers' attitudes towards the products.

5. Persuade
e.g. services like child vaccination face a serious challenge and resistance in
some rural sites. A well crafted and planned advertisement initiative helps
convincing them.

However, advertisement is not necessarily a magic bullet to successful

marketing. Superior advertising can not serve an inferior marketing plan or
rescue a bad product- at least not for long- but inferior advertising can destroy an
excellent plan or product. Thus advertising director must thoroughly understand
marketing and advertising's role in the marketing plan. The marketing manager,
too, must understand the role advertising plays in the marketing effort. The
mutual understanding is a crucial part of effective planning.

1.3 Origin and Development of Advertising

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Activity 3: When do you think advertising had started in the history of human
being? In the pre-modern time, after the modern innovations are introduced or
in this post-modern period that we are in? Discuss.
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Now read the following discussion concerning the evolution of advertising

through different era and see if you could do the preceding activity correctly. The
discussion that follows begins with the epistemology of the term and it gradually
brings the historical stuff after an extensive description trying to define
advertising is presented. So you got to be patient to get into the heart of the
matter even later.
The term advertising is derived from the original Latin word 'advertere' which
means 'to turn' the attention. Every piece of advertising turns the attention of the
readers or the listeners or the viewers or the onlookers towards a product or a
service or an idea. Therefore, it can be said that anything that turns the attention
to an article or a service or an idea might be well called as advertising. It is the
power-packed process pertaining to the dissemination of information concerning
an idea, service or a product to impel an action inline with the intention of an
advertiser. Advertising is salesmanship in print. It is the magnate that motivates
the world of business. It is a tantalising technique of popularizing a product. It is
the magic force that turns an instinct into acquisition, a desire into demand and a
dream into reality by influencing the consumption, directing the production,
diverting the distribution and affecting the very course of exchange.

In a nutshell, advertising is a mass communication process of persuading the

prospects by convincing them to buy products or services with increased
satisfaction to the consumers and profits to the sponsors.

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Perhaps, as a means of formal mass communication, advertising came to be
practiced by royalty who sent drummers to make an announcement or
communicate the will and desires of a monarch to his people.

Advertising, as we understand it today, was not used until about 200 years ago.
The form of advertising for the transmission of information dates back to ancient
Greece and Rome. Criers and signs were used to carry information for
advertising goods and services well before the development of printing. Even
during the middle ages, advertising signs were very extensively used. These
signs generally consisted of illustrations of symbols of the products advertised.
The upsurge in advertising came after the development of printing. When printing
techniques were perfected, and as this industry developed, the signs were
replaced by written words or messages.

Advertising has evolved since the industrial revolution as a tool of marketing

communication. It is an art as well as a science. It is a career for many. It is
rapidly getting professionalized. Competition, growing marketing expenses,
product failures, liberalization, globalization and emergence of new electronic
media have given an impetus to advertising activity.

Currently, advertising has become the most visible marketing tool which seeks to
transmit an effective message from the marketer to a group of individuals. The
marketer pays for sponsoring the advertising activity. Advertising, unlike
salesmanship which interacts with a buyer face-to-face, is non-personal. It is
directed at a mass audience; not at an individual, as in personal selling. The fact
that it involves message, audience, channel and sender, puts advertisement in
the category of marketing communication which is one aspect of mass
communication.

1.4 Types of Advertising

Advertising is complex because so many different advertisers try to reach so

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many different types of audiences. Thus there are different types of advertising.

1.4.1 Brand Advertising- is the most visible form of advertising in the national
consumer advertising. It contributes to the development of long-term brand
identity and image. It also tries to develop a distinctive brand image for a product.
For example, an ad promoting a plane with a green-yellow-red flag develops an
image of safety and security in the aviation business of Africa.

1.4.2 Retail (local) Advertising- retail is local and focuses on the store where a
variety of products can be purchased or where a service is offered. The message
announces products that are available locally, stimulates store traffic and tries to
create a distinctive image for the store. R.A. emphasizes price, availability,
location and hours of service (operation). An ad trying to promote a supermarket
can be taken as an example here. What the ad is supposed to do is to locate
what list of goods, services or ideas are on sale at some retail at a certain
specified service time. By so doing, it stimulates stock traffic. Had one not
known what list of things is available at Tana Super Market, s/he could spend
time searching them from Dembel City Center in vain.
1.4.3 Political Advertising- is a means by which politicians use to persuade
people to vote for them. The major criticism of such advertising is its tendency to
focus on image than on issue. For obvious reason, political candidates do not
emphasize much on their weaknesses while rallying for election. They just run to
build positive image of themselves in the eyes of the electorates.

1.4.4 Directory Advertising- the best example is the yellow page where people
refer to it to find out how to buy a product or service. In this relatively stable
advertising, people can have ready-made information about the best physician,
the best Chinese Restaurant, the best school to study in, the best engineering
consultant or almost any range of issues that have already been registered in the
directory.

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1.4.5 Direct Response Advertising- can be any advertising medium, including
direct mail, but the message is different from that of a national or retail
advertising in that it tries to stimulate a sale directly. The consumer can respond
by telephone or mail, and the product is delivered directly to the consumer by
mail or by some other carrier. What differs this kind of ad from the
aforementioned ones is immediate delivery of goods or ideas to sale for the
needy who had already ordered after once being exposed to the message.

1.4.6 Business to Business Advertising- includes messages directed at retailers,

whole sellers and distributors as well as industrial purchasers and professionals
such as lawyers and physicians. Business publications or professional journals
are often used for this purpose.

1.4.7 Institutional Advertising- also called corporate advertising, carry messages

that focus on establishing a corporate identity or winning the public to the
organization's point of view.

1.4.8 Public Service Advertising (PSA)- communicates a message on behalf of

some good cause; such as stopping drunk driving (mothers against drunk driving)
or prevent child abuse. These ads are usually created for free by advertising
professionals and the media often donate the space and time.

1.4.9 Interactive Advertising- is delivered to individual consumers who have

access to a computer and the internet. Ads are delivered via web-pages, banner
ads and so forth. In this instance, the consumer can respond to the ad, modify it,
or ignore it.

We see, then, that there is not just one kind of advertising. In fact, it is a large and
varied industry. All types of advertising demand creative, original messages that
are strategically sound and well executed.

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Activity 4: What are the differences and similarities between Direct Response
Advertising and Interactive Advertising?
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Please try to make similar comparisons and contrasts between and among
various constructs of the aforementioned types of advertising. Share your views
with one of the students in the neighborhood.

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1.5 What is Social Marketing?
Activity 5: Have you ever heard anything regarding Social Marketing? If so what
are some of its possible differences and similarities with commercial marketing?
Where did the concept emanate from? The following article by Nedra Kline
Weinreich provides you with answers for the above questions. Read the article
carefully.
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Social marketing is the planning and implementation of programs designed to

bring about social change using concepts from commercial marketing.

The health communications field has been rapidly changing over the past few
decades. It has evolved from a one-dimensional reliance on public service
announcements to a more sophisticated approach which draws from successful
techniques used by commercial marketers, termed "social marketing." Rather
than dictating the way that information is to be conveyed from the top-down,
public health professionals are learning to listen to the needs and desires of the
target audience themselves, and building the program from there. This focus on
the "consumer" involves in-depth research and constant re-evaluation of every
aspect of the program. In fact, research and evaluation together form the very
cornerstone of the social marketing process.

Social marketing was "born" as a discipline in the 1970s, when Philip Kotler and
Gerald Zaltman realized that the same marketing principles that were being used
to sell products to consumers could be used to "sell" ideas, attitudes and
behaviors. Kotler and Andreasen define social marketing as "differing from other
areas of marketing only with respect to the objectives of the marketer and his or
her organization. Social marketing seeks to influence social behaviors not to

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benefit the marketer, but to benefit the target audience and the general society."
This technique has been used extensively in international health programs,
especially for contraceptives and oral rehydration therapy (ORT), and is being
used with more frequency in the United States for such diverse topics as drug
abuse, heart disease and organ donation.

Like commercial marketing, the primary focus is on the consumer--on learning

what people want and need rather than trying to persuade them to buy what we
happen to be producing. Marketing talks to the consumer, not about the product.
The planning process takes this consumer focus into account by addressing the
elements of the "marketing mix." This refers to decisions about 1) the conception
of a Product, 2) Price, 3) distribution (Place), and 4) Promotion. These are often
called the "Four Ps" of marketing. Social marketing also adds a few more "P's." At
the end is an example of the marketing mix.

Product

The social marketing "product" is not necessarily a physical offering. A

continuum of products exists, ranging from tangible, physical products (e.g.,
condoms), to services (e.g., medical exams), practices (e.g., breastfeeding, ORT
or eating a heart-healthy diet) and finally, more intangible ideas (e.g.,
environmental protection). In order to have a viable product, people must first
perceive that they have a genuine problem, and that the product offering is a
good solution for that problem. The role of research here is to discover the
consumers' perceptions of the problem and the product, and to determine how
important they feel it is to take action against the problem.

Price

"Price" refers to what the consumer must do in order to obtain the social
marketing product. This cost may be monetary, or it may instead require the
consumer to give up intangibles, such as time or effort, or to risk embarrassment
and disapproval. If the costs outweigh the benefits for an individual, the

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perceived value of the offering will be low and it will be unlikely to be adopted.
However, if the benefits are perceived as greater than their costs, chances of trial
and adoption of the product is much greater.

In setting the price, particularly for a physical product, such as contraceptives,

there are many issues to consider. If the product is priced too low, or provided
free of charge, the consumer may perceive it as being low in quality. On the other
hand, if the price is too high, some will not be able to afford it. Social marketers
must balance these considerations, and often end up charging at least a nominal
fee to increase perceptions of quality and to confer a sense of "dignity" to the
transaction. These perceptions of costs and benefits can be determined through
research, and used in positioning the product.

Place

"Place" describes the way that the product reaches the consumer. For a tangible
product, this refers to the distribution system--including the warehouse, trucks,
sales force, retail outlets where it is sold, or places where it is given out for free.
For an intangible product, place is less clear-cut, but refers to decisions about the
channels through which consumers are reached with information or training. This
may include doctors' offices, shopping malls, mass media channels or in-home
demonstrations. Another element of place is deciding how to ensure accessibility
of the offering and quality of the service delivery. By determining the activities
and habits of the target audience, as well as their experience and satisfaction
with the existing delivery system, researchers can pinpoint the most ideal means
of distribution for the offering.

Promotion

Finally, the last "P" is promotion. Because of its visibility, this element is often
mistakenly thought of as comprising the whole of social marketing. However, as
can be seen by the previous discussion, it is only one piece. Promotion consists
of the integrated use of advertising, public relations, promotions, media advocacy,

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personal selling and entertainment vehicles. The focus is on creating and
sustaining demand for the product. Public service announcements or paid ads
are one way, but there are other methods such as coupons, media events,
editorials, "Tupperware"-style parties or in-store displays. Research is crucial to
determine the most effective and efficient vehicles to reach the target audience
and increase demand. The primary research findings themselves can also be
used to gain publicity for the program at media events and in news stories.

1.5.1 Additional Social Marketing "P's"

Publics--Social marketers often have many different audiences that their

program has to address in order to be successful. "Publics" refers to both the
external and internal groups involved in the program. External publics include the
target audience, secondary audiences, policymakers, and gatekeepers, while the
internal publics are those who are involved in some way with either approval or
implementation of the program.

Partnership--Social and health issues are often so complex that one agency can't
make a dent by itself. You need to team up with other organizations in the
community to really be effective. You need to figure out which organizations
have similar goals to yours--not necessarily the same goals--and identify ways
you can work together.

Policy--Social marketing programs can do well in motivating individual behavior

change, but that is difficult to sustain unless the environment they're in supports
that change for the long run. Often, policy change is needed, and media advocacy
programs can be an effective complement to a social marketing program.

Purse Strings--Most organizations that develop social marketing programs

operate through funds provided by sources such as foundations, governmental
grants or donations. This adds another dimension to the strategy development-
namely, where will you get the money to create your program?

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1.5.2 Example of a Marketing Mix Strategy

As an example, the marketing mix strategy for a breast cancer screening

campaign for older women might include the following elements:

 The product could be any of these three behaviors: getting an annual

mammogram, seeing a physician each year for a breast exam and
performing monthly breast self-exams.
 The price of engaging in these behaviors includes the monetary costs of
the mammogram and exam, potential discomfort and/or embarrassment,
time and even the possibility of actually finding a lump.
 The place that these medical and educational services are offered might
be a mobile van, local hospitals, clinics and worksites, depending upon the
needs of the target audience.
 Promotion could be done through public service announcements,
billboards, mass mailings, media events and community outreach.
 The "publics" you might need to address include your target audience
(let's say low-income women age 40 to 65), the people who influence their
decisions like their husbands or physicians, policymakers, public service
directors at local radio stations, as well as your board of directors and
office staff.
 Partnerships could be cultivated with local or national women's groups,
corporate sponsors, medical organizations, and service clubs or media
outlets.
 The policy aspects of the campaign might focus on increasing access to
mammograms through lower costs, requiring insurance and Medicaid
coverage of mammograms or increasing federal funding for breast cancer
research.
 The purse strings, or where the funding will come from, may be
governmental grants, such as from the National Cancer Institute or the
local health department, foundation grants or an organization like the
American Cancer Society.

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Each element of the marketing mix should be taken into consideration as the
program is developed, for they are the core of the marketing effort. Research is
used to elucidate and shape the final product, price, place, promotion and related
decisions.

Source: [Link]

To summarize important aspects of social marketing:

 The ultimate objective of marketing is to influence action;

 Action is undertaken whenever target audiences believe that the benefits
they receive will be greater than the costs they incur;
 Programs to influence action will be more effective if they are based on an
understanding of the target audience's own perceptions of the proposed
exchange;
 Target audiences are seldom uniform in their perceptions and/or likely
responses to marketing efforts and so should be partitioned into
segments;
 Marketing efforts must incorporate all of the "4 Ps," i.e.:
o Create an enticing "Product" (i.e., the package of benefits
associated with the desired action);
o Minimize the "Price" the target audience believes it must pay in the
exchange;
o Make the exchange and its opportunities available in "Places" that
reach the audience and fit its lifestyles;
o Promote the exchange opportunity with creativity and through
channels and tactics that maximize desired responses;
 Recommended behaviors always have competition which must be
understood and addressed;
 The marketplace is constantly changing and so program effects must be
regularly monitored and management must be prepared to rapidly alter
strategies and tactics.

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These key concepts can be abbreviated as follows:

 Action is the objective

 The target audience is the focus
 The exchange is critical
 Segment markets
 Use all four Ps
 Analyze and beware of competition
 Monitor and be flexible

Source: [Link]

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1.6 Roles of Advertising
Advertising can play four important roles:
 Marketing role
 Communication role
 Economic role
 Societal role
Dear distance student now let us see what each of these roles entail.

1.6.1 Marketing Role: Marketing is a process a business use to satisfy consumer

needs and wants through provision of goods, services and/ or ideas. (Consumer,
in this case, refers to the target market). The tools available to marketing include
the product, the price, the means to deliver the product (the place) and
promotion as a form of marketing communication. This marketing mix is called
the four Ps as shown in the preceding diagram. Advertising must not only be
profit-oriented. While advertising can help businesses make more profit, it must
not be at the expense of public welfare. Unless consumers are kept satisfied by
the day to day activities of advertisers, the over all business process would not
be a healthy one.

Marketing communication consists of several related communication techniques,

including advertising, personal selling and public relations. Though it is often the
most visible, advertising is only one means of marketing communication.

1.6.2 The Communication Role: Advertising is a form of mass communication

which transmits different types of market information to match buyers and
sellers in the market place. Advertising both informs and transforms the product
by creating an image that goes beyond straight forward facts.

1.6.3 Economic Role: According to market-power model, advertising is

considered to be a means of persuasion that increases product differentiation

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and decrease consumer's willingness to substitute competing alternatives. It
reduces price elasticity of demand by informing customers that there are
alternative products or services in the market without mentioning price.
According to the Economics of information theory, however, advertising
enhances price elasticity of demand by mentioning a small change in price a
certain competing product decided to make. Price elasticity in this sense is a
function of consumer's awareness and qualitative knowledge about close brand
substitutes. The more substitutes of a product that exists, the more sensitive the
consumers would become for price.

1.6.4 The Societal Role: Advertisement helps people to be informed on new

innovations, ideas and improved products so that they can make life better by
making informed selections. Advertisement tends to flourish in a society that
enjoys some level of economic abundance where supply exceeds demand. In this
context, advertisement moves from being a simple informational service (telling
consumers where they can find products) to being a message that creates a
demand for a particular brand.

But the question is: Does advertising follow trends or does it lead them? At what
points does advertising cross the line between reflecting social values and
creating social values? Can advertising manipulate people?

Some critics argue that advertising has the power to dictate people how to
behave. They believe that even if individual ad can not control our behavior, the
cumulative effect of non-stop TV, radio, print and outdoor ads can be
overwhelming. However, the evidence demonstrating the manipulative power of
advertising is shaky because so many other factors contribute to the choices we
make. Even so, the advertising industry has highly influenced both people and the
market, especially the media industry to the extent that the mass media no
longer survive without the support from advertising.

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1.7 Functions of Advertising
Even though each ad or campaign tries to accomplish goals unique to its
sponsors, advertising performs three basic functions.

 Provide product and brand information Although many ads are devoid of
information, providing the consumer with relevant information that will aid
decision making is still the main function of advertising. The information
given depends on the needs of the target audience. In the case of
purchasing a new suit, needed information might simply include price and
outlet location. The American Diary Association tells us to "Drink Milk." For
technical products, however, the information is likely to be very detailed.

Activity 6: If there are two ad pieces one of which aims at promoting canned
food and another promoting 2008 model brand new automobile, in which case
do you think is the ad supposed to be more informational? Reason it out.
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 Provide incentives to take action In most instances, consumers are

reluctant to change established behavior. Even if they are somewhat
dissatisfied with the current product or service, a habit has been
established and learning about new product is deemed difficult.
Advertising provides the consumer with reasons to switch brands by
presenting reasons through copy of graphics. Convenience, high quality,
lower price, warranties or a celebrity endorser are all possibilities.

 Provide reminders and reinforcement It is amazing how much advertising

is directed at current customers. Consumers forget why they bought a
particular brand of computer or automobile. Advertising must remind the

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 consumer constantly about the name of the brand, its benefits, its value
and so forth. These same messages help reinforce the consumers'
decision. Most TV ads seem to serve this function.

1.8 Advertising and the Media

The objective of all advertising is to inform the public about the right product or
service or idea at the right time through the right medium. Consequently, the right
selection of the right media is crucial to success in advertising, though equally
important factors are the message, the timing, the place and the target group.

Overall, media serve as a vehicle for advertising. However, the vehicle is not
easily driven. The medium or media to advertise on wouldn’t be arbitrarily
selected. There are some important issues to consider in the process. Four
important issues to consider in this activity of determining the most effective
media for informing the public about products are: Media selection, media
planning, media strategy, and media research.

1.8.1 Media selection-- refers to the selection of a specific medium or a

combination of media ('the media mix'). For example, newspaper may be used to
advertise a cell-phone with a multi-feature for upper middle class audiences. The
same advertisement message may be adapted to radio so as to remind them. Or
a new detergent may be introduced into a market by ad films in the cinema, on
television, with the press and outdoor media being selected as a 'reminder' media.

1.8.2 Media research--involves the collection of data about the various

advertising media, surveying consumers on their media preferences and habits,
and carrying out primary and secondary research on effectiveness of each
medium for selling particular types of products. Agencies may depend on such
readership or audience surveys to draw up media plans and strategies.

1.8.3 Media strategy--is part of the marketing strategy which involves media

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planning and media selection. It refers to the overall activities and decisions
made to get the product, service or idea sold using media as agents.

1.8.4 Media planning--, however, is a more general term which refers to all
decisions regarding the time and place of advertising, in addition to the selection
of the media. Media planning thus involve not only 'media selection' but also the
drawing of an advertising 'schedule' (the frequency, for instance, with which the
ad or campaign will appear in the various media). Single insertion in a single
medium is rare for consumer products. Media planning is, thus, the process of
determining how to use time and space in a medium or campaign to achieve
marketing objectives.

Media planning can have the following importance:

 Minimize inflation of media costs
 Can be taken as a benchmark to advertise for segmentation of a market
consisted of a certain interest group, particular class or socio-economic
standard.

The rise in a number of rival brands and products has made it more necessary to
advertise competitively in carefully selected media. The old practice of selecting
women's magazine for women-oriented products will not work any longer since
there are so many women's magazines in different languages. This is equally
true of business magazines and investment magazines. With a number of
special interest magazines flooding the market, the choice for the advertiser is
not easy to make.

Media planners, therefore, have to address the following key questions:

1. What are the media available that will serve advertisers' interests in the
most effective manner?
2. Which individual medium in each general category of media selected will
be the best vehicle for client's total advertising?

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 3. What would make the best 'media mix' for the client's total advertising?
4. What would be the most effective media schedule for the release of
client's ads in each of those media?

Steps in the media plan

Chunawalla, et al (2000), suggest the following four steps as steps that should
be followed when planning a media.

Step 1: Target market study-- the first step in media planning must be gathering
useful data about the target market audience to be reached by the advertising.
Interest, attitude, age-group, language, religion, sex composition, socio-economic
status, profession and cultural background can be considered in categorizing the
target market. Central Statistical Agency (CSA) can provide such a data. The kind
of data needed about the target audience can be classified into the following:
 Demographic- age, sex, income, religion, language, etc.
 Psychographic- life styles, cultures, beliefs and tastes of various groups of
people (their psychological orientations)
 Consumer profile- taste and preference of the target people with reference
to different products or the particular product or brand to be advertised
 Media profile- the media habit and preference of the target audiences

Step 2: Designing the ad message-- the message should be designed in a way

they suit to the socio-cultural as well as media profile of the target group. The
message, be it visual or copy, must make sense to them, it must speak their
language and must appeal to their expectations. In other words, the message
should focus on: the buying motives of the target group, the selling points of the
product, and should decide which of the selling points to focus on in designing
the ad messages.

Step 3: Matching media and target group-- look for the ideal match between the
target group's various profiles and the appropriate media. Young college

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students, for example, may not spend much time on with TV in weekdays except
weekends. So would there be any point in showing the soft drink ads targeted at
college youths on weekday evenings? Perhaps they are in library scanning some
sport magazines as they may usually do.

Step 4: Media selection-- deciding the media vehicle-- the reach, the frequency
and size of the advertising campaign-- is the final step. The 'media vehicle' is the
individual newspaper or magazine or radio program or TV serial or video film to
be used for exposing the advertisement.

In selecting the media, advertisers will need to consider the following elements:
 The objective of the advertising campaign;
 The coverage and reach of the media;
 Media costs; and
 The nature of the message

Activity 7: Which one among the afore-discussed four elements (media

selection, media strategy, media research, and media planning) you think is
most important in the advertising process in general? Why? Write down your
answer in the space provided before you pass on to the next part..
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 Unit Two
Advertisement and Society

2.1 Background and Unit Objectives

Advertising is an indispensable factor in modern society, as it affects everyone in

the society in one way or the other because it is multi-dimensional. It is being felt
by the society as a great communicator, effective educator, efficient entertainer,
perfect perverter and enchanting cheat too. The social role of advertising is quite
evident from what it does for the society -both good and bad. Some have dubbed
advertising as blatant, uneconomic and anti-social activity. It is really very
difficult to segregate economic and social role of advertising. Some amount of
over-lapping, therefore, is unavoidable. The exact social role of advertising can be
well grasped by answering the following questions. These are: 1. Is advertising
useful activity? 2. Is advertising influencing the consumer prices? 3. Is
advertising having any bearing on consumer choice? 4. Is advertising persuasive?
5. Does it influence consumer welfare and consumer protection? 6. Does it
improve the standard of living? 7. Does it affect the cultural values of society? 8.
Is there any ethics and truth in advertising? 9. Can it be controlled economically?
10. Does it provide enough information to the consumers?

Thus, while some reasonable overlap is eminent with the next unit, this unit will
have the following general objectives:

 Discuss the major roles advertising plays in the modern society

 Debate the controversies revolving around advertising’s persuasive

tendency, usefulness and its impact on consumer’s price.

 Discuss the effect of advertising on culture.

 Define the essence of truth as it is reflected in the business of advertising.

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2.2 Advertising as a Social and Business Process

Advertising is a social institution as much as it is economic. Today, conceive it as

an on-going social process. Process is something that speaks of ceaseless
efforts, activities in search of what is desired. Social process stands for all those
social activities that are carried out to achieve the aims of individual and group
members of a society. These activities need not be necessarily social in
character. They may be economic, political, educational, religious or cultural
which are indispensable and inseparable from the society. It represents a social
life and living where everyone is busy from dawn to dusk doing something,
somewhere for some one for some reward. Advertising is one such activity. It is
warp and woof of modern society. It is so much a part of social life that we are
breathing advertising. It is something that surrounds us like an air. It has a sway
of wide spectrum. It taxes our time, energy and treasure of we people uninvited
and unwarned. It is an essential concomitant of social life. It is the thick shade of
social creation.

It has been so close to us because it is a great persuasive factor. It roots our

lives substantially, if not totally. It respects our way of thinking and most
matching to our common sense, reasoning and demonstrating that it is really
democratic in nature and springling in spirit. It impels us to buy a product but it
never compels to do so. It makes a strong case for a product. It appeals, seeks
favor by providing latest information on a product, service or an idea. It is so
powerful that it acts as a chisel to shape out tastes and a pattern to mould our
opinions. It is a guide, a counsel and a friend to have wise spending on a good
product to derive maximum satisfaction. It generates gainful employment
opportunities for the men and women of head and heart. It raises our standard of
living by affecting the course of consumption, process of production and scale of
exchange. It encourages the cultural pattern and is instrumental in improving for
further refinement. It reduces the tax burden on the society as it replaces social
taxing by income generation. It is the great multiplier of national income,
constructive force in a society of modern times.

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Advertising is also a business process. A business process is characterized by
smooth, effective and efficient conduct and performance of series of operations
in any branch of business. Advertising is the lever of modern business structure.
It is the compass that finds direction for the business community. It is the
stethoscope to feel the pulse of markets and the economic system. Advertising
works before production, with production and after production. Advertising is at
constant work well before the arrival of the product. Modern production is not
only mass but also in anticipation of demand. Every business house works on the
hope that whatever is produced will be sold. Advertising does spade-work for the
arrival of such product meant for the members of the society. It informs them,
educates them, convinces them and prepares them to welcome the new product
or a service or an idea by sweeping away the prejudices in their minds. It tells
them how a new product is better, cheaper, and readily available as compared to
the existing one in the market. Thus, advertisement on 'Sumeet-SP-16' has
created an impression on the people and that the people are ready to welcome it
as a reliable quality product of a standard manufacturing house.

It moves along the production process. Advertising is a continuous activity as

business is. Production and marketing activities are so closely inter-linked that
they go hand in hand. Advertising will not stop once it has done the spade-work.
It informs the consumers when the product will be ready, where it will be
available, under what conditions and how they are to get it. Advertising as tool of
marketing, proceeds along with the apparatus of production to match it to
markets and marketing. Advertising not only moves with production but even
after production. The role of advertising does not come to an end once the
products are ready. It increases, on the contrary. The successful business house
is one that believes in clearing the shelves than warming them with stock piles.
Advertising accelerates the tempo of turnover and quick turning of investment. It
keeps constantly the product before the consumers and results in repeated sales.

