UNIT 3
Economic and social aspects of advertising
ECONOMIC IMPACT OF ADVERTISING
Advertising does have impact on various economic issues. It affects the value of the products, the price of goods and services, the competition in the market, the business cycle and the consumer choice. The economic impact of advertising is explained as follows:
1. Effect on the Value of Products: In Consumer’s mind advertising can give added value to the brand. By making the product better known, advertising can make the product more desirable by the consumer. That is why people have more faith and confidence in advertise brands.
2. Effect on Profits: Advertising may lead to higher demand. Higher demand leads to large scale production and distribution. The large-scale production and distribution bring economies of scale. Therefore, the profits of the firm may increase on account of economies of scale.
3. Effect on Prices: Some advertised products do cost more than unadvertised products, but the opposite is equally true. This is because; when advertising leads to increase in demand, producers go for large scale production and distribution. As such, they get economies of large-scale. These economies are passed on partly to the consumers in form of reduced prices.
4. Effect on Product Life Cycle: Advertising may extend product life cycle. For instance, due to heavy advertising, the growth stage may get extended. For instance, Colgate Palmolive with its heavy advertising have extended the growth stage of its toothpaste brand in India.
5. Effect on Production Costs: Advertising has an indirect effect on production costs. Due to advertising, the firm may get higher demand, which may lead to economies of large scale production. Thus, the cost of production per unit may decline.
6. Effect on Distribution Costs: Advertising has a direct effect on distribution costs. Advertising generates demand, which leads to increase in production, and consequently increase in distribution. The increase in distribution may lead to economies of large scale distribution. Thus, the distribution cost per unit may decline.
7. Effect on Consumer Demand: It is true that the promotional activities including advertising g affects consumer demand. But, it is also true that many social and economic forces like technological advances, increase in educational level, changes in lifestyles etc., are equally significant to affect consumer demand.
8. Effect on Competition: Some critics are of the view that advertising restricts competition, because small firms or newcomers find it difficult to compete with the huge advertising budgets of large firms. However, advertising by big companies often has only a limited effect on small business firms, because a single advertiser is rarely large enough to dominate the whole market.
9. Expansion of Markets: Advertising helps to expand the markets. For instance, a local advertiser may expand to regional markets and from regional to national and international markets. For instance, Rohit Surfactants Limited, a Kanpur based Company that started in 1987 on regional basis, now sells in national markets its famous brand of washing powder ‘Ghari’ – now market leader in India.
10. Effect on Economic Growth: Advertising increases economic growth of a nation. Effective advertising may lead to higher demand. Increase in demand leads to higher production of goods and services. Increase in production leads to higher GDP or economic growth of a nation.
11. Effects on Standard of Living: Advertising may lead to higher standard of living of the Society, which is stated as follows: (a) Effective advertising generates higher demand for products. (b) Increase in demand leads to higher production. (c) Higher production increases employment opportunities. (d)Increase in employment results in increase in purchasing power. (e) Increase in purchasing power enables people to increase consumption of new and better goods and services. (f) Consumption of new and better goods leads to higher standard of living.
12. Effects on Brand Image: Advertising creates impact on brand image. Due to heavy advertising, customers’ perception about the brand changes. Customers develop a favourable perception or brand image of the brand that are frequently advertised.
13. Effect on Brand Loyalty: Advertising also leads to brand loyalty. The repetitive advertising creates ‘top of mind’ awareness, which initially leads to trial purchase in the case of FMCG products. If the customer are satisfied, they may go for repeat purchases and may even recommend the brand to others.
14. Effect on Consumer Choice: Advertising generates competition in the market. To compete effectively, business firms come up with new brands and modify and improve the existing ones. Therefore, one comes across several competing brands of varied products in the market. Therefore, it can be concluded that advertising gives consumers wider choices.
Effect of advertising on consumer demand
Advertising is an effective way to build brand awareness and to tell consumers about the benefits of the product or service. Businesses can increase demand for their offerings by creating targeted advertising campaigns. If an advertising campaign is unsuccessful, it can also reduce the demand for the products or services. It’s important to understand how advertising works and the ways it can change the demand for the product.
Understanding advertising and promotion
Advertising is a fundamental aspect of marketing. It involves paying for a promotional space to encourage consumers to purchase a product or service. Advertising have several goals, and they depend on where the advertising takes place and who it is targeting.
Advertising is most successful when it is targets a specific segment of an audience. In a number of ways businesses can segment their audience, including demographic characteristics such as age, gender and income or behavioral characteristics such as purchasing history and social causes.
It’s important to pick an advertising location that consumers will see, in order to successfully reach their audience segment. Advertising tools include TV, radio, magazines, newspapers, billboards, websites and more. It’s critical to establish goals for the advertising campaign and to pick the medium accordingly. For example, if a business wants to build brand awareness, then TV or radio advertising might work best as it reaches a large and varied audience. If promoting a particular product sale, advertising in niche magazines or websites might be the right option.
Effects of advertising on consumer demands
Advertising plays an important role in increasing and decreasing demand for a product or service. It’s a way to educate and engage consumers about the business, product or service and results. The effects on demand will likely be positive, if the advertising is targeting the audience segment correctly. However, if the advertising do not reach the audience correctly, the effects on the business can be devastating. Advertising can affect both the demand for a particular product or service, and the demand within a particular audience segment.
