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Advertising

Advertising

I. Economic AspectsLester G. Telser

BIBLIOGRAPHY

II. Advertising ResearchCharles K. Ramond

BIBLIOGRAPHY

I ECONOMIC ASPECTS

As more resources are spent on advertising, there is increasing controversy about its consequences. Only the economic aspects of advertising, however, are within the scope of this article. First, we will give some facts about the use and importance of advertising as a means of promotion; the data relate mainly to the United States, but we will also cite some figures for the United Kingdom and Canada. Second, we will show why firms use advertising. We will then discuss how advertising affects price competition and the size of firms and why advertising is used in the Soviet Union. Finally, we will consider those communications media that depend on advertising as their major source of revenue and discuss the relation between advertising and consumer sovereignty.

Scope of advertising

In 1960 total advertising outlays in the United States were estimated to be about $12,000 million, which was 2.3 per cent of gross national product (GNP). Since in 1947 advertising was 1.8 per cent of GNP, there is a slight upward trend in the post-World War II period. However, too much should not be made of this evidence. It covers a short period of time, advertising figures prior to 1935 are unreliable, and the figures just preceding World War II show that the relation between advertising and GNP was about the same as in the late 1950s (Blank 1963).

In 1954 Canadian advertising outlays were 1.6 per cent of GNP, and comparable figures for the United Kingdom are of the same order. In both of these countries advertising outlays constitute a smaller percentage of either GNP or national income than they do in the United States. So far as can be judged from the limited data available, advertising is a less important means of promotion in most other countries than it is in the United States.

There are four major channels of advertising. The printed media, such as magazines and newspapers, contain both advertising and editorial material and are sold directly to the public. The audio–visual media, such as television and radio, are supported primarily by advertising receipts. These media do not, in many countries, collect fees directly from the public. Instead, they aim to attract an audience for advertisers by providing the public with free entertainment. Direct-mail and outdoor advertising attempt to attract the public’s attention and make direct sales appeals. In the United States in 1959, advertising in the printed media accounted for between 45 and 50 per cent of total estimated advertising expenditures. Television and radio received about 14 per cent and 6 per cent, respectively, of advertising expenditures. Direct mail accounted for 14 per cent of the advertising bill, and outdoor advertising was about 2 per cent. The remaining expenditures were on sale display, advertising departments, and the like.

Modern advertising began during the early part of the nineteenth century, after the cheap daily newspaper and the national magazine were introduced. Radio in the 1920s and television in the 1950s caused major changes in the composition of advertising outlays. As a result of these innovations, the cost per advertising message has sharply decreased and the number of advertising messages has risen more than would be implied by the increased dollar expenditures.

The ratio of advertising to sales differs considerably among products. Industrial products, which are purchased primarily by a relatively small number of firms, have a much lower ratio of advertising to dollar sales than do consumer products. Promotion of industrial products depends primarily on salesmen. The products advertised most heavily in relation to dollar sales in the United States in 1957 were toilet preparations (14.7 per cent of sales), drugs and medicines (10.3 per cent), and soaps (7.9 per cent).

Canadian figures that give advertising as a percentage of sales by product category are roughly the same as the U.S. figures. Moreover, a study of advertising relative to sales in 1940 and 1941 by the U.S. Federal Trade Commission (1944) shows that the ratios by product category in the United States are quite close to comparable figures for the year 1935 in the United Kingdom as shown by the Kaldor and Silverman study (1948). That the pattern of advertising outlay with respect to commodity is similar in all three countries is an important finding and deserves a fuller explanation than has so far appeared. Equally important would be an explanation for the differences among the advertising intensities of various products.

Why firms advertise

A correct but umlluminating explanation of advertising is that firms find it profitable. Advertising, however, is only one, and not even the most important, method of sales promotion. Although some products are promoted mainly by advertising, personal selling still accounts for the largest share of promotional outlays. Advertising is a much less labor-intensive method of promotion than are many alternatives for accomplishing the same end. Therefore, it is a technique well suited to sell those products that are, or can be, widely used and for which potential customers are not readily distinguished from the rest of the population. A firm deliberates over the same kinds of factors in allocating its funds to different advertising media as in allocating funds to other methods of sales promotion.

For an understanding of why firms advertise, it is helpful to see how advertising affects sales. Advertising affects sales in two stages. In the first stage a firm buys space in the press or time on television in order to convey advertising messages that create awareness in potential customers. In the second stage these advertising messages induce sales with varying degrees of effectiveness. In order to determine its advertising budget a firm must both decide how many advertising messages of each type it should buy and estimate their effectiveness.

The audience of an advertising medium approximates the number of advertising messages that can be received via that medium. For printed media, such as magazines or newspapers, the paid circulation gives a first approximation of the audience. However, the readership of a newspaper or magazine may exceed the circulation, and, conversely, the number of readers who take note of the advertising may fall short of the circulation. Thus, paid circulation is at best only an approximation to the number of advertising messages received via a printed medium. The audience of a television or radio program is harder to estimate, and special research techniques have been devised for this purpose. Audience size (along with composition) is one of the key determinants of advertising rates. Given this information about an advertising medium, a company can calculate the cost and estimate the effectiveness of advertising messages conveyed by that medium.

The number of advertising messages is the relevant physical measure of the quantity of advertising. This is why advertising per dollar of sales is not always a reliable measure of the quantity of advertising. The absolute advertising outlay and the number of messages transmitted may be very large although the ratio between advertising expenditure and sales is very low. For example, advertising as a percentage of sales is very low for automobiles. However, in 1957 U.S. consumers received nearly $400 million of automobile advertising messages, half from auto manufacturers and half from auto dealers.

Advertising messages can be effective indirectly. Thus, potential customers can learn about products, even though not directly exposed to advertising messages, by hearing about these products from others. By a chain reaction, advertising messages can stimulate transmission of a sizable volume of information (Katz & Lazarsfeld 1955; Ozga 1960).

The preceding analysis explains some dynamic aspects of advertising. There is typically a delayed response to advertising for several reasons. First, many of the advertised products are not of great importance to consumers; thus, a certain amount of repetition or redundancy is necessary to create awareness of the product. Advertising in smaller amounts is not likely to pass the threshold of awareness and, therefore, is likely to be ineffectual. Second, in addition to the problem of making consumers aware of the product, there is the further problem of overcoming their inertia. Although inertia increases the delay between advertising messages and sales, it also makes the effects of advertising persist beyond the time the messages are disseminated. Thus, advertising expenditure can be thought of as an investment to create an asset—sometimes called good will. This asset yields a return for some period of time, it depreciates like a capital good, and it requires maintenance. The marginal rate of return on advertising, as well as the rate of depreciation, can be calculated. Nerlove and Arrow (1962) provide theoretical analysis and Telser (1962) shows empirical results along these lines.

This approach to advertising has several implications. First, we can expect new products to be more heavily advertised than established products. Second, continuous advertising of established products is necessary because new consumers enter the market and others either leave it or forget about the product. Third, in an expanding economy there will be relatively more advertising than in one that is stable or declining.

Advertising versus price competition

One of the criticisms of advertising is that it is wasteful. If firms compete by offering to sell at low prices, then buyers benefit. Such competition among sellers results in products of given quality being sold at the lowest price. However, it is argued, if sellers compete for customers by advertising, then buyers do not benefit by obtaining a lower price; on the contrary, they pay a higher price to reimburse the sellers’ advertising expenses. In its crude form this argument has little merit; if some buyers do not wish to purchase advertised goods, there will generally be sellers who find it profitable to cater to their demand. Then some buyers will seek out the lowpriced sellers who do not advertise, whereas other buyers will choose to pay higher prices for well-known goods.

A more sophisticated version of the argument that advertising may increase prices assumes that by advertising, a company can reduce the elasticity of demand for its product [seeElasticity]. Advertising can change the character of the demand so that customers become less sensitive to price and the advertiser obtains a loyal clientele. This makes possible higher prices and larger profits. Whether advertising can as a matter of fact create brand loyalty is not known with certainty although it is a possibility. There is some evidence worth bringing to bear on this question. We noted above that toilet preparations are the most intensively advertised consumer articles. If advertising tends to create brand loyalty, market shares of cosmetics and similar products should be more stable than market shares of less advertised items, such as branded food products. However, a study of the four leading brands of each of a number of articles in these two product classes over a 13-year period showed that market shares of toilet preparations were markedly less stable than were shares of branded foods. There was, in addition, a substantial turnover of brands in the toilet-preparation class. Because new brands are advertised much more intensively than are established brands, the high ratio, among toilet preparations, of advertising to sales may reflect the short life and high turnover of brands rather than brand loyalty. If this is true, the high intensity of cosmetics advertising results from the lack of brand loyalty to such products as compared with branded food items.

It is by no means obvious that advertising necessarily reduces the price elasticity of demand. Increased advertising may bring a firm new customers whose preferences for the product are weaker than those of the old customers. The new customers are consequently more sensitive to price, and the increased advertising thus increases the price elasticity. Although advertising by a given firm may reduce the price elasticity for its goods by strengthening preferences, competitive advertising has the opposite effect. On balance, increased advertising may increase price elasticity.

Advertising can intensify competition among retailers, thereby reducing retail prices. Since shoppers can compare the various retail prices of a well-known brand at different stores more easily than they can those of a nonstandard item, competition is keener among retailers selling the well-known item. This forces the retail prices of advertised articles closer to invoice costs. Retailers’ advice influences consumer choice of nonstandard items more than the choice of advertised articles. Hence, advertised goods need less promotion at the point of purchase. As a result, the character of both retailing and wholesaling has changed markedly. Sales personnel can be less skilled, and discount houses and self-service stores have become feasible.

Advertising and the size of firms

Defenders of advertising often claim that advertising, by creating mass markets, makes it possible to produce goods at lower unit costs. It is doubtful that this claim is supported by the evidence available. First, many companies that rely heavily on advertising operate plants of different sizes; this is inconsistent with production economies of scale. Second, there are many industries in which a few firms are quite large but which use little advertising; examples of these are to be found primarily among producers of industrial goods. Third, as was noted above, there are some heavily advertised commodities manufactured primarily by small firms; the leading examples are toilet preparations.

There are, however, certain important producers of consumer goods who are heavily dependent on advertising and account for sizable fractions of their industry sales. Examples are producers of breakfast cereals, soaps, automobiles, cigarettes, razors and razor blades, soft drinks, canned soups, baby foods, and distilled liquor. To sum up, there is considerable evidence against the general proposition that advertising, by expanding the market, makes it possible to lower unit costs, and some evidence to support the idea that in some industries, high concentration of output is associated with considerable advertising.

An understanding of the association between advertising and concentration in the industries just cited begins with an examination of the advertising rate schedule. Advertising rates rise as audience increases, but less rapidly. This can give the national advertiser of a given product an advantage over the local advertiser, because the former has a lower promotional cost. The cost advantage to the large firm makes the growth of the small firm more difficult. In addition, sales may rise more rapidly in response to advertising expenditures over some range. If this is true, it reinforces the tendency brought into play by the structure of the advertising rates. For these reasons some firms will make and advertise a large number of consumer goods in order to obtain the savings of largescale advertising. Certain large firms in the food and drug industries owe their size in part to these economies.

Advertising in the Soviet Union

Many of the effects of advertising stand out more clearly in the light of the Soviet Union’s experience with forgoing the use of both trademarks and advertising. Because of adverse experience with this policy, the Soviet Union has come to encourage advertising and the use of brand names. Its reasons for abandoning the old policy and adopting the new are very instructive. First, anonymous producers had less incentive to maintain quality because shoddy goods were not so easily identified by consumers. The government can now shift some of the burden of quality control to factories that are forced to trademark their products and can lose customers if their goods prove unsatisfactory. Second, when advertising is encouraged, information about new goods is disseminated more rapidly, and innovations are stimulated. Because in the past it was not possible to use advertising to generate demand for new products, the incentive to contrive new products was discouraged. Third, a more efficient marketing system, which conserves scarce resources of the state as well as saving the consumer’s time and trouble, is made possible by the use of advertising. Thus, the Soviet Union can now use self-service stores and distribute a given volume of goods with a smaller amount of labor. Goldman (1960) contains a careful account of Soviet advertising experience.

Advertising and the communications industry

In the United States, the broadcasting industry receives virtually all of its revenue from advertisers. Newspapers and periodicals obtain some two-thirds of their revenue from advertising and the balance from sales and subscriptions. Clearly, a substantial part of the entertainment and news provided the public in the United States is paid for directly by advertisers and only indirectly by the public. This creates concern about the quality of the entertainment and the degree to which it reflects the public’s taste. There is, in addition, the question of whether advertising affects freedom of the press. Finally, because most television advertising in the United States is purchased by relatively few companies and only three national networks exist, there are some special problems of economic policy with regard to regulation of the industry.

The public registers its taste for drama and motion pictures directly, by the purchase of tickets to those it likes. Producers have a direct financial incentive to cater to public taste. Although viewers and listeners do not pay directly for radio and television programs, it cannot be doubted that similar considerations guide the producers of these programs. Since advertisers desire large audiences and are willing to pay more for them, producers of radio and television shows have strong incentives to provide what they expect will be popular. The reason the cost of radio and television entertainment is not collected directly from the audience is the economic fact that it is cheaper to collect this cost from advertisers. If certain experiments with closed-circuit television prove successful, direct collection from viewers will make subscription television a profitable enterprise. Yet it is by no means obvious that advertising would be absent from subscription television. People buy magazines and newspapers directly, and both these media contain advertising. Newspapers that did not include advertising have either changed their policy or failed. Aside from the absence of advertising revenue, this suggests that people demand certain kinds of advertising.

There is still more direct evidence that people want certain kinds of advertising. Newspaper advertising rates have always been lower for local advertisers than for national advertisers. Since the cost to a newspaper of local advertising is, if anything, higher than the cost of national advertising, and since national advertisers have several alternatives not available to local advertisers, this phenomenon has mystified students of advertising for a long time. Ferguson (1962) provides an explanation. Most of the local advertising gives newspaper readers information about goods available from local retailers and about the terms of sale. Newspaper readers are as eager to learn about these matters as about news. Hence the more advertising of this kind a newspaper contains, the larger its circulation. Therefore, local advertising rates are lower than those for national advertising, which generally does not have the same stimulus on circulation. Perhaps the communications media would freely carry items as news about consumer goods and services if there were no advertising, just as they now review books and motion pictures.

Partly for these reasons, the more sophisticated critics of advertising take the position that advertisers and television producers cater unduly to popular taste and do not experiment boldly enough with higher art forms. Because there are only three major television networks in the United States and few television channels per city, these critics maintain that the desire to reach a maximum audience leads television producers to undue similarity and slavish imitation of what has proved to be popular. Minority audiences are ignored, and the television fare is reduced to a low, vulgar common denominator. It is one thing to argue that intellectuals cannot find suitable fare on television because it never pays an advertiser to try to attract this audience, an extreme position without empirical support; it is another to argue that serious intellectual programs should be provided during the evening hours and on the days when the potential audience is largest. It would be profitable for advertisers to cater more to minority tastes than they now do if there were more commercial television stations per city and if subscription television became a profitable enterprise. Nevertheless, even if both of these developments occurred and increased variety became possible, it would be naive to expect too much. Since there are fashions in novels and in movies, we should not expect less conformity of television programs.

Both radio and television depend on a relatively small number of firms for a substantial part of their advertising revenue. The 20 largest network television advertisers account for more than 22 per cent of network advertising receipts, and the 20 largest spot television advertisers account for nearly 14 per cent. By way of comparison, the 20 largest newspaper advertisers contribute less than 6 per cent of newspaper advertising revenue. Since there are only three national networks, it is safe to conclude that advertising rates for the largest firms are not arrived at by a purely competitive process. The Federal Communications Commission licenses all television and radio stations and limits the number of stations any one company, or network, may own. The public would benefit more from a larger number of television stations per city than it would from regulation of advertising rates. The development of ultrahigh-frequency (UHF) television, for example, would, by increasing competition, lead to a greater variety of television fare, just as the advent of frequency modulation (FM) radio and the consequent opening up of more radio stations gave listeners a wider range of choice.

Defenders of advertising have claimed as one of its benefits that it makes possible a free press. There can be little doubt that if there could not be advertising in newspapers, the price of newspapers would rise considerably and the circulation would fall—not only for this reason, but also because an important kind of news, advertising, could not be published. Without advertising, broadcasting companies could not survive unless subscription radio and television became profitable. When there is a free press the public can hear a greater variety of views than when the press is controlled by the government. Truth is less easily concealed when conflicting views can be presented to the public. A government that supports and controls the news media, no matter how benevolent it is, cannot be trusted to give as much free expression as would unfettered competition among companies in the news industry, which depend on the public and advertisers for revenue.

Advertising and consumer sovereignty

A convenient assumption in textbooks is that consumers have given, and possibly sacrosanct, tastes and that firms cater to these. As a practical matter this is a myth. People are molded by the opinions and pressures of others from the moment of birth. Our role as consumers begins with what we learn from our parents and continues throughout our lives. Of course, advertisers serve their own interests when they try to get us to buy their wares. However, most people attempting to persuade others are often serving their own interests, and we must learn to be discriminating. A free society requires freedom of persuasion, including attempts to influence how people spend their money. Critics who claim that advertisers lie or induce people to buy things they do not need or to discard goods that are still serviceable overlook the fact that sales clerks can do all this just as effectively; these critics certainly exaggerate the power of advertising. Moreover, they ignore certain mundane but nevertheless important facts about advertising. For every advertiser who tries to persuade consumers to do a particular thing or to buy a particular item, there are others trying to persuade consumers to buy a rival product. In modern industrial society consumers can choose from an ever-increasing and ever-changing array of goods. Wise consumption is difficult under these conditions and demands a degree of skill not required of shoppers in a simpler economy. Efficient distribution in a society of rising real wages requires greater reliance on such labor-saving devices as the self-service store. Advertising is one of the promotional techniques that meets the requirements of efficient distribution. We can expect it to play an ever-increasing role in the developing economies of the world.

Lester G. Telser

[Other relevant material may be found inCommunication, mass; Market R>esearch.]

BIBLIOGRAPHY

Advertising Age: The National Newspaper of Marketing. → Published weekly since 1930.

Blank, David M. 1963 A Note on the Golden Age of Advertising. Journal of Business 36:33–38.

Borden, Neil H. 1942 The Economic Effects of Advertising,. Chicago: Irwin.

Canada, Dominion Bureau of Statistics 1956 Advertising Expenditures in Canada, 1954. Reference Paper No. 67. Prepared by the Merchandising and Services Section, Industry and Merchandising Division, Department of Trade and Commerce. Ottawa: Department of Public Printing and Stationery.

Ferguson, James M. 1962 The Advertising Rate Structure in the Daily Newspaper Industry. Ph.D. dissertation, Univ. of Chicago.

Goldman, Marshall I. 1960 Product Differentiation and Advertising: Some Lessons From Soviet Experience. Journal of Political Economy 68:346–357.

Harris, Ralph; and seldon, Arthur 1962 Advertising and the Public. London: Institute of Economic Affairs.

Kaldor, Nicholas 1950 The Economic Aspects of Advertising. Review of Economic Studies 18:1–27.

Kaldor, Nicholas; and SILVERMAN, RODNEY 1948 A Statistical Analysis of Advertising Expenditure and of the Revenue of the Press. Cambridge Univ. Press.

Katz, Elihu; and Lazarsfeld, Paul F. 1955 Personal Influence: The Part Played by People in the Flow of Mass Communications. Glencoe, III.: Free Press.

Nerlove, Marc; and Arrow, Kenneth J. 1962 Optimal Advertising Policy Under Dynamic Conditions. Economica New Series 29:129–142.

Ozga, S. A. 1960 Imperfect Markets Through Lack of Knowledge. Quarterly Journal of Economics 74:29–52.

Printers’ Ink: The Weekly Magazine of Advertising, Selling, and Marketing. → First published in 1888. Since 1954 one issue each year is a guide to marketing.

Stigler, George J. 1961 The Economics of Information. Journal of Political Economy 69:213–225.

Telser, Lester G. 1962 Advertising and Cigarettes. Journal of Political Economy 70:471–499.

U.S. Federal Trade Commission 1944 Advertising as a Factor in Distribution. Part 5 of Report on Distribution Methods and Costs. Washington: Government Printing Office.

II ADVERTISING RESEARCH

Advertising research is here defined as the study of that part of human behavior attributable to overtly paid-for communications. It is thus distinguished not only from the broader discipline of marketing research but also from kindred studies of aggregate purchasing behavior, economic concomitants of advertising, and communications not always or not overtly paid for. [For discussion of these fields, seeCommunication, mass; Consumers, article onconsumer behavior; Market research; Propaganda.]

As subject matter for the social sciences, advertising remains curiously neglected. Advertising has long been of importance and today accounts for at least one per cent of the national income of most highly industrialized countries (International Advertiser 1965), but it had no important place in economic theory until the 1930s. Advertising accounts for a major share of the promotional expenses of most firms but has not been extensively treated in any but the most recent microeconomic theories of the firm (Ramond 1964c, pp. 662–675). Advertising accounts for an undeniably larger and larger visible and audible part of world culture but as a sociological phenomenon has been described mainly by journalists. Advertising is a much-discussed influence on individual behavior but has interested psychologists only insofar as it can be studied in the experimental laboratory or used to illustrate the clinician’s theories of unconscious motivation. It is hardly surprising that there is no accepted theory of advertising.

The little known about how advertising works comes largely from research done since World War II by advertisers and advertising agencies in the United States, western Europe, and Japan. Most early studies remained unpublished. Until the establishment in 1960 of the Journal of Advertising Research (JAR), there was no means for exchange of ideas among all gatherers or users of this work. Since then some fifty or sixty reports of advertising research are published each year, mainly in the JAR.

Not all this research is beyond criticism. Much of it is done by practitioners whose training in the social sciences and ancillary disciplines has been acquired on the job. In the face of time and cost limitations, methodological standards relax, When this happens, advertising research often merits the charge (Forrester 1958) that it is itself nothing more than advertising.

The primary basis for these political considerations is the organizational structure of the advertising industry. Nowhere in business, perhaps, has accurate evaluation been so inhibited by the organizational structure of the process to be evaluated. Advertising is bought for a manufacturer by an agent, and this agency has usually been responsible for the evaluation of advertising effectiveness. Someone has remarked that this is like having the fuel salesman evaluate the furnace. The fact remains that it has not always been in the best interest of the advertising agency to institute adequate research designed to evaluate advertising effectiveness. The agency has little to gain and much to lose. Instead of such evaluative research, it typically performs only those studies which are necessary to aid its own current decision making and that of the client. Such research is done only when needed and can rarely be accumulated for future guidance. Thus, the ultimate promise of any type of research —its self-liquidation through accumulation of permanent knowledge—is almost by definition denied in the advertising realm.

As most advertising research is designed to aid some decision, it is possible to classify the types of research according to the decision each is designed to help make. For example, decisions about what to say come under the heading of motivation research; decisions about how to say it, under copy research; where, when, and how often to say it, media research; and how much to spend, sales research.

Motivation research

The postwar transition from a war production economy to a consumer economy heightened advertisers’ interest in the motives of their target audiences. By the early 1950s the business community had learned from clinical psychologists that consumers were governed in part by unconscious motives, or at least by motives they had trouble expressing to ordinary interviewers. Depth interviews, projective tests, and the other paraphernalia of the clinical psychologist became popular tools in advertising research. By 1955 the public became interested in whether it was in fact being sold by advertising against its will. Popular books exploited this fear on the part of the book-buying public and ultimately received a quiet rejoinder from more realistic students of human behavior. John Dollard, at the second annual conference of the Advertising Research Foundation, in a frequently anthologized paper entitled “Fear of Advertising,” said: Nor do I fear research into unconscious motives, sometimes called motivation research, as an important factor in mass subversion by advertising. My reasons are as follows: many unconscious motives are stark and ugly and cannot be used in advertising appeals. Furthermore, unconscious motives are tricky; they are likely to come in conflicting pairs of desire and disgust, and one cannot evoke the desirable member of the pair without also evoking its linked opposite. It should be noted also that people are not immediately prone to carry out the unconscious motives which they do have. There are strong forces built into the personality which operate against most unconscious motives. Looking at the matter from a quite different standpoint, it has yet to be proved that unconscious motives can be steadily identified or that, if this were done, they are of superior effect in devising advertising themes. At the moment, the notion of using hidden factors in motivation to influence behavior on a mass scale is still in the status of a bright idea or a horrible fantasy, however you prefer to look at it; but it is not a reliable and valid instrument available to advertisers. (Dollard 1956, p. 7)

As public and professional expectations grew more realistic, motivation research gradually ceased to be regarded as the search for exploitable unconscious motives. Instead it became redefined more modestly as the study of those psychological variables which might be related to the consumer’s purchase of products or services. Put another way, motivation research became the study of relationships between the psychological attributes of a brand or product (its “image”) and the psychological attributes of the consumer (his “personality”). If markets can be segmented, so the argument runs, according to psychological as well as demographic variables, then it should be possible to fashion advertising appeals which are unusually effective in causing sales among the appropriate population segments.

Perhaps the largest body of data on which these hypotheses have ever been tested became available at the J. Walter Thompson advertising agency in 1959, when the Edwards Personal Preference Test was administered to a sample of over three thousand households (Koponen 1960). The Edwards test provided scores on 15 personality traits for the male and female head of each household, while a purchase diary indicated amounts and brands of various products purchased. A prior experiment had shown that a subgroup selected for its scores on certain traits bought more of a mail-order product than did an unselected control group, in response to a direct-mail advertisement using appeals designed specifically to satisfy that particular subgroup’s psychological needs. Neither group bought very much, however, and the results were deemed statistically significant but practically unimportant.