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It ties the consumers to the brand, to the dealer and to the business house as a
loyal customer by providing what a product or a service does for him than his
competitors. Though business is possible without advertising, it is impossible to
conceive business on such a mass scale and at such a grand velocity. It is the
spark-plug and the lubricant 'of business machinery. Today, its function is not
merely to inform, but to sell products, services, ideas and style of living.

Thus, advertising is the business process as nicely put by Stewart. H. Britt.

"Doing business without advertising is like winking at a girl in the dark; you know
what you are doing, but nobody else does". Advertising as a business process is
only a sub process of social process. It is impounded in the compound of society.

But the above discussion concentrates on what a sound advertising does to the
business and to the customers at large. There are, however, deviations from this
standard which will latter be dealt with in much detail in the next unit.

2.3 More on Social Aspects of Advertising

As already been stated in the preceding background, it is worth to break this

broad point into pieces of questions whose answers can develop our knowledge
regarding the point. Dear student, the following part concentrates on discussing
social aspects of advertising in much detail. Pay attention to discussions that
follow each question and try to build up a meaningful synthesis in the end.

2.3.1 Is advertising a useful activity?

Activity 8: What do we mean by usefulness? Is there any objective and
agreeable yardstick to measure usefulness of something? If so, how can we put
it into use so as to judge whether advertising is a useful activity? Try to answer
these questions before you proceed to the following reading.

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Usefulness implies utility. Utility is the value added to a thing or a good. Value is
an intangible or psychological phenomenon that is subjective. Therefore, value of
anything exists in the human mind and not in the thing. Value is something that is
perceived. Thus, "value is the sum-total of utilities, satisfactions and rewards --
either in the realm of expectations before purchase or in experience during and
after use" as put by Sandge and Fryburger. The answer to the question "is
advertising a useful activity?” depends on how a person perceives advertising. In
majority of cases, the answer is yes, as it adds value to the products or services
or the ideas that are bought and sold. It is useful activity because it creates
utilities-- usual and unusual. The usual utilities are: form-place-time and
possession. The unusual is that of perception. Form utility is created when it
informs the availability of latest model. Thus, new models of Sony sound gadgets,
if informed, is the case of form utility because new models are improvement over
the earlier models in terms of quality, performance and price. Place utility is
created when the advertisement gives complete idea on where these products or
services are available and how to get them. Thus, an advertisement of availability
of service of a doctor-- a consultancy on 'baldness' is case of place utility. It is
equally true if the advertisement gives the details of a store or a dealer where the
goods are available. Time utility is created when the advertisement makes clear
about the arrival time or availability time. These are the usual utilities. Perhaps,
the most important unusual utility is that of 'perception' utility.

Perception utility is created when the advertising modifies his perception of

goods and services. Advertising adds value as these changes in perceptions
make product or service more desirable. The very fact that the consumer is
prepared to pay more for the advertised product than the unadvertised, shows
that advertising has added value. In the past, never we heard of advertising about

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common salt. Now, we are prepared to pay higher price for Iodized Salt as an
advertised product.

Advertising is a useful activity from the angles of those who are influenced by it.
It is useful to producers because it increases and stabilizes the sales turnover; it
maintains the existing markets and explores the new ones; it controls product
prices. It is useful to the middlemen because, it guarantees quick sales; it acts as
a salesman; it makes possible retail price maintenance. It is useful to the sales
army because, it creates a colorful background; it reduces his burden and it
instills confidence and initiative. It is useful to the consumers because, it acts a
driving force in making buying decisions, it ensures better quality products at
reasonable prices; it saves good deal of time. It is useful to the government
because, it is a source of revenue; it reduces tax liability on the general public and
is a communicator. The society, in general, stands benefited because, it
generates gainful employment opportunities; it uplifts the living standards of
community; it provides new horizons of knowledge and it upholds the culture of
nation.

Thus, advertising is a useful activity. It would be wrong to dismiss it as a wasteful

and unproductive activity. It is known for its ability to add value. Of all the utilities,
perceptional utility is of paramount importance as it strikes at very root of
economic and social system accepted. Without advertising many business
houses would never get off the ground because it is not enough to just
manufacture a product. You have got to inform the people of its existence and
give them good reasons to buy the said product or a service.

2.3.2 Does advertising influence the consumer prices?

Advertising has definite influence on the consumer prices. Price is the monetary
value paid by the consumers for a product or a unit of service. Price, therefore,

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includes cost of production, distribution and reasonable amount of profit.
Advertising is the part of distribution costs. Therefore, rise in advertising cost
should lead to price rise of a product or a service. This is the general contention.
However, actual effect on advertising will be quite different than contended by
some people, as clarified as under.

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Activity 9:

Briefly discuss the long-term and short-term effects of advertising on consumer price.

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The actual effects are:

1. In the short-run, advertising expenses tend to increase the consumer prices as

cost of product is jacked up by the amount of advertising expenditure.
Consumers will have to pay higher prices for the advertised products or services.
However, in the long-run, as advertising is accountable for increased sales, it
encourages increased production that entails economies of large-scale and
better utilization of existing capacity, unit production cost comes down
considerably and the consumers get benefit of this provided producers decide to
share such savings in costs with the consumers. Therefore, consumers need not
worry so long as producers are ready and willing to pass on the benefits of
savings in costs.

2. Advertising costs are the part of distribution costs. These advertising costs
may be creative or competitive. They are creative so long as they do not increase
materially the prices. Such marginal rise in prices is justified as advertising does
the work of informing the consumers and helping them in having benefits of wise
or rational buying. Once it crosses this safe limit, it becomes competitive and it is
the consumers who suffer a lot as they bear the burnt. Such competitive
advertising is the silent battle fought by the producers at the cost of consumers
where neither the consumers nor the producers are well-off, as it is a losing
battle.

3. When consumers themselves decide to go in for the branded products, then

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they are responsible for the rise in the consumer prices as they patronize a
particular brand or a producer. Such brand or company image is the outcome of
aggressive advertising. Brand advertising creates consumer preferences, divides
the marketing to special class of customers and that class is made to bear the
cost brand preference. Consumers are prepared to pay higher price because,
brand is value --a status symbol --a quality --a personality -- and so on. Thus, the
brand advertising tends to turn demand inelastic to prices, resulting in price
rigidity and exploitation.

4. Whenever advertising is really very effective, it has salutary effect on

consumer prices because, even if there are increased distribution costs, the unit
distribution cost comes down because it supplements the other means of
promotion like personal selling, point of purchase displays, publicity and sales-
promotion. Further, the unit cost of advertising will be much lesser than in case
of personal selling, displays and promotional efforts. In these cases, consumers
are benefited in the form of lower prices.

In short, advertising has favorable effects on consumer prices, though

competitive advertising has harmful effects. Advertising -competitive -if
controlled, there is no reason why the consumer prices are to shoot up to the
detriment of consumer interests.

2.3.3 Does advertising have any bearing on consumer choice?

Activity 10: What is the reason for a basic change in approach of marketing
process from the so-called sellers’ market (caveat emptor) to caveat venditor?
Discuss.

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It is the consumer choice or consumer freedom that revolutionized the very

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concept of modem marketing. In the dead past, the products were produced and
then consumers were to select from the available stock or range of products -as
it happens in many underdeveloped countries even today. This implies existence
of sellers' market. However, today, marketing is consumer-oriented where his
likes, preferences, attitudes, opinions have respect in the production-programs of
producers. Every producer is to take into account these individual requirements
of consumers when producing the goods and services and advertise the same
for successful selling. It is wrong to say that advertising has the super-power to
force a response and can sell anything. The audience's predispositions, their
attitudes, beliefs, motives and values largely determine the costs of not only
production but also distribution -the media the consumers select, the
advertisements they see, the messages that they accept and the product they
buy. Instead of forcing a response, advertising elicits the responses the audience
is predisposed to make. Advertising succeeds when it gives people what they
want. Consumer response in the markets is free and voluntary. That is 'Caveat
emptor' has given way to ‘caveat venditors’.

Accordingly, modern marketing accepts consumer as the king because, he has

the purchasing power and no force on the earth would compel him to buy a
particular product or a service. He has the fullest freedom to spend on the
products or services of his choice; it left to his sweet will and caprice to spend
and enjoy. Every consumer wishes and tries to preserve this consumer
sovereignty. A producer or a dealer succeeds if he wins the favor of this king by
providing what he wants. This consumer sovereignty has two significant
implications. 1. S/He has the fundamental freedom to spend or not to spend his
disposable income on goods and services that are available in the market place.
No one can force the individual in the society to spend as per his calculations.
That is, the consumer may spend now or may postpone the purchase to future
date. 2. Once he decides to spend on a particular product or service, he has again
the full freedom to choose from the available products or services in the market.

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Buying a product is one thing; buying the best is another. Buying the best
depends on his ability to select the best among the wide range of varieties to get
maximum satisfaction at reasonable price. Advertising affects favorably the
consumer choice because it helps the consumer to exercise his/her power of
sovereignty in the most appropriate way, by acting as a counsel, as a guide to the
consumer -- the king of the market. Advertising provides detailed and up-to-date
information regarding the various products available in the market so that the
consumer would decide to buy wisely. That is, selection of the best product or
service depends on his ability to get and analyze the knowledge about the
markets. Advertising as a mass media helps the consumers in preserving and
promoting his sovereignty, his choice, in the following forms.

In the first place, it 'informs'. It informs the consumers about all the products or
services or product or service range available for sale -as to when they are
available?, under what conditions?, at what price?, and so on. Secondly, it
'explains'. It explains the features-- relative merits of each product or service so
that he can have comparative account for making wise selection.

Thirdly, it 'educates'. It provides good deal of information regarding products or

services whether a person is interested in buying or not. This useful knowledge
enlightens him/her as to what a product is? How it differs from others in the line?
What it does for him/her? At what cost? It speaks of not only the existing
products but also the products that will be produced in near future. It makes him
well-informed member of a society. This knowledge is available without payment.
He pays, of course, if he buys the product or service. For instance, while
introducing for the first time, say a pressure cooker or instant coffee, the purpose
is to educate.

Fourthly, it acts as a 'guide'. Consumers of today are really at sea because the
present markets are flooded with too many varieties of products. There are good
many producers with wide range of products trying to meet the variable needs of

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consumers. It is pertinent to note that consumer needs differ in terms of quality
requirements, pockets quantities and time factors. It is advertising that solves
his problem of coming to the conclusion in buying. It is so because advertising
makes him more need conscious and directs him to the point of most accurate
decision in selecting the best for his money.

To sum up, advertising is very powerful mass media of communication that

makes possible consumer choice through rational selection. He gets best value
for his money that he decides to spend. Thus, advertising bolsters preservation
and promotion of consumer sovereignty -the symbol of absolute individual
freedom.

2.3.4 Is advertising too much persuasive?

Persuasion is the power of advertising. It is the stock of this creative industry.
Some critics have given too much importance to this aspect of persuasiveness.
The opponents are of the strong opinion that advertising distorts the natural
human values and that it makes the people to desire wrong things; that it
promotes private luxuries at the expense of public squalor; that it creates
discontent making people dissatisfied with what they have or by making them to
dream of things beyond their reach and contributing to waste by encouraging
people to discard the things well before they are worn out.

This is a wrong view in part, if not in totality. Prof. Frank Knight has said very
correctly that the power of advertising is not so great as to force the prospects to
go in for what each manufacturer says through the advertising message.
Consumer response to advertising is purely voluntary. It is the decision of the
consumer himself. There are no rules which say that the prospect is to buy
everything that is advertised by so many manufacturers or dealers. Consumer
has the choice of accepting or rejecting the appeal or the message. Further, there
is always a time lag between the release of advertising message and the buying
action on the part of consumer. It means that consumer thinks before he decides

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to buy. Just as exchange is free from force, so is a sale or an agreement to sell.

Advertising, by its very nature, is persuasive. Yet we see some advertisements

are too much persuasive though unpalatable to the consumers. On the other
hand, there are advertisements so mild that they fail to do the work of persuasion
effectively. The essence of effective advertising is persuasion. Advertising in any
form contains persuasion. The main function of advertising copy and the art
work is to persuade the reader or the listener or the viewer. With each
advertisement, there is a kind of hierarchy of effects which the consumer goes
through the process of persuasion. This is better known as the A -I- D -A formula.
That is, A for attention drawing, I for interest creating, D for desire stimulation
and A for action on the part of consumer. The objective of advertising is to
influence the thinking of prospect. Persuasion is something that freely allowed in
legal, religious, educational, inter-personal, political and cultural settings and
none comments on it. The question arises as to why one is so vehement about
persuasion in advertising?

Advertis1ng is the greatest skill of persuasion. The secret of success of an

advertisement is persuasion. It appeals to the sense and reason of prospects.
The complaint is that it appeals to our emotions rather than reason. Such a
psychological playing with emotion is somehow considered as bad taste which is
against the individual rational judgment. However, most of our daily reactions are
the results of emotions than reason though we feel that they are the outcome of
reasoning. Be a politician, a novelist, a play-write, a neighbor or even a lover for
that matter, everyone appeals to emotions. Then why not an advertiser? This
speaks of emotional appeal in advertising. As it is indirect form of selling, it has
got be mild and polite, assertive and aggressive. Yet it is un-forceful on prospects
or customers.

The prime function of any persuasive act is not merely to inform the clientele for

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the products, but also to create an interest, a desire and that desire into demand
through the convincing message of advertising. In the process of persuasion, a
customer not having mind to have the product, will not be desirous of having it.
One is bound to feel disturbed for a temporary period of not possessing the
product. Now he decides to go in for it, as his desire is brought to surface. This
happens with everyone -be it a wrist watch or a television set or an automobile.
What is important is that the person comes to stage of action from the stage of
interest only after careful study of information supplied by the advertising. Thus,
advertising does the work of counsel in selecting a product or a service; why a
product or a service? Perhaps the best product or service.

In a nut-shell, advertising is persuasive process. Persuasion is the heart of

advertising. However, it is not the act of force but the tact of convincing. It impels
but never compels the prospectus to buy the product or a service. It is
democratic than dictatorial because, advertising is the business of the people, by
the people and for the people. Whatever the advertisement tells is not binding on
the prospect. Consumer is the supreme judge for his own good; s/he is given the
full freedom to select what s/he thinks best. Advertising is the great facilitator in
the entire process of decision-making. It has the capacity of pre selling the
products and services which is good for the seller and the buyer as it saves
valuable time for the both.

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Exercise1: There are people who feel that their buying decisions are highly
dictated by advertising. To what extent do you and people around you share this
opinion? Conduct an interview with five people regarding the issue and
compare their responses with the discussion in the preceding literature. Report
your findings to the course tutor.

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2.3.5 Does advertising influence the consumer welfare and protection?

Though the consumer occupies the central position in the economic system of a
free nature, consumer has not always received the attention that s/he really
deserves. In the practical world, consumer is the 'slave' and not the 'king' of
modern mechanism of socio-economic forces. There are good many reasons for
this. Here, we are concerned 'with two concepts namely, 'consumer welfare' and
'consumer protection'. We are to analyze how advertising can help the
consumers in promoting and protecting their interests.

Consumer welfare and advertising

The phrase 'consumer welfare' means well-being of the consumers. It is

something that is concerned with the good of consumers and their legitimate
interests. Consumer welfare lies in fulfillment of their normal expectations and
the aspirations as to goods and services that they need. Each and every
consumer is worried about the quality, quantity, price and timeliness of supply of
goods and services. This is one facet of the issue of consumer welfare. Another
and equally significant aspect is making available of those goods and services
which are really needed by consumers as against those not needed in the real
setting. However, the question is how to define these goods and services as
'needed' and 'not needed’? Who is to decide? Whether the consumers themselves
or the government of the nation? Perhaps, consumer is the best judge to decide
as to what is wanted or what is not and which is good and bad for him. However,
the greatest problem is that which is good for one may not be good for another.
What is wanted by one may not wanted by another. This is so because no one is
identical mentally and physically. Each one is unique. Therefore, 'maximum social
good' is the base for the welfare of all the subjects of a nation. That is why, many
a times, it is by the government of the nation that this delicate issue of 'good' or
'bad' -'needed' or 'not needed' is being decided.

In the past, governments of the nation tried to protect the consumer welfare

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through the Acts and Laws which have been the forms of impositions on the
people. The patent example is that of prohibition. The citizen of any country, by
very nature, hates imposition of any kind in any form. The things imposed invite
resistance -a kind of disrespect. Therefore, intelligence lies not in imposing the
things through legislation but by molding their attitudes by educating them,
convincing them and taking them into confidence.

Advertising is clothed with the consumer welfare. The real masters of advertising
are the final users who pay for such advertising. Advertising is the servant of
consumers and is expected to serve the interests of masters to the last birr paid
for. For the price it receives, advertising serves the purposes of consumers as a
counsel, as a guide in protecting the consumer welfare. First, it informs the
prospects of the arrival of products, their varieties, price range, conditions under
which they are available. It adds value to these products and services from the
angle of consumers. Secondly, it improves consumer knowledge about products
and services. It brings home the special features and the specific merits as
opposed to the competitors. This facilitates the selection of light product or a
service. Thirdly, it is a great equator, though the final aim of advertising is to
persuade the consumers to change their mind to buy a product or a service, it is
not mandatory. Even if he does not buy a product or service, he gets at least up-
to-date knowledge about the different aspects of product or a service. He is
better informed. The consumers never know about the plastic items. The use of
vitamin tablets was not known, as the general promoter of health. Even today, in
the rural areas, people are averse to use soap and tooth paste. Many a times, it
was believed that fruits like apple and sweet lemon are given to a patient rather
than a healthy person. Today, we know that the liquor consumption leads to liver
and kidney troubles and smoking leads to cancer; we know that excessive fat in
our daily food is responsible for heart troubles. In the realm of medicine, there
are some powerful medicines that relieve the human beings from deadly
diseases, but result in side effects. Thus, consumers are warned against the use
of saccharin in place of sugar particularly in case of diabetic patients. All these

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are brought to our notice by good many advertisements. Fourthly, advertising
attempts to know the needs of prospects and consumers makes them aware of
such needs and prescribe the goods and services that are most suitable in
meeting their genuine needs.

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Consumer protection and advertising

Activity 11: Point out some of the potential problems with advertising which
necessitated means to protect consumers’ welfare and suggest possible
remedies forwarded by various scholars in the field. You are free to use
additional readings to substantiate your answers.

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Consumer protection is the protection of consumers against all the ills he can
not foresee or determine accurately and guidance in getting his money's worth.
Today, there is a hue and cry in the advertising and sales-promotion which
victimize the consumers by making them to buy more than what they need,
forcing them to pay unreasonably high prices, bending them to go in for the
merchandise of poor quality, making them to buy the goods by impulse than
reason, making them to believe in false and unscrupulous advertising messages.

In simple terms, consumer protection is a form of social action which is designed

to attain the well-being of society namely consumers. Since, in the modern world
an individual consumer is considered more vulnerable for exploitation and
harassment by the manufacturers and dealers because of modern business
environment complexities of business operations - technological changes,
application of mass production techniques, vast resources, man power and
advertising-- it is necessary that the various groups of society namely,
government, judiciary, business units, traders and voluntary associations of

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consumers are to play their due role to protect the consumer’s physical,
economic and environmental interests fully. No manufacturer or supplier of
goods and services can disregard, dispute or ignore the rationality or propriety of
the basic rights of consumers. Therefore, consumer protection stands for
protection on the fundamental rights. Every consumer has a right to spend the
hard earned money the way he likes, to better quality, to reasonable price, to
sufficient quantity, to appropriate time and to be heard.

Today consumer feels that his/her legitimate interests are not protected. S/he
feels weaker in the economic system because the basic information about the
products offered is misleading and confusing; there is suppression of pertinent
information about products and services; it makes conflicting claims about
products and services thus confusing the consumers; availability of wide range
of branded products complicates his selection because the consumer lacks the
educational and the knowledge as to what is the best products or service to buy.
Further, the class of consumers is not organized as it is widely scattered,
diversified in their needs and approaches. The business community takes full
advantage of these weaknesses.

The question is how to protect the consumers from these ills. There are two
possible solutions to this: 1. Governmental regulation, and 2. Self regulation.
Governments have played and are supposed to be playing important role in
curbing unscrupulous unethical advertisements. It should play more containing
role in reducing 'trade puffing' by prescribing norms for just and truthful
advertisements. Any advertiser who talks something does otherwise can be
brought to book and punished for their guilt, through specific Acts. Consumer
Protection Act provides for the better protection of the interest of consumers and
for that purpose to make provision for the establishment of Consumer Councils
for the settlement of consumer disputes and for matters concerned with them.
Though governments keep containing through such Acts, it is worth emphasizing
that the law-breakers are wiser than law-makers. Laws and enactments have

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useful purposes to serve but they are not able to reach those who escape wisely
from the claws of the Laws. It is really heartening to note that legislative
interference with advertising has been attempted to control obscene
advertisements and fraudulent advertisements on spurious drugs. Thus,
government protection is a must. However, legislation alone will not solve all the
problems of consumers for the simple reason that it is inadequate. Self
regulation has two aspects namely, regulation by the consumer's associations
and regulation by the advertising units or their associations, such as those of
advertisers, advertising agencies and the media owners.

In this connection, consumer guidance bureaus can keep track of the false and
misleading advertisements so that the wrong doers can be traced and handed
over to the government for due punishment and penalties. These can investigate
the advertisements and see how far they differ in delivering the goods as against
the claims made in the advertisements. In developing countries such as Ethiopia,
growth and working of these voluntary associations is almost non-existent. Even
in better developed countries like India, the consumer movement had its birth in
the late I960s though the rumblings of its formation had started as early as I920s.
With the lag of time, several organizations have been set up in different parts of
the country, catering to the interests of consumers. The consumer movement
stands for the organized efforts of the consumers seeking to redress, restitution
and remedy for dissatisfaction of standard of living. It is a social movement
seeking to augment the rights and powers of buyers in relation to the sellers.
Consumerism, like democracy, is a movement by the people, of the people and
for the people, where the role of common-man is uncommon.

The important organizations in India are : Consumer Guidance Society of India,

Bombay, Consumer Education and Research Centre, Ahmedabad, Consumer
Action Forum, Calcutta and Karnataka, Consumer Service Society, Bangalore.
However, these suffer from lack of persistent and motivated members,
inadequate finance and overshadowed by the influence of politicians and big

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business houses. That is, such organizations succeed only when there is
adequate and timely finance, whole-hearted support by the members, state and
the advertisers themselves.

Just as there are consumer associations, the associations of advertisers and

their associations of associates like media owners and agencies can play a vital
role in curbing these anti-social activities. It is really heartening to note that
Indian advertising industry has such associations. One such association is
Advertising Standards Council of India which is designed to crack down on
misleading and unethical advertisements. It consists of 78 corporate members,
27 advertisers, 11 press media units, 26 agencies and 7 from allied business. It
has set-up C.C.C. (Consumers' Complaints Council) to decide whether or not the
ads complained against were in violation of A.S.C.I's Code. There is Advertising
Club in Bombay. There is also Indian Advertisers' Society to improve the
standards and image of advertisements and practice of advertising. There is still
Advertising Agencies Associations of India to regulate advertising business. The
other organizations include: All India Manufacturers' organizations. The
Advertisers' Club of Bombay in collaboration with International Advertising
Association organized a workshop on 'Code for Self-regulation in India' in April,
1982. The main objectives of Workshop were: 1. to review the self-regulation
code on advertising in various countries, and 2. to evolve a code for self-
regulation in India. The deliberations of the workshop led to setting-up of a
committee on "self-regulation Code in India" and the modalities for its
implementation. It is possible to set up similar institutions in Ethiopia too.

In a nut-shell, it can be said that the advertising industry should welcome

government and consumer regulation as opposition party for the ruling party so
that the advertising industry allows the opposition to point out the mistakes for
having real solutions to the problems. Such an attempt goes a long way in
reducing the faults, in portraying the decent image of the advertising industry, in
winding the hearts of millions of consumers. The consumers should feel that the

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advertising industry that has come to stay with consumers is doing well to
protect the consumer interests in a responsible way.

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2.3.6 Does advertising affect standard of living of society?

Activity 12: In what ways do you think advertising affects standard of living of
the society? Does it have some roles to play for betterment of your life? How do
you define standard of living, particularly in connection with effects of
advertising and/ or business communication? Try to provide answers to the
above questions before you indulge into reading the following text.

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Everyone is keen enough to look better, eat better, clad better, house in better
shelter, drive better two wheeler or four-wheeler, have better education and so on.
In fact s/he expects improvement in all aspects of his/her life and living.
Standard of living refers to the set of goods and services used by the people
according to their life-style. A consumer life-style is made up of the ways of living
an individual or group that is distinct from others. The life-style of an individual
affects as to what are his/her eating and drinking habits, his/her clothing styles,
his living conditions, his attitudes on the subjects like -religion, politics, unions,
culture and so on. Standard of living as a concept is relative to individual, time
and place. It reflects the extent of satisfaction that an individual is getting by use
of necessaries, comforts and luxuries of life and living.

The standard of living of society is bound to be higher one which is capable of

making available more and more goods and services so that an average man

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enjoys these goods as services as they are brought within his easy reach. The
standard of living of a community depends on two basic factors, namely: the
ability to produce more and more goods and services in the least cost and better
quality on one hand and the purchasing power of the consumers on the other.
Improved standard of living does not mean printing of more notes and minting of
more coins, but increasing the quantity, improving the quality and reducing the
cost of products and services. That is, these benefits should reach the common
man with lower purchasing power.

Advertising has been instrumental in influencing the consumers to desire the

goods and services beyond the bare requirements of food, clothing and shelter.
Advertising information regarding both -- the existing and the new products and
services --is made available to the members of all income groups of the society.
Advertising makes the people to move from needs to wants, by working
effectively on sales side. It converts desires into demand that gives impulse to
increased production. Increased production, in turn, leads to increased
consumption where the benefits of large-scale production are transmitted to the
consumers in the form of greater, better and cheaper production. By affecting the
consumer wants, advertising influences their propensity to consume. The useful
information and persuasion of any truthful advertising will keep the propensity to
consume at a high level thus having salutary impact on production and
consumption cycles. Because of advertising, consumers are motivated to work
harder to move from the lower level of meeting the bare needs to the higher level
guaranteeing more comforts and luxuries.

It should be noted that advertising is not always the cause of higher standard of
living and latter that effect. Many a times, higher standard of living is cause of
increased advertising. It is so because, once a person is used to a particular life-
style, he tries to change from good to better and better to best. There is no end
for this as even the best can be improved upon. It is the advertising that makes
possible search and fulfillment towards improved standard of living.

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Thus, standard of living is favorably influenced by the world of advertising
industry. It makes people optimistic, desirous, and hardworking to meet their
aspirations, to be distinctive from others. It is normally complained that the
advertising high or empty aspirations thereby creating a feeling of frustration for
non-satisfaction. It is not the fault of advertising. It is only an informer and the
persuader and not the compeller to have those goods and services that
advertised. The consumer in question is to decide whether to go for or not. If he
goes for, it means he can afford and if not, there is no reason why he is to get
frustrated.