Increase demand for a product or services
In order to increase demand for a particular product of service, it’s important to create messaging that define the problem consumers are facing, and offer the product as the solution. This kind of effective advertising influences demand by setting the product apart from competitors and educating consumers about the results they will achieve.
For example, if a business is selling children’s backpacks, the best time to increase demand for the product may be in the late summer before schools reopen.
In order to increase demand, the business needs to show consumers why their backpacks are better than any other backpacks on the market. The business can increase demand for their product by carefully selecting the timing and venue for advertising, and showing them apart from the competition.
Increase demand within an audience segment
Through advertising another way to increase demand is to target a particular audience segment. The effects of advertisement on consumer demand are linked to brand awareness and brand loyalty. If an audience segment doesn’t know about the product or service, they have no way of affecting the demand. That’s why it’s important for businesses to understand their consumers and target them effectively.
Advertising aimed at creating consumer awareness for a product needs to carefully consider who the audience segments are. There are often multiple audience segments for a specific product. Those different segments may have different needs and problems, but the same product may fill those needs and solve those problems.
For example, while the main target audience for the business that sells backpacks are parents and their school-aged kids, they may also have a secondary audience of new moms who use the backpacks as diaper bags. To increase demand for that particular audience segment, the business could advertise in local online mommy groups. This way, they can raise brand awareness and build demand in a new audience segment.
Decreasing demand for a product or services
The demand for a product or service can be decreased if an advertising campaign is unsuccessful . For example, if the ad misrepresents the product or sets unrealistic expectations, the campaign can have negative results on the business. It’s critical for advertising to be truthful about what kinds of benefits the product or service provides. This helps to build trust and loyalty with consumers, which can increase demand.
Decreasing Demand Within an Audience Segment
A successful advertising campaign would likely raise demand within a specific audience segment. However, if the business doesn’t correctly target the market, then the campaign can fail. This is why it’s imperative for businesses to thoroughly research their audience. Through market research and competitor research, businesses can learn more about who they serve. They need to know their demographic and behavioral attributes to know how to appeal to them through advertising.
Advertising effects on consumer demand
Advertising can have a range of impacts on consumer demand for a product or service. An advertising campaign can have different influences on demand, depending on its target audience. Effective advertising aims at influencing customers to purchase the advertised brand.
- Primary and Selective Demand: Advertising can create primary demand for generic or new products. For instance, an ad may provide information and make people aware of the benefits of generic products, which may increase primary demand.
For example, the Tea Board may advertise to consume more tea by highlighting the benefits of tea. In competitive markets, advertisers can create selective demand, i.e., demand for a particular brand. To increase selective demand, advertisers may highlight special features of their brand. For instance, Tata Tea advertises to increase demand for Tata Tea brands.
2. Evolving Experiences: Effective advertising creates an emotional experience for the consumers that induce them to increase demand for the advertised brand. For instance, a health drink ad which dramatizes fit and fine or healthy people may induce existing consumers (occasional users) to increase the demand for that health drink. The ad may also induce non-users to buy the advertised product.
3. Social Media and Demand: Social media may also help the advertisers to increase the demand for their products. Online audiences have a more direct and interactive experience with marketers.
Social networks such as Facebook, LinkedIn, Twitter, Whatsapp, etc., can help to increase demand for goods. People may provide review or comments of the products which they have purchased and used. If the reviews or comments are very positive and convincing, other people may also go for purchase of such product. Therefore, it is vital for the advertisers to create a favourable impression on the minds of the people so that they comment favourable on the social media.
4. Professional Advertising: Some business firms depend largely on professional people to increase the demand for their products. Therefore, advertisers must undertake professional advertising or influence the professionals by personally approaching them for their recommendations.
The professional advertising is undertaken to influence the professionals like doctors, engineers, professors, architects, and others. If the professionals are convinced, they may prescribe or recommend the brand. Such recommendations help to increase the demand for the brand.
5. Creativity in Advertising and Demand: Advertisers need to come up with creative ads to influence and induce people to buy the products. Creativity is an on-going process. For instance, Amul Butter comes up with creative ads based on current events. Such ads act as a reminder to existing buyers to continue using the brand, and on the non-users, the creative ads create ‘top of mind’ awareness, which may influence the demand for the brand from non-users.
6. Effect of Advertising on Competition and Demand: Advertising may stimulate increase in competitive activities. Advertising makes competitors active and alive. Due to stiff competition, the competitors may come up with sales promotion techniques such as special discounts, free samples, gifts, extended warranties. The competitors may be forced to come up with new brands with innovative features, and improve the quality of existing brands.
7. Demand from Market Segments: Demand can be increased from certain segments of the markets by creating a new ad campaign that suits or influences the specific type of market segment. For instance, young adults are influenced by pop music, and therefore, the advertiser may use pop music in the ads to influence the young adults. If the advertisers want to influence senior citizens, who may be influenced by classical music, the advertiser may use classical music in the ads to influence them to make a buy decision.
8. Temporary Increase in Demand: Advertising may help to increase the demand temporarily. For instance, if a firm wants quick infusion of cash or wants to quickly liquidate old stock to make room for new stock, advertising can come to the rescue of the firm. The firm may advertise for special time-bound incentives, such as special discounts. The ad may state the last date on which the incentive offer ends to create a sense of urgency amount the buyers. The buyers may take advantage of the offer, thereby, increasing the demand for the firm’s brand temporarily.