So, in fact, were the relationships found between personality variables and purchase behavior using the J. Walter Thompson data on beer, coffee, tea, and toilet tissue. Although brand loyalty, store loyalty, and amount purchased do correlate significantly with certain demographic and personality traits of the 8,900 subjects in the sample, these correlations are too small to give practical guidance. It seems safe to conclude that until more discriminating personality scales are developed, perhaps for the specific purpose of predicting purchase behavior, psychological market segments will not be significantly more useful to the advertiser than demographic market segments.

Copy research

Having learned the needs of his prospects and chosen general appeals or themes by which to reach them, the advertiser must then determine how best to execute those themes. Which copy, headlines, illustrations, music, etc., will best communicate his message? Studies answering questions of this sort have traditionally made up the bulk of advertising research and are still called —even in the age of television—copy research.

Reviews and collections of recent copy research appear elsewhere (Lucas & Britt 1963; National Industrial Conference Board 1963; Twedt 1965). The common implication of many of these studies is that the respondent’s verbal testimony about exposure to advertising cannot be taken at face value. Commercial services report the proportion of a sample who on being shown an advertisement claim to have noted it (the recognition method) or who, on being shown a brand advertised in a magazine they have read, can “play back” enough of the advertisement to indicate convincingly that they have in fact seen it (the aided recall method). The simultaneous popularity and questionability of these techniques led to the largest purely methodological investigation ever conducted in copy research, the five-volume Printed Advertising Rating Methods Study, or PARM (Advertising Research Foundation 1956–1957). The PARM study found, among other things, that recognition scores did not decrease as the time since reading increased, as one would expect if memory loss were occurring. This suggests not that the respondent was “recognizing” the advertisement he had actually seen but the likelihood that this was the kind of advertisement he would have noted, given the opportunity. Other studies find that respondents claim to recognize control advertisements that they could not have seen. The extent of misclaiming was directly related to the respondent’s reports of past reading behavior, his interest in the product advertised, and other personal characteristics. It may be concluded that while these claims perhaps have some value as projective data describing the respondent, they are substantially useless as reports of prior exposure.

They may also be useless as predictors of future behavior. Haskins (1964), in a review of 28 studies, has shown that factual recall of advertising can change without corresponding changes in behavior or other attitudes. He concludes that what is retained by respondents may have nothing to do with their subsequent purchases. Ramond (1965) has shown that such failure of attitude change to predict or coincide with behavioral change may be an artifact of the methods commonly used to measure these changes.

As verbal behavior became increasingly suspect, nonverbal behavior became increasingly popular as a measure of copy effectiveness. Laboratory methods, themselves suspect for their artificiality, found increasing favor as they began to measure relatively involuntary responses to advertising. These included visual recognition, skin moisture, pupillary dilation, and even the rate at which someone would press a pedal to maintain a television picture and sound. No measure has been found completely free from conscious cognitive influences, but the trend of current copy research seems to indicate that such is the goal.

Media research

Having decided what to say and how to say it, the advertiser must then decide where, when, and how often to say it. Surveys and analyses that guide these decisions are known as media research and have as their aim the selection of the audiences for advertising placed in media. They should not be confused with studies that are intended to determine the audiences of only the media themselves.

A comprehensive bibliography of U.S. media research may be found elsewhere (Ramond 1964a), along with a comparison of U.S. and European approaches. For example, there is much variety and controversy in U.S. media research. In the United States no single method has been hammered out for use in an industry-wide study, whereas this has been done in France, Britain, and Sweden (Ramond 1964b). All of these studies have been influenced by the work of the Advertising Research Foundation’s (ARF) Audience Concepts Committee as expressed in its booklet, Toward Better Media Comparisons (Advertising Research Foundation . . . 1961). The committee maintains that to understand the transmission of advertising through media one must count or measure at six stages: vehicle distribution, vehicle exposure, advertising exposure, advertising perception, advertising communication, and consumer response— usually sales.

Vehicle distribution is a count of things, namely, the number of physical units through which advertising is distributed. In broadcast media these are receiving sets in use; in print media, number of copies sold.

Vehicle exposure is a count of people, those whose open eyes or ears were confronted by the vehicle: for broadcast media, by the ongoing program; for print media, by the open page.

Advertising exposure is a count, not of things or people, but of events. These events are also confrontations of open eyes or ears by a turned-on set or an open page, but only where the set or page is carrying a commercial or advertisement.

The fourth, fifth, and sixth stages of the model are perception, communication, and response. There is both a conceptual and an operational difference between these stages and the previous three.

Distribution and exposure measures can in principle be—and have in practice been—objectively defined to the satisfaction of many if not all. In dealing with perception and communication of advertising, however, we face the problem of separating the effect of the medium from the effect of the advertising message itself. So far no research supplier has come forward with any measure of these stages which is as objective, repeatable, and intuitively compelling as those of distribution and exposure.

Actually, perception and communication may be defined by an infinite number of responses. Though a perception may be defined as that which is seen, heard, or in some way received by a sense organ, our knowledge of whether it has been received must be derived from the response of the receiving person. He must somehow translate his private observation into a public gesture. Reports of recognition, recall, or attitudes are possible classes of responses which might define perception or communication of advertising. But note that whatever definition is used, it will require not only that the consumer see or hear the advertising but also that he remember something about it until he is asked to report it. Thus the number of possible definitions is further multiplied by the number of cues or aids to memory which could be used.

While the ARF Audience Concepts Committee made no recommendations concerning operational definitions of perception and communication, it did suggest a conceptual distinction. Perception is defined as an all-or-none phenomenon: it either occurs or does not occur. There are no degrees of perception.

But communication involves more than merely seeing an advertisement. For example, an advertisement can add to the consumer’s knowledge, change his attitude, or make him resolve to purchase the product advertised. It may change his beliefs, make some more prominent than others, or even evoke moods in which his judgments operate differently. Thus one must recognize degrees of communication. One may merely count perceptions, but one must measure communication in a more complex way. The goal in counting perceptions is to extract from each the effect of memory, but the goal in measuring communication is to learn the degree of remembering. Thus, although perception and communication differ conceptually, in practice they both require measures that isolate and distinguish the effect of advertisement-plusmedium from memory, and the effect of the advertisement from that of the medium.

We now come to the final stage of response to advertising, and from the advertiser’s point of view by far the most important. Response at this stage is necessary to justify any advertising at all. Other measures are satisfactory only insofar as they are related in some way to sales. However, sales are the outcome of a great many factors other than advertising. Not only are the personal factors, the attitudes, beliefs, perceptions, and so forth of each individual important, but external factors such as price, market conditions, changing tastes, etc., are also operative.

Theoretically, the way to estimate the sales response to an advertising unit is to arrange for tests with all factors that could possibly influence sales—except for advertising—held equal or randomized. In one area the advertising unit would be displayed, in the other it would not, and the difference in sales in the two areas would be measured. Practically, experiments of this kind turn out to be very difficult. In the first place, if we try to choose markets that are identical in all the relevant characteristics, we usually find some discrepancy between the markets on a variable which we feel sure will affect the outcome of the experiment decisively. Again, we may list what we think are the relevant variables in order to account for their effects, but we never know whether we have been able to identify them all. Even with an exhaustive list of market variables, we may find that the nature of our advertising unit is such that it may act differently in the two markets because of the different psychological characteristics of their inhabitants, or the differing media habits in the two markets. Perhaps the ultimate objection to research designed to attribute sales gains to single advertising units is the very small effect which any one advertising unit may have. Sales tests have been applied mainly to the evaluation of campaigns, not of individual messages.

Sales research

No amount of research into motivation, copy, or media will tell the advertiser what, if anything, his advertising has done to influence the sales of his product. For this information he must conduct sales research, wherein he isolates the contribution to sales of his advertising expenditures. Many advertisers have done so, in the United States and elsewhere, despite the difficulties enumerated in the previous section. The most comprehensive recent review and bibliography is Martin Mayer’s booklet for ARF, The Intelligent Man’s Guide to Sales Measures of Advertising (Mayer 1965). Others include Dominick (1960), the National Industrial Conference Board (1962), Palda (1963) and Ramond (1965).

Properly designed marketing experiments are used to avoid many of the above difficulties (Banks 1965). Proper design requires, among other things, that extraneous influences on sales be dealt with: controllable factors should be controlled; uncontrollable but measurable factors should be measured and accounted for statistically in the analysis; and enough experimental units should be used in each treatment to permit accurate estimates of their variability. From experiments published, we may conclude that when the following conditions are met the sales effects of advertising can be estimated with accuracy, speed, and economy:

(1) The product or the brand has no substitute now or in the foreseeable future. The number of competing products or brands is small, and it is unlikely to be made obsolete by technology during the period of experimentation.

(2) The buyers of the product or brand (a) can be unambiguously defined; (b) can be easily reached by advertising and interviewers; (c) are geographically concentrated; (d) are temporally concentrated—the shorter the selling season the better; (e) spend little time “in the market.”

(3) The lot size of the purchase is constant from purchase to purchase by the same buyer and the same from buyer to buyer.

(4) Price is constant over time, markets, amount purchased, etc.

(5) Channels of distribution are many. The more channels of distribution to the consumer the less likely he will be frustrated in an advertisinginduced attempt to buy.

(6) Levels of distribution are few. The more wholesalers, dealers, and distributors there are between producer and consumer, the more individuals who must decide before purchase can occur, and the more individuals who must be influenced by advertising.

(7) The influence of personal selling is constant over time and over markets.

(8) Technical services provided by competitors do not differ.

(9) The copy platform is constant and unambiguous. The fewer the copy points, the easier it is to tell if communication has occurred.

(10) Special promotions are not undertaken. (11) Packaging is distinctive and constant. (12) The producer is the only advertiser of the brand, i.e., there is no cooperative or local advertising.

(13) Competitors are slow to respond to changes in marketing strategy and maintain more or less the same marketing policies.

(14) Competitors’ advertising and marketing policies are relatively constant over markets.

(15) Potential sales can be accurately estimated for small geographical units, e.g., counties or census tracts, and during short time periods such as weeks or months. This follows from several of the previous desiderata.

(16) Government controls over product design, price, competition, and advertising are minimal or at least unchanging.

Clearly not all of these conditions can be met by most advertisers. Meeting them, moreover, does not guarantee a conclusive experiment but only the avoidance of certain common errors. Experimentation is increasingly popular, not because it always works, but because in many cases it is the only way to have a chance of getting unambiguous measures. In marketing as elsewhere in business, chance plays its inevitable role. Part of this role, however, can be made manifest by the experiment itself.

As published experiments accumulate, the conditions under which the sales effects of advertising can be accurately estimated will become clearer. Until then the prudent advertiser will determine for himself whether his own circumstances augur well or ill for this valuable form of marketing control.

Charles K. Ramond

[Directly related are the entriesConsumers; Market research. Other relevant material may be found inAttitudes, article onAttitude change; Communication, mass; Persuasion; Propaganda.]

BIBLIOGRAPHY

Advertising Research Foundation 1956–1957 A Study of Printed Advertising Rating Methods. 5 vols. New York: The Foundation.

Advertising Research Foundation, Audience Concepts Committee 1961 Toward Better Media Comparisons. New York: The Foundation.

Advertising Research Foundation 1965 Are There Consumer Types? New York: The Foundation.

Banks, Seymour 1965 Experimentation in Marketing. New York: McGraw-Hill.

Dollard, John 1956 Fear of Advertising. Pages 1-9 in Advertising Research Foundation, Proceedings of the Second Annual Conference. New York: The Foundation.

Dominick, Bennet A. 1960 Research in Retail Merchandising of Farm Products: Appraisal of Methods and Annotated Bibliography. Washington: U.S. Department of Agriculture, Market Development Research Division, Agricultural Marketing Service.

Forrester, Jay W. 1958 The Relationship of Advertising to Corporate Management. Pages 75–92 in Advertising Research Foundation, Proceedings of the Fourth Annual Conference. New York: The Foundation.

Haskests, Jack B. 1964 Factual Recall as a Measure of Advertising Effectiveness. Journal of Advertising Research 4, no. 1:2–8.

HRB-Singer, Inc., State College, Pennsylvania 1962 The Measurement and Control of the Visual Efficiency of Advertisements. New York: Advertising Research Foundation.

International Advertiser. → See especially 1965, Volume 6, no. 10.

Koponen, Arthur 1960 Personality Characteristics of Purchasers. Journal of Advertising Research 1:6–12.

Lucas, Darrell B.; and Britt, Steuart H. 1963 Measuring Advertising Effectiveness. New York: McGraw-Hill.

Mayer, Martin 1961 The Intelligent Man’s Guide to Broadcast Ratings. New York: Advertising Research Foundation.

Mayer, Martin 1965 The Intelligent Man’s Guide to Sales Measures of Advertising. New York: Advertising Research Foundation.

National Industrial Conference Board 1962 Measuring Advertising Results. By Harry D. Wolfe et al. New York: The Board.

National Industrial Conference Board 1963 Pretesting Advertising. By Harry D. Wolfe et al. New York: The Board.

Palda, Kristian S. 1963 Sales Effects of Advertising: A Review of the Literature. Journal of Advertising Research 4, no. 3:12–16.

Ramond, Charles K. 1964a Operations Research in European Marketing. Journal of Marketing Research 1, no. 1:17–24.

Ramond, Charles K. 1964b Trends in U.S. Media Research. European Society for Opinion Surveys and Market Research, Commentary (Special Supplement): 35–43.

Ramond, Charles K. 1964c Marketing Science: Stepchild of Economics. Pages 662-675 in Stephen Greyser (editor), The Marketing Concept in Action. Chicago: American Marketing Association.

Ramond, Charles K. 1965 Must Advertising Communicate to Sell? Harvard Business Review 43, no. 5:148–158.

Twedt, Dik Warren 1965 Consumer Psychology. Annual Review of Psychology 16:265–294.

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Advertising

Advertising


Over the course of the twentieth century, child consumers have played an increasingly important role in the economies of developed nations. Children's consumer clout is especially pronounced in the United States, where, according to early-twenty-first-century estimates, children spend or influence the spending of up to $500 billion annually. Advertisers in turn spend hefty sums to capture the consumer allegiance and nagging power of children. Thanks to the power of television, advertising to children in the twenty-first century has become a ubiquitous practice across the globe. It is, however, by no means a recent phenomenon.

A market for children's goodsbooks, toys, clothing, and furniturehad existed since at least the eighteenth century, but market awareness of children as consumers first emerged in the United States during the 1870s and 1880s, when national advertisers began supplying retailers with colorful trade cards and advertising jingle books based on parodies of Mother Goose rhymes. Corporations hoped that child shoppers would digest the advertising messages on the backs of trade cards and bring the advertisements to their mothers' attention, but advertisers' primary goal was to stimulate sales at the point of purchase. If a mother had neglected to specify a brand when she sent her child on a shopping errand, an alluring trade card displayed on a store countertop might decide the issue. Children prized trade cards for their luxurious color imagesa novelty made possible by advances in chromolithography printing. Collecting the cards in scrapbooks was a favorite childhood pastime, especially among girls. Advertisers encouraged this hobby by producing a set or series of collectible trade cards, and children reveled in the status that an unusual card or fine collection conferred on its owner.

At the turn of the twentieth century, the advertising trade largely dismissed children as members of the buying public, but readily embraced the notion that children constituted the future buyers of tomorrow. Theorists of advertising psychology such as Walter Dill Scott argued that buying was in-fluenced less by rational arguments than by unconscious decision making, including "suggestions" that advertisers implanted in the consumer's mind. The plasticity of young minds, Scott surmised, made children especially valuable targets of advertising. If repeatedly exposed to trademarks and brand names, children could, imperceptibly and unconsciously, acquire brand preferences that would last a lifetime.

Such psychological insights hardly constituted a revolution in children's advertising, but they did suggest, contrary to what some Victorians supposed, that the concept of a sheltered childhood was not inherently at odds with children's exposure to the world of commerce. The whole notion that children possessed a consumer consciousness long before they possessed purchasing power circulated broadly in turn-of-the-century advertising iconography. In magazine advertisements and trade cards read by adults and children alike, admakers depicted children as product endorsers, discriminating shoppers, and voracious consumers. These images traded on new cultural ideals of childhood that prized children as much for their spunk and savvy as their innocence.

These middle-class cultural ideals of the spunky child paved the way for even bolder departures in advertising during the 1920s. By then, advertisers conceived of middle-class children not just as buyers of tomorrow but as buyers of today and selling agents within the home. They recognized children as a more definable and viable group of consumers partly because modern childhood itself had become more organized around peer activities. Compulsory schooling, agesegregated classrooms, and the rise of youth organizations like the Boy Scouts and the Girl all elevated the salience of peer interactions. The fact that the Boy Scouts, Girl Scouts, and Camp Fire Girls published their own magazines provided advertisers a ready means of reaching boys and girls with common interests. Indeed, advertisers frequently capitalized on these peer affiliations by suggesting that their products could be used to earn scouting merit badges or enhance camping experiences. Transformations within the middle-class family also contributed to advertisers' enthusiasm for cultivating child consumers. Owing partly to their own middle-class backgrounds, admen and adwomen sensed new opportunities in the democratization of the urban middle-class companionate family, which unlike its Victorian predecessor, granted children greater latitude for self-expression and, in many cases, their own allotment of spending money.

Children's magazine publishers such as St. Nicholas, Boy's Life, and American Boy played an important role in promoting advertising to children as a worthy long-term and short-term investment. American Boy placed numerous ads in advertising trade journals, touting the exuberance of boy consumers and their influence over family purchasing, thanks in part to boys' expertise on new consumer technologies such as cars, radios, cameras, and batteries. AmericanBoy 's promotional efforts paid off handsomely. During the mid-1910s, American Boy began to swell with ads for bicycles, erector sets, rifles, and breakfast cereals. By 1920 annual advertising revenues for the magazine had reached half a million dollars. By the middle of that decade, American Girl and Everygirl's, magazines published respectively by the Girl Scouts and the Camp Fire Girls, had also attracted advertisers who sought both to cultivate the loyalty of future housewives and to boost present sales.

In the early twentieth century, advertisers and magazine publishers alike initiated numerous games, contests, and educational ventures to teach children an appreciation of advertising and train them in brand-conscious shopping. Publishers' investment in this project was at least as deep as advertisers' because magazines now depended more on advertising revenues than subscription sales for their survival. To gain credibility as a profitable advertising medium, American Boy and Scholastic, the national weekly for secondary school students, ran a series of columns explaining why their readers should trust in advertisers and the superior economic value of advertised goods over unbranded goods. Juvenile magazine publishers also won advertisers' confidence by sponsoring contests and games that trained children to pay close attention to advertising.

The public schools provided advertisers with another promising venue for raising brand consciousness. Though ostensibly limited by the conventional boundaries of the school curriculum, advertisers spared little effort in getting their messages into the classroom and via the classroom into the home. They offered free booklets, exhibits, charts, and other "enrichment" materials that promised to transform run-of-the-mill lessons into livelier fare. Because restrictive school budgets often curtailed the use of visual aids, teachers and teaching organizations proved remarkably receptive to corporate-sponsored innovations in the curriculum. In the late 1920s, for example, teachers in some 70,000 schools across the country used Cream of Wheat's graded contest devices, prizes, and breakfast charts to encourage regular consumption of hot breakfast cereals. Although editorialists criticized advertisers for diverting "school facilities to its own selfish purposes," schools provided no substantive counterpoint to the claims of modern advertising until the mid-1930s, when the consumer education movement got underway.

Early-twentieth-century juvenile advertisers struggled to strike the right balance in addressing children's desires and parents' concerns. Overt parental appeals that linked children's consumption to nutrition and achievement often appeared in children's advertising. Yet juvenile advertising in the 1920s and 1930s was remarkably bold in its efforts to empower children within a consumer democracy. Advertisements in children's magazines literally instructed children how to lobby their parents for new purchases, supplying them with sales ammunition that appealed to pressing parental concerns. While Canadian broadcast advertising trade guidelines in the 1970s advised advertisers not to "directly urge children to ask their parents to make inquiries or purchases," early-twentieth-century American advertisers exhibited no such compunctions (quoted in Kline 1993). With boldfaced headlines like "PleaseFatherPlease," advertisements routinely sanctioned begging and the old childhood standbybuttering up mom and dad.

During the interwar years, advertisers also sought to cultivate children's consumer loyalty and interest by addressing their concerns about popularity and personal appearance. As high school enrollments ballooned and adolescents began spending more time in the company of their peers, adjusting to the norms and expectations of age-based peers became an adolescent preoccupation. Even as they presented purchasable solutions to problems of peer approval and image control, advertisers exacerbated adolescent insecurities by reminding teens of their susceptibility to impersonal judgments. Advertisements for products like Postum cereal and Keds shoes encouraged a greater preoccupation with physical appearance in both boys and girls, but advertisers' messages to girls were especially contradictory. They celebrated the athletic girl as emblematic of the post-Victorian gender freedoms modern girls enjoyed, but they narrowed the scope of feminine aspirations and feminine achievement by making peer acceptance and beauty, rather than athletic performance, the ultimate rewards of bodily discipline. If girls purchased their product, advertisers repeatedly counseled, they were sure to garner more datesa reassuring promise in the newly emerging public culture of dating, where popularity was measured by the frequency and variety of dates one commanded.

With the advent of children's radio programs in the 1930s, advertisers, no longer limited to the typically urban, middle- and upper-middle-class readers of juvenile magazines, made children's consumer culture a truly national phenomenon. Millions of Depression-era children satisfied yearnings for autonomy and recognition when they joined radio-inspired clubs like Little Orphan Annie's Secret Circle or Post Toasties' Junior Detective Corps and received "free" premiums in exchange for proofs of purchase. Armed with secret passwords, decoding devices, and mysterious languages impervious to adult comprehension, children embraced the privileges of club memberships as a road to empowerment. Membership in such clubs, however, also afforded many children their first lessons in consumer disappointment, when long-awaited premiums failed to live up to advertisers' hype. Children exercised their own limited form of consumer payback in choosing cash contest prizes over dubious premiums and in mocking exaggerated advertising claims. Though some parents complained about broadcasters' advertising excesses, including their practice of inserting ad pitches into story lines, radio paved the way for perhaps even greater advertising intrusions in the television age.

During the postwar years, the spread of affluence and permissive child rearing in the United States gave children greater economic power, while the advent of television gave advertisers new means to reach children en masse. Despite some initial doubts about television's viability as an advertising medium, advertisers enthusiastically took to the airwaves once they became convinced that popular programs like The Howdy Doody Show and The Mickey Mouse Club could deliver a captivated audience. Radio, however, still had the greater impact on the youth market, as baby boomers accounted for eighty percent of rock and roll record sales during the 1950s.

Advertisers' investment in nurturing children's consumer appetites grew along with the expansion of children's own discretionary funds. In 1960, according to a survey by Seventeen magazine, the average teenage girl had a weekly income of $9.53. By 1999, the typical weekly allowance for thirteen-to fifteen-year-olds ranged from $30.50 to $34.25, with girls receiving on average three to four dollars more than boys. Supplementary earnings typically doubled the weekly yield for teenage boys and girls. Though younger children aged ten to twelve received only a modest five to six dollar boost to their weekly income from earnings, allowances on average swelled their weekly take by an additional twenty-one to twenty-two dollars. According to one 1996 estimate, allowances accounted for more than a third of the $89 billion in spending money at children's disposal. Children's collective consumer clout was weighty, indeed.

In the last two decades of the twentieth century, the barriers between children and the market all but disappeared in the United States. Not only did children's media consumption become more difficult to monitor in families with both parents in the workforcenow the American normbut parental restraints became more difficult to enforce. Parental acquiescence, of course, also contributed to the commercialization of childhood. Advertisers' work was made easier when many American children enjoyed personal televisions and computers with Internet access in their own private bedrooms. Still, the most vigilant parents could at best exercise limited control over children's exposure to commercial messages. Even in public schools, a morning viewing of the Channel One news service exposed children to a daily dose of commercials along with reports on current events. Indeed, what began as a marriage of convenience between under-funded public schools and advertisers in the 1920s grew into a virtually irresistible collaboration, thanks to the anti-tax movement of the last quarter of the twentieth century and voters' reluctance to approve school bond measures. Cash-strapped public schools welcomed the additional revenues an exclusive contract with soda companies could net millions, while a restricted arrangement with a computer company could yield a new supply of "free" computers. In return for their largesse, corporations were rewarded with an advertising venue that reached masses of children far more cheaply than television.

Children's advertisers have added some new spices to old recipes for marketing success. The tradition of weaving product endorsements into children's entertainment programming, a technique first perfected on radio, was taken to new lengths with the advent of toy-based television programs like The Smurfs, Strawberry Shortcake, and He-Man in the 1980sa marketing ploy the toy industry cynically defended by asserting that children needed preformulated story lines to help them play. This strategy also harkened back to the Depression-ridden 1930s, when toymakers revitalized sagging sales by creating licensed character toys that revolved around children's celebrity idols such as Mickey Mouse, Shirley Temple, Buck Rogers, and Superman.

Much like their early twentieth-century predecessors, contemporary marketers judge the effectiveness of children's advertising by the so-called "nag factor"the aim being to maximize the nag until the parental gatekeeper yields. But where earlier advertisers were more cautious about upsetting the balance of power within the familywinning parental goodwill, after all, was the goal of winning juvenile good-willlate twentieth- and early twenty-first century advertisers have pushed the limits of those boundaries. The promises of self-improvement and edification that appeased previous generations of parents have given way to a children's advertising culture in which hedonism, antiauthoritarianism, and kid power reign supreme. Today's kids, as Ellen Seiter puts it, are "sold separately," with appeals designed more to increase the nag factor than to placate the parental gatekeeper.