2.3.7 Does advertising affect cultural values of society?

Activity 13: there are people who think that advertising is degrading established
cultural values. Can one make advertising responsible for change in positive
social values? What do you think?

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There can not be any culture without a society and a society without the culture.
"A culture is a distinctive way of life of a group of people --their complete design
for living." It is the man-made part of man's environment --the sum total of his
knowledge, beliefs, art, morals, laws, customs and any other capabilities and
habits that acquires as a member of society as said by Philip. R. Cateova and
John. M. Hess. It is a way of life that determines our conduct and behavior
towards everything that surrounds us --visible and invisible. It encompasses all
aspects of the environment --both tangible and intangible –that are created by
man. It covers the attitudes and the values of a whole society having bearing on
what we do, what we see, what we use, what we judge, by the words of Philip
Kotler.

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Habits, customs, attitudes, beliefs, values and taboos are the part of culture. A
'habit' is an act of repetition and that turns automatic. It may be a buying habit, an
eating habit, or even wearing shoes or a dress. A 'custom' is a habit followed by
many people belonging to a group. It may be a custom of two meals a day,
painting lips and nails, having a morning or evening bath, visiting churches or
temples a week. An 'attitude' is a state of readiness to make value judgments in
support of or against people, product, an idea, a service. Thus, each one is having
his attitude towards life, people, politics, events, nation, religion - practically for
everything that affects his life and living. These attitudes are ever changing. That
is, a positive may turn negative, a firm one may become temporary and vice versa.
A 'belief’ is a subjective concept of truth. An individual's beliefs are based more
on emotion than reason and may or may not agree with facts. Even a false thing,
for him, becomes a fact. A student using a Casio calculator has a feeling that he
may go wrong if he uses say National. A -'value' is a desirable condition or state
of affairs. Members of a certain group have some values in common. It may be
possessing a wealth, a University degree, a good health, a charming beauty and
so on. These values differ from group to group and time to time. A 'taboo' is a
powerful negative accepted and enforced by the members of a group. It has the
implication that evil consequences will follow in case if violated. Color of the
cloth indicating mourning is blue in Iran, white in India and Japan, purple in
America, black in England and so on. A Hindu woman shall salute her husband
every night before she goes to bed and in the morning before leaving the bed
failing which her husband's life span shall vanish. Thus, Judo-Christian group can
not violate the 'ten commandments'. Violation in all these cases is considered
taboo.

The question is in what way advertising affects the culture of a nation or a

society? To have better understanding, the question is to be broken into three
sub-questions and analyzed, namely, 1. Is advertising a product of culture? 2.
Does advertising shape the cultural values of society? and 3. Are the cultural

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values reflected always in advertising?

1. Is advertising a product of culture?

Answer is certainly 'yes'. It is so because advertising is the subservient of society

or a nation and its needs. The culture of a society or a nation is not the product of
advertising as a social and economic institution. It is the servant and not the
master of the consumers. It is, in fact, the advertising which is the product of
culture. Advertising has the power to persuade the people to buy the products or
services. It does not mean that it has that ultimate or super power to sell
anything and everything under the Sun it wants the prospects to buy simply
because it is advertised. Today, we know that we buy only those goods and
services which we need which we want based on social values having cultural
touch. An individual learns the attitudes, values, norms of conduct acceptable to
the cultural group in the formative years of his life-cycle. The major forces that
train him in cultural norms are his family, school, college, church, mosque or
temple and social contacts. These cultural norms or percepts are the basis for
selecting and evaluating goods, services and the related information. Individual
buying behavior is the result of sociological environment of people of which
culture is the fabric. His behavior is influenced by his social class, family status,
family life-cycle, social relations, reference groups, opinion leaders, roles and life-
style. The value system that has been developed and/ or accepted is not static; it
is ever changing with the passage of time. With these changes in value system,
the role of advertising, as it seems, change to keep pace with the changing times.

The time-cycle has proved that the value system is dynamic. In the past, most of
our society and culture that stressed 'spiritual' living has now changed into
'materialistic' living. That is why, everyone in the society had to earn just enough
to meet his minimum and simple needs. As requirements were limited, and the
things were in plenty, everyone was contended. They believed in 'simple living
and high thinking'. Today, however, the value system has changed totally. We are

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more materialistic and hence the philosophy is 'earn more' 'enjoy more', in this
short life. 'Eat ghee even by borrowing' that holds well. For us, today is important
than tomorrow. What is certain is uncertain future. In such a situation, the
advertising message will be more appealing to the people that meet their needs
and wants of today. In essence, advertising changes its role to uphold the
philosophy, ideals, beliefs, attitudes, likes and dislikes that the society has held in
high esteem.

2. Does advertising shape the cultural values of society?

Once a particular set of values have been imbibed, accepted and continued by a
society, the advertising as a social and business process tries to bring all those
goods and services which are made to respect the prevailing value system. As
current philosophy of life is hedonistic, advertising will pass on the message on
refined goods and services to make the consumers to enjoy the cream of life. In
its role of persuasion, the necessities of past would vanish, comforts become
necessities and the luxuries comforts or even necessities. Thus, every one will be
after what is latest --be it a tooth paste, a soft or a hot drink, an automobile,
sound gadget, medical care, housing and so on. Such refinements expected and
respected by the community, makes advertising to create demand for newer
resulting in increased production, economies of large-scale production and
distribution, more employment, more earnings, more demand and, therefore,
more production in turn. Thus, the cycle of wants, efforts and satisfaction
completes with the emphasis on refined or quality of life.

In precise terms, advertising becomes a major wheel in the mechanism of

production and distribution. It becomes the warp and woof of the social fabric
refining the quality of life within the limits set by the value system of society.
Advertising can not shape the original needs and wants; it gives finishing touches
to refine the original shape determined; within the broad limits set, it has the role
of creating, cultivating and striving to make the goods and services available to

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consumer satisfaction at its highest pitch.

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3. Are cultural values always reflected in advertising?

Answer to this question is certainly 'no'. It is not always that we see advertising
absorbing all the cultural values of society. Many a times, it is against the
esteemed values or norms of an acceptable culture. The problem of today’s
society is how to do away with ill effects of drinking, smoking, gambling,
prostitution and drug addiction. The happenings in the world of today clearly
reveal that advertising has no cultural control over these unwanted events.
Advertising is doing its work of persuasion --conversion of desire into demand --
without bothering much of good or bad effects, goods and services that it is
bringing to the notice of consumers. Thus, a cigarette manufacturer speaks very
high of his brand as the best; the state governments are sparking of lotteries and
casinos attempting to turn a few millionaires every month, sometimes even every
week; liquor producer is promising seventh heaven and high standard of living; in
the name of tourism, nations are encouraging prostitution --male and female --in
day-light. All of us know that these have disastrous and degenerating effects on
the physical and mental health of people. Advertising does not care for as it is
not discouraging these though it is capable of. It has neutral or mild approach in
this regard. Only a statutory warning is not enough to do away with these ill
effects on society and culture. Advertising should uphold the cultural values that
we have learnt in our families, schools, colleges, churches, mosques and temples,
in our friend circles, in the contracts with those who are far and near to us.

Activity 14: Should advertising follow cultural values or should it lead them?
Why? What negatives do you see if advertising lead cultural values?

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2.3.8 Is there ethics and truth in advertising?
Ethics and truth are closely interlinked concepts and, therefore, it is essential to
analyze tEthiopian Electric Service Amhara Region Electric Service Bahir Dar
District has been affixed.]
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been affixed.]

hem in detail.

Exercise 2: Think of radio or TV commercials you have been exposed to or print

ads you have read and examine how truth is entertained. Were the ads you
watched, tuned to or read truthful? Were all the claims factual? Or was there
any sort of exaggeration? How do you think will audiences be affected by those
ad pieces? Give them critical examination.

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[Link] Ethics in Advertising

Ethics is a set of moral principles, norms or values. It is a branch of social

science dealing with 'good' and 'bad' and hence moral duties and responsibilities
of an individual as a social and rational animal. In other words, ethics is
concerned with those values that determine the moral conduct in a given group
or community. 'Moral' principles are the rules or the standards of what is 'right' or
'wrong'. Therefore, morality deals with right or wrong conduct. Here, the word
'morality' is comprehensive than the term 'ethics' because, moral values include
ethical values but opposite is not true. It is true that one which is right is always
good and one which is wrong is always bad. Thus, fooling others is wrong and,

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likewise, bad. Being honest is right and, likewise, good. On the contrary, one
which is good is not always right and one which is bad is always wrong.
Punishing a culprit is good but it is not always right if the punishment is very mild.
Similarly, if a student does not spare extra pen with his friend who is badly in
need, is bad but certainly not wrong.

It is based on the value system of morality that we have accepted certain laws,
acts, and therefore rights. Today’s human rights are right because they are
morally and ethically good. Accepted moral values are seen in the form of laws
which are respected as they are for society's good. This concept of morality is
not rigid. The moral value system changes over the time-cycle. The best and the
most unpalatable examples are that, in the past abortion was wrong and,
therefore, it was immoral and unethical. Same is the case with homosexuality.
Thus, it is the changing time that decides what is 'right' or 'wrong' -'good' or 'bad'
for an individual and the society. Rather, the change in philosophy, attitude, belief,
customs and the like that decides the value system.

Then, what is the relationship between advertising and these terms namely,
ethics and morality? It is established fact that advertising is psychological social
and business 'process of persuading the people to buy products or services. The
test of its success that it results in increased sales, increased share in the
market and profits. Advertising gets aggressive and acrimonious due to ever
increasing competition; so each advertiser wants to excel his rival in techniques
of spending on advertising. In the process of acute and cut-throat competition,
there are chances of discounting truth to succeed in the art of making multiplied
sales and profits. However, advertiser has the social and moral obligation
towards the consumers because it is the consumers who pay to the last birr of
advertising expenditure. That is why it has to be right so that it is good. Good
advertisement does not mean both effective and honest. It means that right
advertisement is good advertisement. A right advertisement is one which is just

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and true. It is proper and appropriate.

Though, it is thought by some people that business morality or ethics is quite

different from the social morality or ethics. The former can not be different from
the latter for the simple reason that business is part and parcel of social setting.
Business is the heart of society because it is for, by and of the society. That is
why business morality can not differ from individual to individual though it may
differ from place to place and time to time.

[Link] Truth and Advertising

Activity 15

Shemsu: “It is fool to think that advertisers must always tell truth and the whole
truth. After all, advertisers aim to sell their goods, services or ideas. Since there
is hardly anyone who reveals weakness of his/her own goods, we shouldn’t
expect advertisers to repel critical customers by telling odds of their own
products.”

Aberash: “I’m weary of false advertising claims. I can’t avoid them as I often
consume the media but I make my purchase decisions based on my own taste
and prior- experience of product’s quality. I can’t trust advertising which has
made a mountain out of a moll hill.”

Whose claim do you favor and why? Discuss before you proceed into the
following reading.

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Truth is vital to the sound economic health of advertising industry. The
effectiveness of advertising, as a tool of promotion, vanishes if the people begin
to believe that advertisements are false or wisely designed to fool them.

No advertiser can fool all the consumers, all the time. Unfortunately, the
credibility of advertising has been under criticism for decades. They are of the
opinion that social stature and image of advertising would improve if
advertisements were more truthful. The image is not really one of trust and
appreciable because of five reasons pointed out by Professor E.J. Kottman.
These are:
1. Not all the advertisements are truthful. Even a single advertisement containing
false statements damages that true image of truthful advertising image because
human being is a generalizing animal --goes straight to the general from a
particular case.
2. Most persons --intellectuals and critics alike--do not make difference between
factual statements and value judgments.
3. The meanings which people ascribe to advertisements are frequently different
from those stated or implied. In other words, people infer notions or formulate
their own propositions that are untrue or unbelievable and conclude that it is the
advertising that is untrue.
4. Each advertisement appears to be full of contradictions--stated, implied or
inferred. Thus, each producer says 'his product is the best'. In fact, it can not be;
this makes the consumers to take them at discount.
5. Much of the advertising are concerned more about the trivial, particularly of all
products on nation-wide scale such as soft-drinks, cosmetics, soaps, drugs etc. It
attempts to make the insignificant seem significant, and in so doing, earns for
advertising a kind of pseudo image.

Truly speaking, it is not easy to define the term 'truth' as it is the most elusive one.
The more we try to go near to it, the more it becomes a miasma, a mirage. Right
from the time immemorial, the entire world is in search of truth; yet no one knows

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about its nature and its whereabouts. It is the greatest philosophical controversy.
Then what is truth? For an average man, truth means facts; the events that have
happened or taken place over a period of time. This common man’s truth is same
as judicial truth. Judicial truth is the content of the swear taken by each entering
the witness-box in the court of law. It runs as: "The whole truth and nothing but
truth". Here, 'truth' means facts; 'whole truth' means all the facts and "nothing but
truth" means no mixing of lies with the facts.

This judicial truth is not applicable to the world of advertising. That is why no
advertisement gives the laxities or the demerits of the product or service. It
paints a rosy picture of brighter side only. That is, the unpleasant truth -the naked
truth -the bitter truth is concealed. The truth that prevails is not the judicial truth
but commercial truth. Advertising is said to render greatest service to the
community even if it does honestly presenting the commercial honesty. Even this
commercial honesty seems to have disappeared. In our daily advertisements, we
come across untruth in varying degrees which are honest yet dishonest, but not
totally honest. The different forms of untruth are: 1. Facts exaggerated, 2. Facts
perverted, and 3. Total lies.

1. Facts exaggerated. Majority of the advertisers make very tall claims about
their products or services. There is truth in their claims but it is too much puffed
and magnified to look too big and believable. It is very common claim by a ready
garment maker that a shirt or a frock lasts longer, needs no ironing as it is crease
-resistant and color; is guaranteed and so on. In actual practice, no shirt lasts
longer, needs regular ironing, and color fades. Even a soap manufacturer has a
claim that one cake is sufficient to wash dozens of clothes; however, the house-
wife finds that it is just sufficient to wash at the most one dozen clothes. A
manufacturer of a domestic grinder-mixer claims that the gadget so designed
that it can be run continuously for a period of 45 minutes. Any mixer of this kind
gets burnt if worked more than 20 minutes incessantly. In all these cases, there
prevails truth but at inflated rate.

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2. Facts perverted. The advertisers make the people on the statements made by
them in a clever and convincing presentation. In fact, it is the face perversion or
misrepresentation finally misleading or misguiding the easily gullible people.
Many examples can be cited of this kind. Some unscrupulous producers use the
terms like 'Made in U.S.A.', "Export Quality". Here, "U.S.A." means "United Shindhi
Association" of Bombay area. "Export Quality" is only the label of home made
goods. Another example is winning of Gold or Silver Medal in international or
national competition. It may so happen that a company might have bagged a
medal long back. However, these competitions are held every year. The company
harps on past achievement. Thus, the advertisements of this kind make openly
the "made- to-believe" statements to fool the general public.

3. Total lies. In the first, two types of untrue statements, we have come across
mixing of lies with truth. However, in case of total lies, there is no truth at all.
These statements are totally false. Many advertisements give false statistics,
fabricated facts, faked certificates and testimonials of film stars, sports-people,
professionals, [Link]., administrators and so on. The advertisements with the
captions --"Millions can not go wrong", "Believe it or not", "Strange but true" are
only a few examples of this kind. Very often, advertisers use the words "foreign
collaboration", "Foreign technology".

All these forms of untruth prevail proliferate because the consumers have neither
time nor power to discover such cheats. Basically, they are unorganized. Such
mal-practices will continue so long as consumers tolerate these. It their
organized effort they work to hook and book the wrong-doers.

In conclusion, it can be said that the advertiser has moral and social
responsibility and can not afford to indulge in mal-practices that affect his own
interests. He can not go astray, because: 1. His reputation is at stake. 2. He can

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not take undue advantage of the trust or the faith that the consumers have put in
advertising. 3. He has legal responsibility as legality is another facet of morality.
4. The consumers get organized and become aware of such acts. 5. Truth never
fails. So an advertiser can not fool all the people all the time. In short, it pays the
advertiser to be honest in stating at what his products or services are, what they
do and how effectively to the consumers.

2.3.9 Can advertising be controlled economically?

Much has been said about the disastrous and degenerating economic effects of
wasteful advertising on society. Society is not against creative advertising, as it is
justified; the unwanted aspect of advertising is one of competitive type. When
advertising crosses a limit, it becomes too much competitive making the
producers to forget the costs and losses of fighting a losing battle at the thin
blood of poor and forlorn consumers. Such a competitive advertising exploits the
consumers than transmitting the benefits of productive and distributive system
of improved efficiency in these fields. Though, there is self-regulation system to
curb such unwanted practices and ill-effects, it has not been, and it can be,
effective as it is purely voluntary.

When one set of efforts fails it gives rise to another workable set of efforts. That
is why some economic measures have been suggested to control such wasteful
advertising activities and their ill-effects. These economic controls are
mandatory as enforced by the Governments -both Central and States. These
economic controls so suggested can be of two types namely, financial and non-
financial. These controls are likely to be more result-oriented because they are
compulsory unlike voluntary measures under the system of self-regulation.

2.3.10 Does advertising provide enough information as a buying aid?

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Each advertiser, through advertisements, is expected to give enough information
to the prospects to help them in selecting the product or service that is best
suited to their requirements. Consumers have every right to get such information
on product features, benefits, time and place of availability and the like. Each
advertiser does this, though he has space and time limitations.

The critics are of the opinion that the advertiser is to give the total information
about the products and services. Each campaign should have USP i.e., Unique
Selling Proposition. Today, advertisers are using window-dressing policy--a
substitute for full length copy with USPs. Total information means both positive
and negative sides of a given product or service. They go to the extent that such
information should not result in persuasion. This is too much that one can expect.
It is like asking the would-be-bride as to why she does not want to marry a would-
be bridegroom. In this practical world, some amount of dishonesty is tolerable
and is, therefore, practiced. Even the statement ''as pure as gold" is itself l00 per
cent correct because, the purest gold is of 97 per cent purity. The question is not
one of justifying the above statement but to look into the practicality.

However, there are countless illustrations where advertisers have given very
scanty information which has been misleading too. A study conducted by Indian
Institute of Mass Communication found that out of every ten advertisements,
three advertisements contained no minimal product information. The other such
examples are: "The tooth paste for people who brush their teeth only once a day".
"Shoe shine lasts 14 days". "Helps solve unique beauty problems". "It is easy to
paint your home as cutting your lawn". "We have sold hundreds of these chairs
for Rs. 159.95--now a special purchase makes on yours for only Rs. 87.25". It only
means that the interested consumers are to collect more detailed information by
visiting the stores or writing to the company. In most cases, consumers rely on
the reputation of the advertiser or the brand of the product range. Again,
advertising is a mass media of communication and it can not meet the individual
needs like a salesman at the counter or one on call. However, it is the

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responsibilities of the advertiser to provide all the material information that goes
in making wise buying decision. It means that he is to be commercially honest, if
not judicially, as noted elsewhere in this text.

2.4 Advertising Justified

Everything in this dynamic world is having one or the other Lupe-hole; no one is
perfect and nothing is flawless. Advertising as a mass media of communication
is no exception to this. However, its socio-economic role is so great and deep
that it has done more good than bad. The contribution of advertising fully
supports it as a socio-economic process, an institution, as a tool of marketing
and a sharp weapon of successful business. It is justified on the following
grounds, in spite of its limitations. The strong points in its favor are:
1. It reduces cost and price of products. It simplifies or replaces the personal
selling. By expanding consumer market, it affects favorably the production where
benefits of large-scale production and distribution are transmitted to consumers.

2. It guides consumers. Consumers --may be ultimate or industrial --depend on

advertising as a dependable guide that provides up-to-date information that acts
as the base for selling the best products or services so that they get best value
for the money they spend.

3. It adds value to products or services. Advertising is useful activity having utility

than waste. It is known for creating, time, place and possession utilities in
addition to perception utility.

4. It encourages competition. Competition is an essential adjunct of dynamic

economic system. It is competition that keeps the producers and distributors on
their toes making them to increase production, improve quality and decrease the
costs of production and distribution. This is something encouraging that lifts the
standard of living of the community.

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5. It generates gainful employment. Advertising is the business of the people.
People talented, committed, vibrant, imaginative, industrious and hence creative
have the definite place in multi-dimensional industry of advertising. It provides
both direct and indirect employment to millions. All the admen and adwomen get
their due share for their efforts and brain.

6. It supports, transmits and transforms the culture. The cultural impact of

advertising is really great. It upholds the value structure of society, refines it,
transmits it and transforms for better tomorrow. It injects sophistication and
refinement thus improving the quality of life. It gives a wide publicity about the
material and cultural incentives of true democratic and free enterprise society.

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7. It stimulates thought and action. Advertising is not purely commercial in its
approach. It does not think always of multiplying sales, profits and more revenue
to the state. The latest role is one of identifying the problems of national and
social importance, provoking thought and propelling action in the right direction
to solve them effectively.

2.5 Summary Questions

Dear distance student, now we are finalizing this unit. But before you pass on to
the next, attempt the following questions to ensure a better understanding of
the unit. Get back to the discussions on each topic after you give each question
a try.

1. What is advertising? Is advertising a useful activity?

2. Discuss the impact of advertising on consumer prices. Are you happy with the
effects?

3. What is consumer choice? In what way advertising affects consumer choice?

4. Is advertising persuasive in action?

5. What do you mean by consumer welfare? Does advertising influences

consumer welfare and protection?
6. What is standard of living? Does advertising improve the standard of living of
community or destroy?

7. What is culture? Is advertising product of culture or culture is the product of

advertising?

8. What do you mean by "ethics" and "truth" ? Is advertising capable of displaying

ethics and truth?

9. What is advertising? Can you control economically advertising for the

wellbeing of society?
10. It is said advertising is "informer" "educator" and "entertainer". Do you think
advertising provides inefficient information to the buyers?

11. Advertising is attacked socially very hardly. How do you justify its role in
society?

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69
 Unit Three
The Economic, Social, and
Regulatory Aspects of
Advertising

3.1 Objectives:
The basic objectives of this unit are to identify and explain the economic, social,
ethical, and legal issues advertisers must consider. The basic economic
principles that guided the evolution of advertising also have social and legal
effects. When they are violated, social issues arise and the government may take
corrective measures. Society determines what is offensive, excessive, and
irresponsible; government bodies determine what is deceptive and unfair. To be
law-abiding, ethical, and socially responsible, as well as economically effective,
advertisers must understand these issues.

After studying this unit, you will be able to:

* Classify the two main types of social criticisms of advertising.
* Understand potential areas of ethical dilemma in advertising.
* Explain some roles to be played by different parts of the society so as to
regulate advertising.
* Evaluate the effectiveness of governmental and NGOs in regulating advertising.
* Employ an economic model to discuss advertising’s effect on society.
* Explain the difference between social responsibility and ethics in advertising.
* Understand how governments regulate advertising.
* Describe how federal agencies in U. S. regulate advertising to protect both
consumers and competitors.
* Discuss the activities of nongovernmental organizations in fighting fraudulent
and deceptive advertising.
* Identify some ethical dilemmas in Ethiopian advertising as well as
corresponding means of regulating them.

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In their constant quest to attract consumers and associate products with “cool”
or luxurious and hedonistic lifestyles, some advertisers have consistently pushed
the boundaries of what is ethically and socially acceptable. American advertising,
for instance, has always embraced erotic suggestiveness while usually staying
clear of full nudity and explicit sexuality. Campaigns that blur that distinction
often arouse controversy and even protest. For two decades, the most notorious
purveyor of sensual “cool” was Calvin Klein—beginning in the late 1970s with the
“nothing comes between me and my Calvin’s” campaign featuring Brooke Shields
and culminating in 1998’s “kiddie-porn” controversy. Klein’s racy advertisements
provoked the anger of conservative groups but earned him the respect of edgier
critics who viewed his campaigns as artistically ironic. In the end, the
controversies benefited Klein, as the media firestorm provided free publicity for
his brand name and underscored the sophisticated “cool” of the campaigns.

Although opposition always existed toward erotic photographs, the explicit

articles bred controversy, particularly as it was hard to see what they had to do
with the clothing. The confusion of the soft-porn genre with conventional
advertising seemed particularly distressing to conservative critics like the
National Coalition for the Protection of Children and Families, who claim that the
company uses “clothing to sell a sexual philosophy.” Especially since the target
market is teens and young adults, the advertising is viewed as transgressing the
proper place of marketing. Critics claim it reverses the conventional purpose of
ads, using the clothing to sell the lifestyle rather than invoking the lifestyle to sell
the clothing.

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3.2 The Many Controversies about Advertising
Activity 16: what are the two types of social criticisms of advertising? Discuss.
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Advertising is one of the most visible activities of business. By inviting people to
try their products, companies risk public criticism and attack if their advertising
displeases or offends the audience or if their products don’t measure up to the
advertised promise. Proponents of advertising say it’s therefore safer to buy
advertised products because, when a company’s name and reputation are on the
line, it tries harder to fulfil its promises (especially when it lists product benefits).

Advertising is both applauded and criticized not only for its role in selling
products but also for its influence on the economy and on society. For years,
critics have denigrated advertising for a wide range of sins—some real, some
imagined.

John O’Toole, the late president of the American Association of Advertising

Agencies, pointed out that many critics attack advertising because it isn’t
something else.

Advertising isn’t journalism, education, or entertainment—although it often

performs the tasks of all three. To go back to Albert Lasker’s original definition,
advertising is salesmanship in print (or in today’s parlance, in the paid space and
time of mass media).

As a means of communication, advertising shares certain traits of journalism,

education, and entertainment, but it shouldn’t be judged by those standards.
Sponsors advertise because they hope it will help them sell some product,

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service, or idea.

Notwithstanding O’Toole’s articulate defence, many controversies still swirl

around the whole field of advertising. Some of them focus on advertising’s
economic role. For example, how does advertising affect the value of products?
Does it cause higher or lower prices? Does it promote competition or discourage
it? How does advertising affect overall consumer demand? What effect does it
have on consumer choice and on the overall business cycle? (Remember that
most of these questions are dealt with in the preceding unit).

Other controversies focus on the societal effects of advertising. For instance,

does advertising make us more materialistic? Does it force us to buy things we
don’t need? Does it reach us subliminally in ways we can’t control? How does it
affect the art and culture of our society? Does advertising degrade our language?

From these economic and social controversies, new questions arise regarding
the responsibility for and control of advertising. What is the proper role for
participants in the marketing process? How much latitude should marketers have
in the kinds of products they promote and how they advertise them? And what
about consumers? Don’t they have some responsibility in the process? Finally,
what is the proper role of government? What laws should we have to protect
consumers? And what laws go too far and violate the marketer’s freedom of
speech?

These are important questions, and there are no simple answers. But debate is
healthy. This unit addresses some of the major questions and criticisms about
advertising, both the pros and the cons, and delves into the regulatory methods
used to remedy advertisers’ abuses.