9. Increase in Specific Product’s Demand: A firm having abroad product line and usually advertises the business in general, rather than specific goods or services; the firm can increase the demand for a specific brand through specific brand’s advertising. For example, if a firm wants to increase the demand for a specific brand of toilet soap, it may focus its advertising effort on only that specific brand. In such a case advertising may be able to increase the demand for that specific brand.
10. Advertising and Decrease in Demand; Advertising may lead to decrease in demand or sales. If advertising gets backfired, the firm may lose the demand in the market. For instance, controversial ads may lead to decrease in demand. Also, if the brand ambassador does something of disrepute, the sales of the endorsed brand may decrease. Poor brand extension may also affect the demand for the flagship brand of the Company.
Effect of advertising on monopoly and competition
Monopoly means a complete or a very substantial hold over a market in respect of one or more products by one seller. Critics, often claim that advertising contributes and strengthens brand monopolies by reducing the opportunity for new products to enter the market, whereas, supporters of advertising assert that advertising helps to face competition.
Critics of Advertising:
Some even claim that big advertisers drive out small-scale advertisers by achieving economies of large scale. They cite the examples of those very large advertisers who have the strongest positions in the market.
- The large company has the power of the large purse, which enables it to spend substantial sums on advertising, particularly to implement varying degrees of product differentiation which enables a company to pre-empt part of a market.
- Advertising thus creates a barrier to new firms entering an industry or a product market.
- The result is high economic concentration.
- Because of their protected position and because of product differentiation these firms can charge monopolistic prices which are too high. Moreover, they can recover the cost of the advertising by charging higher prices.
Thus, it can be concluded that advertising need not develop monopolies, but it can be used creatively to generate competition in the market, and that huge advertising by existing firms need not act as an entry barrier for new players in the market.
Effect of advertising on consumer price
The Consumer price is the final price which the consumers pay for goods and services.
The consumer price is comprised of:
- Production Cost,
- Distribution Cost,
- Profit Margin of the Seller.
Advertising may help to reduce the production cost and the distribution cost per unit produced due to large scale production and distribution on account of increase in demand on account of advertising. The consumer price can decrease provided the seller passes on the benefits of large scale production and distribution (either partly or wholly) to the consumers, without increasing the profit margin.
Impact of Advertising on Production Costs
The cost of production is comprised of three basic costs-
(a) Material Cost;
(b) Labour Cost; and
(c) Overhead Costs
Advertising is a selling and distribution cost and it does not form part of production cost. As such it will not add to the cost of production and hence, it will never increase the cost of production.
However, advertising may indirectly reduce or bring down the cost of production per unit produced (assuming that the firm is operating below optimum production capacity). This is possible, provided advertising generates demand upto the firm’s optimum production capacity.
Impact of Advertising on Distribution Costs
Selling and Distribution costs generally includes –
(a) Advertising;
(b) Sales Expenses;
(c) Other Distribution Costs, etc.
Since advertising is a part of selling and distribution costs, it will naturally add to the total selling and distribution costs. However, advertising may reduce the cost per unit distributed, provided the benefit of large scale selling (due to advertising) is more than the amount spent on advertising.
The above claim i.e. advertising can reduce the cost per unit distributed may be justified from the fact that the sales force required may remain the same, since advertising does the additional job of sales promotion. However, it may be noted that incentives of the sales force and other selling expenses may increase to some extent.
It is to be noted that distribution cost per unit sold will go up when the advertising costs are more than the benefits of large scale distribution.
Impact of Advertising on Consumer Price
It is observed from the above two tables that advertising brings in economies of large scale production and distribution to the manufacturer-advertiser.
In case the advertiser transfers these benefits to the consumer either in part or in full, then the consumer stands to gain as he has to pay a lower price than otherwise.
It is also to be noted that large scale production enables the manufacturer to go for Research & Development, which not only brings in new and improved products but also production takes place at reduced costs.
The seller partly transfers the benefits of economies of scale to the consumer.
It is to be noted that there will be no effect on consumer price, if the advertiser does not pass on the benefit of large scale production and distribution to the consumers.
The consumer price will also increase, if the advertiser increases the profit margin, apart from enjoying the total benefit of large scale production and distribution.
Key takeaways-
- Advertising is an effective way to build brand awareness and to tell consumers about the benefits of the product or service.
- Advertising contributes and strengthens brand monopolies by reducing the opportunity for new products to enter the market.
- The Consumer price is the final price which the consumers pay for goods and services.
Ethical and social issues in advertising
Social aspects of advertising
Culture is a way of life of a particular society. It is a combination of tangible aspects and intangible aspects of a Society. The tangible aspects include music, architecture, buildings, literature, clothing, etc., and the intangible aspects include ideas, knowledge, skills, morals, laws and customs.
Critics of Advertising
The critics of advertising point out that advertising degrade cultural values. They cite the following instances to support their point of view:
- Materialistic Values: Advertising finances and supports mass media. The mass media such as magazines, television, etc., encourages what is popular rather than what is good. This results in materialistic values rather than cultural values.
