Evaluating the Social, Ethical and Economic Aspects of Advertising

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Chapter 22
EVALUATING THE SOCIAL, ETHICAL, AND
ECONOMIC ASPECTS OF ADVERTISING

Chapter Overview

Advertising is a very powerful and influential force in our society, and this text would not be complete without considering the various perspectives and criticisms regarding its social and economic effects. The first half of the chapter focuses on the various criticisms of advertising from an ethical and societal perspective. Attention is then given to appraising the effects of advertising on the economy including its effect on consumer choice, competition, and product costs and prices. Perspectives regarding the economic effects of advertising are summarized by considering two principal models or schools of thought: the Advertising = Market Power and Advertising = Information perspectives. It should be noted that the primary focus in this chapter is on social and economic aspects of advertising, as this is the promotional mix variable that is the subject of the most concern, controversy, and regulation.

Learning Objectives

1. To consider various perspectives concerning the social, ethical and economic aspects of advertising and promotion.

2. To examine and evaluate the social criticisms of advertising.

3. To examine the economic role of advertising and its effects on consumer choice, competition, and product costs and prices.

Chapter and Lecture Outline

I.INTRODUCTION

Because of its high visibility and pervasiveness, along with its persuasive character, advertising has been the subject of a great deal of controversy and criticism. Various parties and scholars have attacked advertising for a variety of reasons including its excessiveness, the way it influences society, the methods used by advertisers, its supposed exploitation of consumers, and its effect on our economic system. The role of advertising in society is a controversial one and a discussion of the area would not be complete without considering the various criticisms regarding its social and economic effects as well as some of the responses to these charges.

II.ADVERTISING AND PROMOTION ETHICS

While many laws and regulations determine what advertisers can and cannot do, not every issue is covered by a rule or guideline. In many situations, advertisers must make decisions regarding appropriate and responsible actions based on ethical considerations rather than what is legal or within industry guidelines. Ethics are moral principles or values that govern the actions and decisions or an individual or group. While a particular action or practice may be within the law, this does not necessarily mean it is ethical. Ethical issues must be considered in making integrated marketing communication decisions as a lapse in ethical standards or judgment can result in actions that are highly visible and can be damaging to a company’s reputation and image.

Advertising is subject to considerable criticism because it is judged by a variety of groups with different norms, values, and ethical standards. Arguments on both sides of controversial ethical and social issues will be presented in this chapter. However, students may have to draw their own conclusions as to which position is right or wrong.

Professor Notes

III.SOCIAL AND ETHICAL CRITICISMS OF ADVERTISING

Much of the controversy over advertising stems from the ways it is used by many companies as a selling tool and because of the impact advertising has on society’s tastes, values, and lifestyles. There are a number of criticisms of specific techniques used by advertisers as well as charges against its impact on society in general.

A.Advertising as Untruthful or Deceptive—One of the major attacks against advertising is that many ads are misleading or untruthful and end up deceiving consumers. The issue of what constitutes deception is, as we discussed in Chapter 21, a very difficult one. However, a concern of many critics is the extent to which...
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