Ethics

• learn different views on economic impact, legal and regulatory issues, the future of the industry.
•  
• examine effects while detached.
• see advertising as an institution.

Definition: to see the cumulative effect of all ads on society. it allows us to see the bigger role advertising plays on society both positive and negative.

economic, societal norms and values

• Ethics: set of moral principles or rules that guide behavior.
• for the individual: acting morally is in ones self interest and is a neccesary condition for ones well being and happiness.

1) the way people interepret/see advertising depends on their ASSUMPTIONS. (both societal and individual)

2) Various types of advertising, goals and reactions to it exists. (types differ, goals difer, peoples reaction differs)

3)difficult to measure effects. cause and efect conclusions are not usually possible. awards based on liking not performance. external unknowns (rain?)

1) individual- prior thoughts, beliefs, values and experiences

2) societal- Shared values, ideas, and assumptions of society during a time period. Perceptions about manipulative power of advertising.

able to see the point of view/ attitudes of positions related to advertising like the consumer, the marketer, competition etc.

challenges can bring opportunity

• 1) open your eyes
• 2) build a foundation of knowledge to draw my own conclusions.
• 3) provide me with things to think about

outcomes: grow as individuals, have the mindset and tools to create more effective advertisements. BUILD A BETTER MORE RESPONSIBLE AND RESPECTED INSTITUTION OF ADVERTISING FOR THE FUTURE.

• 1) advertisers
• 2)Media
• 3)Agencies

• 4)other institutions (gov, education, family, religion)
• 5)audiences
• 6) critics
• COMAAA

• 1. Economic
• 2. social
• 3.cultural

• 1. economic- helps sell products, creates competition
• 2. Information- one main source about products to help with purchase decision.
• 3. entertainment. 1 out of 5 people like ads. funny, makes you think, entertaining cool innovative creative

• 1) paid message
• 2) from an identifiable source
• 3) using a mass mediated channel
• 4) with the intent to persuade

• Intended effects: awareness, market share, image associations
• unintended effects: advertising promotes materialism, alcohol, sexual behavior.Can be offensive, perpetuate stereotypes, controversialthese are influenced by a persons worldview

• Worldview is an individuals knowledge, experiences, feelings and values
• Sources include family, religion, education and advertising.
• Important because our worldview impacts our beliefs about advertising andshapes whether we see humans as passive or active members of society. Passive means ads manipulate, active means consumers create meaning

• 1) need to know your consumers are satisfied with the
• offering in order to protect brand image and corporate image.
• 2) Beliefs can impact public policy decision which in turn determine the
• regulation of advertiseing

• Understanding the critics can in turn help us create better ads and make the
• institution better as a whole.

• 1. Role of consumers in the process (passive or active)
• 2. Amount of advertising (too much?)
• 3. Types of products (creates uneccesary needs?)
• 4. Mirror or molder of values (promotes a fantasy lifestyle or reflects currenttrends?)
• 5. Profanity, obscenity and indecencyAlso known as MART

• (not all criticism is created equal!!)
• 1. Credentials (legitimacy)
• 2. Recency
• 3. Harm identified *
• 4. Reasoning used
• 5. Critics view of the role of the consumer (active or passive)
• 6. Usefulness of criticism

• 1. Listen
• 2. Provide new info
• 3. Prepare a persuasive response
• 4. Pick your battles
• 5. Encourage open discussion and debate

• The shared ideas or assumptions of a society usually shape its institutions in that...
• institutions reflect cultural beliefs 
• institutions help solve problems 
• institutions provide "rules" for behavior.

• 1. Tradition: relies on direction from the past. little room for advertising to grow
• 2. Authority: relies on direction from present/top/whoever is in power. Individual is controlled by few. advertising used to reinforce ideas like propoganda
• 3.classical liberalism: each individual is in control and part of process. they are self interested and rational and "sovereign" which means free and independent.