- Violence: Advertising sponsors serials or programmes which depict scenes of crime and acts of violence. This influences the audience, especially, the younger generation and they too get involved in such crimes and violence.
- Vulgarity: In advertising, there is a good deal of vulgarity. Some of the ads depict nudity and use double meaning language. Such vulgarity is against the norms or culture of the Society, especially, in India.
- Surrogate Advertising: Ads promote the sale of harmful products such as tobacco products, and alcoholic drinks in a good number of countries. The ads of such products dramatize in a glamourous manner the use or consumption of such products.
- Undue Influence: Unethical and uncultured marketers take the advantage of untruthful advertising and lure the people to buy the products or services offered by them. Ads try to create complexes among the people. They often show people using the advertised product as superior as compared to the non-users. Such ads do affect children and other members of the Society in a negative way.
- Unhealthy Competition: Ads create unhealth competition among the marketers. The marketers get involved in unhealthy marketing practices to lure the customers to buy their products.
- Passive Role of Women: Ads depict woman in a passive role, as that of a mere housekeeper or as a servant of the family. This further conforms to the belief of some narrow-minded people that women are meant to play a passive role in the family
Supporters of advertising
The supporters of advertising claim that advertising is not responsible to degrade cultural values, but it upholds and improves cultural values. They cite the examples of the following instances:
- Concern for Girl Child: Some ads show the girl child in a positive role; such as in the ads of Rasna, Complan, Nescafe, etc. This generates concern for the girl child in an Indian society where more importance is given to boys.
- Social Awareness: The public service ads such as family planning, literacy campaigns, health and safety campaigns, etc., makes the people aware of the importance of a healthy culture.
- Sponsorships: Advertisers sponsor sports programmes, and variety of cultural programmes. Without the support of advertising such programmes would not have seen the light of the day. This helps the growth of culture and sports in a big way
- Customs and Traditions: Advertising highlights customs and traditions of India such as strong family ties. For example, Ads develop family ties as a good number of ads show family in a very happy environment, eating together, living together and enjoying the life together. This definitely goes in a long way to strengthen the family relations
- Respect for Women: Now-a-days, ads depict women in a positive and active role. The good example is that of Havells Appliances. In 2014, Havells Appliances came up with a series of ad films depicting ‘Respect for Women Empowerment’. Such ads give a new meaning to the roles of women in our Society
- Caring Males: Ads depict males not only in macho roles, but that of a good father, or a good husband. The best of the example, is that of Nivea (Cream for Men) which depicts a man carrying a bay on his back indicating that men too care.
- National Integration: There are ads on national integration, which brings people of different castes, religions, culture, etc. together. This generates peace and harmony in the society
- Advertising generates employment either directly or indirectly. This increases the purchasing power of the people, and as such improves standard of living, not only on the economic front but also on the education and cultural front.
Advertising as a part of firm’s marketing effort operates in the society. It has to therefore follow the social norms. There are some positive and negative aspects on the social grounds. They are as follows
- Deception in advertising – the relationship between buyer and sellers is maintained if the buyer are satisfied with what they saw in advertisement and what they got after buying the product. The relationship between buyer and seller can’t be healthy if the seller shows false image of the product.
- The subliminal advertising – these ads main intension is to capture the minds of the consumer. The ads are made in such a way that the consumer don’t realize that the ad has impacted on their minds and this results in buying the product which they don’t want.
- Effect on our value system – the advertiser use puffing tactics, endorsement from celebrities, and play emotionally which makes ad so powerful that the consumer buy those products. These ads make poor people buy the product which they can’t afford, people pick bad habits like smoking and drinking, also they buy product as their favorite actor endorse the product. This increase the cost of the society as a whole
- Offensiveness – some ads are so offensive that they are not acceptable by the buyers. The ads which are irrelevant to the products are not acceptable. But there are some ads which are educative and now accepted by the people such as birth control pill was considered offensive and are now considered educative and important.
Ethical issue in advertising
Ethics in advertising is important, because by acting ethically with their advertising, a company is being responsible towards the needs of the customer. Ethical advertising helps the consumer by giving them the information they need to make an informed decision on what products to buy and how these products will enhance their lives--whether they need the product or they just want that product.
When ads are not ethical
- When it try degraded rival's product.
- When it gives false or misleading information about the product
- When it fails to give relevant information.
- When it is immoral.
Forms of untruthful advertising
- Exaggeration: Some advertisers make tall claims in their ads about their products. Tall claims are often made in case of detergents and washing powder, cosmetics and toiletries. For instance, you must have come across such ads of detergent powder claiming that it can wash whitest a dozen of clothes with just a teaspoonful powder. A good example of exaggeration is that of Colgate toothpaste “No germs, no cavities”. The ad has been withdrawn as required by ASCI.
- Misuse of Testimonials: Testimonial is a statement given by a popular personality or any other person claiming the superiority of the brand. In fact, many advertisers pay handsome amounts of money to extract the statement from a personality even though he / she may not be the user of the product. Take the example of ads of soaps, cosmetics, foods products, etc. You will come across a personality praising the product so much, but in reality she / he must not have used the product at all.
- Pressure Tactics: Some firms use pressure tactics to persuade customers to buy the products or services. For instance, certain private institutions may state the last date for enrolment. After some days again they extend the last date and continue to do so to fool the students.