To acknowledge contemporary marketers' greater investment in creating a distinct children's fantasy culture, however, is not to romanticize the early twentieth century as some utopian moment in children's consumer culture. Far from it. The Pokemon fad of the 1990s, in fact, can be viewed as a direct descendant of the children's radio clubs of the 1930s. Just as the promise of special premiums from Little Orphan Annie and Jack Armstrong got children to pester their parents for more Cocomalt or Wheaties, the Pokemon craze led children to plead for the precious trading cards that would help them capture all 150 Pokemon characters, the mythical "pocket monster" creatures featured in the popular animated kids' television show and video game. While in each case clever market tie-ins with radio idols or popular television shows provided the building blocks for the craze, the appeal of joining a distinct kids' world fueled the fad. Radio club members decoded secret messages to which only their peers were privy, while Pokemon traders became experts in Pokemon lore, memorizing the names, special fighting skills, and point values of each Pokemon.

In the decades since the 1950s, this privileging of children's culture has contributed to greater age segmentation within the children's market. The often fuzzy distinctions between teenagers and children that typified advertising in the interwar years have evolved into clearly delineated categories ranging from toddlers to kids to 'tweens to teens. Marketers also expend more time and money gathering data about their various child audiences. Information formerly gleaned from contest data, children's advertising testimonials, and a smattering of personal interviews now comes to advertising agencies through the more scientific channels of surveys and focus groups. During the 1990s, advertisers found more deceitful means to acquire information about children's tastes by requiring children to provide critical personal dataincluding name, sex, age, e-mail address, favorite television show, and favorite musical groupbefore they could enter certain websites. In response to indignant parents and media watch groups, the Federal Trade Commission made it illegal in 1998 to solicit personal information from preteens online without parental permission. Nevertheless, children's advertisers still hold high hopes that the Internet's virtual mall might become as popular a hangout as the neighborhood shopping mall.

Although politicians and consumer advocacy groups have pressured media companies and advertising firms to exercise more restraint and responsibility in promoting violent products and films to children, these limited external controls have done little to rein in a capitalist culture resistant to infringements on free markets and commercial free speech. Indeed, savvy child consumers themselves have discovered avenues of resistance only within the parameters of consumerism itself. One of these avenues is Zillions, a magazine for kids published by Consumer Reports that teaches children the basics of product testing and comparative shopping. Children have also turned consumerism into a language of protest, marketing their own anticorporate sentiments through self-styled Internet zines (self-published magazines) and fashions. Yet such protests have not prevented advertisers from extending their global message. Thanks to rapid commercialization and China's one-child-only birth control policy, Shanghai's singletons have become sufficiently acculturated to consumer abundance and global tastes that they readily grasped the moral dilemma of Toy Story a Disney tale, told from the perspective of animated toys, about how easily children lose interest in a favorite old toy when a new one arrives. Consumerism paradoxically allows children more control over fashioning independent identities, but it also increasingly binds them to a global commercial culture.

See also: Consumer Culture; Media, Childhood and the.

bibliography

Cross, Gary. 1997. Kids' Stuff: Toys and the Changing World of American Childhood. Cambridge, MA: Harvard University Press.

Davis, Deborah S., and Julia S. Sensenbrenner. 2000. "Commercializing Childhood: Parental Purchases for Shanghai's Only Child." In The Consumer Revolution in Urban China, ed. Deborah S. Davis, pp. 54-79. Berkeley: University of California Press.

Forman-Brunell, Miriam. 1993. Made to Play House: Dolls and the Commercialization of American Girlhood, 1830-1930. New Haven, CT: Yale University Press.

Garvey, Ellen. 1996. The Adman in the Parlor: Magazines and the Gendering of Consumer Culture, 1880s to 1910s. New York: Oxford University Press.

Jacobson, Lisa. Forthcoming. Raising Consumers: Children, Child-rearing, and the American Mass Market in the Early Twentieth Century. New York: Columbia University Press.

McNeal, James. 1987. Children as Consumers: Insights and Implications. Lexington, MA: Lexington Books.

Palladino, Grace. 1996. Teenagers: An American History. New York: Basic Books.

Seiter, Ellen. 1993. Sold Separately: Parents and Children in Consumer Culture. New Brunswick, NJ: Rutgers University Press.

Lisa Jacobson

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Advertising

ADVERTISING

Advertising is often thought of as the paid, nonpersonal promotion of a cause, idea, product, or service by an identified sponsor attempting to inform or persuade a particular target audience. Advertising has taken many different forms since the beginning of time. For instance, archaeologists have uncovered walls painted in Rome announcing gladiator fights as well as rock paintings along Phoenician trade routes used to advertise wares. From this early beginning, advertising has evolved to take a variety of forms and to permeate nearly every aspect of modern society.

The various delivery mechanisms for advertising include banners at sporting events, billboards, Internet Web sites, logos on clothing, magazines, newspapers, radio spots, and television commercials. Advertising has so permeated everyday life that individuals can expect to be exposed to 1,500 to 3,000 different messages each day. While advertising may seem like the perfect way to get a message out, it does have several limitations, the most commonly noted ones being its inability to focus on an individual consumer's specific needs, provide in-depth information about a product, and be cost-effective for small companies.

FORMS OF ADVERTISING

Advertising can take a number of forms, including advocacy, comparative, cooperative, direct mail, informational, institutional, outdoor, persuasive, product, reminder, point-of-purchase, and specialty advertising.

Advocacy Advertising

Advocacy advertising is normally thought of as any advertisement, message, or public communication regarding economic, political, or social issues. The advertising campaign is designed to persuade public opinion regarding a specific issue important in the public arena. The ultimate goal of advocacy advertising usually relates to the passage of pending state or federal legislation. Almost all nonprofit groups use some form of advocacy advertising to influence the public's attitude toward a particular issue.

One of the largest and most powerful nonprofit advocacy groups is the American Association of Retired Persons (AARP). The AARP fights to protect social programs such as Medicare and Social Security for senior citizens by encouraging its members to write their legislators, using television advertisements to appeal to emotions, and publishing a monthly newsletter describing recent state and federal legislative action. Other major nonprofit advocacy groups include the environmental organization Green-peace, Mothers against Drunk Driving, and the National Rifle Association.

Comparative Advertising

Comparative advertising compares one brand directly or indirectly with one or more competing brands. This advertising technique is very common and is used by nearly every major industry,


including airlines and automobile manufacturers. One drawback of comparative advertising is that customers have become more skeptical about claims made by a company about its competitors because accurate information has not always been provided, thus making the effectiveness of comparison advertising questionable. In addition, companies that engage in comparative advertising must be careful not to misinform the public about a competitor's product. Incorrect or misleading information may trigger a lawsuit by the aggrieved company or regulatory action by a governmental agency such as the Federal Trade Commission (FTC; see the FTC's statement of policy regarding comparative advertising at http://www.ftc.gov/bcp/policystmt/ad-compare.htm).

Cooperative Advertising

Cooperative advertising is a system that allows two parties to share advertising costs. Manufacturers and distributors, because of their shared interest in selling the product, usually use this cooperative advertising technique. An example might be when a soft-drink manufacturer and a local grocery store split the cost of advertising the manufacturer's soft drinks; both the manufacturer and the store benefit from increased store traffic and its associated sales. Cooperative advertising is especially appealing to small-store owners who, on their own, could not afford to advertise the product adequately. For examples of cooperative advertising programs, see the John Wiley & Sons, Inc. (http://www.wiley.com/WileyCDA/Section/id-10671.html) and the New Mexico Department of Tourism (http://www.newmexico.org/go/loc/department/page/dept-coop-advertising.html) Web sites.

Direct Mail

Brochures, catalogs, flyers, letters, and postcards are just a few of the direct-mail advertising options. Direct-mail advertising has several advantages, including detail of information, personalization, selectivity, and speed. But while direct mail has advantages, it carries an expensive per-head price, is dependent on the appropriateness of the mailing list, and is resented by some customers, who consider it junk mail.

Informational Advertising

In informational advertising, which is used when a new product is first being introduced, the emphasis is on promoting the product name, benefits, and possible uses. Thus, informational advertising is used early in the product life cycle. Car manufacturers used this strategy when sport-utility vehicles were first introduced.

Institutional Advertising

Institutional advertising takes a broad approach to advertising, concentrating on the benefits, concept, idea, or philosophy of a particular industry. Companies often use it to promote image-building activities, such an environmentally friendly business practices or new community-based programs that it sponsors. Institutional advertising is closely related to public relations, since both are interested in promoting a positive image of the company to the public. As an example, a large lumber company may develop an advertising theme around its practice of planting trees in areas where they have just been harvested. A theme of this nature keeps the company's name in a positive light with the general public because the replanting of trees is viewed positively by most people. For example, the idea that "The Future Is Growing," is noted on the Weyerhaeuser (http://www.weyerhaeuser.com) Web site.

Outdoor Advertising

Billboards and messages painted on the sides of buildings are common forms of outdoor advertising, which is often used when quick, simple ideas are being promoted. Since repetition is the key to successful promotion, outdoor advertising is most effective when located along heavily traveled city streets and when the product being promoted can be purchased locally. Only about 1 percent of advertising is conducted in this manner. For more information on outdoor advertising, see the Lamar Advertising Company Web site at http://www.lamaroutdoor.com/main/home/default.cfm. Lamar Advertising Company is among the largest in the United States.

Persuasive Advertising

Persuasive advertising is used after a product has been introduced to customers. The primary goal is for a company to build selective demand for its product. For example, automobile manufacturers often produce special advertisements promoting the safety features of their vehicles. This type of advertisement could allow automobile manufacturers to charge more for their products because of the perceived higher quality the safety features afford. Both Ford Motor Company (http://www.ford.com) and General Motors Corporation (http://www.gm.com) provide extensive information regarding product safety on their Web sites.

Product Advertising

Product advertising pertains to nonpersonal selling of a specific product. An example is a regular television commercial promoting a soft drink. The primary purpose of the advertisement is to promote the specific soft drink, not the entire soft-drink line of a company.

Reminder Advertising

Reminder advertising is used for products that have entered the mature stage of the product life cycle. The advertisements are simply designed to remind customers about the product and to maintain awareness. For example, detergent producers spend a considerable amount of money each year promoting their products to remind customers that their products are still available and for sale. Reminder advertising is often used during the maturity stage of the product life cycle.

Point-of-Purchase Advertising

Point-of-purchase advertising uses displays or other promotional items near the product that is being sold. The primary motivation is to attract customers to the display so that they will purchase the product. Stores are more likely to use point-of-purchase displays if they have help from the manufacturer in setting them up or if the manufacturer provides easy instructions on how to use the displays. Thus, promotional items from manufacturers who provide the best instructions or help are more likely to be used by the retail stores. For more information regarding point-of-purchase advertising, see the Point-of-Purchase Advertising International Web site (http://www.popai.com//AM/Template. cfm?Section=Home).

Specialty Advertising

Specialty advertising is a form of sales promotion designed to increase public recognition of a company's name. A company can have its name put on a variety of items, such as caps, glassware, gym bags, jackets, key chains, and pens. The value of specialty advertising varies depending on how long the items used in the effort last. Most companies are successful in achieving their goals for increasing public recognition and sales through these efforts. For more information about specialty advertising, see the Specialty Advertising Association of California Web site (http://www.SAAC.net).

ADVERTISING OBJECTIVES

The objectives of advertising are to reach specific customers during a particular time frame and get them to buy a particular product. A company that advertises usually strives to achieve one of four types of advertising objectives: trial, continuity, brand switching, and switchback. Which of the four advertising objectives is selected usually depends on where the product is in its life cycle.

Trial

The purpose of the trial objective is to encourage customers to make an initial purchase of a new product. Companies will typically employ creative advertising strategies in order to cut through other competing advertisements. The reason is simplewithout that first trial of a product by customers, there will not be any repeat purchases.

Continuity

Continuity advertising is a strategy to keep current customers using a particular product. Existing customers are targeted and are usually provided new and different information about a product that is designed to build consumer loyalty.

Brand Switching

Companies adopt brand switching as an objective when they want customers to switch from competitors' brands to their brands. A common strategy is for a company to compare product price or quality in order to persuade customers to switch to its product brand.

Switchback

Companies subscribe to this advertising objective when they want to get back former users of their product brand. A company might highlight new product features, price reductions, or other important product information in order to get former customers of its product to switch back.

ADVERTISING BUDGET

Once an advertising objective has been selected, companies must then set an advertising budget for each product. Developing such a budget can be a difficult process because brand managers want to receive a large resource allocation to promote their products. Overall, the advertising budget should be established so as to be congruent with overall company objectives. Before establishing an advertising budget, companies must take into consideration other market factors, such as advertising frequency, competition and clutter, market share, product differentiation, and stage in the product life cycle.

Advertising Frequency

Advertising frequency refers to the number of times an advertisement is repeated during a given period to promote a product's name, message, and other important information. A larger advertising budget is required in order to achieve a high advertising frequency. Estimates have been put forward that a consumer needs to come in contact with an advertising message three times before it will be remembered.

Competition and Clutter

Highly competitive product markets, such as the soft-drink industry, require higher advertising budgets just to stay even with competitors. If a company wants to be a leader in an industry, then a substantial advertising budget must be earmarked every year. Examples abound of companies that spend billions of dollars on advertising in the United States alone in order to be key players in their respective industries (e.g., Ford Motor Company, Johnson & Johnson, and McDonald's Corporation).

Market Share

Desired market share is also an important factor in establishing an advertising budget. Increasing market share normally requires a large advertising budget because a company's competitors frequently counterattack with their own advertising blitz. For example, when General Motors Corporation initiated an employee pricing for everyone campaign, both DaimlerChrysler and Ford Motor Corporation established similar offers. Successfully increasing market share depends on advertisement quality, competitor responses, and product demand and quality.

Product Differentiation

How customers perceive products is also important to the budget-setting process. Product differentiation is often necessary in competitive markets where customers have a hard time differentiating between products. For example, product differentiation might be necessary when a new laundry detergent is advertised. Since so many brands of detergent already exist, an aggressive advertising campaign would be required. Without this aggressive advertising, customers would not be aware of the product's availability and how it differs from other products on the market. The advertising budget is higher in order to pay for the additional advertising.

Stage in the Product Life Cycle

New product offerings require considerably more advertising to make customers aware of their existence. As a product moves through the product life cycle, fewer and fewer advertising resources are needed because the product has become known and has developed an established buyer base. Advertising budgets are typically highest for a particular product during the introduction stage and gradually decline as the product matures.

SELECTING THE RIGHT ADVERTISING APPROACH

Once a company decides what type of specific advertising campaign it wants to use, it must decide what approach should carry the message. A company must decide on such items as frequency, media impact, media timing, and reach.

Frequency

Frequency refers to the average number of times that an average consumer is exposed to the advertising campaign. A company usually establishes frequency goals, which can vary for each advertising campaign. For example, a company might want to have the average consumer exposed to the message at least six times during the advertising campaign. This number may seem high, but in a crowded and competitive market, repetition is one of the best methods to increase the product's visibility and to increase company sales. The more exposure a company desires for its product, the more expensive the advertising campaign. Thus, often only large companies can afford to have high-frequency advertisements during a campaign.

Media Impact

Media impact generally refers to how effective advertising will be through the various media outlets (e.g., television, Internet, print). A company must decide, based on its product, the best method to maximize consumer interest and awareness. For example, a company promoting a new laundry detergent might fare better with television commercials rather than simple print ads because more consumers are likely to see the television commercial. Similarly, a company such as Mercedes-Benz, which markets expensive products, might advertise in specialty car magazines to reach a high percentage of its potential customers. Before any money is spent on any advertising media, a thorough analysis is done for each one's strengths and weaknesses in comparison to the cost. Once the analysis is done, the company will decide which media outlet is best to use and will embark on its advertising campaign.

Timing

Another major consideration for any company engaging in an advertising campaign is when to run the advertisements. For example, some companies run ads during the holidays to promote season-specific products. The other major consideration for a company is whether it wants to employ a continuous or pulsing pattern of advertisements. Continuous refers to advertisements that are run on a scheduled basis for a given period. The advantage of this tactic is that an advertising campaign can run longer and might provide more exposure over time. For example, a company could run an advertising campaign for a particular product that lasts years with the hope of keeping the product in the minds of customers.

Pulsing indicates that advertisements will be scheduled in a disproportionate manner within a given time frame. Thus, a company could run thirty-two television commercials over a three- or six-month period to promote the specific product is wants to sell. The advantage with the pulsing strategy is twofold. The company could spend less money on advertising over a shorter period but still gain the same recognition because the advertising campaign is more intense.

Reach

Reach refers to the percentage of customers in the target market who are exposed to the advertising campaign for a given period. A company might have a goal of reaching at least 80 percent of its target audience during a given time frame. The goal is to be as close to 100 percent as possible, because the more the target audience is exposed to the message, the higher the chance of future sales.

ADVERTISING EVALUATION

Once the advertising campaign is over, companies normally evaluate it compared to the established goals. An effective tactic in measuring the usefulness of the advertising campaign is to measure the pre- and post-sales of the company's product. In order to make this more effective, some companies divide up the country into regions and run the advertising campaigns only in some areas. The different geographic areas are then compared (advertising versus nonadvertising), and a detailed analysis is performed to provide an evaluation of the campaign's effectiveness. Depending on the results, a company will modify future advertising efforts in order to maximize effectiveness.

SUMMARY

Advertising is the paid, nonpersonal promotion of a cause, idea, product, or service by an identified sponsor attempting to inform or persuade a particular target audience. Advertising has evolved to take a variety of forms and has permeated nearly every aspect of modern society. The various delivery mechanisms for advertising include banners at sporting events, billboards, the Internet, logos on clothing, magazines, newspapers, radio spots, and television commercials. While advertising can be successful at getting the message out, it does have several limitations, including its inability to focus on an individual consumer's specific needs, provide in-depth information about a product, and be cost-effective for small companies. Other factors, such as objectives, budgets, approaches, and evaluation methods must all be considered.

see also Advertising Agencies; Promotion

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Allen D. Truell

Michael Milbier

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Advertising

ADVERTISING

ADVERTISING. Whether trying to alter spending patterns or simply alert buyers to a firm's existence, business has for centuries turned to advertising. As the type of media has changed, so too has advertising's form. But aside from a fundamental post–World War I shift in the perception of advertising's power, its function is the same today as it was in 1700: Advertising aims to boost sales.

Buyers purchase a product presumably because they perceive a need or desire for it. They decide from whom and what brand to purchase. Awareness of their choices and an evaluation of which option is "best" influences their decisions. Until the twentieth century, advertising sought only to convey information. But modern advertising seeks to "create demand" by influencing buyers' perceived needs or desires.

Before "Modern" Advertising

In the American colonial period, advertisements were primarily signboards on inns, taverns, coffeehouses, and the like. Travelers needed information about inns, but locals did not need advertisements in order to find the blacksmith.

The first newspaper to appear continuously, the Boston News-Letter, was established in 1704. It contained sporadic advertisements. Real estate advertisements, rewards for runaway apprentices, and notices of slaves for sale were all common, as were announcements of sale of cordage, wine, and cloth. These advertisements were limited to text; they contained no photographs or drawings.

Benjamin Franklin founded the Pennsylvania Gazette in 1728. The Gazette included more advertisements than did any other colonial newspaper, with up to half the pages devoted to advertising. Franklin is credited with introducing the use of large-point headings, using white space to separate the advertisements from the text, and, after 1750, including illustrations.

Over the next century, there was little subsequent change in advertising. Advertisements provided information about goods for sale, arrivals and departures of ships, and stagecoach schedules. Print advertisements were confined primarily within column rules; advertisements spanning more than one column were yet to come.

In the 1860s, newspaper circulation increased, and magazine and periodical advertising began. Advertising volume increased markedly. Multicolumn display advertisements were designed; their first use was to call attention to the transcontinental railroad bonds that were being sold to the public. By the 1870s, multicolumn advertisements were common.

Along with advertising, publicity also works when it comes to boosting sales. The similar effects of advertising and free publicity were illustrated in the 1870s by American showman P. T. Barnum, who sought new patrons for his circus show. Barnum owned a field near railroad tracks over which passenger trains passed. To attract the attention of train passengers, he put an elephant to work plowing the field. Newspapers ran articles about the elephant. The publicity generated such enthusiasm for his show that others sought to emulate his free-publicity-as-unpaid-advertising success.

Industrialization and Advertising

Diffusion of steam power in the 1850s paved the way for a wave of technological change in the 1870s and 1880s. The American system of mass production characterized much of American manufacturing by 1890. Increased mechanization generated increased fixed costs, creating an economic incentive to build large factories that could enjoy economies of scale in production but which were dependent on mass demand. The transcontinental railroad allowed relatively low-cost shipment of goods, making regional or national markets economically feasible. Telegraph wires allowed low-cost and fast nationwide transmission of information. Manufacturers created brand names and sought to familiarize buyers nationally with their product. Where a housewife had once ordered a pound of generic baking powder, now she was encouraged to insist on known quality by requesting only Royal Baking Powder. Similar national advertising campaigns were undertaken in the 1880s and early 1890s by, among others, Corticelli Best Twist Silk Thread, Quaker Oats Company, and Procter & Gamble's Ivory soap.

Manufacturers believed that buyers were primarily interested in the quality of the product; competition by price was uncommon. National firms included drawings of sprawling factories and factory owners in their advertisements; the larger the factory and thus the more successful the firm, the higher quality the merchandise could be presumed to be. Singer Sewing Machines, Steinway Pianos, and McCormick Harvesters and Reapers all produced advertisements of this sort.

Following industrialization, seasonal or cyclical declines in demand could drive firms to bankruptcy because the now high fixed costs continued unabated even when sales and production dropped. The need to maintain demand became especially apparent during the 1893–1897 economic depression. Many businesses failed; many more came close. Businesses needed methods to insulate themselves from cyclical downturns in sales and production. Advertising was one tactic they employed.

The U.S. population increased from 31 million in 1860 to 76 million in 1900. Only 20 percent of the population lived in urban areas in 1860, increasing to nearly 40 percent by 1900. The need for easy provision of consumer goods increased as more people therefore lived divorced from the land. Standardized production and transportation improvements further contributed to the development of the department store. Stores such as R. H. Macy and Company of New York City, John Wanamaker's of Philadelphia, and Marshall Field of Chicago, all established by 1870, advertised regularly in newspapers. Rural families turned to mail-order catalogs—in essence, large books filled cover-to-cover with advertisements. Montgomery Ward's first catalog was issued in 1872; Sears, Roebuck and Co. entered the field in 1893.

By 1900, advertising in newspapers was supplemented by advertising on streetcars, on billboards, and in magazines. Full-page advertisements, especially in women's magazines, sought to influence women's choices. Ladies' Home Journal, established in 1883 by Cyrus H. K. Curtis, led the way. The Crowell Publishing Company founded Women's Home Companion. William Randolph Hearst began Cosmopolitan, Good Housekeeping, and Harper's BAZAAR. Between 1890 and 1905 the monthly circulation of periodicals increased from 18 million to 64 million.

Development of Advertising Agencies

Advertising agents were middlemen in 1850: they bought advertising space from newspapers and resold it at a profit to a company seeking to place an advertisement. Beginning in about 1880, N. W. Ayer and Son of Philadelphia offered its customers an "open contract" under which Ayer would be the company's sole advertising agent and, in exchange, would price advertising space at cost plus a fixed-rate commission. The idea caught on. Manufacturers were soon blocked from buying advertising space without an agent. In 1893, the American Newspaper Publishers Association agreed to not allow discounts on space sold to direct advertisers. Curtis Publishing Company, publishers of Ladies' Home Journal, inaugurated the same practice in 1901, and other magazine publishers soon followed suit. The cost-plus-commission basis for the agency was accepted industry wide in 1919, with the commission standardized at 15 percent.

Until the 1890s, conceptualization and preparation of advertising copy were the responsibility of the firm placing the advertisement. But as companies followed N. W. Ayer & Son's cost-plus-commission pricing policy, agents could no longer compete with each other on price; they needed some other means of distinguishing their services from those of competing agents. Advertising agents—soon to be known as advertising agencies—took on their modern form: writing copy; creating trademarks, logos, and slogans; and overseeing preparation of artwork. Ayer hired a full-time copywriter in 1892; Procter and Collier of Cincinnati did so by 1896; Lord & Thomas of Chicago did so by 1898. By 1910, advertising agencies were universally characterized by the presence of full-time copywriters and artists.

Advertising slogans that lasted nearly 100 years came from these advertising specialists. Ivory soap's slogan "99-44/100% Pure" appeared in 1885; Prudential's "Rock of Gibraltar" started in 1896; and N. W. Ayer and Son suggested the brand name "Uneeda" to the National Biscuit Company (later Nabisco) in 1900. Trademarks such as the Morton Umbrella Girl made famous by Morton Salt did not become common until after 1905, when federal legislation allowed the registration of trademarks for a period of 20 years with provision for renewal.

Advertising men were widely seen as no better than P. T. Barnum's sideshow barkers falsely hawking two-headed freaks rather than professionals presenting dignified, honest, and compelling images of bath soap. One step in convincing others that advertising was a profession to be taken seriously was the 1917 formation of the American Association of Advertising Agencies. The Association crafted broadly defined industry standards. Thereafter, the industry was quickly afforded the respect it desired. In 1926, President Calvin Coolidge addressed the Association's annual convention. For its ability to create mass demand, he credited advertising with the success of the American industrial system.

