The Evolution ofPromoting and Advertising

BrandsChapter 3 with Duane Weaver

Outline

• Rise of Capitalism• Manufacturer’s pursuit of power

• Evolution of Advertising in the USA• The ’00s: More Hip Ads and More

Technology (2001 – present)• DISCUSSION – seminar questions

Rise of Capitalism

• Industrial Revolution• …basic force behind the rapid increase in

mass-production goods that required stimulation of demand

• “principle of limited liability”• gained acceptance and resulted in large

amounts of capital to fund the Industrial Revolution

• What was the impact on advertising as a result of the Industrial Revolution?

Manufacturer’s pursuit of power

• Manufacturer’s attempt to gain power over the distribution channel by building brand demand.

• Takes consumer’s focus away from Retailer and Wholesaler

• Mass Media – telegraph enabled rapid communication, spawned global interest and fostered a sense of community– this “free communication” is supported by advertising.

Evolution of Advertising in the USA (1 of 2)

• Pre-1800• Print media (news books, newsletters, then gazettes)

• 1800-1875• Circulation of dailies (newspapers) 1M/day• Circulation increased by railroad expansion

• 1875-1918• Consumer culture breeds advertising as urbanization takes

hold (self-reliance no longer plausible)• The 1920’s

• “roaring twenties” – advertising was the work of the young, smart and sophisticated

• High standard of living after WW1 and plague• A product for a cure for almost everything• Ads became more visual than past

• 1929-1941 Depression• Advertising seen as villainous as millions starve• Bye-bye pretty, hello ugly harsh-reality, attention-grabbing ads• Radio takes hold as medium

Evolution of Advertising in the USA (2 of 2)

• 1941-1960 (WWII + the 50s)• Start of the babyboomer generation and women join the

workforce• Fear of motivation advertising research and “subliminal ads”

• 1960-1972 (Peace, Love and Creative Revolution)• Advertising slow to keep pace with the cultural revolution• “creative directors” gain more control of copy and ads

• 1973-1980• Slowing economy…ads go back to hard sell• Regulators: ACT, FTC, NARB

• 1980-1992• Designer era with disposable income double parents after

WWII• Greed was good, more stuff was good

• 1993-2000• Prediction of Interactive media enabling audit of more

accountable advertising

The ’00s: More Hip Ads and More Technology (2001 – present)

• Ads seen as ads…self-aware

• Dot.bomb – websites totally dependent on online ads for revenue (However, stock value was in potential ad revenue not real product revenue)

• E-business selling real product online

• Increase in web advertising– Why now?? What has changed?

• Branded Entertainment (and product placement)– Why does this work??

Discussion Questions:

1. Why is advertising an essential feature of capitalistic economic systems?

2. What forces do you think will continue to affect the evolution of advertising?

Social, Ethical and Regulatory Aspects Of Advertising

Chapter 4 with Duane Weaver

OUTLINE

• Social Aspects• Ethical Aspects• Regulatory Aspects• Industry Self-Regulation• Discussion

Social Aspects

• Get together in your teams and discuss the following. Be prepared to provide a a brief summary of your discussion to the class.

• What are the positive impacts to society? Why?

• What are the negative impacts to society? Why?

Ethical Aspects

• ETHICS = moral standards and principles against which behavoior is judged.• Truth and deception (what issues?)• Advertising to children (is it okay?)• Is it okay to advertise alcohol, tobacco,

gambling, prostitution, etc…?

Regulatory Aspects

• Areas:• Deception and Unfairness

• How do you regulate? Can you?

• Competition• Cooperative, comparative, monopoly

• Advertising to children• Industry and consumer groups vs. regulators

like FTC (USA), CRTC (Canada)

Industry Self-Regulation

• E.g.: NARB (National Advertising Review Board) affiliated with BBB (Better Business Bureau).

• Internet• Consumers

Discussion

1. Should Advertising be regulated?2. Can it be effectively managed and

who should be responsible for the social and ethical management of advertising?