- Misrepresentation: You must have come across competing brands with similar names, such as Lux Les, Bata and Bala, Sintex and Suntex, etc. Also some sellers may state that their product is ‘made as Japan’. All this is done to fool the customers
- False Statistics: There are also advertisers who make use of false statistics to substantiate the superiority of their brands. For instance one magazine stated ‘One lakh copies already sold’ but hardly few copies may be actually sold. Also, unethical educational institutions – (Indian as well as foreign ones) – state fake statistics such as rankings, placements, etc. to induce students to join their institutions
- Free Gifts, Discounts and Contests: You must have come across such ads as ‘Pay for two and take three’ or upto 50% discount or enter into a crossword puzzle or some other contest and win handsome prizes. Most of such advertising is another trick to fool the innocent customers. Even if the advertiser gives free gifts, they may not be worth the name and if there is discount sale, the product may be damaged or of old stock or of inferior quality. And there are contests in which the decision of the judges is final in favour of their known contestants.
- Total Lies: There are also cases of advertisers presenting total lies in their ads to trick the customers. For instance, one ad said ‘You can reduce your weight ‘no dieting, no drugs, no exercise, no fasting’. And some of those who responded to this ad landed in the hospital
- Poor Taste: At times some advertisers present vulgar scenes involving sexual innuendo, nudity and double meaning. For instance, Rotomac Pens ad with the words “Sub kuch dikhta hai’ was in poor taste. The ad had been withdrawn subsequently as directed by ASCI.
- Erroneous impressions: There are cases of erroneous impressions. For instance, there was an ad that said,‘Three yards of pure silk for a dollar’ and those who responded got three yards of silk thread.
- Claims of Winning Awards: Advertisers make claims that they have won international awards for their excellence in quality. They may have won such awards, but many a-times, the awards may be consolation ones. Again, the quality that they have presented may be far superior than what they sell in the local market.
- Unhealthy Brand Companies: Now-a-days, advertisers are engaged in unhealth brand comparisons with the help of advertising. Such comparisons create problems and confusion for the right choice of products as far as audience is concerned. Examples can be cited that of Colgate toothpaste, and Pepsodent toothpaste.
- Surrogate Advertising: Some marketers who are not allowed to advertise their products in certain media undertake surrogate or back-door advertising. You must have come across ads for packaged water, music CDs, club glasses, cards etc., bearing the names of alcoholic drinks and cigarettes. However, there is debate on this aspect, as supporters of advertising claim that there should be no restriction to advertise products like alcoholic drinks, provided they are done in a good taste.
- Advertising to Children: Advertisers try to exploit the young kids by advertising products which are not conducive to their health. This includes the ads of chocolates, soft-drinks, etc. Quite often such products lack nutritional value. However, they make believe the kids that such products are healthy for their mind and body, and as such the kids demand such products from their parents. There are cases where ads created inferiority complex if they do not use the advertised products.
Importance of truth in advertising
Truth refers to facts, complete facts and actual facts. In law, truth refers to truth, the whole truth and nothing but the truth.Truth in advertising may have a narrow connotation, for the advertisers are supposed to tell the truth – the facts, features, merits of the product, but no advertiser will advertise – what the product cannot do or what it does not have.
The importance of truth in advertising is stated as follows:
- Survival of the Ad Industry: High ethical standards are vital for the long run health of advertising itself. If people are confronted with growing unethical ads, they will lose confidence in advertising and advertising itself will surely die. However, in spite of so many unethical ads, advertising business progresses and prospers mainly due to the ethical advertising done by a vast majority of advertisers.
- Survival of the Firm: An advertiser to be true should follow certain ethical guidelines in advertising his products. One can never expect to gain from false advertising. An advertiser with false claims may succeed in making short term gains, for he can fool people for some time, but not all the time, for there is a saying – you can fool all people for some time, some people all the time but not all people all the time. For long term survival, a business firm should not resort to false advertising.
- Corporate Image: An advertiser who states true facts about his product will not only build confidence in the minds of the buyers, but it will bring name and goodwill to the firm and its products. False advertising may succeed for some time, but truth will ultimately prevail. Therefore, to build a good corporate image, a firm should come up with ethical advertising.
- Competitive Advantage: Firms that adopt ethical practices including advertising gain competitive advantage in the market. For instance, Tata Group of Companies enjoy’s competitive advantage in the market on account of ethical practices. Customers trust those companies that are honest and ethical in business dealings.
- Customer Loyalty: Ethical advertising may generate customer loyalty. Satisfied customers not only go for repeat purchases but also recommend favourably the products to others. Therefore, to ensure customer loyalty, business firms must resort to truthful advertising.
- Brand Image: Ethical ads help to build brand image. Customers develop a favourable perception of the brand vis-à-vis those brands that resort to unethical advertising. Brand image helps a firm to gain customer trust and loyalty.
- Business Expansion: Truthful ads may enable a firm to expand the business not only in the domestic market but also at the international level. Throughout the world, customers respect those companies that are honest in business practices including ethical advertising. The increase in customer trust and support helps a firm to expand its business form local level to national level and from national level to international level.
- Brand Equity: Ethical ads may help a firm to enhance brand equity. Brand equity is the incremental value of the brand over and above its physical assets. This is because; ethical advertising adds value to the brand, and therefore, the brand may command strong brand equity.