According to the principle of free-market economics, a society is best served by

empowering people to make their own decisions and act as free agents, within a

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system characterized by four fundamental assumptions: self-interest, many
buyers and sellers, complete information, and absence of externalities (social
costs).
This fundamentally utilitarian framework, derived from the goal of society to
promote behaviours that foster the greatest good for the most people, offers a
system of economic activity—free enterprise—that has accomplished that goal
better than any other economic system in history. This is why societies around
the world are increasingly adopting free-enterprise economics.

By using this framework for our discussion of advertising controversies, we have

a basis for understanding how advertising may contribute to, or detract from, the
basic goal of free enterprise: “the most good for the most people.”

3.3 The Economic Impact of Advertising

As Marcel Bleustein- Blanchet, the father of modern French advertising, pointed
out, it’s no coincidence that the level of advertising investment in a country is
directly proportional to its standard of living.

3.3.1 Effect on the Value of Products

Why do most people prefer Coca-Cola to some other cola? Why do some people
prefer Calvin Klein underwear to some other unadvertised brand? Are the
advertised products functionally better? Not necessarily. But, in the mind of the
consumer, advertising has given these brands added value.

In the mid-1960s, a famous psychologist named Ernest Dichter asserted that a

product’s image, created in part by advertising and promotion, is an inherent
feature of the product itself. Subsequent studies showed that while an ad may
not address a product’s quality directly, the positive image conveyed by
advertising may imply quality. Moreover, by simply making the product better
known, advertising can make the product more desirable to the consumer. In
these ways, advertising adds value to the brand. That’s why people pay more for

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Coca-Cola than an unadvertised beverage brand displayed right next to it—even
though all beverages, by law, is functionally the same.

Advertising also adds value to a brand by educating customers about new uses
for a product. At first, telephone was promoted as a necessity and later as a
convenience.

One advantage of the free-market system is that consumers can choose the
values they want in the products they buy. If, for example, low price is important,
they can buy an inexpensive economy car. If status and luxury are important, they
can buy a fancy Mercedes or racy sports car. Many of our wants are emotional,
social, or psychological rather than functional. One way we communicate who we
are (or want to be) is through the products we purchase and display. By
associating the product with some desirable image, advertising offers people the
opportunity to satisfy those psychic or symbolic wants and needs.

In terms of our economic framework, by adding value to products, advertising

contributes to self-interest—for both the consumer and the advertiser. It also
contributes to the number of sellers. That increases competition, which also
serves the consumer’s self-interest.

3.3.2 Effect on Prices

If advertising adds value to products, it follows that advertising also adds cost,
right? And if companies stopped all that expensive advertising, products would
cost less, right? Wrong. Some advertised products do cost more than
unadvertised products, but the opposite is also true. Both the U.S. Federal Trade
Commission and the U.S. Supreme Court have ruled that, by encouraging
competition, advertising has the effect of keeping prices down. That again serves
the consumer’s self-interest. And that is why professionals such as attorneys
and physicians are now allowed to advertise. Sweeping statements about
advertising’s positive or negative effect on prices are likely to be too simplistic.

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We can make some important points, though:
* As one of the many costs of doing business, advertising is indeed paid for by
the consumer who buys the product. In most product categories, though, the
amount spent on advertising is usually very small compared with the total cost of
the product.
* Advertising is one element of the mass-distribution system that enables many
manufacturers to engage in mass production, which in turn lowers the unit cost
of products. These savings can then be passed on to consumers in the form of
lower prices. In this indirect way, advertising helps lower prices.
* In industries subject to government price regulation (agriculture, utilities),
advertising has historically had no effect on prices. In these cases, advertising
has affected price—usually downward, but not always.
* In retailing, price is a prominent element in many ads, so advertising tends to
hold prices down. On the other hand, national manufacturers use advertising to
stress features that make their brands better; in these cases advertising tends to
support higher prices for their brands.

Activity 17: Dear distance student, now try to make comparison and/ or
contrast between what has been said about effects of advertising on price and
discuss if there is any major deviation.
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3.3.3 Effect on Competition

Activity 18: why do you think high advertising costs inhibit the entry of new

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competitors in the market? What implications does huge advertising
expenditure have on competition? Discuss.
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Some observers believe advertising restricts competition because small
companies or industry newcomers can’t compete with the immense advertising
budgets of large firms. It’s true that intense competition does tend to reduce the
number of businesses in an industry. However, some of the firms eliminated by
competition may be those that served customers least effectively. In other cases,
competition is reduced because of mergers and acquisitions (big companies
working in their own self-interest).

High costs may inhibit the entry of new competitors in industries that spend
heavily on advertising. In some markets, the original brands probably benefit
greatly from this barrier. However, the investments needed for plants, machinery,
and labour are of far greater significance. These are typically the real barriers to
entry, not advertising.

Advertising by big companies often has only a limited effect on small businesses
because a single advertiser is rarely large enough to dominate the whole country.
Regional oil companies, for example, compete very successfully with national oil
companies on the local level. In fact, the freedom to advertise encourages more
sellers to enter the market. And we’ve all seen non-advertised store brands of
food compete very effectively with nationally advertised brands on the same
grocery shelves.
3.3.4 Effect on Consumer Demand

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The question of advertising’s effect on total consumer demand is extremely
complex. Numerous studies show that promotional activity does affect
aggregate consumption, but they disagree as to the extent. Many social and
economic forces, including technological advances, the population’s educational
level, increases in population and income, and revolutionary changes in lifestyle,
are more significant. For example, the demand for CD players, cellular phones,
and personal computers expanded at a tremendous rate, thanks in part to
advertising but more to favourable market conditions. At the same time,
advertising hasn’t reversed declining sales of such items as hats, fur coats, and
manual typewriters.

Advertising can help get new products off the ground by giving more people
more “complete information,” thereby stimulating primary demand—demand for
the entire product class. In declining markets, when the only information people
want is price information, advertising can influence selective demand—demand
for a particular brand. But the only effect it will have on primary demand is to
slow the rate of decline. In growing markets, advertisers generally compete for
shares of that growth. In mature, static, or declining markets, they compete for
each other’s shares—conquest sales.

3.3.5 Effect on Consumer Choice

For manufacturers, the best way to beat the competition is to make their product
different. For example, look at the long list of car models, sizes, colours, and
features designed to attract different buyers. And grocery shelves may carry
more than 100 different brands of breakfast cereals—something for everybody.

The freedom to advertise encourages businesses to create new brands and

improve old ones. When one brand reaches market dominance, smaller brands
may disappear for a time. But the moment a better product comes along and is
advertised skilfully, the dominant brand loses out to the newer, better product.
Once again, the freedom to advertise promotes the existence of more sellers,

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and that gives consumers wider choices.

3.3.6 Effect on the Business Cycle

The relationship between advertising and gross domestic product has long been
debated. John Kenneth Galbraith, a perennial critic of advertising, concedes that,
by helping to maintain the flow of consumer demand (encouraging more buyers),
advertising helps sustain employment and income. But he maintains that, despite
declines in the value of the dollar, the U.S. trade deficit persists because
advertising and marketing activities create consumer preference for certain
foreign products.

Historically, when business cycles dip, companies cut advertising expenditures.

That may help short-term profits, but studies prove that businesses that continue
to invest in advertising during a recession are better able to protect, and
sometimes build, market shares. However, no study has shown that if everybody
just keeps advertising, the recessionary cycle will turn around. We conclude that
when business cycles are up, advertising contributes to the increase. When
business cycles are down, advertising may act as a stabilizing force by
encouraging more buyers to buy.

3.4 The Abundance Principle: The Economic Impact of Advertising in

Perspective
To individual businesses such as Calvin Klein, the local car dealer, and the
convenience store on the corner, advertising pays back more than it costs. If
advertising didn’t pay, no one would use it. And the various news and
entertainment media that depend on advertising for financial support would go
out of business. Advertising costs less for the consumer than most people think.
The cost of a bottle of Coke includes about a penny for advertising. And the
$20,000 price tag on a new car usually includes a manufacturer’s advertising cost
of less than $400.

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To the economy as a whole, the importance of advertising may best be
demonstrated by the abundance principle. This states that in an economy that
produces more goods and services than can be consumed, advertising serves
two important purposes: It keeps consumers informed of their alternatives
(complete information), and it allows companies to compete more effectively for
consumer dollars (self interest).
Many suppliers compete for the consumer money. This competition generally
results in more and better products at similar or lower prices. Advertising
stimulates competition (many buyers and sellers). In countries where consumers
have more income to spend after their physical needs are satisfied, advertising
also stimulates innovation and new products. However, no amount of advertising
can achieve long-term acceptance for products that do not meet consumer
approval. Despite massive advertising expenditures, fewer than a dozen of the 50
best-known cars developed in the twentieth century are still sold today.

Advertising stimulates a healthy economy. It also helps create financially healthy

consumers who are more informed, better educated, and more demanding. As a
result, consumers now demand that manufacturers be held accountable for their
advertising. This has led to an unprecedented level of social criticism and legal
regulation, the subject of our next sections.

Activity 19: In your own words, discuss the abundance principle and the effect it
assumes advertising to make on the overall economy.
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3.5 The Social Impact of Advertising

Because it’s so visible, advertising gets criticized frequently, for both what it is
and what it isn’t. Many of the criticisms focus on the style of advertising, saying

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it’s deceptive or manipulative. Collectively we might refer to these as short-term
manipulative arguments. Other criticisms focus on the social or environmental
impact of advertising. These are long-term macro arguments.

In our discussion of the economic impact of advertising, we focused primarily on

the first two principles of free-market economics: self-interest and many buyers
and sellers. The social aspect of advertising typically involves the last two
principles: complete information and absence of externalities. In fact, social
issue debates can be seen as instances where advertising tends to violate one or
more of these basic economic principles. We can examine many issues from
these two perspectives. Some of the most important are deception and
manipulation in advertising, the effect of advertising on our value system,
commercial clutter, stereotypes, and offensiveness. Let’s look at some of these
common criticisms of advertising, debunk some misconceptions, and examine
the problems that do exist.

3.5.1 Deception in Advertising

Activity 20: What is deception? Have you ever been deceived by advertising? If
so, mention some of the instances whereby you faced deceptive ads and
discuss the way it affected you.
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One of the most common short-term arguments about advertising is that it is so
frequently deceptive. Professor Ivan Preston notes that the essence of a
marketplace lies in the willingness of buyers and sellers to enter commercial
transactions. Anything that detracts from the satisfaction of the transaction
produces a loss of activity that ultimately hurts both parties. If a product does

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not live up to its ads, dissatisfaction occurs—and in the long term that is as
harmful to the advertiser as to the buyer.

For advertising to be effective, consumers must have confidence in it. So any

kind of deception not only detracts from the complete information principle of
free enterprise but also risks being self-defeating. Even meaningless (but legal)
puffery might be taken literally and therefore become deceptive. Puffery refers to
exaggerated, subjective claims that can’t be proven true or false, such as “the
best,” “premier,” or “the only way to fly.”

Under current advertising law, the only product claims—explicit or implied—that

are considered deceptive are those that are factually false or convey a false
impression and therefore have the potential to deceive or mislead reasonable
people. But puffery is excluded from this requirement because regulators
maintain that reasonable people don’t believe it anyway. Preston points out that
since advertisers regularly use puffery and non-product facts to enhance the
image of their products, they must think consumers do believe it. Non product
facts are not about the brand but about the consumer or the social context in
which the consumer uses the brand. An example is “Pepsi: The choice of a new
generation.”

The fact is that advertising, by its very nature, is not complete information. It is
biased in favour of the advertiser and the brand. People expect advertisers to be
proud of their products and probably don’t mind if they puff them a little. But
when advertisers cross the line between simply giving their point of view and
creating false expectations, that’s when people begin to object. One problem is
the difficulty of seeing the line, which may be drawn differently by different
people. Papa John’s Pizza no doubt thought it was just puffing when it
advertised “Better ingredients. Better pizza.” Pizza Hut saw it differently, though,
and sued Papa John’s for deceptive advertising. A judge agreed and awarded
Pizza Hut close to half a million dollars in damages. The judge then ordered Papa

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John’s to stop using its “Better ingredients” slogan. This decision was later
overturned on appeal, but the case still goes to show that there are limits on what
an advertiser can safely puff. Preston points out, “Only puffs open to
measurement lose their invisible shields. If Papa John’s says it has better dough,
you can attack it. But if Papa John’s says it’s better overall, that’s OK. The bigger
the lie, the bigger the protection. Isn’t that amazing?”
Ivan Preston believes these kinds of problems can be avoided if marketers
simply improve the kind of information they give in their advertising. He would
require advertisers to have a reasonable basis for any claims they make, whether
those claims are facts about the product, nonfacts such as “Coke is it,” or
nonproduct facts. This, he believes, would contribute positively to our free market
system.

3.5.2 The Subliminal Advertising Myth

Activity 21: What kind of ad is considered subliminal? Have you ever faced
subliminal advertising? If so, put it in context by discussing the way it affected
you.
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Wilson Bryan Key promotes the notion that, to seduce consumers, advertisers
intentionally create ads with sexual messages hidden in the illustrations just
below the threshold of perception. He calls this subliminal advertising. His
premise is that by embedding dirty words in the ice cubes in a liquor ad, for
instance, advertisers can somehow make us want to buy the product. Over the
years, many academic studies have completely debunked this theory. In fact, to

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date, no study has proved that such embedding exists or that it would have any
effect if it did exist. Unfortunately, by promulgating this fiction, Key has been able
to sell many thousands of books; worse, he has propagated a generation of
consumers who believe in the foolishness of subliminal advertising.

The chord that Key has been able to touch on, though, is important to discuss:
the widespread fear that advertisers are messing with our heads—manipulating
us psychologically, and without our consent, into buying things we don’t want or
need. This gets to the heart of the complete information principle because the
criticism suggests that advertising does not give consumers information upon
which to base rational decisions, but rather manipulates us through brainwashing.
Consumers are, therefore, like captured prey, helpless in the jaws of marketing
predators.

If this were true, it would be cause for great alarm and a legal investigation. But,
in fact, if we stop to think about it, we all know it’s not true. Marketers introduce
thousands of new products to the marketplace every year. And every
year—despite massive advertising expenditures—the vast majority of them fail.
Why? Because of competition—many sellers are fiercely competing for the
patronage of the same customers. Only some succeed. Most fail.

If you think about all the products you buy, how many involve a choice between
different brands and different styles? And how many involve a decision based on
price or convenience? Probably most. So how many of your purchases can you
trace to having been helplessly manipulated? Probably none. You receive
information from many different sources: friends and relatives, store displays,
ads, packaging, and retail store clerks. At some point, you make a decision. In
many cases, your decision is not to buy at all—to wait for either more information
or more money. As always, the customer, acting in his or her own self-interest, is
king.

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3.5.3 The Effect of Advertising on Our Value System
A related long-term argument, often voiced by certain professional
critics—sociologists, journalists, consumer advocates, and government
regulators—is that advertising degrades people’s value systems by promoting a
hedonistic, materialistic way of life. Advertising, they say, encourages us to buy
more cars, more CDs, more clothing, and more junk we don’t need. It is
destroying the essence of our “citizen democracy,” replacing it with a self-
oriented consumer democracy.
Critics claim advertising manipulates us into buying things by playing on our
emotions and promising greater status, social acceptance, and sex appeal. It
causes people to take up harmful habits, makes poor kids buy $170 sneakers,
and tempts ordinary people to buy useless products in the vain attempt to
emulate celebrity endorsers.

Again, they claim advertising is so powerful consumers are helpless to defend

themselves against it. Once again, this argument exaggerates the power of
advertising. In fact, most people express a healthy scepticism toward it. One
study showed that only 17 percent of U.S. consumers see advertising as a source
of information to help them decide what to buy. Perhaps that’s why more
advertised products fail than succeed in the marketplace. Still, this may be the
most damning criticism of advertising because there’s no question that
advertisers do indeed spend millions trying to convince people their products will
make them sexier, healthier, and more successful. The very amount of
advertising we witness every day seems to suggest that every problem we have
can be solved by the purchase of some product.

Even if we assume that most people can willingly accept or reject an advertising
message, they are still not getting the whole picture. After all, advertising is
supported by marketers who want to sell their products, but nobody markets the
opposite stance of why we don’t need to or shouldn’t buy a particular product at
all. In this sense, consumers don’t have complete information, so our advocacy

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system has failed. This is an important issue of externalities, because the
aggregate activities of the nation’s advertisers affect many people outside the
immediate marketing transaction and create an unexpected cost to society.

3.5.4 The Proliferation of Advertising

Activity 22: “Are you weary of advertising clutter? You still need too much of it”
How do you react to this assertion? Discuss.
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One of the most common long-term complaints about advertising is that there’s
just too much of it. In the United States alone, the average person may be
exposed to 500 to 1,000 commercial messages a day. With so many products
competing for attention (more than 30,000 in the average supermarket),
advertisers themselves worry about the negative impact of excessive advertising.
According to a recent study by the American Association of Advertising Agencies,
ad clutter is still on the rise. In 2002, the amount of non-program time ranged
from a low of 16 minutes per hour in prime time to nearly 21 minutes per hour in
daytime, a day part that is particularly important to advertisers. The networks add
to the problem themselves by jamming every possible moment with promotions
for their shows. Too much advertising creates an externality not only for
consumers (nuisance), but for the advertisers themselves—the more
commercials that hit the consumer’s brain, the less effective paid advertising is.
Conscious of this, media are cutting significant portion of their advertising
inventory from local newscasts so as to reduce the clutter. Higher ratings, of
course, means they can charge more for their remaining commercial time.

While the clutter problem is irksome to viewers and advertisers alike, most
people tolerate it as the price for free TV, freedom of the press, and a high
standard of living. However, with the proliferation of new media choices, this
externality is only likely to get worse. Virtually every popular website is cluttered
with advertising banners, and our e-mail boxes are flooded with advertising

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messages on a daily basis. While the Federal Communications Commission in
U.S exercises no jurisdiction over the Internet, it did consider reinstating
commercial time limits on television. But, as of now, the only limits currently in
force relate to TV programming aimed at children 12 and under—advertising may
not exceed 10.5 minutes per hour on weekends and 12 minutes per hour on
weekdays.

Clutter is not so evident in other countries. In France, for example, government-

owned stations can carry no more than 12 minutes of commercials per hour.
During movies there is only one 4-minute commercial break, although the
government is considering changing that rule to allow two breaks.
3.5.5 The Use of Stereotypes in Advertising
Activity 23: What is Stereotyping? Can you mention any instance whereby ad
copies or TV/radio commercials stereotyped a certain group of the society?
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Advertising has long been criticized for insensitivity to minorities, women,
immigrants, the disabled, the elderly, and a myriad of other groups—that is, for
not being “politically correct.” This long-term argument also addresses
externalities because the very presence of advertising affects the nature of our
culture and environment, even when we do not want it. This is ironic, because
marketing and advertising practitioners are supposed to be
professional students of the communication process and consumer behaviour.
But, in fact, they sometimes lose touch with the very people they’re trying to
reach. This is a problem which can be addressed by effective planning.

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Since the 1980s, national advertisers have become more sensitive to the
concerns of minorities and women. Latinos, African Americans, Asians, Native
Americans, and others are now usually portrayed favourably in ads, not only
because of pressure from watchdog groups, but also because it’s just good
business; these consumers represent sizable target markets. Marilyn Kern-
Foxworth, a professor in Texas and an expert on minorities in advertising, points
out that positive role portrayal in some mainstream ads has had a positive effect
on the self-esteem of African-American youth. This positive trend has
accelerated with the emergence of many ad agencies owned and staffed by
minorities that specialize in reaching minority markets.

The image of women is also changing from their historic depiction as either
subservient housewives or sex objects. This may be partially due to the
increasing number of women in managerial and executive positions with both
advertisers and agencies. Stanford professor Debra Meyerson says “the glass
ceiling definitely exists, but at the same time, there are an increasing number of
women who are breaking through it.”

Advertisers want to reach, not offend, this sizable market of upwardly mobile
consumers. Some agencies now retain feminist consultants to review ads that
may risk offending women. However, problems still exist, especially in local and
regional advertising and in certain product categories such as beer and sports
promotions. Many advertisers are just not aware of the externalities that their
ads can create, and they may perpetuate male and female stereotypes without
even realizing it. Other advertisers resort to stereotypes for convenience. All too
often, women are still not represented accurately. And the minimal use of
minorities in mainstream ads, both local and national, still strikes of tokenism.
Observers hope that with increasing numbers of women and minorities joining
the ranks of marketing and advertising professionals, and with continuing
academic studies of minority and sex-role stereotyping, greater attention will be
focused on these issues.

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3.5.6 Offensiveness in Advertising
Offensiveness is another short-term style argument that also speaks to
externalities. Many parents, for instance, were incensed at Calvin Klein’s ads
because they perceived them as pornographic, thereby causing a social cost that
extended well beyond the limited scope of merely selling clothes. More recently,
Abercrombie & Fitch came under attack for showing nude and semi-nude models
in the company’s quarterly catalogs. The fact is, people just don’t want their
children exposed to messages that they deem immoral, offensive, or strictly
adult-oriented.

Taste, of course, is highly subjective: What is bad taste to some is perfectly

acceptable to others. And tastes change. What is considered offensive today
may not be so tomorrow. People were outraged when the first ad for underarm
deodorant appeared in a 1927 Ladies Home Journal; today no one questions
such ads.
Taste is also geographic. A shockingly bloody ad for a small surf-wear company
in Sydney, Australia, showed a gutted shark lying on a port. Protruding from its
cut-open belly were a human skeleton and an intact pair of surfer shorts. The
tagline: “Tough clothes by Kadu—Triple stitched. Strongest materials available.
Home-grown and sewn.”
While we might consider that ad quite offensive in North America, it won the
Grand Prix at the International Advertising Festival in Cannes, France, several
years ago. In Australia it received wide media coverage, since two surfers were
killed by sharks while it was running. Rather than pulling the ad out of respect,
the company celebrated in its timeliness, and the local surfer set responded very
favourably.

Today, grooming, fashion, and personal hygiene products often use partial nudity
in their ads. Where nudity is relevant to the product, people are less likely to
regard it as obscene or offensive—except, as in the case whereby the advertising

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is targeting kids. In many European countries, in fact, nudity in commercials is
commonplace. Even some usually serious media are starting to see women’s
breasts in TV commercials and posters. Some industry observers predict that
nudity in U.S. advertising will increase in the twenty-first century but there will be
fewer overt sexual scenes.

Some consumers get so offended by both advertising and TV programming that

they boycott sponsors’ products. Of course, they also have the option to just
change the channel. Both of these are effective strategies for consumers
because, ultimately, the marketplace has veto power. As research results show, if
ads don’t pull in the audience, the campaign will falter and die.

3.6 The Social Impact of Advertising in Perspective

Marketing professionals earnestly believe in the benefits that advertising brings
to society. Advertising, they say, encourages the development and speeds the
acceptance of new products and technologies. It fosters employment.

It gives consumers and business customers a wider variety of choices. By

encouraging mass production, it helps keep prices down. And it stimulates
healthy competition between producers, which benefits all buyers.

Advertising, they point out, also promotes a higher standard of living; it pays for
most of our news media and subsidizes the arts; it supports freedom of the
press; and it provides a means to disseminate public information about
important health and social issues.

Critics of advertising might agree with some of these points but certainly not all
of them. For example, critics charge that rather than supporting a free press,
advertising actually creates an externality that interferes with it. The media, they
say, try to satisfy national advertisers to attract the big ad dollars. In the process,
they modify their editorial content to suit their corporate benefactors and

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consequently shirk their primary journalistic responsibility of presenting news in
the public interest.

In summary, we can conclude that while advertising may legitimately be criticized

for offering less-than-complete information and, in some instances, for creating
unwanted externalities, it should also be applauded when it contributes to the
validity of the principles of free enterprise economics. In most cases, by being a
rich information source (albeit not complete), advertising contributes to the
existence of many buyers and sellers and, therefore, to the self-interest of both
consumers and marketers.

3.7 Social Responsibility and Advertising Ethics

Activity 24: What is the difference between an advertiser’s ethics and its social
responsibility? Discuss.
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Dear student, when advertising violates one of the basic economic assumptions
we’ve described, some corrective action is needed. As we’ll discuss in the next
section, laws may determine what advertisers can and cannot do, but they also
allow a significant amount of leeway. That’s where ethics and social
responsibility come into play. An advertiser can act unethically or irresponsibly
without breaking any laws. Beer and tobacco companies, for instance, could
sponsor music concerts for college students. As Ivan Preston says, ethics begin
where the law ends.

Ethical advertising means doing what the advertiser and the advertiser’s peers
believe is morally right in a given situation. Social responsibility means doing
what society views as best for the welfare of people in general or for a specific

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community of people. Together, ethics and social responsibility can be seen as
the moral obligation of advertisers not to violate our basic economic
assumptions, even when there is no legal obligation.

Advertisers should try to answer the following questions so as to ensure ethical

performance.
 Who should, and shouldn’t, be the target of an advertisement?
 What should, and shouldn’t, be advertised?
 What should, and shouldn’t, be the symbolic tone of the advertising
message?
Humor, sincerity, and sarcasm are all examples of the symbolic tone an ad
can portray.
 What should, and shouldn’t, be the relationship between advertising and
the mass media? Clearly ads containing sexual innuendo shouldn’t be run
on Saturday morning television during the cartoon hours.
 What should, and shouldn’t, be advertising’s conscious obligation to
society?
(Source: Burnnet, Wells and Moriarty, 2000)

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3.7.1 Advertisers’ Social Responsibility
The foundation of any human society is the amicable relationship among its
members. Without harmony, a society will collapse. So all the institutions within a
society have some responsibility for helping to maintain social harmony through
proper stewardship of families and companies, exercise of honesty and integrity
in all relationships, adherence to accepted ethical standards, willingness to assist
various segments of the society, and the courtesy to respect the privacy of
others.

Advertising plays an important role in developed countries. It influences a

society’s stability and growth. It helps secure large armies, creates entertainment
events attracting hundreds of thousands of fans, and often affects the outcome
of political elections. Such power places a burden of responsibility on those who
sponsor, buy, create, produce, and sell advertising to maintain ethical standards
that support the society and contribute to the economic system.

In the United States, for example, the advertising industry is part of a large
business community. Like any good neighbour, it has responsibilities: to keep its
property clean, participate in civic events, support local enterprises, and improve
the community. U.S. advertising professionals have met these challenges by
forming local advertising clubs, the American Advertising Federation (AAF), the
American Association of Advertising
Agencies (AAAA), and the Ad Council. These organizations provide thousands of
hours and millions of dollars’ worth of pro bono (free) work to charitable
organizations and public agencies. They also provide scholarships and
internships, contributions that serve the whole society. As we discuss later, they
even regulate themselves fairly effectively.

Advertisers such as IBM and Honda commit significant dollars to supporting the
arts, education, and various charitable causes as well as their local Better
Business Bureaus and Chambers of Commerce. Still, advertisers are regularly

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blamed when they fail the social responsibility litmus test. Concerned citizens,
consumer advocates, and special-interest groups pressure advertisers when they
perceive the public’s welfare is at risk. The earliest “green advertising”
campaigns, for instance, exemplified a blatant effort by some advertisers to cash
in on consumers’ desire for a cleaner environment. Some promoted nebulous
product qualities, such as “environmental friendliness,” that actually had no basis
in fact. Finally, when the state attorneys general got together and defined
relevant terms for use in green advertising, marketers cleaned up their act.