• scientific revolution- individual discovered.
• each person can speak to god
• shift from agricultural to industrial society

free and indpendent and act in their own self interest.

• egoism (selfish):  by nature are motivated by self interest
• intellectualism(smart): active individual. consumer that is rational and calculating and cant be manipulated. honest and complete information
• quietism (reward): apathetic individuals. need stimulation of a reward to enter market as buyers and to keep entering
• atomism: division of economic power among many ensure good of the whole. many producers, laborers and consumers neccessary

the aggregate of all individual decisions determines the priorities (resources) of society.

• individuals controlled the flow of resources because they were:
• Stimulated to put forth effort. (quietism)
• To puruse their own self interest. (egoism)
•  deliberate and calculating in their pursuit (intellectualism)
• and there were a sufficient numbers of buyers and sellers to keep the market competitive. (atomism)

What will be produced? Whatever sovereign individuals want to buy/ is in demand.

• To whome will it be distributed?
• Those who have marketable skills to earn money

• How will the work of society get done?
• Rational individuals who are lured by gain (quietism) will do they tasks sciety believes are important. this assumes mobility.

• advertisings role is
• Stimualte
• inform
• to make rational decision which
• maintains/encourages a competitive marketplace

Market system economy (a way to allocate resources where the aggregate of all individual decisions determine the priorities of society

Trial by Jury

Freedom of Speech/press

• as long as theire are rational and active conumers as well as many buyers and sellers there should be a self correcting market economy (long run)
• these two factors ensure no one person is exploited

Intellectualism and competitive market (atomism)

• The natural market controls over egoism by means of intellectualism and a
• competitive market. These two factors ensure no one person is exploited
• because sovereign individuals acting in their self interests would naturally result in the good of society.

• There is no direct incentive for social responsibility.
• self interested to whats best for their own monetary gain.

(market is self correcting etc)

the market should be self correcting and self perpetuating as long as there are rational and active conumers and there are many buyers and sellers.

CL assumes there are enough buyers and sellers and also assumes that people have the ability to make rational and caluclating decisions. realistically deicisons are based on both rational (economic) factors AS WELL AS psychological/symbolic (non economic) factors.

inequalities, social and moral decay, image advertising...

Rational individuals make decisions based on economic reasons. deicisons based on economic reasons satisfy functional needs and beliefs like prize, quality, size etc.

decisions based on non econmic reasons are meant to satisfy a psychological or symbolic need like status, image, or group association. these decisions have a potential for greater consumer manipulation

• skepticism rises over who is in control.
• Uncertain about ability of invisible hand to turn self interested acts into socially beneficial act

• increasing desire for government regulation
• to help get CL back on track.

• increasing desire for socially responsible business
• hire minorities, help community, enviro friendly acts

active conumers are considered less vulnerable because thye are more rational and see advertising as a mirror where the ads are persuasive, while passive conumers are considered more vulnerable because they see advertising as a molder that uses ads to manipulate

1. does advertising create needs or provide want satisifers for preexisting needs? molder of society vs mirror

• 2. what tyype of information should be provided?
• must be honest but should it include functional and symbolic products?

• 3. how much information should be provided?
• enough to make rational decisions but ration is subjective.

4. who should provide the information?

Advertising institutions influence (public policy decisions in) advertising which influences brand.

• concern what current and potential customers think can impact corporate/brand levels.
• assumptions influence public policy decisions which in turn influence institutional and/or industry level

advertising influences allocations of resources

advertising increases our standard of living

it creates jobs, pay for our media system

conributed to 2.3% to the GNP

• 1. assumption that adv is working in isolation.
• like other marketing mix elements (4 p's)

• 2. fail to account for external factors.
• demographic, economic, political, legal,sociocultural

• 3. Neccessary data is unavailable.
• can only get it 10 years later. companies dont want to give it out.