Positive and negative influence of advertising on Indian values and culture
Advertising can be defined as the process of effectively notifying the target audience of a business or a company regarding its products and services. According to various experts, there are different key components of advertising. And some of those key components of advertising are
- Studies on the demographic,
- Targeting marketing identification,
- Creating advertising and marketing campaigns,
- Developing and implementing various publicity and promotional campaigns,
- Development of different social media accounts, advertisements, branding strategies, and websites,
- Targeting various community outreach programs and handling campaigns of public relations,
There are two different types of advertising as follows
- Positive advertising - According to experts, positive advertising is more appealing to an average individual than negative advertising techniques. Positive advertising can be defined as some sort of marketing strategies which show the target audience all the positive effects which one can receive due to any particular product or service. Positive advertising techniques are optimistic and persuade customers to switch to the desired product or services. Positive advertising techniques allow customers to trust the company more easily.
- Negative advertising - Negative advertising is the advertisements which work by warning the consumers about the negative consequences of some habit or behavior. A good example of negative advertising could be smoking advertisements.
Positive effects on advertising
- Social benefits - There are many social benefits which advertisements can provide. For example, advertisements can highlight various social issues and promote free speech in nations where it might still be suppressed. This is a very important effect of advertisement.
- It raises higher standard of living due to availability of new and better type of goods and services
- Advertising can help to upgrade cultural valuesthrough dramatization of family ties, respect for elders, etc.
- Advertising can promote communal harmony and other social issues such as concern for girl child through public service advertising.
- Advertising helps to promote social welfare through various campaigns undertaken by business organisations, NGOs, and Govt. Organisations, such as anti-drugs campaigns, child immunization campaigns, etc.
- Economic benefits - According to research, advertisements can make companies and businesses compete to provide higher quality products and services. This ensures that more high-quality products and services are available in the markets which are able to meet the needs and requirements of all customers. This is a very important positive effect of advertisement.
- Advertising may help to reduce consumer price due to the benefits of large scale production and distribution. The large scale production and distribution takes place due to increase in demand on account of advertising.
- Advertising promotes competition, and therefore, consumers can get quality products at right prices.
- Advertising helps to expand business and therefore, consumers in different markets get goods of their choice.
- Advertising generates higher economic growth due to increase in production of goods and services, and therefore, employment level goes up.
- Free entertainment - Another important effect of advertisement is that it provides all viewers with a free form of entertainment without getting anything back as a guarantee.
- Mass communication - The most important effect of advertisement is that it has enabled the various forms of mass media to exist in the form which it does today.
Negative effects on advertising
Critics raise certain issues relating to negative economic and social effects of advertising on the society such as:
- Economic effects
- Advertising may lead to concentration of economic power in the hands of large firms.
- Advertising may increase consumer prices.
- Advertising may lead to unproductive use of funds.
- Avertising may affect economic well-being of the society, because it promotes harmful products (indirectly in India) like cigarettes, liquor etc., and people waste lot of money on such products.
- Social Effects
Critics also raise certain issues relating to the social effects of advertising such as:
- Advertising may degrade cultural value due to undue emphasis on individualism and overemphasis on vulgarity.
- Advertising may create material values rather than spiritual and social values.
- Advertising may create social or racial discrimination by overemphasis
- On well-off sections of the society.
- Advertising of harmful products may also affect social wellbeing of the society in terms of literacy, life expectancy, etc., and people may waste money on such products rather than on education and health
3. Misrepresentation - All advertisements tend to display the products and services in the best possible light. And many advertisements often tend to representing false information about the product or the service. There are many government organization which charges huge fines for misrepresentation.
4. False image - Advertisements tend to invade all possible spheres and because of that one can often develop a false image. This false image make an individual feel bad about himself or herself. This is also one of the negative effects of advertising to children.
5. Unrealistic expectation - This negative effect is common in case products which tend to exaggerate regarding its effectiveness. It sets unrealistic expectations which are hard to meet.
Key takeaways-
- Ethical advertising helps the consumer by giving them the information they need to make an informed decision on what products to buy.
- Positive advertising techniques are optimistic and persuade customers to switch to the desired product or services.
- Negative advertising is the advertisements which work by warning the consumers about the negative consequences of some habit or behavior.
Pro Bono Advertising
Social advertising is also called as Pro Bono advertising. Pro Bono is a shortened version of Latin Phrase – Pro Bono Publico –which means ‘For the Good of Public’.
Social advertising is also referred to as Public Service Advertising. Any advertising done for the social welfare of the society can be considered as social advertising.
Aspects of Pro Bono Advertising:
1. Purpose: The social advertising is undertaken to create awareness among the masses in respect of various social issues and concerns that affect the welfare of the society. The social campaigns make an attempt to educate the public about the negative effects of certain issues. It makes an attempt to highlight the ways and means to overcome the negative tendencies prevailing in the society, which in turn may lead to welfare of the society.
2. Area Coverage: The pro bono advertising can be done through the nation. It can be also done in a particular region or area depending on the nature of the campaign.
3. Target Audience: The prop bono campaigns are targeted to the masses. The social advertising campaigns can be targeted to all members of the society belonging to different age groups, gender, income, occupation, cultures, etc.