Advertisers also receive criticism when they sponsor programming with content
that offends particular interest groups. The Southern Baptist Church, for instance,
urged its members in 1997 to boycott Walt Disney theme parks and movies
because of its perception that Disney had strayed from its tradition of promoting
family values.

3.7.2 Ethics of Advertising

On one level, ethics comprise two interrelated components: the traditional
actions taken by people in a society or community and the philosophical rules
that society establishes to justify such past actions and decree future actions.
These components create the primary rules of ethical behaviour in the society
and enable us to measure how far an individual or company (or advertiser) strays
from the norm. Here, the individual’s rights are subject to the standards of what
is customary (and therefore proper) for the group.

Every individual also faces a second set of ethical issues: the attitudes, feelings,
and beliefs that add up to a personal value system. When these two systems
conflict, should the individual act on personal beliefs or on the obligation to serve
the group and its policies? For example, non-smoking ad agency people may
create ads for a tobacco client. At the first societal level of ethics there is some
conflict: Smoking has been a custom in the United States for centuries and is not
illegal today. However, the U.S. Surgeon General has declared that smoking is a

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national health problem (harmful to the group). This conflict at the first ethical
level passes the responsibility for decision making to the second, individual level.
Because the penalty may be the loss of income, non-smokers may decide to
produce the ads while keeping their own work area smoke-free. The ethical issue
is at least temporarily and partially resolved, or at least rationalized, at the
second ethical level.

When the group or individuals cannot resolve an ethical dilemma, they must
redefine the issue in dispute. Thus, the third level of ethics concerns singular
ethical concepts such as good, bad, right, wrong, duty, integrity, and truth. Are
these concepts absolute, universal, and binding? Or are they relative, dependent
on situations and consequences? A person’s moral and ethical philosophy,
influenced by religion, society, and individual values, will determine their answer.

Let’s say, for example, the copywriter for a cigarette ad is a smoker, and he
writes copy that implies that smoking is a favourable behaviour. But the ad’s art
director, a non-smoker, complains that the ad is unethical because the copy
conflicts with the truth, because smoking is actually an unsafe behaviour. At this
point they reach the third ethical level, and a more senior person, such as the
creative director, may step in and lead a discussion aimed at defining the
agency’s ethical policy on smoking.

As we mentioned before, ethics is such an important topic that we address those

issues that pertain to advertising in here. The Ethical Issue here considers the
issue of puffery as it relates to truth in advertising.

Most advertisers today strive to maintain fair ethical standards and practice
socially responsible advertising. Ad agencies rarely force employees to work on
accounts they morally oppose. Once a free-swinging, unchecked business,
advertising is today a closely scrutinized and heavily regulated profession.
Advertising’s past shortcomings have created layer upon layer of laws,

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regulations, and regulatory bodies. Consumer groups, governments, special-
interest groups, and even other advertisers now review, control, and modify
advertising in order to create more complete information and reduce the impact
of unwanted externalities.

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3.8 How Government Regulates Advertising
Activity 25: what does the Ethiopian government do to regulate advertising
practices that function in a way the society is harmed?
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The American political scene has a tripartite system of checks and balances.
There are many laws that govern what advertisers can and cannot do. These
laws are passed by legislatures, enforced by the executive branch, and
interpreted by the judiciary. This system is repeated at the state and local levels.

On the national level, the president, cabinet departments, and various federal
commissions are responsible for executing the laws passed by Congress. On the
state level, the governor, attorney general, and state departments administer
state laws. Locally, mayors, city managers, city attorneys, and police chiefs
enforce the laws passed by city councils.

Similarly, local laws are interpreted by municipal courts, while the superior courts
and state supreme courts interpret state laws. Federal laws are interpreted by
federal district courts and the U.S. Supreme Court. Every day, advertisers from
the local copy shop to international soft-drink marketers have to deal with the
actions and decisions of all these branches of government. We’ll discuss shortly
some of the most important issues that concern U.S. regulators.

Advertising is at its infancy in Ethiopia as the other modern business

transactions are and hence there is hardly any strong regulatory means from the
part of the government. Consequently, the business is running somewhat
unchecked. So, it is possible to think of similar regulatory mechanisms.

3.9 Government Restraints on International Advertisers

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Activity 26: How can advertising practices conducted through global media be
made to suit to tests of people in countries like Ethiopia?
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Now that advertising has become global, many campaigns use similar themes
and even the same ads across frontiers. But foreign governments often regulate
advertising considerably more than either the United States or Canada. And while
Europe has moved toward uniformity in marketing activities, the laws governing
advertising remain largely national. So advertisers need to keep up with the
changing legal environments of the countries in which they advertise.

Many governments are frequently more authoritarian, and they do not have a
system of checks and balances like the case of U.S. Some governments not only
regulate what ads say, show, or do; they often impose severe restrictions or
outright bans on advertising specific products. The Swedes ban advertising to
children on television. The Greeks ban toy advertising before 10:00 P.M.
Throughout Europe, broadcast advertising for tobacco products is prohibited,
and liquor ads are sharply restricted, especially in France.

In fact, the European Union enacted legislation in 1998 that would gradually have
phased out all forms of tobacco advertising and sponsorships by the year 2006.
But the highest court on the Continent, the European Court of Justice, struck
down the ban in October 2000 declaring it unlawful. Notwithstanding, the British
still enacted legislation in 2002 that outlawed all consumer advertising for
tobacco products. And late in 2002, the 15-nation European Union passed a bill
that would outlaw all tobacco ads in newspapers and magazines, on the Internet,
and at international sporting events beginning in 2005.

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Many countries prohibit puffery superlatives. In Germany, for example,
advertisers may use only scientifically provable superlatives. McCann-Erickson
once had to retranslate the old Coca-Cola slogan, “Refreshes you best,” because
it implied a leadership position that was improvable. The agency substituted
“Refreshes you right” in Germany (in Austria, however, which typically follows
Germany’s lead in advertising law, the original line would be permissible).

Many European countries also ban coupons, premiums, free tie-in offers, and the
like. Companies may advertise price cuts only during “official sales periods,” and
advertisers often need government approval before publishing a sale ad. Across
Europe, advertising on television must be clearly recognizable and kept separate
from other programming. Paid product placements in programs, therefore, are
typically prohibited.

In Singapore, the state-owned broadcasting company yanked a Qantas Airline

spot after the Ministry of Information and the Arts criticized the ad’s “harmful
values.” The spot had used the line “last of the big spenders,” which the ministry
felt encouraged reckless spending by consumers.

Costa Rica has more than 250 laws regulating advertising. Recently, government
officials agreed to consider an industry proposal that would overturn the
particularly onerous law mandating pre-clearance of all advertising.

Regulators are cracking down in China as well. A new comprehensive advertising

law targets false, “unscientific, and superstitious” claims and requires pre-
clearance of all advertising in all media. However, China now allows Taiwanese
advertising on mainland billboards—after pre-clearance, of course. In
international advertising, the only solution to this chaos of potential legal
problems is to retain a good local lawyer who specializes in advertising law.

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3.10 Current Regulatory Issues Affecting U.S. Advertisers
In recent years, both federal and state courts have made a number of significant
rulings pertaining to advertising issues. The most important of these concern
First Amendment rights and privacy rights. We’ll discuss each of these, with
special attention paid to the recent controversy surrounding tobacco advertising
as well as the very sensitive issue of advertising to children.

3.10.1 Freedom of Commercial Speech

The Supreme Court historically distinguishes between “speech” and “commercial
speech” (speech that promotes a commercial transaction). But decisions over
the last two decades suggest that truthful commercial speech is also entitled to
significant, if not full, protection under the First Amendment.

The trend started in 1976 when the Supreme Court held in Virginia State Board of
Pharmacy versus Virginia Citizens Consumer Council that ads enjoy protection
under the First Amendment as commercial speech. The next year the Court
declared that the ban by state bar associations on attorney advertising also
violated the First Amendment. Now a third of all lawyers advertise, and a few
states even permit client testimonials. To help guard against deceptive and
misleading lawyer ads, the American Bar Association issues guidelines for
attorneys.
In 1980 the Court used Central Hudson Gas versus Public Service Commission to
test whether specific examples of commercial speech can be regulated. The four
-pronged Central Hudson test includes the following parts:
1. Does the commercial speech at issue concern a lawful activity? The ad in
question must be for a legal product and must be free of misleading claims.
2. Will the restriction of commercial speech serve the asserted government
interest substantially? The government must prove that the absence of
regulation would have a substantial negative effect.
3. Does the regulation directly advance the government interest asserted? The
government must be able to establish conclusively that cessation of the

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advertising would be effective in furthering the government’s interest.
4. Is the restriction no more than necessary to further the interest asserted? The
government would have to establish that there are no other means to accomplish
the same end without restricting free speech.

In 1982, the Supreme Court upheld an FTC order allowing physicians and dentists
to advertise. Since then, advertising for medical and dental services has
skyrocketed. In 1993, the Supreme Court gave the advertising industry its biggest
win in years. It said the Cincinnati City Council violated the First Amendment
when it banned racks of advertising brochures from city streets for “aesthetic
and safety reasons” while permitting newspaper vending machines.

The issue of freedom of commercial speech is far from settled. Allowing greater
freedom of commercial speech enhances the “government interests” of many
buyers and sellers and complete information. But the additional interest of
reducing externalities creates heated controversies surrounding issues like
tobacco and alcohol advertising and advertising to children. These will likely
continue for years to come.

3.10.2 The Tobacco Advertising Controversy

Activity 27: Have you ever come across tobacco advertised in Ethiopian media?
If so, when, where and how is it advertised? Can the targets be justifiable
exposed to the ad message as such? Reflect.
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Take the case of cigarette advertising. While tobacco is a legal product, the harm
created by smoking ends up killing or disabling more than half a million people
annually and costing taxpayers billions of dollars every year in health costs—a
major externality. To recover these costs, a number of states’ attorneys general
sued the tobacco industry. In 1998, they reached a historic settlement. It
mandated significant reform on cigarette marketing activities and provided for
the largest financial recovery in the nation’s history. Because the industry had
abused its freedom of commercial speech for so many years, the settlement
called for sweeping changes in how, when, and where tobacco companies could
advertise. Most important, the attorneys general sought to protect children from
tobacco advertising. Thus, the settlement banned outdoor advertising posters
(for example, on billboards, buses, and video arcades), sponsorship of events
with a significant youth audience, as well as the use of cartoon characters in any
tobacco advertising.

For businesspeople who believe that freedom of commercial speech should be

afforded equal protection under the First Amendment, the tobacco case is
threatening. Many people are antismoking, anti-alcohol, anti-pornography, or
antigun. But the “free speechers” believe it’s a travesty of the First Amendment to
selectively abridge any free speech, whether it’s for any political, social, or
religious idea or any legal, commercial product. They warn that this selective
limitation of freedom of commercial speech threatens every legal business
because any limitation on the freedom to advertise automatically gives a huge,
monopolistic advantage to those big brands that are already the category leaders.

3.10.3 The Issue of Advertising to Children

Activity 28: How can children be protected from ads targeting at them? Does
such protection go against provisions relating to freedom of expression?
Discuss.
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Advertising to children presents different challenges. Kids aren’t sophisticated
consumers. Their conceptions of self, time, and money are immature. As a result,
they know very little about their desires, needs, and preferences—or how to use
economic resources rationally to satisfy them. And the nature of children’s
conceptual ability makes it likely that child-oriented advertising can lead to false
beliefs or highly improbable product expectations.

While most children and parents are still joint consumers, more and more
children are becoming sole decision makers. To protect them, and their parents,
both critics and defenders agree that advertisers should not intentionally deceive
children. The central issue is how far advertisers should go to ensure that
children are not misled by their ads.
To promote responsible children’s advertising and to respond to public concerns,
the Council of Better Business Bureaus in U.S established the Children’s
Advertising Review Unit (CARU). CARU provides a general advisory service for
advertisers and agencies and also offers informational material for children,
parents, and educators. For more than 20 years, CARU’s Self-Regulatory
Guidelines for Children’s Advertising has guided marketers in the development of
child-directed advertising for all traditional media.

In 1997, CARU published its updated Guidelines to include new directions for
marketing to children via online media. The basic activity of CARU is the review
and evaluation of child-directed advertising in all media. When children’s
advertising is found to be misleading, inaccurate, or inconsistent with the
Guidelines, CARU seeks changes through voluntary cooperation of the
advertisers.

In the developed world, other countries are far more strict than the United States
about advertising to children.

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Sweden and Norway, for example, do not permit any television advertising to be
directed toward children under 12, and no advertisements at all are allowed
during children’s programs. Germany and Holland prohibit sponsorship of
children’s shows, and the Flemish region of Belgium permits no ads five minutes
before or after any programs for children. While the highest level of advertising to
children is in Australia (an average of 34 ads per hour), that country allows no
ads on programs aimed at preschool children.

In the area of television advertising, the government and consumer groups play
an important role at both the national and international level to ensure that
adequate consumer protection for children is maintained and strengthened
where necessary.

3.10.4 Consumer Privacy

The second major regulatory issue facing advertisers is privacy. Today, most
advertisers know it’s illegal to use a person’s likeness in an ad without the
individual’s permission. And since 1987, even using a celebrity lookalike (or
soundalike) can violate that person’s rights. The courts have also ruled that
people’s privacy rights continue even after their death.

Now, with the increased use of fax machines, cell phones, and the Internet, all of
which can be used for advertising directly to prospects, the issue of privacy
rights is again in the news. This time it’s over people’s right to protect their
personal information. Privacy is an ethical issue as well as a legal one. It’s also a
practical issue: Prospective customers who find advertising faxes, telemarketing
calls, and e-mails annoying and intrusive aren’t likely to buy the offending
company’s products.

Internet users worry about people they don’t know, and even businesses they do
know, getting personal information about them. And their concern is not without
reason. Many websites create profiles of their visitors to get data such as e-mail
addresses, clothing sizes, or favourite books. Some sites also track users’

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surfing habits, usually without their knowledge, to better target ads for products.

To create these user profiles, websites use tiny software programs, called
cookies, that keep a log of where people click, allowing sites to track customers’
Web-surfing habits. The cookies are placed on people’s computers when they
first visit a site or use some feature like a personalized news service or a
shopping cart.
Internet companies argue that such tracking is not personal; it’s typically
performed anonymously and helps them customize sites and content to match
users’ interests. However, DoubleClick, a leading provider of marketing tools for
Web advertisers, direct marketers, and Web publishers, recently acquired Abacus
Direct, a direct-mail company with an extensive offline database of retail and
catalog purchasers. This potentially enables DoubleClick to combine online
profiles with offline names, addresses, demographic information, and purchasing
data.

A survey conducted in 2000 revealed that only 27 percent of Internet users

accept the industry’s claim that tracking is helpful. Somewhat more than half, 54
percent, consider it harmful, and 11 percent believe that it both helps and hurts. A
large majority of those surveyed, 87 percent, believe sites should ask permission
before collecting personal information.

Fortunately, consumers are not completely helpless. They can disable the
cookies on their computers. But this may limit their Internet access, because
some websites actually require that cookies be implanted. Internet surfers also
have the option to “opt-in.” This feature allows users to set the terms for which
they give personal information. Also available is the “opt-out” feature, which
allows sites to continuously gather information about visitors unless they
specifically inform the site not to by clicking on a button.

Responding to the rising concern of many consumers, the Federal Trade

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Commission together with the Network Advertising Initiative (an organization
comprised of leading Internet advertising networks including DoubleClick has
created a framework for self-regulation of online profiling.

The guidelines are referred to as the “Fair Information Practice Principles” and
consist of five core elements:
* Notice, which requires that the website clearly post their privacy policy.
* Choice, which relates to consumers’ level of control over being profiled and how
their information is used.
* Access, the ability for consumers to access information collected about them
and make amendments to it.
* Security, which requires that network advertisers make reasonable efforts to
protect the data they collect, from loss, misuse, or improper access.
* Enforcement, a requirement that all industry members subject themselves to
monitoring by an independent third party in order to assure compliance with the
Fair Information Practice Principles. Naturally the dot-com companies would
prefer to avoid government intervention and the layers of laws and regulations
that would bring. So it’s in everybody’s interest for self-regulation to work. Time
will tell.

3.11 Federal Regulation of Advertising in North America

The U.S. government imposes strict controls on advertisers through laws,
regulations, and judicial interpretations. Among the many federal agencies and
departments that regulate advertising are the Federal Trade Commission, the
Food and Drug Administration, the Federal Communications Commission, the
Patent and Trademark Office, and the Library of Congress. Because their
jurisdictions often overlap, advertisers may sometimes have difficulty complying
with their regulations.

Canada has a similar maze of federal regulators. But the Canadian legal situation
is considerably more complex than the United States’ due to the separate (but

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often concurrent) jurisdictions of paternalistic federal and provincial
governments, the broad powers of government regulators, the vast array of self-
regulatory codes, and the very nature of a bilingual and bicultural society. One
simple example of this is the fact that all packages and labels must be printed in
both English and French throughout Canada.

3.11.1 The U.S. Federal Trade Commission

In the United States, the Federal Trade Commission (FTC) is the major regulator
of advertising for products sold in interstate commerce. Established by an act of
Congress, the FTC has a mission of ensuring “that the nation’s markets function
competitively, and are vigorous, efficient, and free of undue restrictions.” The
commission enforces a variety of federal antitrust and consumer protection laws
and works to enhance the operation of the marketplace by eliminating acts or
practices that are deceptive or unfair. In other words, it is the FTC’s responsibility
to maintain the existence of many sellers in the marketplace, strive to provide
more complete information to consumers, and keep the marketing process as
free of externalities as possible.

The FTC’s job is complicated by the fact that the definitions of deceptive and
unfair are controversial.

A. Defining Deception
The FTC defines deceptive advertising as any ad that contains a
misrepresentation, omission, or other practice that can mislead a significant
number of reasonable consumers to their detriment. Proof that consumers were
deceived is not required, and the representation may be either expressed or
implied. The issue is whether the ad conveys a
false impression—even if it is literally true.

Take the case of the FTC against Office Depot, [Link], and Value America.
According to the FTC, the companies engaged in deceptive practices in

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advertising “free” and “low-cost” personal computer (PC) systems because they
failed to adequately disclose the true costs and important restrictions on the
offers. The low cost of the PCs was tied to discounts that were conditioned on
the purchase of long-term Internet service contracts.

While the companies’ advertisements plugged low-cost and, in some cases, free
computer systems, the true costs for the systems were far higher. For example,
one ad featured a computer for $269. But the purchaser’s actual expenses would
exceed $1,000 when taking into account the cost of the required three-year
Internet service contract. The FTC said the restrictions and charges were
inadequately disclosed or that they were disclosed in tiny print. And that
amounted to deception.

Without admitting any wrongdoing, the companies all signed consent

agreements, agreeing to disclose the information prominently in the future to
help consumers easily determine the real costs of such deals.

The FTC is a powerful regulator. The commission cracked down on Exxon (one
of the world’s largest oil companies) and ordered a groundbreaking educational
campaign to inform consumers that the right octane for most cars is regular
octane, not the more expensive premium grade. The FTC also looks at
environmental claims such as biodegradable, degradable, photodegradable, and
recyclable. To avoid confusing terminology, the FTC and the Environmental
Protection Agency (EPA) worked jointly with attorneys general from many states
to develop uniform national guidelines for environmental marketing claims.

B. Defining Unfairness
According to FTC policy, some ads that are not deceptive may still be considered
unfair to consumers. Unfair advertising occurs when a consumer is “unjustifiably
injured” or there is a “violation of public policy” (such as other government
statutes). In other words, unfair advertising is due to the inadequacy of complete

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information or some other externality. For example, practices considered unfair
are claims made without prior substantiation, claims that exploit vulnerable
groups such as children and the elderly, and cases where the consumer cannot
make a valid choice because the advertiser omits important information about
the product or about competing products mentioned in the ad.

In one case, the FTC found that an automaker’s failure to warn of a safety
problem was not deceptive but was unfair. Advertising organizations have
argued that the word “unfair” is so vague it can mean whatever any given
individual wants it to. They have lobbied Congress to eliminate the FTC’s power
to prosecute on unfairness grounds, and Congress did pass a compromise bill
requiring the FTC to show that (1) an alleged unfair practice involves substantial,
unavoidable injury to consumers; (2) the injury is not reasonably avoidable by
consumers themselves; and (3) the injury is not outweighed by benefits to
consumers or competition. This legislation suggests that in the future the FTC
will have to balance on a far narrower beam in its effort to regulate unfairness.

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C. Comparative Advertising
Advertisers use comparative advertising to claim superiority to competitors in
some aspect. In the United States, such ads are legal (and encouraged by the
FTC) so long as the comparison is truthful. In fact, the FTC cracked down on the
Arizona Automobile Dealers Association for restricting truthful, non-deceptive
comparative price advertising among its members.

The AADA’s 199 members constitute 99 percent of the new-automobile and truck
dealers in Arizona. The FTC challenged the association’s Standards for
Advertising Motor Vehicles, which, among other things, prohibited members from
advertising that prices are equal to or lower than a competitor’s, or are the lowest;
that the advertiser will match or beat any price; or that the advertiser will offer
compensation if it cannot offer an equal or lower price.

These prohibitions, according to the FTC, unreasonably restrained competition

among the member dealers and injured consumers by depriving them of truthful
information concerning the prices and financing available for new cars and
trucks.

The 1988 Trademark Law Revision Act closed a loophole in the Lanham Act,
which governed comparison ads but did not mention misrepresenting another
company’s product. Under current law, any advertiser that misrepresents its own
or another firm’s goods, services, or activities is vulnerable to a civil action.

In addition to being truthful, comparative ads must compare some objectively

measurable characteristic. And the greatest scrutiny must be given to the
substantiation. Given the potential for sizable damages—up to millions of
dollars—for faulty comparative advertising, the greatest care must be exercised
in this area.

3.11.2 Investigating Suspected Violations

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If it receives complaints from consumers, competitors, or its own staff members
who monitor ads in various media, the FTC may decide to investigate an
advertiser. The agency has broad powers to pursue suspected violators and
demand information from them. Typically, the FTC looks for three kinds of
information: substantiation, endorsements, and affirmative disclosures.

If a suspected violator cites survey findings or scientific studies, the FTC may
ask for substantiation. Advertisers are expected to have supporting data before
running an ad, although the FTC sometimes allows post claim evidence. The FTC
does not solicit substantiation for ads it is not investigating.

The FTC also scrutinizes ads that contain questionable endorsements or

testimonials. If a non-celebrity endorser is paid, the ad must disclose this on-
screen. The endorsers may not make claims the advertiser can’t substantiate.
Further, celebrity endorsers must actually use the product or service (if
portrayed), and they can be held personally liable if they misrepresent it.

Advertisers must make affirmative disclosure of their product’s limitations or

deficiencies: for example, pesticide warnings, and statements that DDT may be
hazardous to one’s health.

3.11.3 Remedies for Unfair or Deceptive Advertising

When the FTC determines that an ad is deceptive or unfair, it may take three
courses of action: negotiate with the advertiser for a consent decree, issue a
cease-and-desist order, and/or require corrective advertising.

A consent decree is a document the advertiser signs agreeing to stop the

objectionable advertising without admitting any wrongdoing. Before signing, the
advertiser can negotiate specific directives with the FTC that will govern future
advertising claims.

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If an advertiser won’t sign a consent decree, the FTC may issue a cease-and-
desist order prohibiting further use of the ad. Before the order is final, it is heard
by an administrative law judge. Most advertisers sign the consent decree after
the hearing and agree, without admitting guilt, to halt the advertising. Advertisers
that violate either a consent decree or a cease-and-desist order can be fined up
to $11,000 per showing of the offending ad.

The FTC may also require corrective advertising for some period of time to
explain and correct offending ads. In 1999 the FTC ruled that pharmaceutical
giant Novartis advertised without substantiation that its Doan’s Pills brand was
more effective against back pain than its rivals. Because the deceptive
advertising had gone on for more than nine years, the FTC ordered Novartis to
run $8 million worth of corrective advertising. The advertising was to include the
statement: “Although Doan’s is an effective pain reliever, there is no evidence
that Doan’s is more effective than other pain relievers for back pain.” The FTC
also ordered Doan’s to place the statement on their packaging for a year.

To help advertisers avoid such expense, the FTC will review advertising before it
runs and give “advance clearance” in an advisory opinion. It also publishes
Industry Guides and Trade Regulation Rules, which gives advertisers, agencies,
and the media ongoing information about FTC regulations.

In Canada, the laws are even tougher and the consequences stiffer. It’s an
offense for any public promotion to be “false or misleading in a material respect.”
It is not necessary that anyone be misled by the representation, only that it be
false. An offense is a crime. If convicted, an advertiser or agency executive could
go to jail for up to five years, pay a fine, or both.

3.12 The Food and Drug Administration (FDA)

A division of the U.S Department of Health and Human Services, the Food and
Drug Administration (FDA) is authorized by Congress to enforce the Federal Food,

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Drug, and Cosmetic Act and several other health laws. The agency monitors the
manufacture, import, transport, storage, and sale of over $1 trillion worth of
products annually, which accounts for 25 cents of every dollar spent annually by
American consumers. And they do so at a cost to the public of little more than a
penny a day per person.

It’s the FDA’s job to see that the food we eat is safe, the cosmetics we use won’t
hurt us, and the medicines and therapeutic devices we buy are safe and effective.
With authority over the labelling, packaging, and branding of packaged foods and
therapeutic devices, the FDA strives to give consumers complete information by
ensuring that products are labelled truthfully with the information people need to
use them properly. The FDA requires manufacturers to disclose all ingredients on
product labels, in in-store product advertising, and in product literature. The label
must accurately state the weight or volume of the contents. Labels on
therapeutic devices must give clear instructions for use. The FDA can require
warning statements on packages of hazardous products.

It regulates “cents off” and other promotions on package labels and has
jurisdiction over the use of words such as giant or family to describe package
sizes. When consumer-oriented drug ads became common in the mid-1980s, the
FDA ruled that any ad for a brand name drug must include all the information in
the package insert. That meant advertisers had to run lengthy commercials or
use very small type in print ads. In 1997, the FDA changed that rule, allowing
pharmaceutical companies to advertise their drugs on broadcast media as long
as they mentioned any important possible side effects and directed people to
their print ads, their Internet sites, or consumers’ own doctors for more
information.

With that ruling, prescription drug advertising instantly soared on television and
radio, tripling over the next five years. It’s estimated that in 2001, pharmaceutical
companies spent some $2.7 billion in direct-to-consumer advertising. Although

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the FDA is responsible for ensuring that all these ads are fair and accurate, the
agency is so understaffed that many questionable and, unfortunately, deceptive
or misleading ads do get through. However, any time the FDA has sent a letter to
marketers citing false advertising claims, the companies have stopped running
the misleading ads.