• Advertising is a MARKET POWER
• assumption: consumers are passive

Advertising as MARKET COMPETITIONassumption: consuemrs are active

• Static in one point in time
• ads manipulate and change tastes due to image ads and psychological messages that
• establish loyalty
• lower compeitition (high barrier to entry when an established brand makes it harder for others to enter) this is also known as first mover advantage or economies of scale.
• also higher prices to consumer
• and higher profits for advertiser.
• believes adv. causes concentration.

Flaws include advertising is sole cause of loyalty and effects are permanent.

• Dynamic.
• In this view ads provide info for its active consumers about subsititues. these ads are persuasive.
• it increases price sensitivity
• it increases compeittion
• it lowers price and search costs for consumers.
• in terms of economies of scale, theres not a barrier, adv actually reduces risk of entry.
• cost of doing business is equal in long run.
• not concentrated, it may be that concentration causes adv.

flaws assume that consumers seek out and weigh all options. also that consuemrs are good judges

production increases from higher demand leading to costs being spread across a larger volume of goods.

from market power: to manipulate and control the market/convince ppl they need something to fit in

• from market comp: provide info on subs
• to let consumers know they exist
• may reach new customers
• consumers want adv (for active consumers)

• facts
• knowledge
• consumers have diff tastes
• may want tastes changed/spice it up
• lowers search costs and resources

Full price= price of product and resources search cost.

the press must operate for the social good of society. the press must provide an open forum for diverse ideas

• 1. serve the political system
• 2. provide for an informed public for self government
• 3. serve as a watchdog of the government
• 4. serve the economic system -bring buyers and sellers together
• 5. provide entertainment
• 6. maintain own financial self sufficiency

Describes the ideal yet serperate relationship between mass medias functions of providing content and revenue.

Conflict arises between values of informing the public while making $ in the process. (50-80% of revenue generated by media is from advertising

• News can be biased because of financial concerns.
• (TV entertainment programming choices altered and mags consider advertisers in decisions...

cam create advertorials

• blur advertising and editorial content.
• you think someone is writing an editorial about a product they like but really its just a spot ad for advertisers.

it can confuse consumers and create higher "Credibility: for "ad" mssg.

• Mass media is a screen for ads.
• MM outlets can accept or reject any ads.
• 1.airwaves are scarce, so broadcasters have an added responsibility to operate in the public interest.
• 2. content of programs and ads cant be known by audiences prior to viewing.
• economic interests can also impact decisions.

• 1. media concentration (vertical and horizontal integration)
• 2. media as gatekeepers (media mgmt decides our best interest)
• 3. agenda setting (media tell you what to think about like value, norms features etc).
• 4. Spiral of silence (similar options get discussed while differing views become silenced)
• 5. Cultivation process

• 1. government 
• -nonprotected speech regulations: child porn, false adv
• -content neutral regulations: no viewpoint is favored, but time and place restrictions exist
• -viewpoint or topic restrictions: gov needs a avery compelling reason to restrict
• 2.societal agreements
• 3. media
• 4.consumers

Non commercial: news, politics, opinions are most protexted.

commercial: speaker has economic intent

in establishing the rights of the advertiser to interact with the public the "good of the people" must be considered.

• 1300s- laws interpreted by god
• 1776-declaration of independence
• 1787- US constitution seperated church and state
• 1791: bill of rights introduced with the first 10 amendments to constitution

first 150 years not much attention paid to the first amendment (1942)

1942 valentine v. chrestensen: 1st distinction between speech and commercial speech

1964 new york times v. sullivan: advertising protected as free speech i an editorial adv. within the boundaries of time place manner restriction

1975 bigelow v. virginia: adv.of a legal service is ok if it serves public interest. cases to be assessed on a case by case basis.

1976 virginia state pharm v. virginia citizens consumer.(drug prices) commercial speech is indispensable to the proper allocation of resources and to the formation of intelligent opinions

• 1977 bates v.state bar of arizona:
•  lawyers can advertise

1980