4. Type of Copy: Mostly hard sell copy is used to convey the social message to the audience. The ad may highlight the negative aspects of certain customs, traditions, or practices. For instance, an anti-noise pollution campaign can highlight the negative aspects of noise on the society and on the environment.
5. Personalities: The advertisers may use personalities or celebrities to create a better impact on the audience. For instance, the Govt. Of India selected Mr. Amitabh Bachchan for the ‘Pulse Polio Campaign’.
6. Sponsors of Social Advertising: Anyone who has the funds and the inclination towards social good can undertake social advertising. Normally, large business firms like the Tata Group of Companies undertake social advertising. Also NGOs and Govt. Organisations undertake public service advertising campaigns.
7. Media Used: Any media can be used that can reach the target audience. For instance, a campaign on “Don’t Drink & Drive” can be placed in any possible media such as radio, newspapers, magazines, TV, outdoor, etc. The media-mix depends on the availability of funds with the sponsor.
8. Types of Advertising: The social advertising can be classified into two groups as follows:
(a) Public Service Campaigns: Public service advertising deals with social and cultural issues. Such issues are dealt with the intention of improving public welfare. Examples of such public welfare campaigns include:
- Anti-drugs / anti-smoking campaigns.
- Literacy campaign.
- Anti-noise or dirt pollution campaign.
- Family planning / welfare campaigns.
- Concern for the girl chid campaign.
- Anti-dowry and anti-child marriages campaign.
- Child immunization campaigns, etc.
(b) Social cause Advertising: Advertising facilitates cause-marketing. Cause marketing attempts to link a company to some social or charitable cause. Advertising can help to promote the cause-marketing efforts. For example, a business firm may be concerned with the development of education in tribal area, and a part of its profits may be spent on such development. Advertising can promote the cause-marketing by highlighting that a part of its profits will be utilised for such social cause activity.
MGNREGA – Mahatma Gandhi National Rural Employment Guarantee Act is an Indian job guarantee scheme enacted by legislation on August 25, 2005. The scheme aims all enhancing the livelihood security of people in rural areas by guaranteeing hundred days of wage-employment in a financial year to rural household whose adult members volunteer to do unskilled manual work.
Directorate of Advertising and Visual Publicity (DAVP) is the nodal agency of the Government of India for advertising by various Ministries and Organisations of Government of India including public sector undertakings and autonomous bodies.
Vision of DAVP
To communicate important social advertising messages in an effective manner, to empower the lives of the country’s citizens, and the one-step agency for the advertising needs of all Central Government bodies all over the country, be it print, audio-visual, outdoor or emerging media, and to provide services in a professional, responsive and quality-driven manner, at media-buying rates which are the most competitive in the market.
Role of DAVP
At DAVP, we provide solution for the paid publicity requirements of all Central Government organizations, PSUs or Government Societies. Depending on the Client’s target audience, and his budget, a range of media are used, ranging from the conventional, like newspapers, TV and radio channels, or Outdoor publicity options such as hoardings, messages on Railway Platforms, etc.
DAVP undertakes various social awareness campaigns under the series titled as “Bharat Nirman”. The various campaigns focused on the following aspects:
- Children Immunization,
- Right to Education,
- Drinking Water,
- Empowerment of Scheduled Castes,
- Mahatma Gandhi National Rural Employment Guarantee Act,
- Integrated Child Development Scheme,
Benefits of DAVP Campaigns:
The DAVP campaigns bring certain benefits to the member of the society:
1. Awareness: The DAVP campaigns create awareness of the various facilities provided by the Government to the public such as drinking water facilities, employment facilities under MGNREGA etc. They also highlight certain issues or concerns which the society needs to pay attention.
2. Social Development: The DAVP campaigns can bring about social development in the country. For instance, the campaigns on health and education can improve literacy rate, life expectancy and also result in family welfare. Education and life expectancy are the two main indicators of social development.
3. Empowerment of Weaker Sections: The DAVP campaigns may highlight the special facilities and benefits available to the weaker sections such as scheduled castes, scheduled tribes and others. Therefore, these campaigns bring out social empowerment of the weaker sections.
4. Standard of Living: DAVP campaigns highlight the employment facilities available under MGNREGA and other schemes. Therefore, people in villages and in semi-urban areas get employment. Increase in employments result in increase in income level. The increase in income leads to higher purchasing power. The higher purchasing power facilitates higher consumption of goods and services, which in turn results in improvement in standard of living.
Self-Regulatory body- Role of ASCI (Advertising Standard Council of India)
Self regulation laws
Self regulations laws refer to standards and / or codes that provide guidelines for ethical and professional conduct of advertising.
The codes / standards have been laid down by various authorities such as:
- Advertising Standards Council of India (ASCI),
- Indian Newspaper Society (INS),
- Doordarshan,
- Advertising Agencies Association of India (AAAI),
The Standards or Codes have been adopted in order to guide the following:
- The advertisers,
- The publications / media,
- The advertising agencies.
Main highlights of self regulation laws:
- Unethical ads to be done away with.
- Those who do not follow the code / standards are at a disadvantage. The member publishers of INS lose their accreditation. The advertising agency has to withdraw the campaign and so on.
- Consumers are protected against the misuse of untruthful ads.
- Decency is generated as offensive and vulgar ads are done away with.