The Nutritional Labelling and Education Act (NLEA), which went into effect in
1994, gave the FDA additional muscle by setting stringent legal definitions for
terms such as fresh, light, low fat, and reduced calories. It also sets standard
serving sizes and requires labels to show food value for one serving alongside
the total recommended daily value as established by the National Research
Council.

The first time the FDA took severe action against a prominent marketer over a
labeling dispute, it seized 2,400 cases of Procter & Gamble’s Citrus Hill Fresh
Choice orange juice. Fresh Choice was made from concentrate, not fresh-
squeezed juice as P&G claimed. Due to increased FDA scrutiny, many advertisers
are now more cautious about their health and nutritional claims.

3.13 The Federal Communications Commission (FCC)

The seven-member Federal Communications Commission (FCC) in U.S is an
independent federal agency with jurisdiction over the radio, television, telephone,
satellite, the Internet, and cable TV industries. The FCC is responsible for
protecting the public interest and encouraging competition. Its control over
broadcast advertising is actually indirect, stemming from its authority to license
broadcasters (or take away their licenses). The FCC stringently controls the
airing of obscenity and profanity, and it can restrict both the products advertised
and the content of ads. For example, the FCC required stations to run
commercials about the harmful effects of smoking even before Congress
banned cigarette advertising on TV and radio.

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In the 1980s, the FCC decided there were enough buyers and sellers that
marketplace forces could adequately control broadcast media, so it deregulated
both radio and TV stations. The FCC no longer limits commercial time or requires
stations to maintain detailed program and commercial logs. However, stations
still keep records of commercial broadcasts to assure advertisers they ran.

The 1992 Cable Television Consumer Protection and Competition Act gave the
FCC additional teeth. It placed new controls on the cable TV industry to
encourage a more service-oriented attitude and to improve the balance between
rates and escalating ad revenues. The FCC can set subscriber rates for cable TV,
so subscription revenues should slow while advertising rates rise.

Studies show violence on TV is linked to violent behaviour (a public health issue).

Congress responded by enacting the 1992 Television Violence Act, exempting
network and cable companies from antitrust laws if they agree to self-regulate
violence. Because network and cable companies deny that violence on TV is
related to violence in life, government intervention is a possibility.

3.14 The Patent and Trademark Office and the Library of Congress
A basic role of government is to promote and protect the economic well-being
(self-interest) of its citizens. One way the U.S. government does this is by
promoting “the progress of science and useful arts, by securing for limited times
to authors and inventors the exclusive right to their respective writings and
discoveries”; in other words, by registering and protecting their intellectual
property.

Through the issuance of patents, the government provides incentives to invent,

invest in, and disclose new technology worldwide. By registering trademarks and
copyrights, the government helps businesses protect their investments, promote
their goods and services, and safeguard consumers against confusion and
deception in the marketplace (complete information).

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A trademark such as Coca-Cola, AT&T, or Levi’s is a valuable asset. According to
the Lanham Trade-Mark Act (1947), a trademark is “any word, name, symbol, or
device or any combination thereof adopted and used by a manufacturer or
merchant to identify his goods and distinguish them from those manufactured or
sold by others.”

Patents and trademarks are registered with and protected by the U.S. Patent and
Trademark Office, a bureau of the Department of Commerce. Ownership of a
trademark may be designated in advertising or on a label, package, or letterhead
by the word Registered, the symbol ®, or the symbol . If someone persists in
using a trademark owned by another or confusingly similar to another’s mark, the
trademark owner can ask for a court order and sue for trademark infringement.

The Library of Congress protects all copyrighted material, including advertising,

in the United States. A copyright is a form of protection provided to the authors
of “original works of authorship,” including literary, dramatic, musical, artistic, and
certain other “intellectual works.” A copyright issued to an advertiser grants the
exclusive right to print, publish, or reproduce the protected ad for the life of the
copyright owner plus 50 years.

An ad can be copyrighted only if it contains original copy or illustrations. An idea

cannot be copyrighted; nor can slogans, short phrases, and familiar symbols and
designs (although the latter may be trademarkable).

Copyright is indicated by the word Copyright, the abbreviation Copr., or the

symbol © followed by the year of first publication and the name of the advertiser
or copyright owner.

3.15 State and Local Regulation

Advertisers are also subject to state or local laws. Since the U.S. federal

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deregulation trend of the 1980s, state and local governments have taken a far
more active role.

Regulation by State Governments State legislation governing advertising is often

based on the truth-in-advertising model statute developed in 1911 by Printer’s Ink,
for many years the major trade publication of the industry. The statute holds that
any maker of an ad found to contain “untrue, deceptive, or misleading” material is
guilty of a misdemeanor. Today 46 states (all except Arkansas, Delaware,
Mississippi, and New Mexico) enforce laws patterned after this statute.

All states also have “little FTC acts,” consumer protection laws that govern unfair
and deceptive business practices. States themselves can investigate and
prosecute cases, and individual consumers can bring civil suits against
businesses. To increase their influence, some states team up on legal
actions—for example, to challenge deceptive ad promotions in the airline, rental-
car, and food-making industries. As one observer pointed out, “Many of the food
manufacturers could litigate some of the smaller states into the ground, but they
might not be willing to fight it out against 10 states simultaneously.”

Different states have different regulations governing what can be advertised.

Some states prohibit advertising for certain types of wine and liquor, and most
states restrict the use of federal and state flags in advertising. This can present a
major problem to national marketers. And in some cases, it actually hurts
consumers. For example, many companies trying to conduct environmentally
responsible marketing programs feel stymied by the different state laws
governing packaging materials and recycling. In the tobacco case discussed
earlier, the teaming of numerous state attorneys general proved a formidable foe
for the giant tobacco industry. In the end, facing the prospect of an infinite
number of lawsuits from individual states and even municipalities, the industry
buckled under, agreeing to settle and pay the various states hundreds of billions
of dollars.

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Regulation by Local Governments
Many cities and counties also have consumer protection agencies to enforce
laws regulating local advertising practices. The chief function of these agencies
is to protect local consumers against unfair and misleading practices by area
merchants.

3.16 Nongovernment Regulation

Nongovernment organizations also issue advertising guidelines. In fact,
advertisers face considerable regulation by business-monitoring organizations,
related trade associations, the media, consumer groups, and advertising
agencies themselves.

3.16.1 The Better Business Bureau (BBB)

The largest of the U.S. business-monitoring organizations is the Better Business
Bureau (BBB), established in 1916. Funded by dues from more than 100,000
member companies, it operates primarily at the local level to protect consumers
against fraudulent and deceptive advertising and sales practices. When local
bureaus contact violators and ask them to revise their advertising, most comply.

The BBB’s files on violators are open to the public. Records of violators who do
not comply are sent to appropriate government agencies for further action. The
BBB often works with local law enforcement agencies to prosecute advertisers
guilty of fraud and misrepresentation. Each year, the BBB investigates thousands
of ads for possible violations of truth and accuracy.

When the NAD finds a valid complaint, it contacts the advertiser, specifying any
claims to be substantiated. If substantiation is inadequate, the NAD requests
modification or discontinuance of the claims.

The case of the leather flight jacket shows how well the NAD process works. Neil

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Cooper LLC is a company that manufactures a leather jacket. In its print ads it
claims that its A-2 leather flight jackets are the “official battle gear of U.S. Air
Force Pilots.” Avirex, Ltd., a competing company, complained to the NAD since
the A-2 jacket currently being purchased by the Department of Defense and worn
by U.S. pilots is the jacket manufactured by them, not Neil Cooper. Neil Cooper
explained that, while it was not the current supplier, many pilots continued to buy
from Neil Cooper directly because they preferred that product. Notwithstanding,
the NAD sided with Avirex and recommended that Neil Cooper qualify its claims
to make it clear that it is selling a reproduction of an authentic A-2 flight jacket
rather than the current official jacket of the U.S. Air Force. Neil Cooper agreed.

If the NAD and an advertiser reach an impasse, either party has the right to a
review by a five-member NARB panel (consisting of three advertisers, one agency
representative, and one layperson). The panel’s decision is binding. If an
advertiser refuses to comply with the panel’s decision (which has never yet
occurred), the NARB will refer the matter to an appropriate government body and
so indicates in its public record. Of 3,000 NAD investigations conducted between
1971 and 1990, only 70 were disputed and referred to the NARB for resolution.

3.16.2 Regulation by the Media

Almost all media review ads and reject material they regard as objectionable,
even if it isn’t deceptive. Many people think the media are more effective
regulators than the government.

A. Television
Of all media, the TV networks conduct the strictest review. Advertisers must
submit all commercials intended for a network or affiliated station to its
broadcast standards department. Many commercials (in script or storyboard
form) are returned with suggestions for changes or greater substantiation. Some
ads are rejected outright if they violate network policies.

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The three major U.S. broadcast networks base their policies on the original
National Association of Broadcasters Television Code. But network policies vary
enough that it’s difficult to prepare universally acceptable commercials. Cable
networks and local stations tend to be much less stringent, as demonstrated by
their acceptance of condom ads.

B. Radio
The 19 U.S. radio networks, unlike TV networks, supply only a small percentage
of their affiliates’ programming, so they have little or no say in what their
affiliates advertise. A radio station is also less likely to return a script or tape for
changes. Some stations, such as KLBJ in Austin, Texas, look mainly at whether
the advertising is illegal, unethical, or immoral. They don’t want spots to offend
listeners or detract from the rest of the programming.

Every radio station typically has its own unwritten guidelines. KDWB, a
Minneapolis/St. Paul station with a large teenage audience, turned down a
psychic who wanted to buy advertising time but did allow condom and other
contraceptive ads.
C. Magazines
National magazines monitor all advertising, especially by new advertisers and for
new products. Newer publications eager to sell space may not be so watchful,
but established magazines, such as Time and Newsweek, are highly scrupulous.
Many magazines will not accept advertising for certain types of products.

The New Yorker won’t run discount retail store advertising or ads for feminine
hygiene or self-medication products. Reader’s Digest won’t accept tobacco ads.
Some magazines test every product before accepting the advertising. Good
Housekeeping rejects ads if its tests don’t substantiate the advertiser’s claims.
Products that pass are allowed to feature the Good Housekeeping “Seal of
Approval.”

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D. Newspapers
Newspapers also monitor and review advertising. Larger newspapers have
clearance staffs who read every ad submitted; most smaller newspapers rely on
the advertising manager, sales personnel, or proofreaders.

The advertising policies set forth in Newspaper Rates & Data specify, “No
objectionable medical, personal, matrimonial, or clairvoyant advertising accepted;
no stock promotion or financial advertising, other than those securities of known
value.” Another rule prohibits ads that might easily be mistaken for regular
reading material unless they feature the word advertisement or advt.

In addition, most papers have their own acceptability guidelines, ranging from
one page for small local papers to more than 50 pages for large dailies such as
the Los Angeles Times. Some codes are quite specific. Some newspapers
require advertisers who claim “the lowest price in town” to include a promise to
meet or beat any
price readers find elsewhere within 30 days.

One problem advertisers face is that newspapers’ codes are far from uniform.
Handgun ads may be prohibited by one newspaper, accepted by another if the
guns are antique, and permitted by a third so long as the guns aren’t automatic.
And newspapers do revise their policies from time to time.

3.16.3 Regulation by Consumer Groups

Of all the regulatory forces governing advertising, consumer protection
organizations have shown the greatest growth. Starting in the 1960s, the
consumer movement became increasingly active in fighting fraudulent and
deceptive advertising. Consumers demanded that products perform as
advertised and that more product information be provided for people to compare
and make better buying decisions. The consumer movement gave rise to
consumerism, social action to dramatize the rights of the buying public. The U.S.

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consumer has the power to influence advertising practices dramatically.

Today, advertisers and agencies pay more attention to product claims, especially
those related to energy use (such as the estimated miles per gallon of a new car)
and the nutritional value of processed foods. Consumerism fostered the growth
of consumer advocacy groups and regulatory agencies and promoted more
consumer research by advertisers, agencies, and the media in an effort to learn
what consumers want—and how to provide it.

Investment in public goodwill pays off in improved consumer relations and sales.

A. Consumer Information Networks

Organizations such as the Consumer Federation of America (CFA), the National
Council of Senior Citizens, the National Consumer League, and the National
Stigma Clearinghouse exchange and disseminate information among members.
These consumer information networks help develop state, regional, and local
consumer organizations and work with national, regional, county, and municipal
consumer groups.

Consumer interests also are served by private, nonprofit testing organizations

such as Consumers Union, Consumers’ Research, and Underwriters Laboratories.

B. Consumer Advocates
Consumer advocate groups investigate advertising complaints received from the
public and those that grow out of their own research. If a complaint is warranted,
they ask the advertiser to halt the objectionable ad or practice. If the advertiser
does not comply, they release publicity or criticism about the offense to the
media and submit complaints with substantiating evidence to appropriate
government agencies for further action. In some instances, they file a lawsuit to
obtain a cease-and-desist order, a fine, or other penalty against the violator.

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Today, with so many special-interest advocacy groups, even the most sensitive
advertisers feel challenged. To attract attention, advertising must be creative and
stand out from competing noise. Yet advertisers fear attention from politically
correct activists (the “PC police”). Calvin Klein ads were attacked by the Boycott
Anorexic Marketing group. A Nike ad starring Porky Pig was protested by the
National Stuttering Project in San Francisco.

3.16.4 Self-Regulation by Advertisers

Advertisers also regulate themselves. They have to. In today’s competitive
marketplace, consumer confidence is essential. Most large advertisers gather
strong data to substantiate their claims. They maintain careful systems of
advertising review to ensure that ads meet both their own standards and industry,
media, and legal requirements.

Many advertisers try to promote their social responsibility by tying in with a local
charity or educational organization. Many industries maintain advertising codes
that companies agree to follow. These codes also establish a basis for
complaints. However, industry advertising codes are only as effective as the
enforcement powers of the individual trade associations. And because
enforcement may conflict with antitrust laws, trade associations usually use peer
pressure rather than hearings or penalties.

3.16.5 Self-Regulation by Ad Agencies and Associations

Most ad agencies monitor their own practices. Professional advertising
associations also oversee members’ activities to prevent problems that might
trigger government intervention. Advertising publications report issues and court
actions to educate agencies and advertisers and warn them about possible legal
infractions.

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A. Advertising Agencies
Although advertisers supply information about their product or service to their
agencies, the agencies must research and verify product claims and comparative
product data before using them in advertising. The media may require such
documentation before accepting the advertising, and substantiation may be
needed if government or consumer agencies challenge the claims.

Agencies can be held legally liable for fraudulent or misleading advertising claims.
For this reason, most major advertising agencies have in-house legal counsel and
regularly submit their ads for review. If any aspect of the advertising is
challenged, the agency asks its client to review the advertising and either confirm
claims as truthful or replace unverified material.

B. Advertising Associations
Several associations monitor industry-wide advertising practices. The American
Association of Advertising Agencies (AAAA), an association of the largest
advertising agencies throughout the United States, controls agency practices by
denying membership to any agency judged unethical. The AAAA Standards of
Practice and Creative Code set advertising principles for member agencies.

The American Advertising Federation (AAF) helped to establish the FTC, and its
early vigilance committees were the forerunners of the Better Business Bureau.
The AAF Advertising Principles of American Business, adopted in 1984, define
standards for truthful and responsible advertising. Since most local advertising
clubs belong to the AAF, it is instrumental in influencing agencies and advertisers
to abide by these principles.

The Association of National Advertisers (ANA) comprises 400 major

manufacturing and service companies that are clients of member agencies of
the AAAA. These companies, pledged to uphold the ANA code of advertising
ethics, work with the ANA through a joint Committee for Improvement of

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Advertising Content.

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3.17 Unit Summary
As one of the most visible activities of business, advertising is both lauded and
criticized for the role it plays in selling products and influencing society. Some
controversy surrounds advertising’s role in the economy. To debate advertising’s
economic effects, we employ the four basic assumptions of free-enterprise
economics: self-interest, many buyers and sellers, complete information, and
absence of externalities.

The economic impact of advertising can be likened to the opening shot in

billiards—a chain reaction that affects the company as well as its competitors,
customers, and the business community. On a broader scale, advertising is often
considered the trigger on a country’s mass-distribution system, enabling
manufacturers to produce the products people want in high volume, at low prices,
with standardized quality. People may argue, though, about how advertising adds
value to products, affects prices, encourages or discourages competition,
promotes consumer demand, narrows or widens consumer choice, and affects
business cycles.

Although controversy surrounds some of these economic issues, few dispute the
abundance principle: In an economy that produces more goods and services than
can be consumed, advertising gives consumers more complete information
about the choices available to them, encourages more sellers to compete more
effectively, and thereby serves the self-interest of both consumers and marketers.

Social criticisms of advertising may be short-term manipulative arguments or

long-term macro arguments. While the economic aspect of advertising focuses
on the free-enterprise principles of self-interest and many buyers and sellers, the
social aspect typically involves the concepts of complete information and
externalities.

Critics say advertising is deceptive; it manipulates people into buying unneeded

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products, it makes our society too materialistic, and there’s just too much of it.
Further, they say, advertising perpetuates stereotypes, and all too frequently, it is
offensive and in bad taste.
Proponents admit that advertising is sometimes misused. However, they point
out that despite its problems, advertising offers many social benefits. It
encourages the development of new products and speeds their acceptance. It
fosters employment, gives consumers and businesses a wider variety of product
choices, and helps keep prices down by encouraging mass production. It
stimulates healthy competition among companies and raises the overall
standard of living. Moreover, sophisticated marketers know the best way to sell
their products is to appeal to genuine consumer needs and be honest in their
advertising claims.

In short, while advertising can be criticized for giving less than complete
information and for creating some unwanted externalities, it also contributes to
the free enterprise system by encouraging many buyers and sellers to participate
in the process, thereby serving the self-interest of all.

Under growing pressure from consumers, special-interest groups, and

government regulation, advertisers developed higher standards of ethical
conduct and social responsibility. Advertisers confront three levels of ethical
consideration: the primary rules of ethical behaviour in society, their personal
value system, and their personal philosophy of singular ethical concepts.

The federal and state courts of U.S, for instance, are involved in several
advertising issues, including First Amendment protection of commercial speech,
and infringements on the right to privacy. Advertising is regulated by federal,
state, and local government agencies, business-monitoring organizations, the
media, consumer groups, and the advertising industry itself. All of these groups
encourage advertisers to give more complete information to consumers and
eliminate any externalities in the process.

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The Federal Trade Commission, the major federal regulator of advertising in the
United States, is responsible for protecting consumers and competitors from
deceptive and unfair business practices. If the FTC finds an ad deceptive or
unfair, it may issue a cease-and-desist order or require corrective advertising.

The Food and Drug Administration (FDA) monitors advertising for food and drugs
and regulates product labels and packaging. The Federal Communications
Commission (FCC) has jurisdiction over the radio and TV industries, although
deregulation severely limited its control over advertising in these media. The
Patent and Trademark Office governs ownership of U.S. trademarks, trade
names, house marks, and similar distinctive
features of companies and brands. The Library of Congress registers and
protects copyrighted materials.

State and local governments also enact consumer protection laws that regulate
advertising. Non-government regulators include the Council of Better Business
Bureaus and its National Advertising Division. The NAD, the most effective U.S.
non-government regulatory body, investigates complaints from consumers,
brand competitors, or local Better Business Bureaus and suggests corrective
measures. Advertisers that refuse to comply are referred to the National
Advertising Review Board (NARB), which may uphold, modify, or reverse the
NAD’s findings.

Other sources of regulation include the codes and policies of the print media and
broadcast media. Consumer organizations and advocates also control
advertising by investigating and filing complaints against advertisers and by
providing information to consumers. Finally, advertisers and agencies regulate
themselves.

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3.18 Review Questions
1. What role does advertising play in our economic system?
2. What are the two types of social criticisms of advertising?
3. What is puffery? Give some examples. Do you ever feel deceived by puffery in
advertising?
4. Does advertising affect our value system? In what ways?
5. What is the difference between an advertiser’s ethics and its social
responsibility?
6. How does government regulation of advertising in the United States differ
from regulation in Ethiopia?
7. How does commercial speech differ from political speech? Do you think
advertisers should have the same First Amendment rights as everyone else?
Explain.
8. What is the role of the FTC in advertising? Do you think this role should be
expanded or restricted?
9. How well do advertisers regulate themselves? In what areas do you think
advertisers could do well, and where should they clean up their act?
10. The Advertising Experience In order to understand better a technique, even a
questionable one, it is sometimes best to have practiced it oneself. Take a
common product and create a responsible advertisement for it. Next, puff the ad
up using the techniques studied in the unit. Be prepared to discuss the
differences between the advertisements and how the puffery affects consumer
perception.

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 Unit Four
Advertising in Print, Electronic, and Digital Media

4.1 Objectives

Dear student, this chapter tries to examine the unique features of print, broadcast
and digital advertising and also makes an attempt to compare and contrast the
three based on their tendency to complement each other in the marketing
communication mix as well as on their features deviating from one another. Each
medium has its own characteristics, advantages and drawbacks. Advertisers
must be able to make comparison and contrast so as to decide the most cost
effective method.

Thus, at the end of this unit, you will be able to:

 Explain the advantages and disadvantages of magazine advertising

 Define the major types of newspaper advertising

 Explain the advantages and disadvantages of newspaper advertising

 Describe the advantages and drawbacks of broadcast and cable TV as

advertising media

 Analyze the pros and cons of using radio in the creative mix

 Explain the different types of radio advertising

 Discuss the opportunities and challenges presented by the new digital,

interactive media

 Debate the pros and cons of the internet as an advertising medium

 Define the various kinds of internet advertising

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4.2 Using Print Media
Once all the strategic marketing, advertising and media planning is accomplished
and the creative direction is set, the advertiser can turn to the tactical details of
actually scheduling and buying media time on radio and television and media
space in magazines and newspapers. This is where a big money is spent in
advertising—on the actual placement of ads in the media. So the competent
performance of the media buying task is crucial for getting the most bang for the
advertiser’s buck.

The person in charge of negotiating and contracting with the media is called a
media buyer. Media buyers often specialize in one medium or another. So there
are print media buyers, spot-TV media buyers, network media buyers and so on.
The degree of specialization, however, depends on factors such as the size of the
ad agency or the media buying firm the buyer works for. In small agencies buyers
don’t often specialize. They do it all.

Success as a print media buyer requires a range of knowledge and abilities. First,
media buyers must have a broad and basic understanding of all the various
forms of print media available and the terminologies used in the field. They need
to know, for example, how magazine and newspapers are categorized, the
advertising possibilities each form offers and the pros and cons of using various
types of print media vehicles. Today, they should also have an understanding of
the impact of new technologies on print media.

Second, buyers need to know how to buy magazine and newspaper space. They
must understand how to analyze circulation, where to go to get reliable
information and how to calculate and negotiate the most efficient media buys.

Finally, media buyers can exercise their creativity by developing ingenious,

sophisticated ways to integrate the advertiser’s print media efforts into the whole
creative mix.

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Obviously, this is no small task. But for the student of advertising who may begin
his career in a media department, a basic understanding of all these issues is
quite important.
4.2.1 Using Magazine in the Creative Mix
Advertisers use magazine in this creative mix for many reasons. First and
foremost, magazines allow an advertiser to reach a particular target audience
with a high quality presentation. Flexible design options, prestige, authority,
believability and long shelf-life are some important features of magazines which
can be employed for the good of advertising. But this doesn’t mean that
magazine is a perfect advertising medium to employ. It has its own minuses.

Here is the summary of the pros and cons of magazine advertising;

The pros:
Flexibility in readership and advertising. Magazines cover the full range of
prospects; they have a wide choice of regional and national coverage and a
variety of lengths, approaches and editorial tones.
Colour gives readers visual pleasure and colour reproduction is best in slick
magazines. Colour enhances images and identifies the package. In short, it sells.
Authority and believability enhances the commercial message. TV, radio and
newspapers offer lots of information but lack the depth needed for readers to
gain knowledge and meaning; magazines often offer all three.
Permanence or long shelf life. Magazines let the reader appraise ads in detail,
allowing a more complete education/ sales message and the opportunity to
communicate the total corporate personality.
Prestige for products advertised in upscale or speciality magazines like Selamta.
Audience selectivity is more efficient in magazines than any other medium
except direct-mail. The predictable specialized editorial environment selects the
audience and enables advertisers to pinpoint their sales campaigns.
Cost efficiency because wasted circulation is minimized. Print networks give

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advertisers reduced prices for advertising in two or more network publications.
Selling power of magazines is proven, and results are measurable.
Reader loyalty that sometimes borders on fanaticism.
Extensive pass-along readership. Non subscribers read the magazines after
subscribers finish it.
Merchandising assistance. Advertisers generate reprints and merchandising
materials that help them get more mileage out of their ad campaigns.

The Cons
Lack of immediacy that advertisers can get with newspapers or radio.
Shallow geographic coverage. They don’t offer the national reach of broadcast
media.
Inability to deliver mass audiences at a low price. Magazines are very costly for
reaching broad masses of people.
Inability to deliver high frequency. Since most magazines come out only monthly
or weekly, the advertiser can build frequency faster than reach by adding
numerous small-audience magazines to the schedule.
Long lead time for ad insertion, sometimes two to three months.
Heavy advertising competition. The largest circulation magazines have 52
percent advertising to 48 percent editorial content.
High cost per thousand. Average black and white CPM in national consumer’s
magazine ranges from $5 to $12 or more; some trade publications with highly
selective audiences have a CPM of more than $40 for a black and white page.
Declining circulations, especially in the single-copy sales, is an industry wide
trend that limits the reach of an advertiser’s message.

4.2.2 Using Newspapers in the Creative Mix

Newspaper is an important medium in the creative mix, second only to television
in advertising volume, but costing much less. Among the overall advertising
expenditure in U.S, newspaper receives 21.9 percent. Newspaper had always
knocked the establishment with its radical coverage of social issues, politics,

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media and culture.

Although the newspaper is the major community-serving medium for both news
and advertising, more and more national advertisers are shifting to radio and
television. As a result, radio and TV carry most of the national advertising in the
U.S, while 88 percent of newspaper advertising revenue comes local advertising.

[Link] The pros and cons of Newspaper Advertising

Print ads in general and newspapers in particular provide a unique, flexible
medium for advertisers to express their creativity—especially with businesses
that rely on local customers. In general, advertising has the following pros and
cons.

The Pros:
Mass medium penetrating every segment of society. Almost all consumers read
the newspaper.
Local medium with broad reach. Covers a specific geographic area that
comprises both a market and a community of people sharing common concerns
and interest.
Comprehensive in scope, covering an extraordinary variety of topics and
interests.
Geographic selectivity is possible with zoned editions for specific
neighbourhoods or communities.
Timeliness. Papers primarily cover today’s news and are read in one day.
Credibility. Studies show that newspaper ads rank highest in believability. TV
commercials are a distant second.
Selective attention from the relatively small number of active prospects who, on
any given day, are interested in what the advertiser is trying to tell them or sell
them.
Creative flexibility. An ad’s physical size and shape can be varied to give the
degree of dominance or repetition that suits the advertiser’s purpose. The

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advertiser can use black and white, colour, Sunday magazines, or custom inserts.
An active medium rather than a passive one. Readers turn the pages, clip and
save, write in the margins, and sort through the contents.
A permanent record, in contrast to the ephemeral nature of radio and TV.
Reasonable cost.

