Kleppner's Advertising Procedure Ch. 24

This is my personal summary of Kleppner's Advertising Procedure.

Chapters
Chapters 1 & 2: Basics of Advertising Chapter 3: History and Brands Chapter 4: Target Marketing Chapter 5: Agencies and Services Chapter 7: Media Strategy Chapter 13: Internet Marketing Chapter 24: Economic, Social and Legal Aspects of Advertising Addendum: Corporate terrorism

Chapters 24 - Economic, Social and Legal Aspects of Advertising

Advertising in the USA has gone through stages.

1865-1900: when wild claims about products were allowed.
1900-1965: when the public & government required curbs on wild claims & powerful monopolies.
1965-present: when social responsibility and consumer protection became issues.

Advertising as an institution

Advertising is 2.5% of the GDP. (How much of that is political ads?)

Economic Role

Proponents and critics of advertising have recognized some important issues:

It informs or misinforms the consumer.
Its expense prevents entry by new products.

Arguments in favor of advertising:

It informs.
... or misinforms.
It supports “free” media and employs people.
... advertising discourages political freedom since media prefer the two big parties.
It encourages evolution of products.
... innovations may be chemically toxic or unnecessary & wasteful.
It permits mass production & cheaper products.
... mass production increases the barrier to entry for small manufacturers.
It increases buying & therefore improves the economy.
... mass production of defective products decreases buying.

Arguments against advertising:

It persuades but does not inform. It is what ads don’t tell you that is often most important to know.
It encourages brand-switching which does not improve the economy.
Branding is intended to keep prices high.
Advertising is expensive and is a barrier to entry.

Social Role

Advertising has been criticized for creating new cultural norms to serve the profit motive.

Two problems:

Advertising tells people what is expected, valued, fashionable, tasteful in terms of products but other areas as well. This can have negative consequences in that it can encourage people to behave badly: to embrace classism, to be envious or condescending, to brag, to be petty, to treat some groups badly, etc.
Advertising is used more and more to sell ideas, and is therefore creating non-product-related ideas.

Additional specific criticisms are given in the book, some foolish, some not. Not mentioned:

Use of ads to condition children to throw tantrums to get parents to buy things.
Excessive use of minorities in print ads, or the rush to appear PC.

Categories of complaints:

Content that doesn’t reflect society.
Offensive products e.g. tobacco or hard liquor.
Too many ads.
Ads that prey on foolish, easily addicted, or weak-minded people.

The Advertising Council encourages the support of causes.

Cause-related marketing

Appeared first in 1983 with Amex’s Statue of Liberty campaign.

Check and photo op.

Today companies engage in strategic philanthropy.

They look for an exclusive association with some cause.
The cause must be relatable to their product sales.
The cause ought to be a long-term one.
The cause must be important to the public so that they want to help with it.

There are 3 kind of cause marketing:

transactional, e.g. 1 purchase gets one payment to the cause
message, e.g. a brand is related to an information campaign
licensing, which let companies use a charity’s logo in ads.

Advertising's influence on editorial decisions!

We’re supposedly supposed to believe that editing and advertising are separate, despite obvious evidence that they aren’t. Everyone knows that editors avoid upsetting advertisers.

Some advertisers try to directly control news stories or have them removed.
Advertisers are trying to sponsor TV shows again.
Product placement is big.
Advertorials are clearly becoming prominent in AM radio and cable TV.
Advertisers have threatened to withhold advertising to get their way, as with the recent Survivor show with race-specific teams.

Print media is 50-75% from advertisers.

Broadcast is (the book claims) almost 100%.

Fraudulent advertising

Prevented by 3 means:

laws & the FTC
the media has guidelines
self-regulation by advertisers

The FTC

In 1914, the FTC was created to prevent unfair competition.

The FTC can act against an advertiser when:

There is representation/omission/practice that is misleading.
The act seems misleading to a consumer acting reasonably.
The representation/omission/practice is material.

The company must provide substantiation of any claimed benefit, or discontinue the product.

(This is probably why makers of unmarked trans-fat-containing food simply say it is unhealthy even if the reasonable expectation is that it is not unhealthy.)