- Generates health and fair competition in the market among different sellers.
- Advertisers cannot make statements directly or indirectly about competitors or their products that may mislead of confuse consumers.
- Indiscrimate use of advertising for the promotion of products which are regarded as hazardous to society are not accepted by media. For instance DD does not allow to advertise liquor and cigarettes on TV.
- Advertisements which might result in mental, physical or moral harm to children are banned.
- Self-regulation laws make the advertisers, ad. Agencies and the media more responsible in carrying out their duties in the field of advertising.
Role of ASCI
The Advertising Standards Council of India (ASCI), established in 1985. The ASCI was formed with the support of all four sectors connected with Advertising. The ASCI is not a Government body, but it is a voluntary self-regulatory council, registered as a not-for-profit Company under section 25 of the India Companies Act. Its main objective is to promote responsible advertising; thus enhancing the public’s confidence in Advertising. ASCI thus aims to achieve its overarching goal i.e., to maintain and enhance the public’s confidence in advertising.
The ASCI was set up to perform the following tasks:
- Truthfulness in Advertising: ASCI performs its role through its Consumer Complaints Council. The CCC ensures the truthfulness and honest of the claims made by the advertisers in the advertisements. It safeguards the consumers against misleading advertisements. The code framed by ASCI clearly states:
- Advertisements must be truthful. All descriptions, claims and comparisons which relate to matters of objectively ascertainable fact, should be capable of substantiation.
- Where advertising claims are expressly stated to be based on, or supported by independent research or assessment, the source and date of this should be indicated in the advertisement.
- Advertisements shall not be so framed as to abuse the trust of consumers or exploit their lack of experience or knowledge. No advertisement shall be permitted to contain any claim so exaggerated as to lead to grave or widespread disappointment in the minds of consumers.
- Advertisements shall not distort facts nor mislead the consumer by means of implications or omissions. Advertisements shall not contain statements or visual presentations, which directly or by implication or by omission or by ambiguity or by exaggeration are likely to mislead the consumer about the product advertised.
- Non-Offensive Ads: The CCC ensures that advertisements are not offensive to generally accepted standards of public decency. The ASCI Code clearly states “Advertisements should contain nothing indecent, vulgar or repulsive, which is likely in the light of generally prevailing standards of decency and property, to cause grave or widespread offence.”
- Safeguards Against Indiscriminate Use of Advertising: The ASCI safeguards against indiscriminate use of advertising in situations or for the promotion of products, which are regarded as hazardous to Society or to individuals. The ASCI code clearly states:
- No advertisement shall be permitted which:
- Tends to incite people to crime or to promote disorder and violence or intolerance.
- Derides any race, caste, colour, creed or nationality.
- Adversely affects friendly relations with a foreign country.
- Advertisements addressed to children shall not contain anything, whether in illustration or otherwise, which might result in their physical, mental or moral harm or which exploits their vulnerability.
- Advertisements shall not, without justifiable reason, show or refer to dangerous practices or manifest a disregard for safety or encourage negligence.
- Advertisements should contain nothing, which is in breach of the law, or omit anything which the law requires.
- Advertisements shall not propagate products, the use of which is banned under the law.
4. Fairness in Competition: The ASCI ensures fairness in competition. The ASCI ensures that the consumers are informed on the choices at the market place. IT also ensures that business firms follow the canons of generally accepted competitive behaviour and not adopt unfair practices.
5. Responsibility of the Advertisers: The ASCI has fixed responsibility of advertisers to observe its code. As the advertiser initiates the advertising brief and sanctioned its placement in the media, the advertiser carries full responsibility for the observance of the ASCI Code. The advertiser is responsible for the entire content of the ad. Therefore, the ASCI performs an important role to ensure that the advertisers are held responsible if anything is misleading or unethical in their ads.
6. Responsibility of the AD agencies: The ASCI has fixed responsibility of the ad agencies to observe its code. Ad agencies are made responsible to ensure the observance of ASCI Code in as much as the facts are know to them, i.e., to advise their clients in accordance with the code.
7. Responsibility of Media Owners: ASCI has fixed responsibility of the media owners to observe its code. Media owners must view each ad offered to them for publication from the viewpoint of the code. IF any ad is considered by the media owners to be in contravention of the code, the media owner shall refer the matter to CCC of ASCI. Ads found by the CCC to be in violation of the code shall be refused for publication by media owners.
8. Responsibility of Celebrities: The Advertising Standards Council of India (ASCI) issued a series of sweeping guidelines in April 2017 on celebrity advertising. The guidelines are aimed to finally claim down on random or exaggerated claims made by celebrity advertising. The guidelines must be strictly followed by actors, sports people, doctors, authors, activists and educationists.
Key takeaways-
- Social advertising is also called as Pro Bono advertising.
- ASCI main objective is to promote responsible advertising; thus enhancing the public’s confidence in Advertising.
- Self regulations laws refer to standards and / or codes that provide guidelines for ethical and professional conduct of advertising.
- At DAVP, we provide solution for the paid publicity requirements of all Central Government organizations, PSUs or Government Societies.
Sources-
- The advertising concept book by Pete Berry
- Tested advertising methods by Jon Steel
- Scientific advertising by Claude C Hopkins
- Truth, lies and advertising by Jon Steel