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The cons:
Lack of selectivity of socioeconomic groups. Most newspapers reach broad,
diverse groups of readers, which may not match the advertiser’s objectives.
Short life span. Unless readers clip and save the ad or coupon, it may be lost
forever.
Low production quality. Coarse newsprint generally produces a less impressive
image than the silk, smooth paper stock of magazines, and many newspapers
can’t print colour.
Clutter. Each ad competes with editorial content and with all the other ads on the
same page or spread.
Lack of control over where ad will appear unless the advertiser pays extra for a
preferred position.
Overlapping circulation. Some people read more than one newspaper.
Advertisers may be paying for readers who were already reached in a different
paper.

[Link] Types of Newspaper Advertising

The major classifications of advertising are display, classified, public notices and
pre-printed inserts.

Display Advertising- display advertising includes copy, illustrations or photos,

headlines, coupons and other visual components. Display ads vary in size and
appear in all sections of the newspaper except the first page of major sections,
the editorial page, and the classified section.

One common variation of the display ad, the reading notice, looks like editorial
matter and sometimes costs more than normal display advertising. To prevent
readers from mistaking it for editorial matter, the word advertisement appears at
the top.

Classified Advertising—classified ads provide a community marketplace for

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goods, services and opportunities of every type, from real estate and new-car
sales to employment and business opportunities. A newspaper’s profitability
often depends on a healthy classified section.

Classified ads usually appear under subheads that describe the class of goods or
the need the ads seek to satisfy. Most employment, housing and car advertising
is classified. Classified rates are typically based on how many lines the ad
occupies and how many times the ad runs. Some newspapers accept classified
display ads, which run in the classified section of the newspaper but feature
larger type and/ or photos, art borders, abundant white space, and sometimes
even colour.

Public Notices—for a normal fee, newspapers carry legal public notices of

changes in business and personal relationships, public governmental reports,
notices by private citizens and organizations, and financial reports. These ads
follow a preset format.

Preprinted Inserts—like magazines, newspapers carry preprinted inserts. The

advertiser prints the inserts and delivers them to the newspaper plant for
insertion into a specific edition. Insert sizes range from a typical newspaper page
to a double postcard; formats include catalogs, brochures, mail-back devices,
and perforated coupons.

Some large metropolitan dailies allow advertisers to limit their inserts to specific
circulation zones. A retail advertiser that wants to reach only those shoppers in
its immediate trading area can place an insert in the local-zone editions. Retail
stores, car dealers, and large national advertisers are among those who find it
less costly to distribute their circulars this way than to mail them or deliver door
to door.

4.2.3 What Works Best in Print Advertising

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Use simple layouts. One large visual gives the ad a focal point. Wrapping text
around smaller visuals works as well, too. But avoid cluttered page (layout that
resemble the magazine’s editorial format are well read.)
Always put a caption under a photograph. Twice as many people read picture
caption as body copy. The picture caption can be an ad by itself.
Don’t be afraid of a long copy. People who read belong the headline are good
prospects. If your product is expensive (like a car, a vacation or a business
product), prospects are hungry for information. Consider long copy if you have a
complex story to tell, many different product point of market or an expensive
product or serviced to sell.
Avoid negative headlines. Many people are neutral-minded and many remember
only the negatives. Sell the positive benefits in your product—note that it wouldn’t
harm or that some defect has been solved. Look for emotional words that attract
and motivate.
Don’t be afraid of long headlines. On average, long headlines sell more
merchandise than short ones.
Look for short story appeal. After the headline, a striking visual is the most
effective way to get reader’s attention. Try for a story appeal—the kind of visual
that makes the reader ask: (what is going on here?)
Photos work better than drawings. Photography increases recall in average of 26
percent over artwork.
Look at your ad in its editorial environment. Paste your ad into the magazine in
which it appears—or, for newspaper Photostatted in the same tone as the
newspaper page. Beautifully mounted layouts are deceptive. The reader will
never see your ad printed on high-gloss paper with a big white board and
mounted on a board. It is misleading to look at it this way.
Develop a single advertising format. An overall format for print advertising can
double recognition. This rule holds a special meaning for business and industrial
advertisers. One format will help readers see your add as coming from one large
corporation, rather than several small companies.
Before-and-after photos make a print better than words. If you can, show a

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visual contrast—a change in the situation or a demonstration of product
superiority.
Don’t print copy in reverse type. It may look attractive but it reduces readability.
For the same reason, don’t print copy on top of an illustration.
Make each ad a complete sale. Your message must be contained in the headline.
React to the overall impression as the reader will. Only advertisers read all their
ads. Any ad in a series must stand on its own. Each one must make a complete
sale. Assume it is the only ad for your product a reader will ever see.

4.3 Advertising Using Electronic media: TV and Radio

4.3.1 The medium of Television
Today, the medium of television is available to advertisers in two principal forms:
broadcast and cable TV. Broadcast TV reaches its audience by transmitting
electromagnetic waves through the air across some geographic territory. Cable
TV reaches its audience through wires, either strung from telephone poles or laid
underground.

As a way to reach a mass audience, no other medium today has the unique
creative abilities of television: the combination of sight, sound and motion; the
opportunity to demonstrate the product; the potential to use special effects; the
empathy of the viewer; and the believability of seeing it happen right before your
eyes. 57 percent of viewers believe that TV is the most authoritative advertising
source, compared to only 20 percent for newspapers, 11 percent for magazines
and 9 percent for radio.

Even if television (both broadcast and cable) have attracted advertisers attention,
they have some identified drawbacks. The following text lists advantages and
disadvantage of both.
A. Pros and Cons of Broadcast TV Advertising
The Pros

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Contemporary broadcast TV offers advertisers many advantages over competing
media.

 Mass coverage. A full 98 percent of all U.S. homes have a TV (most have
more than one), and viewing time for the average household increased
from about 5 hours a day in 1960 to 8 and half hours a day in 1986.

 Low cost. Despite the often huge initial outlays for commercial production
and advertising time, TV’s equal huge audience bring the cost per
exposure down to $2 to $10 per thousand viewers.

 Some selectivity. TV audience vary a great deal depend on the time of day,
day of the week and nature of the programming. Advertising messages
can be presented when potential customers are watching, and advertisers
can reach selective geographic audiences by buying local and regional
markets.

 Impact. TV offers an immediacy that other forms of advertising can’t

achieve, displaying and demonstrating product with sound and full colour
right before the customer’s eyes.

 Creativity. The various facets of the TV commercial-site, sound, motion

and colour—permit infinite original and imaginative appeals.

 Prestige. Since the public considers TV the most authoritative and

influential medium, it offers advertisers a prestigious image. Some big
companies increase their prestige by regular sponsoring cultural TV
programs.

 Social dominance. In North America, most people under age 35 grew up

with TV as a window to their social environment. They continue to be
stirred by TV screens of the Olympics, space travels, assimilations, wars
and political scandals.

The cons
Sometimes broadcast TV just doesn’t “fit” the creative link because of cost, lack
of audience selectivity, inherent gravity, or the clutter of competitive messages.

 High production cost. One of broadcast TV’s greatest handicaps is the

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 high cost of producing quality commercials. Depending on the creativity
approach, the cost of filming a national commercial today may run from
$200 000 to more than $1000 000.

 High air-time cost. The average cost of a prime time network commercial
is close to $400 000. A single 30-second commercial for a top-rated show
in prime time may cost over $500 000. Especial attractions like the Super
Ball costs almost $ 2000 000. The cost of large coverage, even at low
rates, prices small and medium-size advertisers out of the market.

 Limited selectivity. Broadcast TV is not cost-effective for advertisers

seeking a very specific, small audience. And it is losing small of its
selectivity because of changing audience trends. More women are
working outside the home or watching cable TV, hurting advertisers on
network shop operas.

 Brevity. Studies show that most TV viewers can’t remember the product or
company in the most recent TV ad they watched—even if it was within the
last five minutes. Recall improves with the length of the commercial;
people remember 60-second spots better than 30-second spots.

 Clutter. TV advertising is usually surrounded by station breaks, credits,

and public service announcements, as well as six or seven other spots. All
these messages compete for attention, so viewers become annoyed and
confused, and often misidentify the product.

 Zipping and zapping. VCR users who escape through commercials when
replaying taped programs are zipping; remote-control users who change
channels at the beginning of a commercial break are zapping.

B. Pros and Cons of Cable Television Advertising

The pros
The primary advantages of cable TV are its selectivity, low cost and great
flexibility.

 Selectivity. Cable offers specialized programming and at particular type of

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 viewers. Narrowcasting allows advertisers to chose programming with the
viewer demographics that best matches their customers.

 Audience demographics. Cable subscribers are younger, better educated

and more affluent, have higher-level jobs, live in large households, and are
more likely to try new products and buy more high-ticket items, such as
cars, appliances and high-tech equipments.

 Low cost. Many some companies get TV’s immediacy and impact without
the enormous expenditures of broadcast TV. Cable advertising may cost
as little as radio. Many national advertisers find sponsorship attractive,
since an entire cable series can cost less to produce than a single
broadcast TV commercial.

 Flexibility. Broadcast TV commercial need to be short because of the high

cost of production and air time, but cable ads can run up to two minutes
and, in the case of infomercial, much longer. They can also be tailored to
fit the programming environment.

 Testability. Cable is a good place to experiment. Testing both products

and various advertising approaches: ad frequency, copy impact and
different media mixes.

The cons
Like every medium, cable TV has its drawbacks.

 Limited reach. About 40 percent of households don’t have cable. This is

cable’s main weakness.

 Fragmentation. With more than 50 channels at their disposal, cable

viewers don’t watch anyone show in enormous numbers. To reach the
majority of the cable audience in particular market, ads must run in many
situations.

 Quality. Cable, particularly local cable, sometimes has poorer production

quality and less desirable programming than broadcast TV.

 Zipping and zapping. Cable TV is subject to some of the same drawbacks

as a broadcast TV, including zipping and zapping.

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4.3.2 The Medium of Radio
Radio is a personal, one-on-one medium; people listen alone. And radio is mobile.
It can entertain people who are driving, walking, at home or away from home. It is
a particularly strong way to reach people who commute by car.

Radio is also adaptable to moods. In the morning, people may want to hear the
news, upbeat music, or interesting chatter; in the afternoon, they may want to
unwind with classical or easy-listening music.

While TV is a passive medium that people simply watch, they get actively
involved with radio. They listen intently to their favourite personalities; they call in
to make requests. Participate in a contest, or comment on a discussion; they use
their ears and imagination to fill in what they can’t see. Most people listen
faithfully to two or three different radio stations with different types of
programming. This means that smart advertisers can use the medium to
establish an immediate, intimate relationship with consumers and other
stakeholders. That makes radio an ideal medium for integrated marketing
communications.

4.3.2.1Types of Radio Advertising

An advertiser may purchase network, spot, or local radio time. Local purchases
account for 79 percent of all radio time sold; national spot radio, another 17
percent; and networks 4 percent.

A. Networks
Advertisers may use one of the national radio networks to carry their messages
to the entire national market simultaneously via stations that subscribe to the
network’s programs. More than 100 regional radio networks in the United States
operate with information oriented towards specific geographic markets.

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Networks provide national and regional advertisers with simple administration
and low effective net cost per station. Disadvantages include lack of flexibility in
choosing affiliated stations, the limited number of stations on a network’s roster
and the long lead times required to book time.

B. Spot Radio
Spot radio affords national advertisers great flexibility in their choice of markets,
stations, air time, and copy. They can put commercials on the air quickly—some
stations require as little as 20 minutes’ lead time, and advertisers can build local
acceptance by using local personalities.

C. Local Radio
Local time denotes radio spots purchased by a local advertiser or agency. It
involves the same procedure as national spots.
Radio advertising is either live or taped. Most radio stations use recorded shows
with live news in between. Likewise, nearly all radio commercial are pre-recorded
to reduce costs and maintain broadcast quality.
[Link] The Pros and Cons of Radio Advertising
The pros
The principal advantages of radio are high reach and frequency, selectivity, and
cost efficiency.

 Reach and frequency. Radio offers an excellent combination of reach and

frequency. The average adult listens more than three hours a day, radio
builds a large audience quickly, and a normal advertising schedule easily
allows repeated impact on the listener.

 Selectivity. Specialized radio formats, with prescribed audiences and

coverage areas, enable advertisers to select the market they want to reach:
a specific sex, age group, ethnic or religious background, income group,
employment category, educational level or special interest.

 Cost efficiency. Radio offers its reach, frequency, and selectivity at one of
the lowest costs per thousand, and radio production is inexpensive.

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 National spots can be produced for about one-tenth the cost of TV
commercial. And local stations often produce local spots for free.

 Other advantages. Radio also offers timeliness, immediacy, local

relevance, and creative flexibility.

The cons
In spite of these advantages, radio has limitations: it is an aural medium only, its
audience is highly segmented, the advertiser’s commercials are short-lived and
often only half-heard, and each ad must compete with the clutter of other
advertising.

 Limitations of sound. Radio is heard but not seen, a drawback if the

product must be seen to be understood. Some agencies think radio
restricts their creative options.

 Segmented audiences. If a large number of radio stations compete for the

same audience, advertisers who want to blanket the market have to buy
multiple stations, which may not be cost-effective.

 Short-lived and half-heard commercials. Radio commercials are fleeting.

They can’t be kept like a newspaper or magazine ad. Radio must compete
with other activities for attention, and it doesn’t always succeed.

 Clutter. Stations with greatest appeal for advertisers have more

commercials. Advertisers must produce a commercial that stands out
from the rest.

4.4 Advertising Using Digital Interactive Media and Direct Mail

As the fastest growing medium in history, the internet offers incredible
opportunities for a wide range of people in both business and advertising. For
advertisers, there is a whole new world of potential customers out there, waiting
to be engaged. Without question, what we are witnessing is a new creative
revolution that will continue well into this new millennium.

Both print and broadcast news media have taken advantage of digital

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technologies as a means for coverage expansion. Virtually every major
newspaper, magazine, and television network publishes online editions of its
organization’s news, much of which is increasingly exclusive to the internet.
Many daily newspapers, like the New York Times ([Link]), updates
their pages each day to remain abreast with the latest news and sometimes even
update hourly as news breaks over the wire services.

Media budgets tend to be very pragmatic. As audiences migrate, so do the media

money. As a result, media spending on Internet advertising is growing
exponentially. And one of the great draws of the Internet from the marketer’s
point of view is its demographics. Many of the people who cruise the internet are
still well-educated, upscale males who use the Net for business purposes.

4.4.1 Types of Internet Advertising

Ads on the internet can be taken as a variety of forms, and as the net matures,
the number of forms continues to expand. Most advertising opportunities today
can be classified as a web sites, banners, buttons, sponsorships, interstitials or
classifieds. We will discuss each briefly.
A. Web Sites
Some companies view the whole Web Site as an ad. And in some ways it is. But
in truth the Web Site is more than just an ad—it’s an alternative “storefront,” a
location where customers, prospects, and other stakeholders can come to find
out more about the company, its products and services, and what it stands for.
Some companies use their Web site like an extended brochure to promote their
goods and services; others act as information and entertainment publishers and
try to create a cool environment that people will visit often; still other treat their
web site as an online catalogue store, conducting business right on the Net. Thus,
except when being used like a brochure, the Web site is not really an ad; it’s an
“ad-dress”.
Web sites typically consists of a home page and an indefinite number of
subsequent pages that users can visit for further information. A Web site doesn’t

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refer to an 8.5 by 11-inch page. It refers to a single HTML (hypertext markup
language) file, which, when viewed with a browser, may actually be several
screens long. A long Web site may have hundreds of these pages of information.
This means the site contains hundreds of different documents of various lengths
(from one to 10 or more screens), each probably covering a different subject.

B. Banners
The most basic form of web advertising is the ad banner. A banner is a little
billboard that spreads across the top or the bottom of the Web page. When users
click their mouse
pointer on the banner, it sends them to the advertiser’s site or a buffer page. The
standard size of an ad banner is 468 pixels (picture elements) wide by 60 pixels
high. That means that on a standard 8.5 by 11-inch page, the banner would
measure just over 4.5 inches wide by one-half inch high.
The cost of banners fluctuates widely, from free to over $15,000 per month. It
depends entirely on the number and type of visitors the site regularly receives.

C. Buttons
Similar to banners are buttons, small versions of the banner that often look like
an icon and usually provide a link to an advertiser’s home page. Since buttons
take up less space than banners, they also cost less.
Today, a host of new software technologies, like Shockwave, Java, Acrobat, and
Enliven, have greatly enhanced the once-static banner and button ads. Full
motion and animation, for example, are now commonplace. The Excite and
Webcrawler search engine also offer audio features, available to advertisers at
additional cost, that accompany a click on the banner. In other words, the banner
and buttons are becoming more interactive. We can anticipate seeing more audio
and animation integrated into these ads as improving technology accommodates

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them.

D. Sponsorships
A form of advertising on the Internet that is growing in popularity is the
sponsorship of Web pages. Corporations sponsor entire sections of a publisher’s
Web page or sponsor single events for a limited period of time, usually calculated
in months. In exchange for sponsorship support, companies are given extensive
recognition on the site. Sometimes, this is done by integrating the sponsor’s
brand with the publisher’s content, as a sort of advertorial, or with banners and
buttons on the page.
IBM has exclusively sponsored the Super Bowl Web page since 1996, at an
estimated cost of $1 million for each event. Other forms of sponsorships have
included Web serials, sites devoted to women’s issues, contests, and giveaways.
Because of their high cost, sponsorships are most common on sites with high
traffic, where the opportunity for exposure is greatest.

E. Interstitials
A new form of Net advertising is the interstitials (or intermercial). This is an
animated ad that pops up on the screen while the computer downloads a Web
site that the user has clicked on. In 1997, interstitials were so new that they
accounted for 1 or 2 percent of Internet ads. However, a study by entertainment
software company Berkeley systems found that interstitial ads are twice as
effective at generating higher brand awareness as online banners. So we may
see them grow in popularity if actual practices show them grow in popularity if
actual practice shows them to be as effective as the research indicates.

F. Classified Ads
Another growing area for internet advertisers, and an excellent opportunity for
local advertisers, is the surplus of classified ad Web sites. Many of these offer
free classified advertising opportunities because they are typically supported by
ad banners of other advertisers. In style, the classifieds as very similar to what

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we are all familiar with from newspapers. You can search for homes, cars, jobs
computer equipment, business opportunities and so on. Moreover, the search
can be narrowed to a city or expanded nationwide. Many of these sites are
sponsored by the search engines themselves or by local newspapers around a
country. To date, most sites promise more volume than they deliver; most still
have relatively few listings in each category. However, this is still a new area and
can be expected to grow substantially in the near future. For now, the lack of
volume actually gives the local antique or auto showroom a better shot at being
seen.

4.4.2 The pros and Cons of internet Advertising

The Pros
 Truly interactive medium. More than any other medium, the Internet
allows consumers to directly interact with an advertiser thereby
establishing future friendships.

 Enormous audience. By the turn of the centaury, the Internet is expected

to reach some 400 million people. The Internet is also the only true global
medium, providing information and commerce that is immediately
accessible from around the world.

 Immediate response from customers that can’t be rivalled, except through

personal selling. Products and information are available on demand by the
customer, providing instantaneous feedback for the advertiser.

 Highly selective targeting unmatched by any other medium. By purchasing

keywords and employing cookies, advertisers can reach potential
customers exactly when they are in the market to buy.

 Affluent market. 65 percent of internet users have house-hold income of

$50 000 or more, compared with 35 percent of the U.S. population.
Seventy-five percent of Internet users attended college, compared with
only 46 percent of the U.S. population.

 Provides in-depth information about a company and/ or its products.

Aside from sending e-mail, the vast majority of internet activity involves

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 gathering news or conducting research. Commercial Web sites provide
detailed information about products or services to information-hungry
customers.

 A rapidly growing industry that provides tremendous profit opportunity for

savvy direct marketer. The internet is expected to continue its stunning
growth for some time, particularly as the children of today grow up with
the technology and become the customers of tomorrow.

 Reaches business-to-business users when television and radio often

cannot—while they are still at work. Consumer advertising can also reach
these business users of the Internet.

 Advertorials are effective tools for advertisers and often incorporated into
www publications. An advertiser can place its name into an article to build
credibility and increase exposure. With clever use, these advertorials can
provide anything from tips and tricks on product use to new recipes
requiring a certain product.

 Virtual storefront. Catalogue companies have exemplified the profitability

of direct-mail campaigns, which can be replicated by Web pages on the
Internet. Today’s most commonly purchased online merchandises are
computer products, travel arrangements and entertainment-related
products.

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The Cons
 Medium is untested. The Internet is plagued by a lack of knowledge of
advertising effectiveness, market research, and standardization of
measurements for both ad exposure and pricing. Although the medium
promises enormous profitability, many unknown factors prevent
advertisers from spending millions of dollars in an online campaign.

 Targeting costs can be among the most expensive relative to any other
medium because of the precision of the targeting criteria. As with all other
media, the more selective the targeting criteria, the higher the costs.

 Slow downloads still hamper many users from the full online experience.
Data transfer times must reduce tremendously and computer processor
speeds must increase before the Internet can realize its fullest potential.
Also, unlike radio and TV, the Internet technologies themselves are in
perpetual development and growth.

 Not yet a mainstream medium, most likely due to the high cost of
personal computers and the technology impediments for many people.
For this reasons the elderly and poorly educated are underrepresented on
the internet.

 Ads must be inappropriately placed on the wrong Web pages. While

online ad networks allow advertisers to play banners on millions personal
Web pages, the sheer number of these pages prevents effective policing
for contents. An advertiser may thus be inadvertently associated with
content inappropriate to the company.

 Security and privacy concerns still prevent many users from engaging in
online purchases although with time these fears will likely be allayed. Until
the Internet proves itself to be a safe place for financial transactions, it is
unlikely to be accepted by a xenophobic public as a viable medium for
commerce.

 Global marketing limitations. Although advertisers can easily reach the

international market, the Internet is not nearly as pervasive in other
countries as it is in the United States. Many countries are hampered by the

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 high cost of local telephone services, and developing countries simply lack
the technology infrastructure to provide Internet services to the public.

4.5 Unit Summary

Advertisers or advertising agencies have multiple choices regarding media
selection. Varieties of media are available for them and hence they can employ
one or mix of media of their choice based on the relative merits and demerits of
the media. In the preceding unit, the pros and cons of newspaper, magazine,
radio, TV and internet are considered as possibilities for advertising.

Careful management cognizant of the various pluses and minuses of media or

media mix, is the key to success of advertising among other things. Production
managers perform the classic functions of management: planning, organizing,
directing and controlling. They also have to keep up with changing technology,
monitor costs, and meet budgets.

Radio spots are among the quickest, simplest, and least expensive ads to
produce. A producer manages the production process through the preproduction,
production and post-production stages. The producer contracts with a recording
studio, selects talent and collects music and sound effects for the recording
session. TV production involves the same three stages. In the preproduction
stage, the producer determines production technique most suitable to the script:
live action, animation, special effects or a combination.

Digital media are used in mass audience venues, private audience venues, and
personal audience venues. The personal audience venue includes PC
applications such as advertising on the internet, with online database services, or
via interactive TV and kiosks. Digital media are a whole new industry that opened
up opportunities for new people coming into the field.

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 Unit Five
How Advertising Works: The Psychology of Advertising

5.1 Objectives
Dear student, in this chapter we investigate how advertising works and its
potential impact. We also examine the psychological underpinnings of
advertising. Thus, when you have completed this unit, you will be able to:

 Explain how advertising affects its audience.

 Describe the environment of the advertising process.

 Outline the message reception process.

 Summarize the branding process.

 Explain the debate over creative versus content-driven ads.

5.2 The Psychology of Advertising: Message Reception

Everything about the success of a particular advertisement depends on the target

audience receiving and processing it accurately and completely. This section
illustrates the message reception process. Advertisers must understand this
process.

How does advertising work? This question doesn't have a simple answer. One
thing we do know is that advertising may communicate a number of messages in
a number of areas simultaneously. For example, at the same time you grasp a
copy point, you may also form a favorable or unfavorable opinion of the
advertised product. The message's effects on knowledge and liking can happen
simultaneously. The following discussion analyzes how advertising works in
terms of five basic psychological categories: perception, awareness,
un¬derstanding, persuasion, and memorability.

5.2.1 Perception: Creating Stopping Power

When a person perceives something, the message has registered. One of the

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biggest chal¬lenges for advertisers is simply to get consumers to notice their
messages. This is harder than it seems. How many ads did you notice in today's
newspaper? Not only do consumers miss more than half the messages directed
at them, but rather messages continuously compete for their attention. In
addition, the ads must be intrusive and original. We look at exposure, attention,
and stop¬ping power next.

A. Exposure

The first step in perception is simple exposure. Exposure is mainly a media-

buying problem. First, the message has to be placed in a medium that the target
audience listens to, sees, reads, or watches. Better-educated, older consumers
watch the History Channel, so if those consumers are your target, that's a sound
option for placing your ad.

Exposure is the minimum requirement of perception. If your target never sees or

hears the advertisement, or if your target skips the page or changes the channel,
then no matter how great the message is, it will not be perceived.

B. Attention

Once the audience has been exposed to the message, the next step is to keep
their attention. Attention means that the mind is engaged; it is focusing on
something. Attention is aroused by a trigger, something that catches the target's
interest. The trigger can be something in the message or something within the
reader or viewer that makes him or her lock onto a par¬ticular message. In print it
may be a sales price in large type, a startling illustration, or a strong headline. On
television the trigger may be Sound effects, music, an action-oriented or visually
interesting scene, or a captivating idea. Snickers targets young male sports
en¬thusiasts through humor and celebrity athletes.

C. Stopping Power

Getting attention involves more than just attracting the notice of the viewer or

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reader, how¬ever. Consumers who are in scanning mode have wandering
attention. Nailing down attention requires some kind of stopping power. Ads that
stop the scanning are usually high in intrusiveness and originality.

Advertisements are designed to get attention. That means they sometimes have
to be intrusive, demanding attention. Intrusiveness is particularly important for
products that have a small "share of mind"; those that are not very well known or
not very involving or inter¬esting, such as toilet paper, canned vegetables, or
motor oil. In many cases there is little difference between competing brands, so
the product interest is created solely by the ad¬vertising message.

What can you do to create this kind of impact? Many intrusive ads use loud, bold
ef¬fects to attract viewer attention-they work by shouting. Others use captivating
ideas or mesmerizing visuals. In print ads, for instance, research indicates that
contrast can attract viewer attention. If every other ad in the medium is big and
bold, then try one that is small, quiet, and simple; use a lot of white space. If
everything else is tiny and gray (like type), then be big and bold or use color. If
everything else is colorful, then use black and white. Iden¬tify the characteristics
of the medium environment and then do something different. The "Matter of
Effectiveness" box deals with a type of intrusiveness that can be quite risky.

Creative advertising is interesting because it presents unique or novel thought.

The function of originality is to capture attention. People will notice something
that is new, novel, or surprising. Creative advertising breaks through the old
patterns of seeing and say¬ing things without being irrelevant or bizarre. The
unexpectedness of the new idea creates stopping power.

