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2004 The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin
Chapter
3
The Economic, Social, and
Regulatory Aspects of Advertising
Identifies and explains the
economic, social, ethical, and
legal issues advertisers must
consider
Objectives
Classify the two main
types of social criticisms
of advertising
Employ an economic
model to discuss
advertisings effects
Explain the difference
between social
responsibility and ethics
Understand how
governments regulate
advertising here and
abroad
Discuss court rulings that
affect advertisers
freedom of speech
Describe how federal
agencies regulate
advertising
Define the roles state
and local governments
play in ad regulation Discuss self-regulation
The Many Controversies About
Advertising
affect product value?
make us more
materialistic?
increase prices?
discourage
competition?
affect demand?
make us buy things
we dont need?
affect us subliminally?
debase
language?
Does advertising . . .
influence consumer choice?
affect art?
The Many Controversies About
Advertising
affect product value?
make us more
materialistic?
increase prices?
discourage
competition?
affect demand?
make us buy things
we dont need?
affect us subliminally?
debase
language?
influence consumer choice?
Economic Societal
affect art?
Economic Impact of Advertising
Economic Impact of Advertising
Effects on . . .
value of
products
prices
competition
demand
Economic Impact of Advertising
Effects on . . .
demand
Primary demand
Secondary demand
Consumer choice
Business cycle
Abundance Principle: The Economic
Impact of Advertising in Perspective
Abundance
Principle
Complete information
Self-interest
Social Impact of Advertising
Short-term manipulative
arguments
Deception in advertising
Subliminal advertising myth
Social Impact of Advertising
Long-term macro
arguments
Effect of advertising on
values
Proliferation of advertising
Use of stereotypes in ads
Offensive ads
Advertisings social impact in
perspective
Social Responsibility and Advertising
Ethics
Ethical advertising Social responsibility
Advertisers social responsibility
Ethics of advertising
How Government Regulates Advertising
Federal
State
Local
Legislative Executive Judicial
Legislative Executive Judicial
Legislative Executive Judicial
Government Restraints on International
Advertisers
Tobacco
Children
Puffery
Premiums and
product placements
Current Regulatory Issues Affecting
U.S. Advertisers
Freedom of
commercial speech
Virginia State Board of
Pharmacy v. Virginia Citizens
Consumer Council
Central Hudson Gas v. Public
Service Commission
Current Regulatory Issues Affecting
U.S. Advertisers
Tobacco
advertising
Advertising to
children
Consumer
Privacy
Federal Regulation of Advertising in
North America
Federal Trade Commission (FTC)
Defining deception
Defining unfairness
Comparative advertising
Investigating violations
Federal Regulation of Advertising in
North America
Federal Trade Commission (FTC)
Defining deception
Defining unfairness
Substantiation
Endorsements
Affirmative disclosure
Comparative advertising
Investigating violations
Federal Regulation of Advertising in
North America
Federal Trade Commission (FTC)
Defining deception
Defining unfairness
Comparative advertising
Investigating violations
Remedies for unfair or
deceptive advertising
Consent decree
Cease-and-desist
order
Corrective advertising
Federal Regulation of Advertising in
North America
Food and Drug Administration (FDA)
Nutritional
Labeling and
Education Act
Trademark
Copyright
U.S. Patent and
Trademark Office
Federal Communications
Commission (FCC)
Patent and Trademark Office and
Library of Congress
State and Local Regulation
Regulation by
state
governments
Regulation by
local
governments
Nongovernment Regulation
Better Business Bureau
National Advertising Review Council (NARC)
NAD NARB
Regulation by media
Newspapers Magazines Radio TV
Regulation by consumer groups
Self-regulation by advertisers
Self-regulation by agencies and associations
Agencies AAAA AAF ANA

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