Modern Advertising

Modern advertising—advertising with the goal of creating desire for a product where none previously existed—began in the early twentieth century. With the blessing of leaders in the advertising industry, academic psychologists had begun applying principles of psychology to advertising content in the late 1890s. In 1901, psychologist Walter Dill Scott, speaking on the psychology of advertising, addressed a gathering of businessmen. His book The Theory of Advertising appeared in 1903. Advertisers were initially skeptical of Scott's thesis that psychological principles, especially the concept of suggestion, could be effectively applied to advertising.

An ongoing conflict thus arose in the early twentieth century between two types of advertising: "reason-why" and "atmosphere" advertising. Dominant in the late nineteenth century, reason-why advertising consisted of long, detailed discourses on the features of a product. Atmosphere advertising reflected psychology's influence; it emphasized visual imagery that evoked emotions. The conflict between the two types of advertising was especially intense in the decade before World War I (1914–1918). In 1909, the advertisers of Colgate toothpaste took the conflict directly to consumers, giving them the opportunity to decide "Which Is the Better Ad?"—the one that offered a detailed explanation of the health advantages of Colgate toothpaste, or the one that used illustrations to associate the use of Colgate with a happy family life.

Most practitioners and advertisers were won over by about 1910. Psychologists were judged correct; advertising could change needs and desires. After 1910, most advertising copy emphasized buyers' needs and desires rather than the product's objectively described characteristics. Advertising's success during World War I fully settled the issue. American advertisements sounded a patriotic pitch as they sought to sell Liberty and Victory Bonds, raise money for the Red Cross, and more. Some advertising historians even credited the industry with shortening the war.

By the mid-1920s, the two types of advertising peacefully coexisted. Reason-why copy was deemed appropriate for industrial advertising where decision-making rested on a "rational" profit motive. Atmosphere advertising dominated consumer goods advertising; with increasing standardization of consumer products eliminating many of the real differences between brands, the emphasis of advertising shifted to the "imagined" advantages.

A number of advertising textbooks appeared in the 1920s, authored by professors of psychology whose academic affiliations were often with schools of business. Surveys sought to ascertain the fundamental wants or desires of human beings. A typical list would include appetite, love, sexual attraction, vanity, and approval by others. Atmosphere advertisements emphasized how a product could satisfy these desires.

Advertisers increasingly looked upon themselves as quite set apart from the consumers who saw their ads. Copywriters were male. Consumers were female. Roland Marchand, author of Advertising the American Dream (1985), found that advertisers in the 1920s and 1930s were predominantly male, white, Christian, upper-class, well-educated New Yorkers who frequently employed servants and even chauffeurs, and whose cultural tastes ran to modern art, opera, and symphonies. They saw their audience as female, fickle, debased, emotional, possessing a natural inferiority complex, having inarticulate longings, low intelligence, and bad taste, and being culturally backward. The copy and visual imagery created by these advertising men often emphasized the woman's desire to be loved or her desire to be a good mother.

Ironically, just at the time advertisers sought increased respect through formation of their own professional association, the advertisements they were writing conveyed ever more disrespect for their readers. Many advertising historians note the post–World War I change in advertising's tone. Frederick Lewis Allen, author of the renowned history of the 1920s Only Yesterday (1931) wrote:

"[In the 1920s], no longer was it considered enough to recommend one's goods in modest and explicit terms and to place them on the counter in the hope that the ultimate consumer would make up his or her mind to purchase.… [T]he copywriter was learning to pay less attention to the special qualities and advantages of his product, and more to the study of what the mass of unregenerate mankind wanted—to be young and desirable, to be rich, to keep up with the Joneses, to be envied. The winning method was to associate the product with one or more of these ends, logically or illogically, truthfully or cynically. …" (pp. 141–2)

Advertising is often charged with creating a culture of consumerism in which people define themselves by the goods they buy. Certainly the first big boom in advertising volume and the rise of consumerism are coincidental: Consumerism first characterized the United States in the early twentieth century; advertising volume increased at an annual rate of nearly 9 percent between 1900 and 1920. Moreover, it was in this period that advertising first began emphasizing the ability of goods to meet emotional needs and, more to the point, first began its efforts to create needs where none had previously been felt.

Television and Beyond

The function of advertising has remained constant since the advent of modern advertising but its form has evolved as new forms of media have appeared. Radio broadcasting began in 1922 and with it, radio advertising. By 1930, 40 percent of households owned a radio; more than 80 percent owned one by 1940. Radio advertising expenditures doubled between 1935 and 1940 to $216 million in 1940.

Television began in the 1950s and quickly found its way into almost everyone's living room: 11 percent of households owned a television in 1950 but 88 percent owned one just a decade later. Television advertising expenditures increased nearly tenfold between 1950 and 1960, reaching $1.6 billion by 1960.

Outdoor advertising increased with paved mileage. In the decade after World War II (1939–1945), outdoor advertising expenditures, adjusted for inflation, increased 5 percent annually as paved mileage in the United States increased 3 percent annually. One of the more famous billboard campaigns, begun in 1925, was for Burma-Shave, a brushless shaving cream manufactured by the American Safety Razor Company. Their jingles appeared one line per sign over the course of a mile or more, always ending with the name of the product:

If you think

She likes

Your bristles

Walk bare-footed

Through some thistles

Burma-Shave

The introduction of the videocassette recorder (VCR) led to more changes in advertising. New in 1980, by 1990 over two-thirds of U.S. households owned a VCR. Viewers could fast-forward through commercials when watching taped shows, presenting a new challenge to advertisers. "Product placement" was the result. Firms now paid to have their products used in television shows and films. The practice was spurred by one phenomenal success: the use of Reese's Pieces candy in the 1982 film E. T. The Extra-Terrestrial had increased candy sales by over 65 percent. By 2000, product placement was pervasive.

Table 1

Advertising Volume
SOURCE: 1900–1970, U.S. Bureau of the Census, Historical Statistics of the United States: Colonial Times to 1970, Series T444. 1990, 2000, U.S. Census Bureau, Statistical Abstract of the United States: 2001, Table 1271.
Amount Average rate of growth
(billions of dollars) (percent)
19000.5
19202.98.8
19293.41.7
19463.3-0.1
196011.99.5
197019.65.1
1990129.69.9
2000236.36.2

The most recent media development, the Internet, was advertisement-free until the first banner advertisements were sold in 1994. Ownership of computers and use of the Internet are both increasing rapidly; by 1999, 34 percent of adults nationwide claimed access to the Internet or an online service. Internet advertising increases apace.

Consumer objections to advertising and its tactics have resulted in legislation, lawsuits, and voluntary restraint. The 1914 Federal Trade Commission Act empowered the Federal Trade Commission (FTC) with the authority to regulate "unfair methods of competition." The 1938 Wheeler-Lea Amendment extended the FTC's powers to "unfair or deceptive acts or practices." The detrimental effects of billboards on the countryside inspired the federal Highway Beautification Act in 1965, which regulated placement of billboards near interstate highways. The "Joe Camel" campaign for Camel cigarettes introduced by R. J. Reynolds in the 1970s resulted in a 1990s federal lawsuit because of the campaign's alleged attempt to hook kids on smoking. A voluntary ban on television advertising by the Distilled Spirits Council of the United States was just one part of its Code of Good Practice regarding marketing and advertising, first adopted in 1934. Political advertising, with the goal of swaying voters rather than consumers, enjoys First Amendment protection but does face some constraints under state laws and under the Federal Communications Commission's Equal Access Law as well as the Federal Election Campaign Act.

Advertising Statistics

Data on advertising expenditure and employment in the industry is summarized in the annual Statistical Abstract of the United States, available online and in any reference library. As seen in Table 1, advertising expenditure has had several periods of rapid growth: the 1910s, 1950s, and 1980s. Advertising volume in 2000 was just over 2 percent of gross domestic product. Over 400,000 people worked in advertising in 2000, a nearly threefold increase since 1980. Approximately 40,000 establishments provided advertising and related services in 2000, about one-third of which had paid employees.

What constitutes an advertisement has changed over time: a name on a wooden signboard; an information-packed display in a newspaper; a full-color glossy advertisement in a magazine; a beautiful blonde singing about a new Chevrolet; candy scattered in a wood for an extraterrestrial alien; logos on the side of coffee mugs; Nike swooshes on professional sports team uniforms; pop-up advertisements on the Internet. The changes will continue as media opportunities develop.

BIBLIOGRAPHY

Fox, Stephen. The Mirror Makers: A History of American Advertising and Its Creators. New York: Morrow, 1984.

Laird, Pamela Walker. Advertising Progress: American Business and the Rise of Consumer Marketing. Baltimore: Johns Hopkins University Press, 1998.

Marchand, Roland. Advertising the American Dream: Making Way for Modernity, 1920–1940. Berkeley: University of California Press, 1985.

Norris, James D. Advertising and the Transformation of American Society, 1865–1920. New York: Greenwood Press, 1990.

Pope, Daniel. The Making of Modern Advertising. New York: Basic Books, 1983.

Presbrey, Frank. The History and Development of Advertising. Garden City, N.Y: Doubleday, 1929.

Scott, Walter Dill. The Theory of Advertising: A Simple Exposition of the Principles of Psychology in Their Relation to Successful Advertising. Boston: Small, Maynard and Company, 1903.

Martha L.Olney

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Cooke, Jay

COOKE, JAY


Jay Cooke (18211905) was the foremost investment banker in the United States during the mid-nineteenth century. He pioneered new ways of mobilizing the savings of Americans for productive ends, most significantly to fund the Union effort during the American Civil War (18611865). For this reason he was known as the "Financier of the Union."

Born in Sandusky, Ohio, Cooke attended public school until the age of 14. He then ended his formal education and took a job as a clerk in a general store. In 1838 he obtained work with his brother-in-law's canal transport company in Philadelphia, but the firm failed shortly after Cooke's arrival in the city. Cooke returned to Sandusky. Two years later he was lured back to Philadelphia by a job offer as an office boy with banker F. W. Clark. Cooke worked in the Clark banking house from 1839 to 1857. He rose quickly in the firm, and in three years, at the age of twenty-one, he became a partner.

F.W. Clark's profits derived from dealing in "domestic exchange." This meant the firm bought and sold bank notes from various parts of the country, pricing them according to risk. The nation in those days had no official government currency except metallic money. Private bankers provided the paper medium of daily exchange. With the bank notes of so many banks in circulation, a banker had to be shrewd when it came to judging the worth of paper that often purported to be "good as gold."

In the 1850s Cooke began to invest his own money in ventures outside of banking. One of his investments included a land speculation deal in Iowa and Minnesota that involved obtaining land from the government at prices below $1.25 an acre. The land was then resold to incoming farmers at $3.00 and $4.00 an acre. The land speculation scheme made Cooke very wealthy.

Growing restless as a junior partner at F.W. Clark and Company, Cooke left the firm in 1857. For the next few years he devoted his attention to private investing, particularly in railroads. He decided to reenter the banking business on the eve of the American Civil War. On January 1, 1861, he opened Jay Cooke and Company.

When Abraham Lincoln (18091865) took office he found the U.S. Treasury nearly empty. In order to finance the Union effort in the Civil War, the government was faced with three methods: taxation, borrowing, or printing paper money. Unlike the opposing Confederate States of America, Lincoln chose to borrow money to pay the war, a strategy that worked largely because of the efforts of Jay Cooke. Conversely, the Confederate government in Richmond chose to print paper money. This created an inflation rate of 5000 percent by the end of the war.

The traditional method of government finance was to offer government bonds to private bankers at competitive auction. In 1861 many bankers were unsure whether the Union would survive to pay the debt. Secretary of the Treasury Salmon P. Chase insisted on selling the bonds at par (one hundred cents on the dollar), but most bankers considered them to be too risky at that price. Cooke approached Chase and proposed marketing bonds directly to the public. Chase initially rejected the idea. But as the war turned against the Union in the summer of 1862, he became more receptive. He appointed Jay Cooke and Company as sole agent to sell $50 million in government bonds at 6 percent interest. The bonds were due in 20 years but the government could redeem them in five; hence, they were popularly called "5-20s."

Cooke promised one million dollars worth of daily sales in 5-20s. He also took a fee of 1/2 percent on the first $10 million he sold and 3/8 percent on the remaining bonds. His strategy exceeded all expectations. In 1865 he repeated his earlier success by helping the government finance a new issue of bonds. These were the so-called "7-30s" (bonds due in 30 years but redeemable in seven).

After the war Jay Cooke and Company engaged in further government debt financing, but by 1869 the government finance business had wound down and opportunities for profit appeared elsewhere. Cooke agreed to be the banker and agent for the Northern Pacific Railway Company. The rail line was projected to connect Lake Superior with Puget Sound on the Pacific coast, promising to become the largest construction project in U.S. history.

Originally financing for the Northern Pacific was earmarked to build the line westward. To finance further construction and service the debt, money was raised from fees charged to traffic along the first completed sections of the track and from the sale of a congressional land grant worth $50 million. With great difficulty Cooke managed in 1870 to raise $5 million for construction. He then initiated a public campaign to sell $100 million in Northern Pacific bonds at 7.3 percent interest. His goal was to raise enough money from small investors to complete construction of the railroad, but the results were disappointing. He only sold about $16 million worth of bonds in 1871 and 1872. Like major American and European bankers, small investors, were wary despite the high interest rate offered and regardless of Cooke's reputation for reliability.

Poor sales of Northern Pacific bonds and a tightening of the money market forced Jay Cooke and Co. to declare bankruptcy in 1873. Cooke lost most of his vast fortune and spent the next several years trying to satisfy his creditors. In 1880 he resumed business as an investor in Western mining ventures and was able to make a second fortune before his death.

Jay Cooke changed the nature of investment banking by reaching out to hundreds of thousands of Americans and asking them to invest their small holdings to support the Union cause during the Civil War. In the following century Wall Street would follow Cooke's lead by devoting itself to attracting the savings of the individual investor.

Clearly, Cooke's ideas created more than a new way of doing business on Wall Street. His innovative financing methods also kept the U.S. government afloat during crisis. In fact, without the millions of dollars invested by individuals of modest means, the financing of government debt and major industries in the late nineteenth and twentieth centuries might well have been unimaginable.

See also: Bonds, Salmon P. Chase, Inflation


FURTHER READING


Gates, Paul Wallace, ed. The Fruits of Land Speculation. New York: Arno Press, 1979.

Gordon, John Steele. "Paying for War." American Heritage, March 1990.

Hammond, Bray. Sovereignty and an Empty Purse: Banks and Politics in the Civil War. Princeton, New Jersey: Princeton University Press, 1970.

Larson, Henrietta M. Jay Cooke: Private Banker. Cambridge, Massachusetts: Harvard University Press, 1936.

Minnigerode, Meade. Certain Rich Men. New York: G.P. Putnam's Sons, 1927.

Oberholtzer, Ellis Paxton. Jay Cooke: Financier of the Civil War. Philadelphia: George W. Jacobs and Co., 1907.

Trescott, Paul B. Financing American Enterprise: The Story of Commercial Banking. New York: Harper and Row, 1961.

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Advertising

Advertising

BIBLIOGRAPHY

Advertising is a form of mass media designed to promote a specific product, service, or idea on behalf of a business or organization. Advertisers ordinarily use media such as television, radio, print (magazines, newspapers, and billboards), sponsorship of cultural and sporting events, and the Internet.

From the Industrial Revolution to the mid-twentieth century, advertising in the United States and Europe was generally straightforward and usually included an image and description of the products function, price, and location to be purchased. According to William M. OBarr in his 2006 article Representations of Masculinity and Femininity in Advertising, ads were primarily directed toward women because they were responsible for the majority of consumer purchases, the exception being big ticket products like cars and major appliances. Since World War II, however, industries have increasingly courted the adult male consumer, and with the advent of youth culture, children, teenagers, and young adults have been targeted as well.

A common strategy for advertisers is to make the consumer feel as though the given product will remedy a specific problem or insecurity. Designers prey on a modern culture obsessed with status, self-enhancement, youth, body image, and gender identity, the latter being a favored theme now aimed at both men and women. Critics such as John Kenneth Galbraith (1969) and Christopher Lasch (1978) charged that advertising functions to create desires that previously did not exist and that advertising serves to promote consumption as a way of life.

A dialectical relationship exists between consumers and advertisers where ads face heavy skepticism and scrutiny, while at the same time receive access and appreciation in the form of high revenue, lavish award ceremonies, and TV programs devoted to airing successful commercials. In the United States, argued Michael Schudson in his 1984 book Advertising, the Uneasy Persuasion: Its Dubious Impact on American Society, the culture is amenable to advertising that is more pervasive and more intrusive than in any other industrialized country (p. 128). Millions watch the United Statess Superbowl programming not for the content of the football game, but rather just to see the premier of new, multimillion-dollar ads.

A crucial difference between previous eras and today is advertisings saturation. In U.S. and European cities a conservative estimate of peoples daily exposure to ads is 250 messages a day, while others suggest that that number is closer to 5,000 messages a day. This ubiquity creates a more skeptical and desensitized audience. As a result marketers go to greater lengths to make their products stand out.

Advertisers now use more diverse and insidious mediums such as stickers on food, social networking websites like YouTube, motion sickness bags, and space within public schools. Guerrilla marketing practices like product placementwhere the intended audience is unaware that they have been exposed to an advertisement, while the desired impression of the given product remainsare now everyday tactics. In 2007 blinking electronic signs promoting a television show were surreptitiously planted on highways and bridges in Boston and mistaken for terrorist bombs.

Given the use of more sophisticated technology and the expansion of the Internet, marketers can better assess the effectiveness of their pitches and the return on investment. Sophisticated techniques like data mining help identify (and subsequently create) niche consumption desires. Additionally hyperspecialized media outlets enable advertisers to target more precise demographics. For example advertisers now design ads for gay men and air them on gay-oriented cable television channels like Here TV and Logo. Targeted marketing and reliable measurements of effectiveness are the holy grail of companies seeking to reduce costs.

In an era of global capitalism, advertising agencies work for clients all over the world and target niche demographics in nearly all continents. Successful advertising for multinational corporations hinges on the familiarity with local habits, symbols, and cultural differences. According to Marieke K. de Mooij in the 2005 publication Global Marketing and Advertising: Understanding Cultural Paradoxes, for a global brand like McDonalds a company that sells its food via more than 30 thousand distribution points, in 119 countries, serving 47 million customers a dayparticular attention must be paid to local culture for the pitch to be successful. For example, advertising for McDonalds in France tied into Asterix and Obelisk, the most famous historical cartoon of the nation (Mooij 2005).

As more advertising proliferates in the globalized context, we are likely to see new, unforeseen forms of consumer reluctance and resistance. Companies will surely continue to manage this dialectic for their own financial advantage.

SEE ALSO Consumerism; Galbraith, John Kenneth; Goodwill; Hidden Persuaders; Internet; Markets; Media; Television; Veblen, Thorstein; Want Creation; Wants

BIBLIOGRAPHY

Galbraith, John Kenneth. 1969. The Affluent Society. 2nd ed. Boston: Houghton Mifflin.

Lasch, Christopher. 1978. The Culture of Narcissism: American Life in an Age of Diminishing Expectations. New York: W. W. Norton.

Mooij, Marieke K. de. 2005. Global Marketing and Advertising: Understanding Cultural Paradoxes. 2nd ed. Thousand Oaks, CA: Sage.

OBarr, William M. 2006. Representations of Masculinity and Femininity in Advertising. Advertising and Society Review 7 (2).

Schudson, Michael. 1984. Advertising, the Uneasy Persuasion: Its Dubious Impact on American Society. New York: Basic Books.

Tyson Smith

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Jay Cooke

Jay Cooke

From 1862 to 1873 Jay Cooke (1821-1905) was the outstanding merchant banker in the United States. During the Civil War he made possible the sale at par of hundreds of millions of dollars' worth of Union government bonds to the American public.

Born at Sandusky, Ohio, on Aug. 12, 1821, Jay Cooke was the son of a frontier lawyer and politician. He stopped his schooling at 14 and worked as a clerk in his own community and in St. Louis, Mo. He arrived in Philadelphia in 1839; from that time on his activities were virtually always associated with this city, which he made the leading financial center of the country for a brief time. He learned banking in the firm of E. W. Clarke and Company, where he worked until 1857. In 1861 Cooke set up his own banking house, a partnership, Jay Cooke and Company, engaging in the characteristic activities of private or merchant bankers: dealing in gold; buying and selling the notes of state banks; trading in foreign exchange; and acting as "note" broker, that is, the discounting of commercial paper.

Great Financier

The outbreak of the Civil War gave Cooke his great opportunity, and his many fruitful ideas pushed him to the top of the business. Salmon Chase, the secretary of the Treasury and a fellow Ohioan, sought to sell the Treasury's first issues of war bonds and notes through banks and failed (at this time it was customary to dispose of public securities by competitive bidding). Cooke persuaded Chase to appoint him a special "fiscal agent." Using the then unheard-of methods of advertising and personal solicitation by salesmen all over the country, Cooke sold at par (from October 1862 to January 1864) more than $500 million of the 6 percent bonds to as many as 1 million individual investors and country bankers. As fiscal agent, Cooke played another important role: he supported the price of government securities in the New York money market. "Pegging the market" from this time on became a necessary part of such financing. In January 1865 Cooke was called again to handle a large issue of 3-year Treasury notes bearing 7.3 percent interest; in 6 months he sold more than $600 million.

By the end of the war Cooke had three banking houses, each with a separate group of partners, in Philadelphia, New York, and Washington. In 1870 a similar bank was set up in London, and the next year all were brought together as a single partnership. Cooke expanded (and overexpanded) into many fields. He had been friendly to the National Banking Act of 1863 and obtained charters for national banks in Washington and New York; the national banks were the prime source of Cooke's strength.

To these banks and to small investors at home and abroad Cooke, now an investment banker, sold participation in state and railroad loans; the largest loans went to the great land-grant Northern Pacific Railroad, which was chartered to run from Duluth, Minn., to Tacoma, Wash. In this connection Cooke introduced two new ideas into banking: the establishment of banking syndicates as underwriters to handle particular issues, and the active participation by bankers in the affairs of the companies they were helping finance. Thus, Cooke became the banker and fiscal agent of the Northern Pacific in 1869, and he made short-term loans to the railroad out of his own house's resources—a fatal step.

In 1870, although Cooke was responsible for the proposal, he was only one (and a lesser participant) of the investment banking houses taking part in the great refunding operations of the Civil War loans. Congress authorized the sale of $1.5 billion worth of Treasury securities of various types bearing 4 to 5 percent interest in exchange for the higher-priced wartime issues. J. S. Morgan and Company, and Drexel, Morgan and Company, and their English connections now had their opportunity, and they pushed Cooke into the background.

End of an Empire

Meanwhile, Cooke's troubles with the Northern Pacific Railroad were piling up. In addition to making loans to the railroad, he undertook the underwriting of its initial issue of first-mortgage bonds. But sale of these bonds moved slowly, and the firm of Jay Cooke and Company continued to make advances to the railroad out of the demand liabilities of its customers; this was a risky business. All the western rails required large funds for building and improvements, and when the national economy turned downward in early 1873, investment markets dried up. Cooke's banks and his associated houses were caught in illiquid form—they could not meet the demands of their depositors—with the result that on Sept. 18, 1873, the New York office of Jay Cooke and Company shut its doors, as did the banks with which it was associated.

This started the large-scale Panic of 1873; one of its results was the complete collapse of the Cooke financial empire and the end of Cooke's influence in the money markets; his personal fortune was wiped out. Later in the 1870s he invested a small sum in a silver mine which turned out to be a bonanza, and Cooke was able to sell his holdings for $1,000,000, thus assuring a comfortable old age. He died on Feb. 16, 1905, in Philadelphia.

Further Reading

The best biography of Cooke is Henrietta M. Larson, Jay Cooke: Private Banker (1936). An earlier work, drawing extensively on private papers, is Ellis Paxson Oberholtzer, Jay Cooke: Financier of the Civil War (2 vols., 1907). Indispensable to an understanding of the role and early development of merchant and investment banking in the United States is Fritz Redlich, The Molding of American Banking: Men and Ideas (1951). □

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Cooke, Jay (1821-1905)

Jay Cooke (1821-1905)

Source

Financier

Background. The Unions preeminent financier through the Civil War and into the 1870s was born on the western frontier. His father, Eleutheros Cooke, was a prominent lawyer and eventually congressman in Ohio, but the Western Reserve (which eventually became the state of Ohio) was during the period of Cookes youth rugged and isolated. Cooke received his training in high finance by working at a series of commercial apprenticeships that took him gradually east, to the money markets he would one day dominate. He entered business at the age of fourteen as a clerk in his hometown of Sandusky, then moved to Saint Louis in 1836. When his employers there went under in the Panic of 1837, he relocated again, to Philadelphia where he found a clerkship with a canal packet line.

Philadelphia Banker. When he reached Philadelphia, Cooke had arrived at what was then still the financial capital of the country. In 1839 he changed jobs and put himself right at the heart of the money market when he joined the firm of E. W. Clark & Company, an unincorporated bank that functioned (like others in the city) as a kind of currency clearinghouse, buying up the notes of other, often distant banks at a discount and sending them back to the home institution for redemption. The work required a keen eye for counterfeits and an ability to keep track of which banknotes from where had what valuesa complicated business in an economy that circulated innumerable currencies, notes, and other forms of money. After the Panic of 1857, Cooke retired from the firm.