Advertising agencies go to great lengths to create original advertising. Some

agencies push their creative people to take more risks to make their ads more
distinctive. Such unexpected approaches to mundane products are being used
successfully by advertising agencies to sell things such as toothpaste, coffee,
and ice cream.

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5.2.2 Awareness: Making an Impression

Once a message has been perceived and has caught your attention, your
perceptual process can move on to the next step, which is awareness of the
message and the product. Awareness means that the message has made an
impression on the viewer or reader, who can subse¬quently identify the
advertiser. Note that although awareness of the advertising comes first, it is not
the ultimate objective. As far as the advertiser is con¬cerned, the ultimate
objective is awareness of the product, not the advertisement. For ads that
introduce a significant product improvement, it is important to create a high level
of awareness among potential buyers and retailers.

A. Attention

Attention is a message design problem. The advertising message can, and must,
compete with other messages in the same medium. Within a news medium, the
advertising has to be able to compete with the intrinsically interesting nature of
the news. In an entertainment medi¬um such as television, the advertising has to
compete with the mesmerizing entertainment values of programming. Radio is
almost always a background medium, so advertisers compete for the attention
of listeners who are driving, mowing the lawn, cleaning the house, or doing some
other activity. Outdoor advertising is directed toward an audience whose
atten¬tion, by definition, is directed elsewhere. Not only does outdoor advertising
have to com¬pete for attention, it also has to be able to win out over distractions
such as other signs along the road, the car radio or tape deck, and conversation
among passengers.

Low levels of attention can create a minimal level of awareness. If the objective
is sim¬ply a brand or product reminder, then the attention level doesn't need to
be as high as it does when the objective calls for the understanding of a copy
point. Attention is obtained by providing relevance, information, and involvement.

B. Relevance

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The last ad element that aids awareness is relevance. People will pay attention to
advertis¬ing only if it's worth their time while doing so. They make a deal with the
advertiser: "Make it worth my time and I'll pay attention to your message as long
as it doesn't bore me."

Selective perception is driven by relevance. We pay attention to ads that speak to

our personal concerns and interests by providing information about such things
as work, hobbies, roles, and relationships. Selection--being interested in one thing
and not in something else--is also driven by changing conditions. When we are
hungry or thirsty, for example, we pay more attention to food and drink ads.

C. Interest

Because many types of relevance exist, many types of interest exist. You might
be interest¬ed in the product advertised or in some element in the ad itself: the
model or the star, the promise made in the headline or by the announcer, or an
unusual graphic. Different topics, product categories, and specific products have
varying levels of built-in interest. Some prod¬ucts are just inherently more
interesting than others. Food and vacations are more interest¬ing to most people
than are toilet cleaners.

Interest is usually created by one of two things: personal involvement or curiosity.

You are predisposed to be aware of things that interest or apply to you (getting
through school, hobbies, a trip you want to take, or a career goal). If a message
applies to any of these ele¬ments on your list, then it affects you personally and
the message has personal relevance. Most people also respond to general
human interest topics strike some universal chord, such as babies, kittens, and
puppies, as well as tragedies and success stories.

Curiosity provides the cognitive nudge that engages your mind. Whenever you are
con¬fronted with something new, there is a period of curiosity, usually
accompanied by doubt or some kind of questioning. New information is often
greeted by phrases such as "Can you believe it?" This confrontation of curiosity

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with doubt means you have entered the interested state. You are interested
because the message might be personally relevant.

Advertisers trying to develop a message that stimulates interest will speak to the
per¬sonal interests of their target audience and do something to elicit curiosity.
Ads that open with questions or dubious statements are designed to build
interest and create curiosity. Getting attention, then, is the stopping power of
advertisement. Keeping attention is the pulling power of an ad: It keeps pulling
the reader or viewer through to the end of the message.

Interest is a momentary thing; it dies easily as attention shifts. A major

advertising challenge is to maintain interest until the point of the message is
reached. Because of the scan¬ning and browsing behavior of many readers and
viewers, maintaining interest is more dif¬ficult than arousing it.

To maintain interest, advertisers must consider the pulling power of their

message. The sequencing of the ad affects its pulling power: Does the copy pull
the reader or viewer through to the end? How does the message develop? For
example, if we start with a ques¬tion, then readers tend to continue through the
ad to find the answer. Storytelling is anoth¬er good technique to hold the
audience. Most people want to know how 3 story ends. Suspense, drama and
narrative are good literary tools for maintaining interest.

D. Involvement

Relevance is a key factor in the concept of involvement, the intensity of the

consumer’s interest in a product, medium, or message. High involvement mean,
that a product (or information about it) is important and personally relevant.
Low-involvement means, that the product or information is perceived as
unimportant. Typically, people in a high-involvement situation--such as
purchasing a new car, home, or European vacation-- will be searching for
information and evaluating it critical1y. Advertising for high involvement product,
usually provides a lot of information about the product. In contrast, low-

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involvement purchases, such as chewing gum, toothpaste, and paper towels, are
made without much searching and with little effort to think critically about the
decision. Advertising for this type of product often focuses on simple slogans or
images.

The word involvement is also used to describe an advertising technique that tries
to get the audience to participate in how the message develops and evolves.
Compelling readers or viewers to get involved in the message either physically
or mentally is a strong persuasive technique. The more involved viewers or
readers are in developing the message, the more impact the message has.

Being aware of the message is not enough. Next, we look at how people move to
the next stage of the message process: understanding the message.

Activity 29: What are some common methods of attracting and maintaining
consumer interest? Discuss in much detail with some practical examples from
the local media.

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5.2.3 Understanding: Making It Clear

Undemanding is a conscious mental effort to make sense of the information

being printed. This mental Process is how we learn things. Whereas attention
can be a passive response, understanding demands an active response from
consumers. First, we find ourselves interested, then we learn something about
the subject of our interest and then we file it away in our memories. That series
of steps is called knowing.

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Understanding is particularly important for ads that present a lot of information
(brand, price, size, how the Product works, when and where to use it, and so on).
When product differences exist, the features, and how they translate into selling
points are also important pieces of information. Informational advertising,
advertising that contains a large amount of product information, requires clear
and relevant explanation. Consumers have little patience for ads that are
confusing, vague, or unfocused. The reader or viewer must be able to follow
the logic, make choices, compare points of view, comprehend reasons and
arguments, synthesize and organize facts, and, in general, make sense of things.

If you are designing an advertising message for which understanding is an

objective, your ad must present the facts in a way that makes it easy for people
to assimilate the information. Ads that don't work very well contribute to the
consumer's confusion.

Teaching, learning, Knowing

Teaching is an important aspect of advertising because most advertisers want

people to learn or know something after they have read, watched, or heard the
message. In the case of new products, ads must bridge the gap in people's
experience by teaching them how to recognize and use the product. For an
existing product, learning about new features or benefits may be the goal for the
consumer.

How to Design a Message to Promote Understanding: Practical Tips

For a written message, use the literary tools of definition, explanation,

demonstration, comparison, and contrast. Each tool works most effectively in
certain situations.

 Use definition and explanation when the message is written or spoken.

 For many circumstances, visuals are more effective for demonstration,

comparison, and Contrast.

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 Use any visual, whether print, video, interactive, to compare two products or
to show before-and-after scenarios.
 Television is particularly good for demonstration because it can show a
sequence of operations.

Association

Another way to know something is to make a connection in you, mind. When you
link up to concepts (fall and foothal1, Coca-Cola and refreshment, for example)
you have learned something. Advertisers use associations to build images.
Advertisements that use association try to get consumers to link the product with
something they aspire to, respect, value, or appreciate, such as a pleasant
experience or a specific lifestyle.

5.2.4 Persuasion: Attitude Change and Trial

In addition to providing information, advertisements must persuade people to

behave or do something. A persuasive message tries to establish, reinforce or
change an attitude, build an argument, touch an emotion, anchor a conviction
firmly in the potential customer’s belief structure.

Believability is an extremely important concept in advertising. Do consumers’

believe the messages? Are the claims believable? Do spokespeople, particularly
authority figures, have credibility? Consumers say they do not believe in
advertising claims, but at the same time they find advertising helpful in making better
decisions.

Support is an important element in the message strategy. Support is everything

in the message that lends credibility to its promise. For a message to be
believable, advertisers must provide support, Such as facts, convincing
arguments, or conclusive demonstration.

Appeals

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Persuasion in advertising rests, on the Psychological appeal to the consumer. An
appeal is something that makes the product particularly attractive or
interesting to the consumer. Common appeals are security, esteem, fear, sex,
and sensory pleasure. Appeals generally pin-point the anticipated response of the
audience to the product and the message.

Agencies also use the word appeal to describe a general creative emphasis. For
example, if the price is emphasized in the ad, then the appeal is value, economy,
or savings. If the product saves time or effort, then the appeal is convenience.
A message that focuses on a mother or father making something for a child,
such as cookies or a rocking chair might appeal to family love and concern.
Advertiser use a status appeal to establish something as a high-quality,
expensive product. Appetite appeal using mouth-watering visuals is used in food
advertising. The adult and child see-through image in the ad below uses a fear
appeal about water pollution.

Attitudes and Opinions

Beliefs, attitudes, and values structure, opinions, which reflect how negatively or
positively we feel about something and help us evaluate the information we
receive. People's opinions are built on a complex structure of attitudes. Every
person has a different attitude structure based on individual experiences.

Advertising that seeks to affect this complex structure of attitudes usually

attempts to accomplish one of three things:

 Establish a new opinion where none has existed before

 Reinforce an existing opinion

 Change an existing opinion

New opinions must be created when a new product is introduced. Consumers

modify or confirm their opinions about the product as they use it. No matter
how strong the advertising, a bad experience with a new product negates all the

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positive attitudes the advertising message implanted. Once consumers have
negative experiences, advertisers have to concentrate on changing attitudes.

Likeability

An important indication of positive and negative attitudes, likeability signals how

people re¬spond to a product or a message. An advertiser will try to build
positive attitudes for new prod¬ucts and maintain existing positive attitudes for
successful mature products. When a product is liked well enough by consumers
to generate repeat sales, that is called brand loyalty.

One likeability technique is the use of entertainment. Advertisers have found that
com¬mercials that look like shows and provide high entertainment value seem to
be better liked by audiences than ads with high levels of information. The
entertainment issue is one that advertising experts debate because although
entertainment may get and keep attention, some people believe that it doesn't
sell products very well.

Arguments

Persuasive messages deal with more than basic attitude structure. People are
persuaded by argument or reasoning. Reasons are based on the logic of claims
and the way the claims are supported or substantiated. Argument in this sense
refers not to a disagreement, but to a line of reasoning in which one point follows
from another, leading to a logical conclusion Ads must focus on logic and proof
when dealing with reasons as the Jeep ad does.

To create a persuasive message, a certain creative agency aiming to sell

refrigerator spoke directly about how frustrating food spoilage is. Because food
preservation is the purpose of a refrigerator. May tag (the Advertising agency)
was able to deliver a strong product benefit. The product feature, labeled "Dual
Cool," easily translated into a reason why the May tag refrigerator was better.

Emotions

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Logic is not the only means of persuasion. Emotions persuade, too. How
someone feels about the product, service, brand, or company may be just as
important as what that person knows about it. Feeling in this sense refers to an
attitude, but it is an attitude surrounded by emotions. The intensity of the
response-the impact-comes from the emotions. Advertis¬ers that touch people's
emotions with their messages have greater success in getting con¬sumers to
remember that message. Telephone and greeting-card companies have
succeeded with emotional campaigns because they are selling sentiment: warm
feelings, love, missing someone, nostalgia, and so on.

Many of our buying decisions are emotional ones. We buy shoes because we
don't want to go barefoot, but we buy a closet full of shoes for other reasons:
different styles for different occasions and different moods. We often use logical
surface reasons to justify emo¬tional decisions that we don't acknowledge, even
to ourselves.

Conviction Leads to Trial

Attitudes, reasons, logic, and emotion are all part of the persuasive package.
What they lead to is belief. We believe something about every product we
purchase; if we didn't, we wouldn’t buy it. We believe it is good for us, wi11 make
us look better or live better, or it wi11 make us richer or healthier. Even low-
involvement products such as chewing gum involve some belief system (I believe
this gum will taste better, freshen my breath, or do less damage to my teeth than
other brands).

A conviction is a particularly strong belief that has been anchored firmly in a

person's set of attitudes. It is often built of strong, rational arguments that use
such techniques as test results, before-and-after visuals, and demonstrations to
prove something. Opinions based on convictions are very hard to change, so an
advertiser who can build conviction in the target audience achieves a strong

165
competitive advantage.

Conviction may be based on a convincing argument, a demonstration, or a

testimonial. For many people, seeing is believing, so a product demonstration
tends to remove doubt and increase belief in the sales message.

Another tool used to build conviction is public relations. Because of the credibility
of news stories, publicity can provide important support to an advertising
message. A story on how and why the May tag "Dual Cool" refrigerator offered
superior food preservation re¬ceived 280 placements in newspapers and
magazines and reached over 20 million readers.

Retrial

Ultimately, every marketer strives to create a market situation in which

customers repurchase in a regular, predictable manner. The goal is to build
strong brand loyalty. Advertising can foster this behavior in a number of ways.
The use of testimonials in advertising reinforces the customer'5 belief in the
product. Likewise, distributing coupons or introducing a continuity program (a
program that rewards users for continued use of a product or ser¬vice, such as a
frequent flyer program) through media is effective in keeping customers. Simply
keeping the brand name in front of customers goes a long way toward
reinforcing continued use of that brand.

5.2.5 Memorability: Locking Power

We must have perception and attention to create stopping power, and maintain
awareness to develop pulling power. Ads that work effectively also have locking
power-that is, they lock their messages into the mind. If consumers can't
remember seeing the ad, or if they can remember the ad but not the brand, then
they might as well not have seen it as far as the ad¬vertiser is concerned. Let's
say that you're going grocery shopping. It's important that you remember that
soft drinks are on sale and the brand that was on sale. How does that memory

166
process happen?

Our memories are like filing cabinets. You watch a commercial, extract the parts
of it that interest you, and then find a category in your mental filing cabinet where
you can store that fragment of information. The fragment, incidentally, may not
look much like the orig¬inal information you saw or heard because your mind will
change it to fit into your own sys¬tem of concerns, preoccupations, and
preconceptions.

A week later you may not remember where or even whether you have a fragment
la¬beled "soft drink" filed away because most of us have messy mental filing
systems. How¬ever, the information may resurface when a cue triggers the
memory. Maybe you remember a party planned for the weekend and that
reminds you about the soft drink sale. The cueing process works to pull
fragments out of the file so that they become topmost in our minds.

Advertising focuses on two types of memory: recognition and recall. Recognition

means that a person can remember having seen something before; it has
achieved top-of-mind awareness. Recall is more complex. With recall a person
not only remembers having seen something before, but he or she also can
remember the information in the message.

Vampire Creativity

One of the great advertising challenges is to create memorability. Testing proves

that peo¬ple often remember a commercial, but not the product. This problem,
called vampire creativity, occurs primarily with advertisements that are too
original, too entertaining, or too involving. The story of the commercial can be so
mesmerizing that it gets in the way of the product.

Celebrity advertising can have this problem. When major rock stars appear in
song-and-¬dance extravaganzas for soft drinks, many viewers cannot remember
which star is associ¬ated with which product. It is essential that the commercial

167
establish a strong link between the message and the product so that
remembering the advertisement also means remem¬bering the brand.
Fortunately for May tag, the recurring May tag repairman did not detract from the
product.

Repetition

Advertisers can do several things to ensure the memorability of their messages.

One tech¬nique is repetition. Psychologists maintain that people need to hear or
see something a min¬imum of three times before it crosses the threshold of
perception and enters into memory. Jingles are valuable memorability devices
because the music allows the advertiser to repeal a phrase or product name
without boring the audience.

Clever phrases are useful not only because they catch attention, but also
because they can be repeated to intensify memorability Advertisements use
slogans for brands and cam¬paigns (a series of ads run under an umbrella
theme). An example of a slogan is "Get Met. It Pays," (Met Life) or Nike's previous
slogan "Just Do It."

Taglines are used at the end of an ad to summarize the point of the ad's
message in a highly memorable way, such as "Nothing outlasts the Energizer.
They keep going and going and going." When a tagline is used consistently on all
marketing messages, it becomes a slogan. Both slogans and taglines are written
to be highly memorable, often using mnemon¬ic devices (techniques for
improving memory) such as rhyme, rhythmic beats, and repeat¬ing sounds.

Key Visuals

In addition to verbal memorability devices, many print and interactive ads and
most televi¬sion commercials feature a key visual. This visual is a vivid image
that the advertiser hopes will linger in the viewer's mind to act as a fragment of
information stored in the memory's filing system. Because television is mainly a
visual medium, an effective commercial relies on some dominant scene or action

168
that conveys the essence of the message and can be re¬membered easily.

Memorability also depends on the ad's structure. The beginning of an advertising

mes¬sage is the most important part for attracting attention and the end or
closing of a message is the most important part for memorability. To help
consumers to remember the product name, an advertiser will repeat it at the end
of the commercial. Most print ads end with a logo (a distinctive mark that
identifies the product or company) or a signature (the name of the company or
brand, written in a distinctive typestyle). Television commercials often conclude
with a memorable tagline and superimpose the product name on the last visual,
accompanied by the announcer repeating the brand name.

Making Teamwork Work

One aspect of how advertising works is the industry's dependence on teamwork to gen¬erate
ideas as well as plan and monitor work across departments (research, media, cre¬ative) and
other functional areas. Chip Budde, Target-base Account Manager in Dallas, addressed the
importance of teamwork as follows:

At my first job a year out of school, I was working on a project to stimulate customer trial for
a new product I spent days by myself attempting to solve the problem but still didn't arrive at
something I was happy with. Frustrated, I asked a couple of my friends at work to join me for
lunch. None of them were involved in my project when I began to com¬plain about my lack of
progress. One of group members offered a comment that sparked a string of excellent
solutions from someone else at the table. I had no idea that these peo¬ple, from completely
unrelated fields could help me solve my problem. I received a valu¬able lesson in why groups
are better at solving problems than lone individuals.

Why is it important to learn to work in teams? If you expect to succeed in any facet of
marketing (or in any other field. frankly) creativity is a must. And diversity is a key ele¬ment in
creativity. When differing viewpoints are introduced into a discussion, ideas grow
exponentially. In advertising you brainstorm frequently. From packaging to promotional ideas,
groups are a great way to generate ideas.

169
The best brainstorming sessions I participate in involve everyone, no matter how remotely
related to the project. These groups include engineers, production managers, salespeople,
and accountants. Learning to work with not only opposing opinions, but op¬posing
perspectives is very important in these situations. I'm sure you've heard numer¬ous stories
al10ut "the guy in payroll" who came up with the brilliant tagline for the new advertising
campaign. It's not a myth. It happens frequently to organizations-and indi¬viduals-that are
willing to build teams with a wide variety of members and listen to all viewpoints.

It may seem like common sense to work with others, but building consensus in a diverse
group is a skill often overlooked. It's important to listen to and work with oth¬ers' ideas.
Luckily, it's a learnable skill. Clubs, sports, taking an improvisational acting class-anything
that forces you to build on someone else's efforts-will help you work better in teams. It's a
skill that will make you much more productive--and valuable--during your career. "

After graduating from the University of Kansas, Chip Budde earned a graduate de¬gree in
marketing communications from Northwestern University. He has done promo¬tional work
with such brands as Doritos, Reebok, and Mountain Dew.

Activity 30: How does the pattern of perception-awareness¬-understanding-

persuasion-memorability relate to advertising? What types of ads are
appropriate at each level?
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5.3 How Brands Work

Brand personalities and brand images create a feeling of familiarity with a known
product. Because the brand is familiar, consumers feel comfortable or even
pleased to buy it again. Branding, the process of creating a unique identity for a
product, is the secret behind the phenomenal success of Levi's jeans and Coke
over the years. The jeans maker and soft-drink pro¬ducer have familiar and
comfortable images, and consumers know from experience that they offer
dependable quality at a reasonable price. Branding creates memorability, but it
also establishes preferences, habits, and loyalties. In short, it encourages a
relationship between a brand and its user.

Branding is particularly important for parity products, those for which there are
few if any major differences in features. Salt is an example of a parity product.
The products are undifferentiated in the marketplace, but through the
development of a brand image, they are differentiated in the minds of their users.
What image comes to mind when you think of Morton Salt? What enhances the
difference between one type of salt and another is adver¬tising. In such cases
the distinction may be minor, but the difference is not, because the dif¬ference
lies in the perceived image and personality of the product. Personality is
important both in positioning a brand and in developing a brand image.

5.3.1 Brand Image

A brand identifies and represents a particular product, but it is much more than
just a name. It is an image in customers' minds that reflects what they think and
feel about a product¬ how they value it. A brand image is a mental image that
reflects the way consumers per¬ceive the brand, including all the identification
elements, the product personality, and the emotions and associations evoked in
the mind of the consumer. Product personality--the idea that a product takes on
familiar human characteristics, such as friendliness, trustwor¬thiness, or
snobbery--is an important part of an image.

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A brand, then, has both physical and psychological dimensions. The physical
dimen¬sion consists of the physical characteristics of the product itself and the
design of the pack¬age or logo: the letters, shapes, art, and colors that
advertisers use to define the graphics of the image. In contrast, the psychological
side includes the emotions, beliefs, values, and personalities that people ascribe
to the product. For example, when we talk about the brand image of Coca-Cola,
we are talking about the beverage itself, and also about the distinctive blackness
of the fluid, the lettering of the name, and the multitude of impressions and
values con¬veyed by its slogan "Live on the Coke side of the world."

5.3.2 Promise

A brand is also a promise of value. Because it seeks to establish a familiar image,

a brand also creates an expectation level. An accumulated reservoir of goodwill
and good impressions is called brand equity.

5.3.3 Building a Brand's Equity

The idea of brand equity has been around for a long time. However, brand equity
has become more important to advertisers such as May tag that want to stand
out from the crowded pack of competitors that offer high-quality products.

Branding assists the consumer's memory process by identifying the product and
mak¬ing it possible to position it relative to other products. But branding can also
transform a prod¬uct and make it more valued because of the respect that has
been created for the brand name. The tools used to transform products and lock
brands into memory include distinctive names, slogans, graphics, and characters
(such as the May tag repairman). All these tools convey subtle yet complex
meanings about the products' values and bene¬fits, in addition to serving as
identity cues.

Because the effects of image advertising build up over time, consistency is

critical to this process. You can't say one thing today and something different

172
tomorrow. The late David Ogilvy, founder of Ogilvy & Mather Advertising, believed
strongly in brand image advertising. He said that every ad should contribute to
the image. The message should focus on what that image is supposed to be, and
should be ruthlessly consistent."

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5.4 Creativity or Content?
The battle over the soul of advertising wages between those who believe ads
should move people and those who just want to move products. That battle has
reached a higher pitch, putting careers, accounts, and reputations on the line.
Although the debate over the effec¬tiveness of any advertising goes back
decades, tensions between those with differing views is heating up because
businesses want advertising results and commercial production and media time
costs are sky-high. Is it best to create ads that entertain and provoke, or is it best
to sell products by informing consumers of unique product features?

"This comes out of a basic disagreement about what the role of advertising is,"
says Bob Kuperman, president and CEO of TBWA Chiat/Day North America,
Nissan's agency and a shop passionately on the side of creative ads that move
people. As Kuperman sees it, one side says you must sell, and that you do that by
giving consumers just the facts, whereas the other side holds that you have to
build an emotional bond between consumers and brands that goes beyond
product attributes.

The controversy over the role of advertising is not likely to be resolved soon. In
fact, new factions offer a middle-of-the road approach. Some claim that certain
advertising ob¬jectives are more suited to persuasive, content-driven ads
(generating sales response, informing an audience of key facts), whereas others
are more suited to ads that move peo¬ple (build brand relationships). Still other
experts contend that content-relevant advertising can also be creative, although
this is difficult to accomplish.

Two reasons may help explain why this type of advertising is not more common.
First, many advertisers are stuck in the dichotomy of content versus creativity
and assume that other alternatives are impossible to achieve. This myopic
understanding of advertising is at least partly the result of advertisers' inability to
consider advertising from the perspective of the consumer. Second, few

174
advertisers are willing to accept the fact that every ad should be goal-directed
and that each goal is legitimate. A person preparing a grocery list is not very
interested in clever supermarket advertising; he or she simply wants to know
which prod¬ucts are on sale.

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Activity 31: Do you think the creative ad advocates and pragmatists that insist
on content-driven ads can reach common ground? Discuss.
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5.5 Summary
Advertising must reward the target audience with relevant information,
motivation, or at least entertainment. An advertisement must compete with other
advertisements, with surrounding stimuli, and with hundreds of other possible
distractions for viewers', listeners', and readers' attention. To be effective, an
advertisement must break through the clutter, attract attention, and hold it.

The external environment of the advc.1ising process has three key components:
the marketing strategy, history and at¬titudes of consumers, and other marketing
communications. The internal environment includes noise, the target audience,
delivery mechanisms, and the media and message strategies.

The psychology of advertising focuses on message reception. That process

involves five factors: perception. awareness, understanding, persuasion, and
memory. The first step, perception, means that advertisers must break through
noise and create stopping power. Advertisements that are intrusive--that demand
attention--have the most stopping power and create high levels of awareness.
Awareness means that the message has made an impression on the viewer or
reader. Advertisements must also be understandable and persuasive. Persuasive
advertisements speak to the head with logic and t o the heart with emotion.
Reasoning and association build arguments and link a brand with something
positive or likable. In addition to attracting and holding attention, effective
advertisements have locking power: They lock enduring impressions into
memory. These impressions are strongest and most durable when the
advertisement is original and personally relevant.

Brand personalities and brand images create a feeling of familiarity with a known
product. The brand helps the consumer feel comfortable with the product and
encourage consumers to buy it again. Branding also creates memorability,
establishes preferences, habits and loyalty. It encourages a relationship.

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There is an ongoing debate in advertising between those that feel advertising
should be creative versus those that feel advertising should be content-driven. A
middle-of-the-road group argues that the focus of advertising should be based on
the particular objectives of the ad.

Exercise 3: What do you think makes an effective ad-- one that creates an
emotional bond with consumers to build brands or one that is designed to
inform about the product’s unique benefits?
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References

th
Arens, F. W. (1999). Contemporary Advertising. (7 ed.). Boston: McGraw-Hill.

th
Batra, R., Myers, J. and Aaker, D. A. (1996). Advertising Management. (5 ed.).
New Delhi: Prentice-Hall.

Brown, M. and Plessis, E. D. (2005). The Advertised Mind: Ground-breaking

Insights into How Our Brains Respond to Advertising. London: Kogan Page.

Fearon, R. (1991 ).Advertising that Works: How to Create A Winning Advertising

Program for Your Company. Chicago: Robus Publishing.

Goddard, A. (1998). The Language of Advertising. London: Routledge.

Mooij, M. D. (2005). Global Marketing and Advertising: Understanding Cultural

nd
Paradoxes (2 ed.). California: SAGE.

th
Wells, Burnett and Moriarty. (2000). Advertising Principles and Practices (5 ed.).
New Jersey: Prentice Hall.

179