Union Finance. By the time Cooke reentered business in 1861, new financial challenges and opportunities were forming. The outbreak of the Civil War caught the federal government at a bad time, fiscally speaking. The country had run deficits for four years since 1857the longest stretch of deficit finance since the War of 1812. Secession intensified the pressure, draining gold from the treasury and undercutting the governments credit rating. Soon the government was having trouble meeting even its ordinary peacetime expenses. The incoming secretary of the treasury, former Ohio governor Salmon Chase, had worked with Cookes brother, Henry, in Ohio politics and quickly adopted Cooke as an informal financial adviser. Initial issues of short-term bonds yielded lackluster results, but when Union defeat at the first Bull Run in July 1861 began to make the scale of the upcoming war clearer, Cooke first secured a $2 million infusion from Philadelphia bankers, on the security of three-year notes bearing interest of 7.3 percent (seven-thirties), then together with Chase brokered an agreement from the Associated Banks (a New York group) for $50 million more, again in seven-thirties. Thereupon Cooke returned to Philadelphia and converted his office into an agency promoting and subscribing the public securities of the Union.

Marketing the War Effort. Salmon Chase was determined to make war finance a broad, democratic, and propagandistic campaign, and Cooke adapted his financial promotions to this end. Anticipating twentieth-century war finance, Chase and Cooke (to borrow an anachronistic phrase) not only used the war to sell the bonds, but used the bonds to sell the war. Cooke orchestrated a massive public-relations campaign that ultimately enlisted more than 600,000 subscribers, perhaps as many as a million, and sold over $1 billion worth of securities. He grossed commissions of about $4 million for this service, though he also paid heavy advertising expenses and ran the agents himself; net profit probably came to about $700,000.

Postbellum Expansion and Bust. After the war Cooke converted his operations back to a general banking business, based in Philadelphia and opening branches in New York in 1866 (by which time the latter city had supplanted Philadelphia as the nations financial capital), and in London in 1870. He became involved in many enterprises during this period of heady national economic expansion, most notably (and disastrously) the Northern Pacific Railroad. Construction on this railroad, projected to link Duluth on Lake Superior to Tacoma on the Washington coast, reached as far as the Missouri River from the east before Cookes finances collapsed on 18 September 1873 in part because of unrelated failures in European financial markets. As Cooke went under, he pulled down enough affiliates with him to set off a general economic panic. In later years he managed to recover some of his holdings, and to develop a second fortune in western mining and other investments. The 1873 collapse, however, gave J. P. Morgan, his chief rival, the opportunity to supplant Cooke as the high financier of the federal government.

Source

Henrietta M. Larson, Jay Cooke: Private Banker (Cambridge, Mass.: Harvard University Press, 1936).

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Advertising

Advertising

In the early days of human spaceflight in the 1960s, public curiosity about astronauts was fueled by regular headlines in the media. Products selected for the space program were perceived to be exceptional, and promoters were quick to exploit this by playing up the fascination and mystery surrounding spaceflight. A crystallized, dehydrated, orange-flavored beverage called Tang was touted as "what the astronauts drink," and sales skyrocketed as the public clamored to have what the astronauts had. With the space age, thus, came space-themed advertising.

Consumers are bombarded daily with multimedia advertisements, coaxing people to buy, choose, or react to a myriad of products and services. Advertisers are hired to promote these products and services to specific markets based on a careful calculation of a target population's propensity to consume. To appeal to this possibility, advertisers strive to stay in the mainstream of the target audience in fashion, entertainment, food, and new technology by implanting a brand with a message that is crafted to be remembered by the recipient. Over the years, space themes have been used as a backdrop for many new products.

Before humans were orbiting Earth, space-themed advertisements were uncommon because the general public did not connect with outer space. Now, in the early twenty-first century, with discussion of futuristic orbiting hotels and launch adventure trips within the realm of technological possibility, space as a backdrop or theme for advertising is well-established.

Some fantastic concepts have been considered for advertising in space. For example, one firm considered using an Earth-based laser to beam messages onto the Moon. They soon realized this was impractical, however, because the images needed to be about the size of Texas to be visible to earthlings!

Pizza Hut, Inc., contracted with a Russian launch firm to affix a 9-meter-high (30-foot-high) new corporate logo on a Proton rocket carrying aloft a service module to the International Space Station and scheduled for launch in November 1999. Advertising the event prior to the launch date gave Pizza Hut international recognition, and the company expected 500 million people to watch the live televised event. The launch was planned to coincide with a release of Pizza Hut's transformed millennium image; the launch, however, was postponed for eight months because of technical problems.

Pepsi, the soft drink company, paid a large sum of money so that Russian cosmonauts would unveil a newly designed brand logo on a simulated "can" during missions to the Russian space station Mir in May 1996. The company has also pursued smaller scale promotional ventures in the U.S. space program since 1984.

NASA and other outer space agencies have researched the profitability of permitting advertising through the display of logos on space hardware, such as the International Space Station. While there is a market for such advertising, studies suggest that demand would not necessarily be sustained beyond the novelty of the first few paying customers.

Space.com, one of several space-related web sites that appeared in the dot-com boom of the late 1990s, derived significant revenue from advertising banners at the web site. Interestingly, the advertising content tended to relate to very down-to-Earth necessitiescredit cards, cars, goods and servicesand not space merchandise or otherworldly creations.

see also Commercialization (volume 1); International Space Station (volumes 1 and 3); Mir (volume 3).

Len Campaigne

Bibliography

Damon, Thomas. Introduction to Space: The Science of Spaceflight. Malabar, FL: Orbit Book Company, 1989.

National Aeronautics and Space Administration. Office of Advanced Concepts and Technology. Spinoff 93. Washington, DC: U.S. Government Printing Office, 1994.

Reynolds, Glenn H., and Robert P. Merges. Outer Space: Problems of Law and Policy. Boulder, CO: Westview Press, 1989.

United States Space Foundation. Space: Enhancing Life on Earth. Proceedings Report of the Twelfth National Space Symposium. Colorado Springs, CO: McCormick-Armstrong, Printers, 1996.

Weil, Elizabeth. "American Megamillionaire Gets Russki Space Heap!" New York Times Magazine, 23 Aug. 2000.

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advertising

advertising. From shop and inn signs, street cries, and handbills to commercial television, sports sponsorship, and e-commerce, promoters have long combined information and persuasion to encourage others to avail themselves of goods or services. The introduction of newspapers in the 17th cent. spurred consumerism in the 18th, since column ends were easily filled with advertisements for books, proprietary medicines (with glowing testimonials), public meetings and entertainments. Advertisement tax, introduced on newspapers in 1712, was abolished in 1853 and a golden age came with the return of illustrations, vastly increased expenditure, and the introduction of catchphrases and colour lithography. Over-enthusiasm led to excess, and parliamentary controls were introduced in 1889 (Indecent Advertisement Act).

The ethics and psychology of advertising began to be discussed and techniques studied more seriously. The First World War saw one of the most famous posters of all time—‘Your Country needs YOU’—and from the 1920s, when agencies were introduced, the industry began to put its house in order (Advertisement Regulation Act, 1925). Codes of standards, especially after the Second World War, encouraged greater sobriety, and techniques changed. Hoardings became less used and sandwich-men almost disappeared. The advent of commercial television (1955), followed by radio advertising (1972), proved pervasive. A renewed debate began on the propriety of some forms of advertising, and restrictions were placed upon tobacco promotion in particular. The industry established its own Advertising Standards Authority in 1962. In a free market economy, competitive advertising remains of crucial importance and, with the exception of the British Broadcasting Corporation, supports most of the media.

A. S. Hargreaves

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Cooke, Jay

Jay Cooke, 1821–1905, American financier, b. Sandusky, Ohio. He founded Jay Cooke & Company, which marketed the huge Civil War loans of the federal government. He later turned to railroad bonds and in 1870 undertook to raise $100 million for the Northern Pacific and financed construction to Bismarck, N.Dak. The burden proved to be too great and continuing the financing became impossible. In 1873, Cooke's New York branch closed its doors and helped to precipitate the Panic of 1873.

See biographies by E. P. Oberholtzer (1907, repr. 1968) and H. M. Larson (1936, repr. 1968); M. Minnigerode, Certain Rich Men (1927, repr. 1970).

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Advertising

Advertising

DENTSU INC.

FOOTE, CONE & BELDING COMMUNICATIONS, INC.

INTERPUBLIC GROUP INC.

JWT GROUP INC.

LEO BURNETT COMPANY, INC.

THE OGILVY GROUP, INC.

OMNICOM GROUP

SAATCHI & SAATCHI PLC

YOUNG & RUBICAM, INC.

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Advertising

ADVERTISING

In few modern industries have Jews had greater influence than in advertising, and this applies particularly in America. It has even been suggested that Jewish advertising men are responsible for the wide scope and shape of the modern advertising agency. Though the use of advertising began after the Civil War of 1865, until the beginning of the 20th century, business concerns wishing to promote the sale of their goods or services developed their own programs and even wrote their own copy. The existing agencies were thus brokers in media space. This was the pattern when Albert D. Lasker, often called the father of modern advertising, joined the Chicago agency of Lord and Thomas in 1898. He soon realized that by providing first-rate copywriters, who were creative, imaginative artists, the agency could be of far greater help to the client than by just offering the service of selling him space for his advertisements. In 1904, when only 24 years of age, he became a partner in the firm and by 1912, Lasker became the sole owner of Lord and Thomas. He built it in three decades into one of the best known and most respected advertising agencies in America.

Milton H. Biow may be regarded as the man who molded the advertising agency into a form which would meet the requirements of modern business. He began in 1918 with a oneman business and in the four decades of its existence, it became one of the largest and best known agencies both in the United States and abroad. Biow's agency was credited with being the first to use radio and television "spots" for short advertisements. This era saw the development of the partnership agencies. One of these, Grey Advertising, was founded in 1917 by 18-year-old Lawrence Valenstein. Later he formed a three-man partnership with two men he had taken into his employment, Arthur C. Fatt and Herbert D. Strauss. Each of the three was successively president of the company. All three believed advertising to be an important ingredient in the wider activity of marketing, and the firm played a leading part in developing the system of creating a demand for a product before introducing it to the market. In 1936 the agency started Grey Matter, a newsletter of merchandising comment and interpretation, which was widely read both by the advertising industry and by business generally. By the late 1960s the agency was one of the most successful with branches in Canada, Japan, and a number of European countries.

Two former directors of Grey Advertising, William *Bernbach and a non-Jew, Ned Doyle, joined with Maxwell Dane in 1949 to form another three-man partnership, Doyle, Dane, Bernbach, which developed rapidly. Bernbach may well be regarded as the successor to Lasker, Biow, and the Grey partners, becoming the leader of the "creative revolution" that was sweeping across Madison Avenue, the New York center of American advertising. Bernbach began to use copy in which advertisers spoke to the public in low-keyed, even self-deprecating terms. This new approach of intelligent subtlety was quickly and widely emulated. In 1955 Norman B. Norman and a number of his associates in the agency firm of William H. Weintraub and Co. bought control of the agency and changed its name to Norman, Craig, and Kummel. They soon expanded its business by the use of the "empathy" formula, which Norman described as "emotional advertising" aimed at having the reader find himself inside the advertisement.

Other Jews who have made important contributions to advertising are Julian Koenig and Frederic S. Papert (1926) who founded Papert, Koenig, and Lois; Maxwell B. Sackheim (d. 1982), an expert in mail order advertising; David Altman, of Altman, Stoller, and Chalk, specialist in fashion advertising; Ernest Dichter, a psychologist who founded the Institute for Motivational Research; Stanley Arnold, sales promotion consultant; and Monroe Green, an advertising vice president of the New York Times. Green was largely responsible for building the New York Times Sunday Magazine into a powerful combination of trade and consumer publication. In the 1920s and 1930s Jews in advertising were mainly relegated to media or market research jobs, and had no part in front office, account-management, or contact functions. But the skill and accomplishments of many of them opened the gates to Jews and other members of minorities, in a profession that had been restricted to gentiles for decades. Among the Jews who rose to prominence in the American advertising industry in more recent years were Carl *Spielvogel, who later became United States ambassador to Slovakia; Donny Deutsch, who sold his agency for many millions and began a career in television; and Linda Kaplan Thaler, whose creativity started with advertising jingles and expanded into a flourishing, multifaceted agency.

It was not until the 20th century after World War ii, that Jews rose to prominence in advertising in Britain. The multiplicity of media used in modern advertising called for creative ability and Jews found outlets for their skills in this profession. Jewish agencies include Caplan's Advertising, Progress Advertising, and Richard Cope and Partners. Probably the best-known contemporary British advertising agency is Saatchi & Saatchi, founded by the two *Saatchi brothers. In general, however, Jews play only a limited role in British advertising.

On the continent of Europe advertising developed slowly until after World War i when the growth of methods of communication was rapid, but Jewish participation was brought to an abrupt close by the Nazi Holocaust. Since World War ii expanding American agencies and to some degree British agencies have extended their operations to the continent to compete with their European counterparts and it is here that Jews have begun to play a creative role.

In Israel

There was little organized advertising in Mandatory Palestine. The first advertising agency was set up in Jerusalem in 1922 by Benjamin Levinson, who was followed by a handful of others. Several more modern agencies were established by newcomers from Germany in 1933–39. Large-scale advertising started only with the rapid development of industry and the creation of a growing consumers' market in Israel, especially after the Sinai Campaign (1956). Today, Israeli advertising is indistinguishable in its methods and pervasiveness from advertising in any other Western-style consumer society.

The favorite medium is still the daily press: In 2003 Israel's newspapers received 53% of advertising revenues ($293 million). Next came television with 33% and radio with 7%. Internet advertising, the new frontier, had a modest 2%. The Israel Advertising Association, established in 1934, has 60 agencies as members.

bibliography:

B.B. Elliott, A History of English Advertising (1962); J. Gunther, Taken at the Flood: The Story of Albert D. Lasker (1960); M. Mayer, Madison Avenue, usa (1958); M.H. Biow, Butting In: An Adman Speaks Out (1964). in israel:Sefer ha-Shanah shel ha-Ittonaim (1965), 353–70.

[Jack Barbash]

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advertising

advertising, in general, any openly sponsored offering of goods, services, or ideas through any medium of public communication. At its inception advertising was merely an announcement; for example, entrepreneurs in ancient Egypt used criers to announce ship and cargo arrivals. The invention of printing, however, may be said to have ushered in modern advertising. After the influence of salesmanship began to insert itself into public notice in the 18th cent., the present elaborate form of advertising began to evolve. The advertising agency, working on a commission basis, has been chiefly responsible for this evolution. The largest group of advertisers are the food marketers, followed by marketers of drugs and cosmetics, soaps, automobiles, tobacco, appliances, and oil products. The major U.S. advertising media are newspapers, magazines, television and radio, business publications, billboards, and circulars sent through the mail. With the advent of the wide availability of electronic mail and access to the World Wide Web in the 1990s, the Internet has also become an important advertising venue. Since many large advertising agencies were once located on Madison Avenue in New York City, the term "Madison Avenue" is frequently used to symbolize the advertising business. The major criticisms of advertising are that it creates false values and impels people to buy things they neither need nor want and that, in fact, may be actually harmful (such as cigarettes). In reply, its defenders say that advertising is meant to sell products, not create values; that it can create a new market for products that fill a genuine, though latent, need; and that it furthers product improvement through free competition. The Association of National Advertisers and the American Association of Advertising Agencies, both founded in 1917, are the major associations.

See M. Mayer, Madison Avenue, U.S.A. (1958); R. Glatzer, The New Advertising (1970); R. Hovland and G. Wilcox, ed., Advertising in Society (1988); W. Wells et al., Advertising: Principles & Practice (4th ed. 1998); J. B. Twitchell, Adcult, USA (1995) and 20 Ads That Shook the World: The Century's Most Groundbreaking Advertising and How It Changed Us All (2000).

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Advertising

Advertising

Sections within this essay:

Background
Bureau of Consumer Protection
Advertising Agency Obligations
Publisher Obligations
Franchises and Businesses
Telemarketing Sales
Environmental Marketing Practices
Labeling Rules

Comparative Advertising
FTC Litigation
Additional Resources
Organizations
The Council of Better Business Bureaus
Federal Trade Commission

Background

The Federal Trade Commission (FTC) works to ensure that the nation's markets are efficient and free of practices which might harm consumers. To ensure the smooth operation of our free market system, the FTC enforces federal consumer protection laws that prevent fraud, deception, and unfair business practices. The Federal Trade Commission Act allows the FTC to act in the interest of all consumers to prevent deceptive and unfair acts or practices. In interpreting the Act, the Commission has determined that, with respect to advertising, a representation, omission, or practice is deceptive if it is likely to mislead consumers and affect consumers' behavior or decisions about the product or service. In addition, an act or practice is unfair if the injury it causes, or is likely to cause, is substantial, not outweighed by other benefits, and not reasonably avoidable.

The FTC Act's prohibition on unfair or deceptive acts or practices broadly covers advertising claims, marketing and promotional activities, and sales practices in general. The Act is not limited to any particular medium. Accordingly, the Commission's role in protecting consumers from unfair or deceptive acts or practices encompasses advertising, marketing, and sales online, as well as the same activities in print, television, telephone and radio. For certain industries or subject areas, the Commission issues rules and guides. Rules prohibit specific acts or practices that the Commission has found to be unfair or deceptive. Guides help businesses in their efforts to comply with the law by providing examples or direction on how to avoid unfair or deceptive acts or practices. Many rules and guides address claims about products or services or advertising in general and is not limited to any particular medium used to disseminate those claims or advertising. Therefore, the plain language of many rules and guides applies to claims made on the Internet. Solicitations made in print, on the telephone, radio, TV, or online naturally fall within the Rule's scope.

Bureau of Consumer Protection

The FTC's Bureau of Consumer Protection protects consumers against unfair, deceptive, or fraudulent practices. The Bureau enforces a variety of consumer protection laws enacted by Congress, as well as trade regulation rules issued by the Commission. Its actions include individual company and industry-wide investigations, administrative and federal court litigation, rule-making proceedings, and consumer and business education. In addition, the Bureau contributes to the Commission's on-going ef-forts to inform Congress and other government entities of the impact that proposed actions could have on consumers. The Bureau of Consumer Protection is divided into six divisions and programs, each with its own areas of expertise. One of the divisions is the Division of Advertising Practices.

Within the Bureau of Consumer Protection is the Division of Advertising Practices and the Division of Enforcement. These entities are the nation's enforcers of federal truth-in-advertising laws. The FTC Act prohibits unfair or deceptive advertising in any medium. That is, advertising must tell the truth and not mislead consumers. A claim can be misleading if relevant information is left out or if the claim implies something that is not true. In addition, claims must be substantiated especially when they concern health, safety, or performance. The type of evidence may depend on the product, the claims, and what experts believe necessary. Sellers are responsible for claims they make about their products and services. Third parties such as advertising agencies or website designers and catalog marketers also may be liable for making or disseminating deceptive representations if they participate in the preparation or distribution of the advertising or know about the deceptive claims.

The Division of Advertising Practices focuses its enforcement activities on claims for foods, drugs, dietary supplements, and other products promising health benefits; health fraud on the Internet; weight-loss advertising and marketing directed to children; performance claims for computers, ISPs and other high-tech products and services; tobacco and alcohol advertising; protecting children's privacy online; claims about product performance made in national or regional newspapers and magazines; in radio and TV commercials, including infomercials; through direct mail to consumers; or on the Internet.

Advertising Agency Obligations

Advertising agencies (and more recently, website designers) are responsible for reviewing the information used to substantiate ad claims. These agencies may not simply rely on an advertiser's assurance that the claims are substantiated. In determining whether an ad agency should be held liable, the FTC looks at the extent of the agency's participation in the preparation of the challenged ad and whether the agency knew or should have known that the ad included false or deceptive claims.

Publisher Obligations

Like advertising agencies, catalog and magazine publishers can be held responsible for material distributed. Publications may be required to provide documentation to back up assertions made in the advertisement. Repeating what the manufacturer claims about the product is not necessarily sufficient. The Division of Enforcement conducts a wide variety of law enforcement activities to protect consumers, including deceptive marketing practices. This division monitors compliance with Commission cease and desist orders and federal court injunctive orders, investigates violations of consumer protection laws, and enforces a number of trade laws, rules, and guides.

Franchises and Businesses

The Franchise and Business Opportunity Rule requires franchise and business opportunity sellers to give consumers a detailed disclosure document at least 10 days before the consumer pays any money or legally commits to a purchase. The document must include:

  • the names, addresses, and telephone numbers of other purchasers
  • a fully-audited financial statement of the seller
  • the background and experience of the business's key executives
  • the cost of starting and maintaining the business
  • the responsibilities of the seller and purchaser once the purchase is made

In addition, companies that make earnings representations must give consumers the written basis for their claims, including the number and percentage of owners who have done at least as well as claimed.

Multi-level marketing (MLM), sometimes known as network or matrix marketing, is a way of selling goods and services through distributors. These plans typically promise that people who sign up as distributors will get commissions two ways: On their own sales and on the sales their recruits have made.

Pyramid schemes are a form of multi-level marketing which involves paying commissions to distributors only for recruiting new distributors. Pyramid schemes are illegal in most states because the plans inevitably collapse when no new distributors can be recruited. When a plan collapses, most people ex-cept those at the top of the pyramid lose money. Lawful MLMs should pay commissions for the retail sales of goods or services, not for recruiting new distributors. MLMs that involve the sale of business opportunities or franchises, as defined by the Franchise Rule, must comply with the Rule's requirements about disclosing the number and percentage of existing franchisees who have achieved the claimed results, as well as cautionary language.

Telemarketing Sales

The FTC's Telemarketing Sales Rule requires certain disclosures and prohibits misrepresentations. The Rule covers most types of telemarketing calls to consumers, including calls to pitch goods, services, sweepstakes, and prize promotion and investment opportunities. It also applies to calls consumers make in response to postcards or other materials received in the mail. Calling times are restricted to the hours between 8 a.m. and 9 p.m. Telemarketers must disclose that it is a sales call, and for which company. It is illegal for telemarketers to misrepresent any information, including facts about goods or services, earnings potential, profitability, risk or liquidity of an investment, or the nature of a prize in a prize-promotion scheme. Telemarketers must disclose the total cost of the products or services offered and all restrictions on getting or using them, or that a sale is final or non-refundable. Although most types of telemarketing calls are covered by the Rule, the Rule does not cover calls placed by consumers in response to general media advertising (except calls responding to ads for investment opportunities, credit repair services, recovery room services, or advance-fee loans). It also does not cover calls placed by consumers in response to direct mail advertising that discloses all the material information required by the Rule (except calls responding to ads for investment opportunities, prize promotions, credit repair services, recovery room services, or advance-fee loans). The Mail or Telephone Order Merchandise Rule requires companies to ship purchases when promised (or within 30 days if no time is specified) or to give consumers the option to cancel their orders for a refund.

Environmental Marketing Practices

Guidelines for using environmental marketing claims have been established by the Federal Trade Commission. The guides themselves are not enforceable regulations, nor do they have the force and effect of law. These guides specifically address the application of Section 5 of the Federal Trade Commission Act that makes deceptive acts and practices in or affecting commerce unlawful to environmental advertising and marketing practices. Guides for the Use of Environmental Marketing Claims provide the basis for voluntary compliance with such laws by members of industry and are available from the EPA and the FTC. The guides apply to advertising, labeling, and other forms of marketing to consumers and do not preempt state or local laws or regulations. Generally, environmental claims must specify application to the product, the package, or a component of either. Environmental claims should not overstate the environmental attributes or benefit. Every express and material implied claim conveyed to consumers about an objective quality should be substantiated and other broad environmental claims should be avoided or qualified.

A product which purports to offer an environmental benefit must be backed with factual information. Green Guides govern claims that consumer products are environmentally safe, recycled, recyclable, ozone-friendly, or biodegradable. These guides apply to environmental claims included in labeling, advertising, promotional materials, and all other forms of marketing. The guides apply to any claim about the environmental attributes of a product, package, or service in connection with the sale, offering for sale, or marketing of such product, package, or service for personal, family, or household use, or for commercial, institutional, or industrial use.

According to the guidelines, a product or package should not be marketed as recyclable unless it can be collected, separated, or otherwise recovered from the solid waste stream for reuse or in the manufacture or assembly of another package or product through an established recycling program. Products or packages that are made of both recyclable and non-recyclable components must have any recyclable claim adequately qualified to avoid consumer deception about which portions or components of the product or package are recyclable. Claims of recyclability should be qualified to the extent necessary to avoid consumer deception about any limited availability of recycling programs and collection sites. If an incidental component significantly limits the ability to recycle a product or package, a claim of recyclability would be deceptive. A product or package that is made from recyclable material, but, because of its shape, size, or some other attribute, is not accepted in recycling programs for such material, should not be marketed as recyclable.

Likewise, claims that a product or package is degradable, biodegradable, or photodegradable should be substantiated by competent and reliable scientific evidence that the entire product or package will completely break down and return to nature, i.e., decompose into elements found in nature within a reasonably short time after customary disposal. Claims of degradability, biodegradability, or photodegradability should be qualified to the extent necessary to avoid consumer deception about the product or package's ability to degrade in the environment where it is customarily disposed and the rate and extent of degradation.

A recycled content claim may be made only for materials that have been recovered or otherwise diverted from the solid waste stream, either during the manufacturing process (pre-consumer) or after consumer use (post-consumer). To the extent the source of recycled content includes pre-consumer material, the manufacturer or advertiser must have substantiation for concluding that the pre-consumer material would otherwise have entered the solid waste stream. In asserting a recycled content claim, distinctions may be made between pre-consumer and post-consumer materials. Where such distinctions are asserted, any express or implied claim about the specific pre-consumer or post-consumer content of a product or package must be substantiated. For products or packages that are only partially made of recycled material, a recycled claim should be adequately qualified to avoid consumer deception about the amount, by weight, of recycled content in the finished product or package. Additionally, for products that contain used, reconditioned, or remanufactured components, a recycled claim should be adequately qualified to avoid consumer deception about the nature of such components. No such qualification would be necessary in cases where it would be clear to consumers from the context that a product's recycled content consists of used, reconditioned, or remanufactured components.

Labeling Rules

The Textile, Wool, Fur, and Care Labeling Rules require proper origin and fiber content labeling of textile, wool and fur products, and care label instructions attached to clothing and fabrics.

For a product to bear the label "Made in USA," the product must be "all or virtually all" made in the United States. The term "United States," as referred to in the Enforcement Policy Statement, includes the 50 states, the District of Columbia, and the U.S. territories and possessions. "All or virtually all" means that all significant parts and processing that go into the product must be of U.S. origin. That is, the product should contain no, or negligible, foreign content. The product's final assembly or processing must take place in the United States. The Commission then considers other factors, including how much of the product's total manufacturing costs can be assigned to U.S. parts and processing and how far removed any foreign content is from the finished product. In some instances, only a small portion of the total manufacturing costs is attributable to foreign processing, but that processing represents a significant amount of the product's overall processing. Claims that a particular manufacturing or other process was performed in the United States or that a particular part was manufactured in the United States must be truthful, substantiated, and clearly refer to the specific process or part, not to the general manufacture of the product, to avoid implying more U.S. content than exists.

A product that includes foreign components may be called "Assembled in USA" without qualification when its principal assembly takes place in the United States and the assembly is substantial. For the assembly claim to be valid, the product's last substantial transformation should have occurred in the United States.

Comparative Advertising

It is completely legal for a company to compare its product or service to another company's in an ad provided the comparison is truthful and accurate. However, it is illegal to mislead through an implied comparison. A statement in an ad that a product is more reliable than another because it does something that the other product may also do, can manipulatively imply a falsehood.

FTC Litigation

Typically, FTC investigations are non-public to protect both the investigation and the companies involved. If the FTC believes that a person or company has violated the law, the agency may attempt to obtain voluntary compliance by entering into a consent order with the company. A company that signs a consent order need not admit that it violated the law, but it must agree to stop the disputed practices outlined in an accompanying complaint. If a consent agreement cannot be reached, the FTC may issue an administrative complaint or seek injunctive relief in the federal courts. The FTC's administrative complaints initiate a formal proceeding that is much like a federal court trial but before an administrative law judge; evidence is submitted, testimony is heard, and witnesses are examined and cross-examined. If a law violation is found, a cease and desist order may be issued. Initial decisions by administrative law judges may be appealed to the full Commission. Final decisions issued by the Commission may be appealed to the U.S. Court of Appeals and, ultimately, to the U.S. Supreme Court.

In some circumstances, the FTC can go directly to court to obtain an injunction, civil penalties, or consumer redress. The injunction preserves the market's competitive status quo. The FTC seeks federal court injunctions in consumer protection matters typically in cases of ongoing consumer fraud.

Additional Resources

Advertising: Principles And Practice Wells, William, Prentice Hall, 1999.

Copywriting for the Electronic Media: A Practical Guide Meeske, Milan, Wadsworth Publishing Company, 1999.

Trust Us, We're Experts: How Industry Manipulates Science and Gambles with Your Future Rampton, Sheldon and John Stauber, Putnam, 2000.

Organizations

The Council of Better Business Bureaus

4200 Wilson Blvd., Suite 800
Arlington, VA 22203-1838 USA
Phone: (703) 276-0100
Fax: (703) 525-8277
URL: http://www.bbb.org

Federal Trade Commission

600 Pennsylvania Avenue, NW
Washington, DC 20580 USA
Phone: (877) FTC-HELP
URL: http://www.ftc.gov

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Advertising

Advertising

Sections within this essay:

Background
Before the Internet
Print, Radio, and TV Advertising
Advertising Becomes More Intrusive

Benefits of Internet Advertising
Advertising Caveats
Website Advertising
Cookies
Spam

Internet Advertising and Children
Making Internet Advertising Work for Users
Additional Resources
Organizations
Electronic Frontier Foundation (EFF)
Federal Communications Commission (FCC)
Federal Trade Commission (FTC)

Background

The number of people who see an advertisement on the Internet and click on it to get more information is growing. For these people, the Internet is a means of streamlining commerce. Depending on the sophistication of the ad, the viewer may be able to get product information, comparison information on other products, a listing of current vendors who sell the product (along with the price each charges), and an electronic order form. The Internet allows people to purchase anything from travel tickets to groceries online, and people are drawn to online products via ads.

It is also true that people who have clicked on an online ad have in all likelihood provided the advertiser with a way to collect information about them. Some of this information may seem innocuous—a favorite hobby, product preferences. In some cases, however, the site may gather more information about viewers than they realize, and it may do so more actively than they wish.

Because the Internet is a relatively new phenomenon (having become popular as a communications tool in the 1990s), there are still a number of questions about how to use it effectively. Moreover, because the Internet exchanges information between computers, it allows users to be "tracked" to varying degrees. Not surprisingly, this ability has made the Internet a particularly attractive tool for advertisers and marketers. An advertisement placed on the Internet has the potential to reach literally millions of people anywhere in the world, at a fraction of the cost of traditional print or broadcast advertising. As with traditional advertising, some people welcome the information, while others simply wish to be left alone. In most cases this is not a problem; an Internet user who sees an ad has the option of clicking it and being put on an electronic mailing list if he or she chooses, while someone who is not interested can ignore the ad. In fact, many people do wish to be placed on such lists. Being on these lists might allow a consumer to receive information about new products and special offers via email. To some, this is seen as a convenience.

Some Internet sites, however, are set up to collect information about visitor usage patterns. They use this information to target potential customers via mail, telephone, and email. For every person who sees this as a convenience, there is someone else who views it as a threat to security and privacy. Al-though the issue will likely be a work in progress for some time, various groups in the government and the private sector are working to ensure that Internet advertising is safe and secure and that it respects the privacy of viewers and customers.

Before the Internet

Using advertising as a means of tracking customers and their preferences is hardly new. The twentieth century witnessed the growth of targeted marketing based on information supplied, willingly, by consumers. This could be accomplished by many means, with the dual goal of finding out which advertising is most effective and which customers are most receptive.

Print, Radio, and TV Advertising

A simple example is a print advertisement in a newspaper or magazine that includes the line, "Mention this ad and receive an additional discount on our services." The advertiser had an accurate and coste-ffective way of determining how successful the ad was; if hundreds of people mentioned it, the ad was working, but if no one mentioned it, the ad needed to be changed or dropped. Ads of this type also appear on radio and television.

An ad that asks people to list their name and address and asks them to send that information to the advertiser is designed to perform two functions. First, it allows the advertiser to track individuals and reach them directly with product and service offers. Second, it allows the consumer to receive targeted information about products that he or she may be interested in purchasing. For a consumer who sees this as a service, this works well for everyone concerned. A consumer who has no interest in getting mail or telephone calls from advertisers can simply ignore requests for additional information.

Advertising Becomes More Intrusive

As technology made it easier for records to be kept, it became increasingly difficult for people to remain anonymous. As marketing became a more definitive science in the latter half of the twentieth century, more people found themselves subjected to ads in the mail and on the telephone. Anyone with a telephone number and a mailing address could expect to be contacted by advertisers. People who did business with a company and paid by credit card or people who submitted their names to local businesses offering free prizes, might find themselves being targeted with specific offers. Junk mail, junk phone calls, and even junk faxes have become a fact of life for virtually everyone. People who switch to unlisted telephone numbers often find that they get calls for the last person before them to hold that number. Organizations such as the Direct Marketing Association (DMA) can help consumers get off mail and telephone lists, but other lists do continue to crop up.

Benefits of Internet Advertising

Despite the negative aspects of Internet ads, they do actually serve a useful function for both consumers and those who have websites. For consumers, Internet advertising provides them with one enormous advantage: free access to websites. Many websites use the revenue generated by ads to pay for the web hosting service that allows them to appear in the Internet in the first place.

From the website's perspective, accepting ads allows people to have free access. Without the ads, the sites would likely need to charge a fee to remain viable and pay for web hosting services (which include the space on the Internet to run the site).

Advertising can be done via email as well. This is a highly cost-effective way for companies to reach customers or potential customers. Typically, a company will collect the email addresses of customers and ask them whether they wish to be sent special offers or company news via email. Those who say yes will get periodic product updates and special purchase officers delivered electronically. Customers can opt into or out of the system. Email has the advantage of quick delivery and minimal cost; even a company that has no website can send e mail.

Advertising Caveats

Website Advertising

Anyone who has visited a website on the Internet is familiar with the ad that flashes across the screen, known as the banner ad. Banner ads often have some sort of graphic element that catch the viewer's attention, along with an invitation to learn more about the product being advertised.

Banner ads are often considered intrusive and many people simply ignore them. Other ads that are less easy to ignore actually pop up on the screen while the viewer is looking at a website. Some of these ads open up in a new window, and the viewer must physically close these windows to get rid of the ad.

What many people fail to realize is that by clicking on to an Internet ad, they are authorizing a tracking device to be placed on their computer. This device will allow the advertiser to monitor the potential customer's computer use, including other sites visited and purchases made. Many people who believe they are safe from Internet advertisers are surprised to find themselves getting offers online or in the mail because they are unaware that clicking onto a banner ad launches this tracking device, known as a cookie.

Cookies

Despite the whimsical name, cookies are a powerful tracking tool for advertisers. They are designed to store small pieces of information on a computer to make it easier for websites to remember the computer user. In its most innocuous form the cookie is a useful item. Cookies are used to save passwords and user ID information, which is useful for people who visit websites of organizations they belong to. Thanks to cookies, the computer can "remember" this information instead of forcing the user to type it in each time he or she visits a site.

Cookies can also be used, however, to gather more personal information about users, including what they purchase, how much time they spend at different sites, what they click on, and what they purchase. Often, banner ads include cookies, so anyone who clicks on a banner ad gets a cookie placed on his or her computer. That may be fine if the cookie only tracks the user's visits to that particular ad. Unfortunately, many banner ad companies actually collect data from cookies for all their member companies. This is how clicking on one particular ad can generate junk email, phone calls, or print mail.

Spam

Unsolicited electronic advertising, or spam, has become an increasingly common nuisance to anyone with an email account. Spam is essentially electronic junk mail. Those who send spam may purchase email lists, or they may use technology that sends to random email names in a particular domain name (in much the same way computerized telemarketing will dial different telephone numbers at random). Spam may advertise anything at all from magazines to electronic equipment to travel packages. One of the most pervasive, and offensive, uses of spam is advertising of pornographic websites and literature.

Spam is popular with advertisers because it is convenient and because it costs a fraction of what mass mailings cost. With an actual mailing, the advertiser has to pay for paper, printing, and postage. With email advertisements, none of those costs exists. As with telemarketing, the danger of offending potential customers is offset many times over by the number of new customers who see email marketing as a convenient way to receive information.

A number of companies offer spam-filtering services that are designed to identify mail that looks like spam and prohibit its delivery. Usually the spam is stored where the would-be recipient can view it at his or her leisure and delete as necessary. Some Internet service providers (ISPs) also offer anti-spam functions. Electronic communication experts recommend that those who wish to minimize the amount of spam they get can send complaints to the ISP's postmaster (for example, if the domain name is sample.com, the complaint would be sent to [email protected]) Often the ISP has no idea that a customer is using spam and will be only too happy to remove that client from its roster. Replying to a spam message, even when there are instructions for getting off of a list, is not recommended because even an angry note tells the sender that they have reached a live person, and they may continue to send spam anyway.

Internet Advertising and Children

Children are particularly vulnerable when it comes to advertising. Marketers have long known that television advertising can be highly effective in reaching children, who are not savvy enough to understand that ads can be misleading.

Congress enacted legislation in 2000 to protect children, as well as their parents, from unscrupulous or unwitting advertisers who try to solicit information. Known as the Children's Online Privacy Protection Act (COPPA), it requires websites to obtain verifiable parental consent before collecting data from children. This data could include names, mailing addresses, email addresses, birth dates, and other private or personal information that children may not realize should not be shared online.

There have been cases, for example, in which children have been asked to provide this sort of information to websites as part of the entry rules for an online contest. COPPA mandates that in the case of such contests, children cannot be asked for information that is not deemed reasonably necessary. Companies that violate COPPA can face large fines. COPPA covers all websites for children ages 13 and under, as well as any website that collects data from children.

In fairness to these websites, many of them were ignorant about the problem and its potential fallout. Through increased education and compliance efforts, COPPA has helped children's websites to be more careful. For example, a 1998 survey of 144 children's websites revealed that only 24 percent had some sort of privacy policy to ensure that children's information would not be given to other sources. A second survey, released in 2001, revealed that the number of sites with a privacy policy had risen to nearly 90 percent.

Making Internet Advertising Work for Users

Used properly, Internet advertising can be appealing to consumers and cost-effective to advertisers. Consumers who wish to get the most out of Internet advertising can follow some simple guidelines to ensure that they are not being placed unwittingly on mailing lists.

  • Learn how to reject and remove cookies. Internet browsers (such as Netscape, Internet Explorer, and Opera) allow users to set their preferences to accept only certain cookies, or no cookies at all. This can be helpful, but it sometimes makes it cumbersome to access websites that use cookies to store member ID and password names. Each browser does provide instructions on how to do this, and also on how to selectively delete cookies currently residing on a computer.
  • Provide only the necessary information to conduct online transactions. Some websites ask for name, mailing address, home and work phone numbers, email address, date of birth, etc. Users probably do not need to divulge all this information. In most online forms, "required fields" (those that must be filled out for the form to be accepted) are marked with an asterisk; everything else is optional.
  • If users belong to any online lists or frequent any sites where they make purchases, they can check their preferences to see what information is available. About 2001 Yahoo, which offers services such as listserve hosting, upgraded its technology. In so doing, it set all Yahoo customers to a default setting in which they all consented to receiving solicitations by mail, phone, and email. Yahoo did notify its customers and provided instructions on how to change those preferences, but if they belong to other list groups or if they make purchases from a particular site they should periodically check their settings.
  • Do not respond to spam. Sending a reply to spam asking to be removed from a list almost never works. Users can contact their Internet service provider to find out if it can help them track down spam; there is also software on the market that can screen some spam.

Some organizations on the Internet provide information about online privacy issues, advertising, legal action, and spam. The Electronic Frontier Foundation (http://www.eff.org) offers a variety of information and also has links to other information.

Ultimately, dealing with Internet advertising is like dealing with any other type of advertising. Understanding how it works may not eliminate ads, but it will help users know how to minimize their impact.

Additional Resources

Advertising and Marketing on the Internet: Rules of the Road Federal Trade Commission, Bureau of Consumer Protection, 1998.

Advertising on the Internet Zeff, Robbin Lee, and Brad Aronson, Wiley, 1999.

Advertising on the Web Sterne, Jim, Que, 1997.

Cybermarketing Keeler, Len, AMACOM, 1995.

E-Advertising and E-Marketing: Online Opportunities Haegele, Katie, Rosen Publishing Group, 2001.

Organizations

Electronic Frontier Foundation (EFF)

454 Shotwell Street
San Francisco, CA 94110 USA
Phone: (415) 436-9333
Fax: (415) 436-9993
URL: http://www.eff.org
Primary Contact: Shari Steele, Executive Director and President

Federal Communications Commission (FCC)

445 12th Street SW
Washington, DC 20554 USA
Phone: (888) 225-5322
Fax: (202) 418-0232
URL: http://www.fcc.gov
Primary Contact: Michael K. Powell, Chairman

Federal Trade Commission (FTC)

600 Pennsylvania Avenue NW
Washington, DC 20580 USA
Phone: (202) 382-2537
URL: http://www.ftc.gov
Primary Contact: Frederick J. Zirkel, Inspector General

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Advertising

Advertising

What It Means

The term “advertising” refers to all the methods that organizations use to communicate a message to potential customers. In most cases the message informs people about a product or service that the organization sells and then urges those people to purchase that product or service. For example, Progressive Auto Insurance has many television commercials that first state the benefits of the company’ insurance policies and then try to persuade consumers to buy such a policy. Not all advertisements, however, ask customers to purchase an item for sale. Campaigning politicians may advertise their candidacy for office and request that people vote for them. A nonprofit organization (a group whose goal is to support an issue of public or private concern rather than to make money) may post an advertisement warning people about the dangers of alcohol or drugs.

Advertisers broadcast their messages in a number of ways, including through television and radio commercials, on billboards, along the sides of city buses, in magazines and newspapers, on the Internet, on movie theater screens, and through mass e-mails (spam). Another advertising technique is called product placement: a company can arrange to have their product used in a movie or a television show. Many of the characters in the program, especially the most appealing ones, may wear Nike footwear, thus encouraging viewers to purchase their own Nikes. The organization promoting the product or service must pay for any of these types of advertising. Television commercials are the most expensive form of advertising, but they are also considered the most effective because they reach the widest audience.

When Did It Begin

As far back as 3100 bc , Egyptians used ink on papyrus to create sales messages and political arguments. Some historians regard these artifacts as the first examples of print advertising. Ancient Greeks and Romans also used papyrus to promote sales. After the invention of the printing press in 1445, advertisements for books and medicine began appearing on handbills or flyers. In the seventeenth century these products were also regularly advertised in London’s newspapers.

In the United States classified ads became popular in newspapers during the eighteenth century. The classified section of a newspaper consists of a series of messages, usually appearing in small print, advertising merchandise for sale, available jobs and housing, garage sales, and so forth. In today’s newspapers classified ads are normally posted by individuals selling their own cars or renting out living space, but in the eighteenth century larger corporations advertised their goods and services in this format. The success of classified ads led such major corporations as Sears to attempt to reach customers more directly, usually by mailing them catalogs that contained a complete list of their available products.

More Detailed Information

Most organizations follow a similar set of steps to craft an advertisement and broadcast it to potential customers. The first step is to identify a target market, which is the group of consumers most likely to purchase the product or service. The word demographic is also used to mean a target market. An advertising demographic is a specific segment or portion of the population determined by age, gender, and social class. One demographic, or target market, that advertisers have identified is urban professional males, ages 25–49; market research (data that charts consumer buying patterns) indicates that people in this group tend to buy similar products.

The second step in preparing an advertisement is to create a message that is likely to appeal to the target market. For instance, SUV (sport utility vehicle) advertisements tend to appeal to professional people who have families, enjoy outdoor activities, or both. Automakers create images to convey the message that these vehicles have enough space to accommodate the entire family and that the vehicles are ideal for trips to the countryside. Advertisements for soft drinks, on the other hand, tend to appeal to younger males; these ads often depict kids engaging in such activities as skateboarding and skiing.

The third step in the process is to place the advertisement in a location where members of the target market are likely to see or hear it. For example, home improvement commercials often run during the breaks in televised sporting events because most people watching these programs are men who use home improvement products, such as power tools. Likewise, commercials for shampoo and cosmetics typically run during television shows that are known to have mostly female viewers.

Two of the most important aspects of advertising are brand names and value propositions. A brand is a complex term that refers to the identity or reputation of a product or service. Among many things a brand can include a logo (a graphic image that denotes a product or company), a slogan (a memorable phrase associated with a product or service), and a distinguished set of customers recruited to advertise the product. Taken together, these features connect a product with a set of ideas and a standard of excellence. For instance, the Nike brand identifies itself with the “Swoosh” logo, a slogan that reads “Just Do It,” and a series of famous athletes, such as Michael Jordan and Tiger Woods, who testify about the quality of Nike apparel. The slogan (“Just Do It,”) links Nike products to the idea of adventurousness. The message is that, instead of procrastinating or wallowing in self-doubt, people who wear Nikes go out and do exciting things. Using famous athletes to present the products associates Nike with a high level of accomplishment. The implication is that the average consumer will also achieve athletic success by using Nike products.

A value proposition is the statement in an advertisement that explains the benefit of purchasing a product or service. For example, one technology firm may emphasize the statement “Service at Affordable Prices,” while another technology firm claims that they are “Always Available to Help with Computer Problems.” Saving money is the value proposition in the first case, and having reliable technical support is the value proposition in the second case. Because most consumers examine advertisements for less than 30 seconds, advertisers believe that it is important to clearly state only one value proposition per advertisement.

Conducting market research to discover the behaviors of a target audience and branding a product or service so that it appeals to that target audience increase the demand for the product or service. The logic is straightforward. Advertisers identify the needs of their target audience and then demonstrate how the product or service they are advertising fulfills that need. This increases the demand for that product or service. For example, in the early spring advertisers for lawn products will write ads that show middle-class homeowners that they need a well-groomed and healthy green lawn that is free of weeds. Next, advertisers will show how a given lawn product will provide consumers with grass that will make their neighbors envious. The goal is to distinguish this lawn-care product from rival lawn-care products.

In addition to branding the product for a specific target audience, the frequency of the advertisement (the number of times the advertisement appears) also has a significant impact on the demand for it. Some market analysts (professionals who study buying trends) even argue that the frequency of an advertisement promotes demand more than the content of the advertisement. This means that the companies with money to buy a lot of advertising time on the television and the radio and advertising space in newspapers and billboards are more likely to create demand than companies with smaller advertising budgets. Creating brand awareness through frequency requires creativity as well as cash, however. For instance, logos should be designed so that they promote immediate recognition of the product. For this to happen the logo has to be recognizable against any background and at any size. These qualities allow the manufacturer to display the logo most frequently.

In addition to their having a massive advertising budget, Nike shoes are in great demand because their logo is the most recognizable and visible of all the athletic-shoe logos. The Nike Swoosh looks exactly the same whether it is displayed on the side of a sneaker, on the breast of a shirt, or across a billboard. What is more, the Nike logo seems to look presentable no matter how many times it appears on an athlete’s clothing. Thus, viewers will spot the logo on the sides of an athlete’s shoes, on the tongue of the shoe, on the back near the Achilles tendon. The logo will appear again on the breast of an athlete’s shirt, in the back along the base of his shirt, as well as in two or three places on his athletic gloves. Furthermore the audience is likely to see the Nike logo displayed in several places at the auditorium.

Recent Trends

E-mail spamming is one of the most common and, many people find, bothersome forms of electronic advertising. This technique involves sending identical messages via e-mail to millions of recipients. Spam has been widely deployed since 1995, when e-mail and the Internet first became available to a large number of consumers. Some of the products and services most commonly advertised via e-mail spam messages include prescription drugs, mortgage offers, and computer ink cartridges. Frequently, goods of questionable value are advertised in spam e-mails, including counterfeit brand-name items, counterfeit software, and stocks (shares of ownership in corporations) offered at inflated prices for shares in dubious businesses.

A huge number of spam e-mails are sent in the United States, and the rate at which they are sent has increased alarmingly. In June 2005, 30 billion spam e-mails were sent each day. One year later the number had jumped to 55 billion per day, and by December 2006, 85 billion spam e-mails were being sent every day. According to some estimates, as much as 85 percent of incoming e-mail is spam. Most consumers have a spam-filtering device on their computers that scans all incoming e-mails for words that might indicate that the message is spam.

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Advertising

Advertising

Advertising, a form of communication between a paying sponsor and an identified audience (Dunn and Barban 1986), has become ubiquitous. Advertising's financial impact is significant: In 2004 within the United States alone, $263.77 billion was spent on advertising (Coen 2006). However, focusing exclusively on advertising's economic impact means that one overlooks the significant cultural power that advertising wields. Corporations, consumers, and other agencies have begun examining the phenomenon with more complexity to measure the degree of social and political influence of advertising. They note the limitations of seeing advertising only as a paid communication designed to sell products or services to an identified audience, acknowledging that many factors—including the advertised messages and their visual elements, contexts, and viewers—shape the meaning of the advertisement. More importantly, they argue that focusing on the economic role of advertising omits the degree to which other messages and values are being, if not sold, at least circulated within society. With growing attentiveness to the values that are associated with advertising (along with consumerism and marketing), many have critiqued the pervasiveness of advertising, its increasingly specific targeting of populations, and the cultural values associated with particular products. Since the 1960s, as advertising became a larger part of consumer culture, a number of questions emerged from a variety of disciplines. How are various identities—such as gender, sexuality, age, and race—portrayed in advertising? How do companies reinforce or challenge social identities? What values and perspectives are being advertised along with specific products?

MARGINALIZATION OF NON-DOMINANT GROUPS

There is a relationship between how people are represented in advertising and the perceived societal role of those groups. Women, people of color, older citizens, and other non-dominant groups (including gay, lesbian, bisexual, and transgendered [GLBT] audiences) have traditionally played a marginal role in the creation of advertising. These groups have historically held little control over their representation, let alone the values and messages that advertising portrays about them. As a result, advertising can convey notions about the perceived values of a group that might not correspond with the actual desires and experiences of the group itself. In addition, although advertisers frequently organize their audiences by various identity factors (e.g., gender, sexuality, age, race, class, and religion), they do not always research those audiences. Consequently, advertisers may not be aware of products and services that might benefit that population. Indeed, they might choose to market products with known health risks (e.g., fast food, tobacco, and alcohol) to particular groups, such as people of color (Dates and Barlow 1990) or women (Deadly Persuasion 2003). Given the ways in which portrayals of non-dominant groups have often been misogynist, racist, and homophobic, such patterns can create social discord (Kellner 1995).

Certainly, other media traffic in these images; however, advertising helps defray the cost of most media to consumers, so all media must consider the dominant images within advertisements. Most media outlets are directly supported by advertisers; in 1990, it was estimated that general audience magazines received 50 percent of their revenues from advertisers, whereas newspapers collected seventy-five percent from advertisers, and broadcasters relied almost exclusively on advertising income (Herman 1990). It is not surprising, perhaps, that the information presented in media outlets can be affected by the interests of their financial supporters (i.e., advertisers). It becomes increasingly difficult for individuals to overlook the influence of advertising when trying to determine their own relationship to society, let alone that of other groups when "neutral" media can be influenced by advertisers. Advertising, then, is a central promoter of values within public discourse, providing "perhaps the most dynamic and sensuous representations of cultural values in the world" (Lears 1994).

REINFORCEMENT OF GENDER NORMS

Advertising can reinforce particular gender norms; advertisements directed at women, for instance, often valorize nurturing and supportive roles. Such depictions, which confine women to the domestic sphere, persist despite the fact that by the 1980s, only ten percent of families included a wife and mother whose sole job was taking care of her children while her husband worked (Levitan, Belous, and Gallo 1988). Other stereotypical feminine or misogynist behaviors are portrayed as representative of all women, including women as naggers, nymphomaniacs, mentally incompetent, animalistic, and as bodies (rather than as humans). In contrast, men are typically featured as dominant, heroic, and/or competent subjects (rather than objects). Male voices are more likely to be featured in voiceovers, reinforcing the notion that authority is masculine. Such representations, then, reinforce norms of men as being linked primarily with the public sphere, whereas women are associated with the private sphere. The few exceptions seem incapable of challenging gendered norms.

In the late 1980s, images began surfacing that featured men as foolish (particularly when juxtaposed with items traditionally thought as feminine, such as those related to food preparation) or as fathers. Yet men are infrequently depicted as caregivers in advertisements. When they do appear as parents, they and the children usually participate in conventionally masculine activities. Such images suggest that men can assume a nurturing role, which has been socially defined as feminine, but they are rarely portrayed in additional feminine modes. For example, in 1999, Kaufman pointed out that men are "never shown caring for girls," suggesting that such choices might be read as excessively effeminate.

OBJECTIFICATION OF WOMEN

When women are represented in advertising—a public domain—they are frequently depicted as objects, rather than as subjects. This objectification of women, and their bodies, can be better understood when one considers the "gaze," which controls and fetishizes the female body (Mulvey 1975). Mulvey's work offers a productive point of origins for many scholars, including John Berger, who highlights the gendered dynamics of this concept: "Men act; women appear. Men look at women. Women watch themselves being looked at. Thus she turns herself into an object—and most particularly an object of vision—a sight" (Berger 1977). Rather than being an active subject with agency, women are presented as passive or decorative objects, who rarely interact with the products being sold (Sheehan 2003): This passivity is part of a larger cultural message being sold along with the product. These objectifying gazes have acquired moralistic dimensions: What is beautiful is considered self-evidently good (Wolszon 1998). Objectification is presented as a desirable goal that can be accomplished if one buys the appropriate products and services. Although advertisers have expanded their portrayal of who can benefit from these products and services—businesswomen, women of color, women of various ages—the demand on consumers to be sexually appealing is still a central theme of many advertisements (Kilbourne 2003).

It has become commonplace that "sex sells" when advertising strategies are discussed. However, the degree to which this maxim might be true has sparked debates and research. In one such study, female subjects on magazine covers had their heads emphasized only four percent of the time (the ratio for men is 900% more); their torsos and bodies (along with their heads) comprise the remaining shots (Lambaise and Reichert 2006). Feminist critique has focused on the high frequency of nearly or completely nude female bodies in advertisements as well as the visual dismemberment of those bodies. Feminists and others have critiqued the disturbing trend of using extremely young girls as sexual objects in ads (Kilbourne 2003, 2000). Such patterns reinforce the objectification of women, presenting it as a normal social phenomenon.

INFLUENCE ON STANDARDS OF BEAUTY

Others have rightly noted that consumers may view the highly artificial portrayal of female beauty (models typically have a lower body weight than the average consumer, are styled by many people, and may have their images digitally touched up in the editing room) as a documentary of female beauty rather than as a highly stylized fiction. Some researchers have found that there is little, if any, proof that an attractive model or spokesperson prompts consumer spending decisions (Cabellero, Lumpkin, and Madden 1989). And yet, these appeals to beauty continue to be pitched at women and girls rather than at men: such appeals appeared in fifty-six percent of television commercials that ran during teenage girls' preferred television shows; in contrast, such appeals appeared in only three percent of television advertisements aimed at men during viewing hours where they were the major audience (Signorelli 1997). Naomi Woolf has maintained that this "beauty myth" is a means of prescribing behavior to women (investing one's time and financial resources to portray youth and naïveté) and not appearance (1992). This distinction focuses on the appeal of beauty as a social control: As images of beauty continually shift, insecure consumers may perpetually justify their purchases of products and services. By endlessly manipulating and redefining beauty, advertising and corporate profits are secured.

OBJECTIFICATION OF MEN

Some researchers see insecurity as the motivating force behind the abundance of overtly muscular or conspicuously athletic men in advertising (Klein 1993). These representa-tions masculinize the values, products, and services that appear in the media. Granted, these masculine images differ from norms of female models—male models are encouraged to exhibit physically strong and intimidating bodies whereas female models are encouraged to be excessively thin—but these images speak to the ways in which men, too, can be objectified in the media. As advertisers began foregrounding the bodies of male models, consumers (women and men) were invited to become voyeurs of male bodies. While sexual objectification of women remains a long-standing phenomenon, consumers have begun to witness an increase in the sexual objectification of men. Mulvey's concept of the "gaze" has been revived with this acknowledgement that men might also be eroticized—and disempowered—as objects of desire (Mulvey 1975, Schroeder and Zwick 1999). When paired, women and men are often positioned to foreground the competition, power, and domination between the two (Goffman 1979). Such domination is often eroticized (hooks 1997).

FUNCTION RANKING AND VIOLENCE

While a model's appearance is scrutinized by advertisers and researchers, other elements of the image matter as well: clothing, activity, facial expression (or lack thereof), setting, other objects, postures, sex of the people portrayed, and other attributes of identity (e.g., race, class, and age). Researchers contend that the action of models within advertising can underscore the power differential between groups. Erving Goffman defines this phenomenon as "function ranking," the relative passivity of female models when male models are present, a pattern that he sees as supporting male dominance; Ellen Seiter finds a similar pattern when analyzing advertising images of black children observing their more active white playmates, which subtly hints at white supremacy (Goffman 1979, Seiter 1995). This passivity becomes even more troubling when advertisers accentuate this power differential so that violence becomes part of the message.

Violence in advertising may include linguistic aggression (using specific language, such as "bitch"), may highlight fear (by featuring models in perilous situations), and may even feature models posed as corpses. Typically, violence is presented as erotic or fashionable with male models as the aggressive party. Given that in the United States one in four women experiences domestic violence and that one in five women and one in thirty-three men have experienced an attempted or completed rape (Tjaden 2000, Rennison 2001), this strategy exploits and glamorizes what is a painful reality for many survivors. Some consumers have negatively responded to these portrayals of sexual objectification and of violence through boycotts, complaints, and media awareness campaigns. Such campaigns include Joan Kilbourne's "Killing Us Softly" video series, the work of the activist organization Guerilla Girls, and the long-running "No Comment" section of Ms. Magazine, which includes objectionable ads and the company's contact information on its penultimate page. These negative responses—particularly those that affect the public image of the company or the financial future of a given product—have affected an industry leery of alienating consumers (Twitchell 1996).

MARKETING TO TARGET GROUPS

This negotiation of sexuality—given its commercial appeal—becomes increasingly coded upon consideration of advertising images that are constructed to be appealing to both heterosexual and homosexual audiences. Brumbaugh and Grier's concept of "encoding" describes the phenomenon in which

marketers draw on knowledge of the selected segment to create advertising that carries a certain intended meaning for that segment. Markets 'encode' the meaning through the use of cues such as culturally similar actors, shared cultural symbols, appropriate media placement, and preferred language or vernacular. The marketer's hope is that the cues will be 'decoded' by viewers in the target segment to yield the intended meaning that encourages favorable evaluates of the product and firm.

                              (Brumbaugh and Grier 1999)

These coded messages allow advertisers to access a larger market of consumers: gay and lesbian audiences are meant to interpret these ads as representing their culture(s) and experiences, subcultural codes that are presumably not legible to heterosexual consumers (Clark 1996). When this strategy works, advertisers can market to the GLBT community without necessarily acknowledging their intent or the existence of the GLBT community.

Additional strategies have emerged to maintain coded ambiguity for GLBT audiences. Ads with "androgynous marketing" deploy "a multifaceted eroticism that includes homoeroticism," including the use of beautiful models of the same sex without presenting their relationship as non-platonic (Soldow 2006). Another strategy that relies on ambiguity is that of "gay window" advertising, which portrays same-sex couples or groups in ads where heterosexual couples might have traditionally appeared (Stabiner 1982). Companies advertise their products in less ambiguous ways when the ads are placed in media that are planned for and used primarily by GLBT people, such as Instinct, Out, The Advocate, and the cable network LOGO. Advertisers might specifically place ads in gay-friendly media despite past policies of discrimination against GLBT employees. For instance, the Adolph Coors Company placed an ad in Instinct in 2000, presenting an attractive image to a community that had previously boycotted Coors for its homophobic company policies in the 1970s. Some images are marketed to both GLBT and heterosexual audiences; however, many have critiqued these strategies.

Some lesbians have contended that objectifying women, as that ad does, fails to become more palatable just because women's desires are acknowledged. They realize that this pattern of portrayal is lucrative, especially in mainstream presses where "lesbian" images cater to male heterosexual viewers. In addition, they note that the financial incentives of presenting homoeroticism in a positive light do not mandate that those representations are personally salient or empowering (Clark 1996). In fact, they can be quite exploitative (Williamson 1986).

Yet companies continue to recognize the financial benefits of broadening their consumer base and have responded accordingly. It has been estimated that corporations within the United States spend about $232 million annually in gay media and in sponsoring gay-specific events (Commercial Closet Association 2007). Advertising in gay media has grown significantly: for example, print ad revenues quadrupled between 1994 and 2007, and there was a 241.9 percent jump in ads with "gay-specific" content between 2003 and 2004 (Commercial Closet Association 2007). Despite the ways in which these groups (and people of color) may be marginalized, advertisers remain aware that these groups have spending power. This research area remains quite undeveloped (O'Guinn, Allen, and Semenik 1998).

DISCRIMINATION IN ADVERTISING

Despite their considerable consumer power, the representations of older adults—and the effects of those representations on consumers—deserve further scrutiny as well. Ageism affects advertising: Consumers' disrespect for or dread about aging are assumed in ads that advertise products designed to restore or resurrect one's youth. For female consumers, physical signs of age that are thought to negatively impact beauty (such as weight gain and facial wrinkles) are presented as terrors that can be avoided. Presenting particular bodies as "too old" reinforces discrimination against older citizens. Certain publications that target these populations, including media presented by the AARP (American Association of Retired Persons), have articulated their criteria for disapproval of such images and insist that advertisers recognize the diversity and dignity of older people (Wood 1989).

Such recognition of human dignity would also alter the representation of people of color. Historically, there has been a pattern of racist and demeaning images, typically in marketing to white audiences, when people of color are included—if they are at all. The rise of the post-civil rights era alerted marketers to the financial gains in addressing African-American audiences. However, racist images persist, such as ads which depict people of color as primitive or as a subservient class. The 1980s marked an increase in advertising companies deliberately seeking out people of color, particularly African-Americans. Researchers have noted that white consumers do not object to having African-Americans in such ads; however, the fact that researchers felt compelled to notice this tacit approval indicates the power differential between these groups (Gren 1999). Some advertisers use different methods to reach people of color than they do for mainstream audiences; in addition, some agencies have begun to specialize in marketing products and services for those populations (Cortese 2004).

CONSUMER BEHAVIOR AS A SOCIAL SCIENCE

Consumers have responded in various ways to advertisers' efforts. Some attempt to distance themselves from the consumerism that these ads foster (Dominquez and Robin 1999). In contrast, some people deliberately seek out advertising as a form of entertainment (including television channels devoted to advertising), often in venues where commercials are seen as more noteworthy than the purported entertainment event: The Super Bowl may be the most notorious example.

Advertisers are understandably interested in what consumers find compelling. Brand images create "a set of associations linked to the brand that consumers hold in memory" (Keller 1993); typically, the strongest ads have held consistent images for two or three decades or longer (Aaker 1991). Other agencies are also interested in the impact of advertising. Public service ads promote programs or values thought to be for the public good. The government is also aware that certain products can cause direct and indirect risks. Sometimes product advertisements are regulated; for instance, tobacco companies must display health warnings in their advertisements. The government is also involved in investigating the process by which goods are marketed; indeed, one of the Federal Trade Commissions tasks is the monitoring of deceptive, and therefore illegal, advertising.

The growth in media corporations and new technologies has furthered the impact and pervasiveness of advertising. Advertising can appear in major mediums: print (e.g., magazines, newspapers), communication networks (including television, Internet, radio), public space (such as billboards), and electronic arenas. In the early 2000s, researchers became increasingly interested in how word of mouth might entice would-be consumers (Rosen 2002). Historically, advances in media have been followed by an increase in advertising. Radio, for instance, debuted without advertising in 1920 and subsequently adopted sponsorship programs and other advertising campaigns in the 1940s and 1950s. The success of such advertising was so impressive that the study of consumer behavior became defined as a social science after World War II (Woods 1995). To learn more about the marketing itself, continued attention to advertising's audience, visual components, copy, and consumer response help the public learn how to decipher the product—and our culture.

see also Media.

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Soldow, Gary. 2006. "Homoeroticism in Advertising: Something for Everyone with Androgyny." In Sex in Consumer Culture: The Erotic Content of Media and Marketing, ed. Tom Reichert and Jacqueline Lambaise. Mahwah, NJ: Lawrence Erlbaum Associates.

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                                          Mary McDonnell

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Advertising

ADVERTISING

•••

As the cost of healthcare becomes an increasing focus of attention, advertising becomes an increasing object of concern. At its best, advertising can provide information to help consumers make informed choices. Conversely, it can also inflate expectations, create demand, manipulate desire, transform wants into perceived needs, and increase the use and cost of healthcare services. In the not too distant past, healthcare was understood as medical care. The activities of physicians were regulated by standards of ethics that eschewed commercialism. Though there has always been an economic aspect (usually a fee) associated with the physician–patient encounter, the revolution in the financing of healthcare delivery is transforming the personal doctor–patient relationship into a socially complex interaction in which physicians are cast among a multitude of providers, and patients are transformed into consumers. The focus on the economics of healthcare underscores the commercial aspects of healthcare delivery both by physicians and other providers. Though physicians and not-for-profit institutions should be responsive to a service ethic, they compete in the same economic arena as for-profit organizations and often behave similarly. Furthermore, in some cases the patients are not the direct consumers; services may be purchased by employers, alliances, the state, or other contracting entities, whose interests may not entirely coincide with those of patients.

Advertising may be judged by the standards of business ethics: truthfulness, nondeceitfulness, nonexploitativeness, and profitability. But healthcare is not strictly a commodity to be sold effectively with profit to the public. The care of health is also a fundamental human endeavor binding the caregiver and the care-seeker in mutually reciprocal ways. Otto E. Guttentag, noting the essential human quality of healthcare, defined medicine as "the care of health of human beings by human beings." Lawrence J. Nelson and colleagues argued in a 1989 article that several key features distinguish caring for the sick from other commercial products: (1) Patients are in a distinctive position of vulnerability and dependency on those providing the services; (2) their own self and destiny—even life—are at stake in the encounter with the provider; and (3) the relationship with the provider may become an important aspect of the healing encounter. All of these elements suggest that there are special obligations incumbent on healthcare providers that go beyond the usual obligations of the seller to the buyer of most commodities.

Traditional prohibitions against advertising attempted to orient professionals to their service obligations by minimizing the commercialization of the encounter (Relman). According to the traditional view, physicians and other professionals should obtain business by developing a reputation for quality service, getting referrals from satisfied patients/clients or from others who know their work, not through any kind of self-promotion.

The major ethical issue in advertising in a market economy is truthfulness. If given adequate information, the consumer should make appropriate choices: what kind of healthcare, where, when, provided by whom, at what cost. A larger question concerns the justice of a market system of choice based on individual self-interest. Proponents view advertising in healthcare as a way to promote competition and thus reduce cost in a highly regulated industry. Opponents criticize advertising for inflating expectations and thus increasing cost. Others suggest that the quality of care has been lowered by making cost rather than quality the focus of allocation decisions (Rodning and Dacso).

The high cost of healthcare in the United States has prompted a search for ways of reducing both the cost of medical services and the percentage of gross national product devoted to healthcare without appreciably lowering quality of care. Advertising is located at the crossroads between cost and quality, between regulated markets with an emphasis on quality and free markets with an emphasis on cost and choice. Regulations that provide standards for training, licensure, specialty certification, and hospital accreditation have resulted in high-quality, but expensive, healthcare. Market solutions, such as encouraging advertising to promote competition, have been seen as a way of reducing cost.

Historical Background

Physicians participate in markets, but traditionally orient themselves by ethical standards that go beyond economic behavior.

THE ORIGINS OF PROFESSIONALISM. Modern professional organizations, defined by their codes of ethics and regulating themselves by ethical principles, take their origin from the Aesculapian societies of the fourth century b.c.e. and in particular from the oath of the Greek physician Hippocrates, which bound its members to ethical standards that did not apply to society as a whole. The Hippocratic oath emphasized the principle of patient benefit, placing the patient at the center of the physician's attention.

By the nineteenth century, when the British Medical Association (BMA) and the American Medical Association (AMA) were founded, the concept of a profession organized around explicit standards of ethics was well established. Prohibitions against advertising were among the first professional standards because treatments based on scientific knowledge distinguished physicians from their main competitors, itinerant nostrum salesmen promoting often dubious products with even more dubious promotional claims. Advertising was expressly prohibited as unprofessional and undignified in virtually all countries in which physicians had established their professional identity through professional associations such as the BMA and AMA, which were organized around a code of ethics (Havighurst; Dyer, 1985). Although the actual license to practice is granted and regulated by the state, the task of enforcing the ethics codes falls to the professional associations or the specialty societies.

THE ANTITRUST CHALLENGE TO THE PROFESSIONS. The professions have always maintained a delicate balance between altruism and economic self-interest (Jonsen, 1990). As the medical profession became more scientifically effective and better organized, it enjoyed regulations (licensure, specialty certification, and accreditation) that guaranteed a virtual monopoly on healthcare delivery. Healthcare became synonymous with medical care. Although the Sherman Antitrust Act of 1890 banned monopolies, the learned professions were considered exempt from the act, which applied only to businesses. Late in the twentieth century, however, the business aspects of medicine began receiving increased attention, and the learned professions exemption ended in 1975 with the U.S. Supreme Court's Goldfarb v. Virginia State Bar decision, in which Virginia lawyers were found liable to charges of price-fixing the fees charged for title searches. The Goldfarb decision heralded a flurry of antitrust activity in the professional arena, most notably the 1975 suit by the Federal Trade Commission (FTC) against the American Medical Association, holding that the AMA was in restraint of trade because its code of ethics prohibited advertising. The AMA Principles of Medical Ethics then in effect (1957 version) said simply, "[A physician] shall not solicit patients," meaning that a physician should not attempt to obtain patients by deception. The 1980 revision eliminated all reference to advertising. Nonetheless, in the 1982 case Federal Trade Commission v. American Medical Association, the U.S. Supreme Court decided in favor of the FTC, barring the AMA from making any reference to advertising and the solicitation of patients, and further prohibiting the AMA from "formulating, adopting and disseminating" any ethical guidelines without first obtaining "permission from and approval of the guidelines by the Federal Trade Commission."

The FTC suit hinged on the questions of cost, advertising, and the mercantile aspects of medical practice. The position of the FTC was that costs were high because doctors had a monopoly on healthcare delivery and could thus maintain artificially high costs for their own profit. If doctors were not prohibited from advertising, it was argued, prices would come down because patients could shop for the best prices. In other words, medicine could better be controlled if it were regulated as a business rather than as a profession (Pertschuk).

The Ethics and Goals of Advertising

Advertising serves two very distinct and divergent objectives:(1) dissemination of information, and (2) product differentiation, which economists define as public perception of differences between two products, even though such differences may not in fact exist.

Dissemination of information provides the facts on which rational consumers can make informed choices. In healthcare, information about the services provided, location, hours of service, fees charged, and languages spoken are examples of services that might be advertised. Arguments in favor of advertising in healthcare are based on an understanding of advertising as dissemination of information.

Advertising also serves to differentiate products, and the methods for doing so are more ethically problematic. How can the claim be made and justified that one product is better than another? The FTC requires that any claims of product differentiation be empirically measurable. For example, in order to claim that a particular mouthwash "kills germs on contact by millions," it is necessary to be able to count killed germs. Usually advertisers attempt to differentiate products not on the basis of objective criteria about the product but by manipulating unconscious wishes and fantasies (such as youth, power, beauty, sex, and affluence), associating the product with images of attractive people in beautiful surroundings. The consumer is left to feel tremendous anxiety about the possible consequences of making the wrong choice of detergent, antiperspirant, or health plan.

Though many physicians have shown reluctance (or an aversion) to advertising their services, healthcare institutions have readily accepted the imperative to advertise in an attempt to create markets, capture market share, and find niches in the marketplace. Notable in this regard is advertising directed at target populations, for example, women, cancer patients, and those needing psychiatric and substance abuse services.

Truth in advertising was the concern when the field of advertising itself attempted to follow the course of professionalism in the early part of the twentieth century. At issue were the values that distinguished professional advertisers from retail-space merchants. The American Marketing Association established university training programs and codes of ethics that promoted the scientific ideal of detachment and statistical analysis. The scientific vision of community and definition of people as consumers replaced the older, empathic, and value-laden world in which a merchant understood what customers (not consumers) wanted and needed based on living in the same community (Christians, Schultze, and Simms; Schultze).

Professional advertising is illustrative because medicine's traditions of professionalism are derived from an era in which physicians participated in the life of the community in which they practiced. Knowledge of the patient as a person, as well as the patient's life history and social situation, has traditionally been deemed essential to quality care. At issue in 2003 for medicine is whether it will be possible to preserve the values of personal care that characterized the ideals of an earlier era.

The Commodification and Commercialization of Medicine and Medical Technology

Some aspects of healthcare are unquestionably commercial. The pills that only a doctor can prescribe are things, and a price must be attached to their acquisition. Hospital over-head becomes part of healthcare costs. Physicians' services (either for procedures or for time spent with a patient) involve a commercial aspect, though they are not just commercial. The locus of ethical decision-making shifts as the mechanism for financing shifts. Whereas physicians once made decisions on behalf of patients or with patients (according to principles of beneficence or autonomy), decisions are being made by corporations on behalf of populations or in the interest of reducing costs to populations. As this happens marketing of goods and services becomes an investment opportunity, not necessarily in the interest of conserving resources, but in the interest of creating capital for investors.

Medicine and medical technologies are increasingly considered in economic terms as commodities. It is fashionable to think of healthcare as an "industry," and as such the activities of the players—doctors and patients, providers and consumers, hospitals and healthcare organizations, equipment manufacturers and pharmaceutical suppliers—are seen in terms of market value rather than values deriving from a personal healing encounter. Value becomes a matter of money rather than a matter of conscience. It is the job of a market economy to distribute goods and services, bringing together consumers and products. Markets may be trusted to be free (laissez-faire) to the extent they do not violate their own frame of reference. Markets must be valued and controlled on their own terms, such as in the admonition, caveat emptor (let the buyer beware). But when vast public resources are involved, public oversight is also required. Deceptive or coercive marketing practices cannot be tolerated and require regulatory restraints on market freedoms.

DIRECT-TO-CONSUMER MARKETING. The growing trend of direct-to-consumer marketing needs to be evaluated in terms of the integrity of the information provided and the nature of the appeals made. Informed consumers make good partners in the healing relationships. Advertisements whose message is "Ask your doctor if this pill is right for you" provide little or no information about the product being promoted. Hair loss, impotence (erectile dysfunction), unhappiness, and sleeplessness are all subjects to be discussed with physicians and for which pharmacologic remedies may be expected. Once the expectation is created, it may be harder for the physician to assess risks (such as addiction liability) or side effects versus benefits, especially if a drug company has already courted the physician with gifts ranging from pens and notepads (bearing the name of a drug) to dinners (where "information" about products is offered) to vacations in expensive resorts.

The traditional way of mediating such claims is through scientific research, published in peer-reviewed journals. Consumers have access via the Internet to all sorts of information that does not receive such academic scrutiny. In the United States, federal regulatory agencies, such as the Food and Drug Administration (FDA) and the FTC, are charged with evaluating the research on which such claims are made. Yet much of the research is performed or funded by product manufacturers, and results that are unfavorable to the product may be suppressed, resulting in a publication bias in which only positive results are published and leading to a false (unscientific, but commercially advantageous) impression of the efficacy of a particular product (Otto et al.). Expensive high-technology screening tests (such as computed tomography scans for heart disease and cancer) are similarly promoted as educational information directly to consumers even though these tests' lack of specificity (resulting in false positives and negatives) causes physicians to question their value (Lee and Brennan). The ethical standard for judging such advertisements would be the truthfulness of the claims made. But presenting such appeals as informational when they are in fact promotional is a manipulation of demand, especially when the research on which such claims are made is not presented or, even worse, when it is skewed (Wolfe).

Several dramatic examples bring into mind the ethical constraints that might be necessary on advertising designed to create markets. Cosmetic surgery to improve a person's subjective sense of one's own beauty, for example, is medical in a way that is different from reconstructive surgery to repair a face damaged by an accident, although both involve similar skills and may be performed by the same plastic surgeon. Similarly (in an economic sense) assisted reproductive technologies, such as in vitro fertilization, may like other medical treatments relieve the distress of a childless couple, although the availability of such services is based more on the ability to pay than on need. The assisted reproduction industry commodifies the product, a human pregnancy, in ways that are more ambiguous ethically than they are commercially (Macklin and White). Technologies such as assisted reproduction along with the emerging genetic technologies, as well as more established technologies such as safe abortion, intensive care, and organ transplantation, help one to imagine limits on commercialization, advertising, and marketing (Dyer, 1997). As Allen Verhey noted in a 1997 article, "There are some boundaries and limits to the sphere of the marketplace. We do not want a market in which body parts are profitable; we prohibit the sale of organs, even those of the dead. We do not want babies sold at auction. Some things are not to be commodified and commercialized"(p. 135).

Conclusion

It could be debated whether advertising that goes beyond dissemination of information is ever ethical, though it is an accepted feature of market economies. The ethical issue for advertising is whether advertising is truthful and whether there can be objectively measurable standards for judging the truthfulness of advertising claims. A more problematic concern is the way in which advertising plays upon people's unconscious wishes and fantasies: sex, greed, and the quest for power, status, and perfection. The scientific basis for advertising rests on the ability to identify and manipulate such longings and fears. When one speaks of "the market" or "market forces" or "demand," one is generally talking about human wants and wishes.

Key questions facing the ethics of advertising in healthcare include:

  • What standards or regulations should be in place concerning the placement of advertisements?
  • Is any appeal legitimate so long as it does not mislead, make false claims, or actually harm?
  • Is the negative portrayal of women in, for example, the promotion of unhealthful products such as tobacco or alcohol so morally offensive as to persuade the government to extend the scope of regulation of what is permissible in advertising, such as limiting advertising to dissemination of information?
  • Is the effectiveness of the psychology of persuasion sufficient to justify advertisements, or can some higher principle be brought to bear?

Perhaps advertising itself should be subjected to the first principle of Hippocratic ethics, primum non nocere (first do no harm). Or to echo the caveat of President Dwight D. Eisenhower about the "military-industrial complex," beware the medical-industrial complex. Advertising that promotes consumer choice by providing information is consistent with the ethical ideal to promote patient autonomy. Advertising that deceptively promotes the interest of the provider at the expense of the consumer could not be ethically condoned, especially when the consumer is a patient.

allen r. dyer (1995)

revised by author

SEE ALSO: Harmful Substances, Legal Control of; Lifestyles and Public Health; Medicine, Profession of; Pharmaceutical Industry; Professional-Patient Relationship; Profit and Commercialism

BIBLIOGRAPHY

Christians, Clifford G.; Schultze, Quentin J.; and Simms, Norman H. 1978. "Community, Epistemology, and Mass Media Ethics." Journalism History 5(2): 38–41, 65–67.

Colman, Richard D. 1989. "The Ethics of General Practice and Advertising." Journal of Medical Ethics 15(2): 86–89, 93.

Dyer, Allen R. 1985. "Ethics, Advertising, and the Definition of a Profession." Journal of Medical Ethics 11(2): 72–78.

Dyer, Allen R. 1988. Ethics and Psychiatry: Toward Professional Definition. Washington, D.C.: American Psychiatric Press.

Dyer, Allen R. 1997. "Ethics, Advertising, and Assisted Reproduction: The Goals and Methods of Advertising." Women's Health Issues 7(3): 143–148.

Federal Trade Commission v. American Medical Association. 638 F.2d 443 (1982).

Gillon, Raanan. 1989. "Advertising and Medical Ethics." Journal of Medical Ethics 15(2): 59–60, 85.

Goldfarb v. Virginia State Bar. 421 U.S. 773; 44 L.Ed.2d 572; 92 Sup. Ct. 2004 (1975).

Guttentag, Otto E. 1963. Personal communication. See also "On Defining Medicine." Christian Scholar 46: 200–211.

Jonsen, Albert R. 1990. The New Medicine and the Old Ethics. Cambridge, MA: Harvard University Press.

Lee, Thomas H., and Brennan, Troyen A. 2002. "Direct-to-Consumer Marketing of High-Technology Screening Tests." New England Journal of Medicine 346(7): 529–531.

Macklin, Ruth, and White, Gladys B. 1997. "Art, Ads, and Ethics." Women's Health Issues 7(3): 127–131.

Morreim, E. Haavi. 1988. "A Moral Examination of Medical Advertising." Business and Society Review 64(1): 4–6.

Nelson, Lawrence J.; Clark, H. Westley; Goldman, Robert L.; et al. 1989. "Taking the Train to a World of Strangers: Health Care Marketing and Ethics." Hastings Center Report 19(5): 36–43.

Otto, Michael W.; Tuby, Kimberly S.; Gould, Robert A.; et al. 2001. "An Effect-Size Analysis of the Relative Efficacy and Tolerability of Serotonin Selective Reuptake Inhibitors for Panic Disorder." American Journal of Psychiatry 158(12): 1989–1992.

Pertschuk, Michael. 1977. "FTC Conference." Quoted in Rosoff, A. F. "Antitrust Laws and the Health Care Industry: New Warriors into an Old Battle." Saint Louis University Law Journal 23: 478.

Relman, Arnold S. 1978. "Professional Directories—but Not Commercial Advertising—as a Public Service." New England Journal of Medicine 299(9): 476–478.

Rodning, Charles B., and Dacso, Clifford C. 1987. "A Physician/Advertiser Ethos." American Journal of Medicine 82(6): 1209–1212.

Schultze, Quentin J. 1981. "Professionalism in Advertising: The Origin of Ethical Codes." Journal of Communication 31(2): 64–71.

Verhey, Allen. 1997. "Commodification, Commercialization, and Embodiment." Women's Health Issues 7(3): 132–142.

Wolfe, Sidney M. 2002. "Direct-to-Consumer Advertising: Education or Emotion Promotion?" New England Journal of Medicine 346(7): 524–526.

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Advertising

Advertising

Advertising, the promotion of goods or services through the use of slogans, images, and other attention-getting devices, has existed for thousands of years, but by the late 1990s in the United States it had become ubiquitous, permeating almost every aspect of American life. Indeed, the most omnipresent trend was the placement of advertisements and logos on virtually any medium that could accommodate them. Advertising and brand logos appeared regularly on T-shirts, baseball caps, key chains, clothing, plastic cups and mugs, garbage cans, bicycle racks, parking meters, the bottom of golf cups, in public restrooms, on mousepads, in public school hallways, and, for schools fortunate enough to be located near major airports, on school rooftops. The quest for new advertising venues never stopped—advertising has been placed on cows grazing near a highway (in Canada), and on the edible skins of hot dogs.

Television screens became commonplace in many places where the audience was captive—doctor's offices, which were fed specialized health-related programs interspersed with commercials for health-related products, airports (fed by CNN's Airport Network), and supermarket checkout counters. Indeed, by 1998 place-based advertising, defined by advertising scholar Matthew P. McAllister in The Commercialization of American Culture as "the systematic creation of advertising-supported media in different social locations" had reached almost any space where people are "captive" and have little to distract them from the corporate plugs. Advertising had invaded even what was once regarded as private space—the home office, via the personal computer, where advertisements on Microsoft Windows "desktop" were sold for millions of dollars.

By 1998, almost all sporting events, from the high school to professional levels, had become advertising vehicles, and the link between sports and corporations had become explicit. Stadiums (San Francisco's 3Com stadium, formerly Candlestick Park), events (The Nokia Sugar Bowl, the Jeep Aloha Bowl), teams (the Reebok Aggie Running Club), awards (the Dr. Pepper Georgia High School Football Team of the Week, the Rolaids Relief Man award, for Major League Baseball's best relief pitcher), and even individual players had become, first and foremost, brand advertising carriers. Sports shoe manufacturers spent millions of dollars and competed intensely to have both teams and star players, at all levels of competitive sports, wear their shoes—as a basketball player wearing Nike shoes provided essentially a two-hour advertisement for the corporation each time the player appeared on television or in an arena.

It was not until the late 1800s that advertising became a major element of American life. Advertising had been a mainstay of U.S. newspapers beginning in 1704, when the first newspaper advertisement appeared. In the 1830s, new printing technologies led to the emergence of the "penny press," inexpensive city newspapers that were largely supported by advertising, rather than subscriptions. Until the late 1800s, however, most advertisements were little more than announcements of what merchant was offering what goods at what price. But in the late 1800s, the confluence of mass production, the trans-continental railway, and the telegraph necessitated what had before been unthinkable—a national market for products that could be promoted through national publications. Advertising promoted and branded products that had, until around 1910, been seen as generic commodities, such as textiles, produce, and coal.

At the same time, printing technology also advanced to a stage where it became possible to create visually appealing ads. Still, before the 1920s, advertising was, by current standards, fairly crude. Patent medicines were advertised heavily during the late 1800s, and the dubious claims made by advertisers on behalf of these products tainted the advertising profession. But, by the turn of the century, the new "science" of psychology was melded with advertising techniques, and within ten years advertising agencies—which had emerged in the late 1800s—and the men who worked for them began to gain some respectability as professionals who practiced the "science" of advertising and who were committed to the truth. After the successful application of some of these psychological principles during the U.S. Government's "Creel Committee" World War I propaganda campaigns, advertising became "modern," and advertising leaders strove to associate themselves with the best in American business and culture. Advertising men, noted advertising historian Roland Marchand in Advertising the American Dream, viewed themselves as "modernity's 'town criers.' They brought good news about progress." The creators of advertisements believed that they played a critical role in tying together producers and consumers in a vast, impersonal marketplace, in part by propagating the idea that modern products and ideas were, by their very newness, good. Advertising men, wrote Marchand, believed that "Inventions and their technological applications made a dynamic impact only when the great mass of people learned of their benefits, integrated them into their lives, and came to lust for more new products."

From the 1920s to the 1950s, advertisers and advertising dominated the major national media, both old (newspapers and magazines) and new (radio and television). The first radio advertisement was sent through the airwaves in 1922, and by the 1930s radio and its national networks—the Columbia Broadcasting System (CBS) and the National Broadcasting Corporation (NBC) were a firmly entrenched part of American life.

In the 1950s, television quickly became the medium of choice for national advertisers, and about 90 percent of all U.S. households had sets by 1960. After that, audiences became increasingly fragmented for all media and advertising soon became targeted to particular markets. Magazines and radio led the way in niche marketing. In the 1950s, these media were immediately threatened by television's mass appeal. Radio, whose programming moved to television, began offering talk shows and music targeted at specific audiences in the 1950s, and with the targeted programs came targeted advertising, including acne medicine ads for teens on rock 'n' roll stations and hemorrhoid ointment commercials for older people listening to classical music. By the late 1960s and early 1970s, magazines became increasingly specialized; such general-interest, mass-circulation magazines as Life, Look, and the Saturday Evening Post first lost advertising support and circulation, and in the case of the first two, went out of business. Meanwhile, the number of special-interest magazines increased from 759 in 1960 to 2,318 in the early 1990s. These magazines appealed to smaller audiences that shared common interests—hobbies, sports, fashion, and music. By the 1970s sleeping bags could be advertised in Outside magazine, rock albums in Creem, and gardening implements in Herb Quarterly.

Up until the 1990s, advertisers still had a relatively well-defined task: to determine where money would best be spent based on four primary criteria: reach, or how many people could possibly receive the message; frequency, or how often the message could be received; selectivity, or whether the advertisement would reach the desired potential customers; and efficiency, or the cost (usually expressed in cost per thousand people). However, during the 1980s, changes in society (government deregulation during the Reagan era) and technological changes (the broad acceptance of VCRs, cable television, and remote controls) forced advertisers to seek out new venues and to embrace new techniques. As the media became increasingly more complex and fragmented, corporations footing the bill for advertising also demanded more specific data than ever before, to the point where, in the late 1990s, there were serious—and increasingly effective—attempts to measure whether a specific ad led to a specific purchase or action by a consumer.

Advertisers in the late 1990s sought to regain some of the control they lost in targeting ads on television. Before the 1980s, most major markets had half a dozen or so outlets—CBS, NBC, ABC, PBS, and one or two independent stations. In addition, remote controls and VCRs were uncommon. Viewers' choices were limited, changing the channel was difficult, and it was difficult to "zap" commercials either by channel "surfing" (changing channels quickly with a remote control) or by recording a program and fast-forwarding over ads. "Advertisers are increasingly nervous about this recent, if superficial, level of power audiences have over their electronic media viewing," wrote McAllister. "New viewing technologies have been introduced into the marketplace and have become ubiquitous in most households. These technologies are, in some ways, anti-advertising devices."

Cable television had also, by the late 1980s, become troublesome for advertisers, because some stations, like MTV and CNN Headline News, had broken up programs into increasingly short segments that offered more opportunities to skip advertising. Sports programming, an increasing mainstay of cable, also puzzled advertisers, because commercials were not regularly scheduled—viewers could switch between games and never had to view a commercial. Attempts to subvert viewer control by integrating plugs directly into the broadcast had some success—and one advertiser might sponsor an ever-present running score in one corner of the screen, while another would sponsor instant replays and a third remote reports from other games. These techniques were necessary, as at least one study conducted in the 1980s indicated that when commercials came on, viewership dropped by 8 percent on network TV and 14 percent on cable stations.

Cable television, which had existed since the 1950s as a means of delivering signals to remote communities, blossomed in the 1970s. Home Box Office (HBO), became, in 1972, the first national cable network. By 1980, 28 percent of U.S. households had cable television, and by 1993 this figure reached 65 percent. Cable, with the ability to provide up to 100 channels in most areas by the late 1990s, provided the means for niche marketing on television, and by the mid-1980s, advertisers took for granted that they could target television commercials at women via the Lifetime Network, teenagers through MTV, middle-class men through ESPN, blacks through BET, the highly educated through the Arts and Entertainment Network, and so on. Many advertisers found the opportunity to target specific audiences to be more cost-efficient than broadcasting to large, less well-defined audiences, because in the latter group, many viewers would simply have no interest in the product, service, or brand being pitched.

Advertising, in short, had a direct impact on television content. By the early 1990s, many individual programs had well-defined audiences, and could become "hits" even if they reached only a small portion of the potential general audience. For example, the WB network's Dawson's Creek, which debuted in 1998, only attracted nine percent of all viewers watching at the time it was broadcast, but it was considered a hit because it delivered a large teen audience to advertisers. Similarly, Fox's Ally McBeal achieved hit status by attracting only a 15 percent share of all viewers, because it appealed to a vast number of young women. These numbers would have been considered unimpressively small until the 1990s, but by then the demographics of the audience, rather than the size, had become all important to network marketers. In 1998, advertisers were paying between $75,000 and $450,000 for a 30-second commercial (depending on the show and the day and time it was broadcast), and demanded to know exactly who was watching. In the 1980s and 1990s, three new networks—Fox, UPN, and WB—had emerged to compete with the well-established CBS, NBC, and ABC, and succeeded by targeting younger viewers who were attractive to certain advertisers.

Despite strong responses to the many challenges advertisers faced, some groups remained elusive into the 1990s. People with active lifestyles were often those most desired by advertisers and could be the most difficult to reach. Non-advertising supported entertainment—pay cable (HBO, Showtime), pay-per-view, videos, CDs, laser disks, CD-ROMS, video games, the Internet, etc.—was readily available to consumers with the most disposable income. As opportunities to escape advertising increased, it paradoxically became more difficult to do so, as corporate and product logos found their way to the most remote places on earth. For example, outdoor gear manufacturer North Face provided tents for Mount Everest expeditions; these tents were featured in the popular IMAX film "Everest"; corporate logos like the Nike "swoosh" were embedded on every article of clothing sold by the company, making even the most reluctant individuals walking billboards who both carried and were exposed to advertising even in the wilderness.

As advertising proliferated in the 1980s and 1990s, so did its guises. Movie and television producers began to charge for including products (product placement) in films and programs. In exchange for money and tie-ins that plugged both the film and product, producers displayed brands as props in films, excluding competing brands. One of the most successful product placements was the use of Reese's Pieces in the movie E.T. (1982), which resulted in a sales increase of 85 percent. In Rocky III, the moviegoer saw plugs for Coca-Cola, Sanyo, Nike, Wheaties, TWA, Marantz, and Wurlitzer. Critics viewed such advertising as subliminal and objected to its influence on the creative process. The Center for the Study of Commercialism described product placement as "one of the most deceitful forms of advertising." Product placement, however, was a way of rising above clutter, a way to ensure that a message would not be "zapped."

Identifying targets for ads continued, through the late 1990s, to become increasingly scientific, with VALS research (Values and Lifestyles) dividing audiences into categories such as "actualizers," "achievers," strivers," and "strugglers." Even one of the most traditional advertising methods, the highway billboard, had, in the 1990s, adapted sophisticated audience-identification techniques. One research firm photographed license plate numbers as cars drove by billboards, then matched the number with the car owner's address, which gave the advertisers an indication of income and class by neighborhood. Billboard advertisers also successfully identified geographic areas with high numbers of people matching the characteristics of a company's or product's best customers. For example, Altoids, a strong mint, had, in the late 1990s, a strong customer base among young, urban, and socially active adults, who were best reached by billboards. Altoids' advertising agency, Leo Burnett, identified 54 demographic and lifestyle characteristics of Altoids customers and suggested placing ads in neighborhoods where people with those characteristics lived, worked, and played. This was a wildly successful strategy, resulting in sales increases of 50 percent in the target markets.

By 1998, many businesses were having increasing success marketing to individuals rather than consumer segments. Combinations of computers, telephones, and cable television systems had created literally thousands of market niches while other new technologies facilitated and increased the number of ways to reach these specialized groups.

The most promising medium for individually tailored advertising was the Internet. Online advertising developed quickly; within five years of the invention of the graphical web browser in 1994, the Direct Marketing Association merged with the Association for Interactive Media, combining the largest trade association for direct marketers with the largest trade association for internet marketers. Advertisers tracked world wide web "page views" and measured how often Web surfers "clicked through" the common banner advertisements that usually led directly to the marketing or sales site of the advertiser. Many companies embraced the even more common medium of e-mail to successfully market to customers. For example, Iomega, a disk drive manufacturer, sent e-mail to registered customers about new products and received favorable responses. Online retailers such as bookseller Amazon.com touted e-mail announcements of products that customers had expressed interest in as a customer service benefit. Although internet advertising was still largely experimental in the late 1990s, many manufacturers, wholesalers, and retailers recognized that web advertising was a necessary part of an overall marketing plan. Companies that provided audience statistics to the media and advertising industries struggled to develop trustworthy, objective internet audience measurement techniques.

—Jeff Merron

Further Reading:

Ewan, Stuart. Captains of Consciousness: Advertising and the Social Roots of the Consumer Culture. New York, McGraw-Hill, 1976.

Fox, Stephen. The Mirror Makers: A History of American Advertising and Its Creators. New York, William Morrow, 1984.

Marchand, Roland. Advertising the American Dream: Making Way for Modernity, 1920—1940. Berkeley and Los Angeles, University of California Press, 1985.

——. Creating the Corporate Soul: The Rise of Public Relations and Corporate Imagery in American Big Business. Berkeley and Los Angeles, University of California Press, 1998.

McAllister, Matthew P. The Commercialization of American Culture: New Advertising, Control and Democracy. Thousand Oaks, California, Sage Publications, 1996.

Pope, Daniel. The Making of Modern Advertising. New York, Basic Books, 1983.

Savan, Leslie. The Sponsored Life: Ads, TV, and American Culture. Philadelphia, Temple University Press, 1994.

Schudson, Michael. Advertising: The Uneasy Persuasion. New York, Basic Books, 1984.

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Advertising

Advertising


Advertising performs two important jobs. It informs consumers what products and services are available, and it tries to persuade them to make choices about what to buy. Advertising has been around ever since somebody had something to sell, but in the late 1800s, it became a part of everyday life. At the beginning of the twenty-first century, advertising is everywhere. From coffee (see entry under 1990s—The Way We Lived in volume 5) cups to the World Wide Web, from clothing to public garbage cans, advertising appears wherever there is a space to put a logo or a slogan.

Modern advertising began in the 1920s, the decade that saw the rise of the New York City advertising agencies on Madison Avenue. Mass production meant that more people could afford things like cars, radios, and refrigerators (see entry under 1910s—The Way We Lived in volume 1). Improved transport also meant that fewer goods and services were supplied locally. In 1920, there were eight million passenger cars on American roads; by the end of the decade, the number was over twenty-three million. Because of such changes in American culture, advertising campaigns became standardized across the United States. An advertisement for a Ford car in California was exactly the same as an ad in Florida and New Hampshire.

Before the 1920s, most advertising was in the form of painted signs, printed cards in cigarette (see entry under 1920s—Commerce in volume 2) packets, and small-scale posters or newspaper advertisements. Better printing and photography soon had a dramatic effect. The first annual exhibition of advertising photography was held in New York in 1921. Large poster billboards soon replaced advertisements painted on the sides of buildings. The most famous novel of the period, The Great Gatsby (1925) by F. Scott Fitzgerald (1896–1940), even uses a fading advertisement billboard to comment on American society at the time. Soon, glossy photographic ads filled American magazines. The pictures in the ads were often just as beautiful as those accompanying the articles. Radio (see entry under 1920s—TV and Radio in volume 2) also played a major role in the growth of advertising. The first radio advertisement was broadcast in 1922. By the 1930s, radio advertising reached almost every American home.

Market research was more or less invented in the 1920s when advertisers began to work out what kinds of people read certain magazines or newspapers. Even as far back as 1923, Claud Hopkins (1866–1922), president of the Lord & Thomas agency in New York, could boast: "The time has come when advertising in some hands has reached the status of a science." In the twenty-first century, film trailers match the style of the main feature; upmarket clothing is advertised in glossy magazines. Computers and the Internet (see entry under 1990s—The Way We Lived in volume 5) have made advertising still more personal. Online retailers can keep track of the likes and dislikes of individual consumers and provide advertising just for them.

Despite the increased sophistication of advertising, advertisers do face certain problems. As companies began to advertise and sell their products all over the world, they learned that they had to choose the names of their products very carefully. Advertisers must avoid using words that might be offensive in a country where the product is sold. For example, there is a soft drink in Italy called Pshitt and a toilet paper in Sweden called Krapp's. Neither of these products would sell well in America. Another downfall of advertising is its high cost. In 1865, American companies spent a total of $50 million on advertising. Less than a century later, in 1956, General Motors (see entry under 1900s—The Way We Lived in volume 1) alone spent more than $162 million. In 1997, the chemical company Unilever spent around $2 billion advertising its products worldwide. Do companies get their money's worth from advertising? Many consumers have grown so used to seeing advertising that they no longer pay attention to it. Advertisers have to resort to more creative ways of calling attention to their products.

An example of a new kind of advertising can be found on television (see entry under 1940s—TV and Radio in volume 3). Since television became common in the 1950s, it has been crucial to advertisers of all kinds of products. The idea that different groups of people watch different television shows led to advertising aimed at smaller and smaller groups. In the 1990s, TV networks began to use certain shows to deliver groups of consumers to the advertisers. For example, advertising aired during Dawson's Creek was aimed at the show's mostly teen audience, whereas Ally McBeal (see entry under 1990s—TV and Radio in volume 5) provided advertisers with an audience of young professional women. One problem with TV advertising is that viewers avoid commercials by switching channels or leaving the room. Electricity suppliers report surges in demand as viewers make hot drinks and snacks during commercial breaks in popular shows. Advertisers have tried to avoid this by making their commercials unavoidable. Sponsoring a program allows advertisers to force viewers to see their name—as in many branded sporting events—and placing products within an actual program became a common practice in the late 1990s.

In the twenty-first century, advertising provides many of society's most familiar images and is discussed alongside film as a key popular art form of the last century. It has also become more persuasive than ever before. By putting their logo on every piece of clothing they sell, companies like Nike (see entry under 1960s—Commerce in volume 4) persuade customers to advertise the company's products at their own expense. Most people claim that advertising does not affect their buying decisions, but the evidence tells a different story.


—Chris Routledge

For More Information

Dunn, John. Advertising. San Diego: Lucent Books, 1997.

Fox, Stephen. Mirror Makers: A History of American Advertising and ItsCreators. Urbana: University of Illinois Press, 1997.

Gay, Kathlyn. Caution! This May Be an Advertisement: A Teen Guide toAdvertising. New York: Franklin Watts, 1992.

Klein, Naomi. No Logo. London: HarperCollins, 2000.

Mierau, Christina. Accept No Substitutes!: The History of AmericanAdvertising. Minneapolis: Lerner, 2000.

Robinson, Jeffrey. The Manipulators: A Conspiracy to Make Us Buy. London: Simon and Schuster, 1998.

Sivulka, Juliann. Soap, Sex, and Cigarettes: A Cultural History of American Advertising. Belmont, CA: Wadsworth, 1997.

Sobieszek, Robert A. The Art of Persuasion: A History of Advertising Photography. New York: Harry N. Abrams, 1988.

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Advertising

Advertising

Advertising is a paid, persuasive form of communicating a message that attempts to influence the buying behavior or thought patterns of consumers. Advertisements are also a sign of the times, reflecting what consumers find attractive or influential. Throughout modern history advertising has played a role in idealizing favored groups, and dehumanizing or stereotyping disfavored groups.

The following advertisements ran in a special issue of a leading German weekly magazine (Illustrierte Zeitung Leipzig: Sonderausgabe 1944, Der europäische Mensch) during the height of World War II in Nazi Germany. Each advertisement depicts a Nazi ideal, or refers to a Nazi goal.

Focke-Wulf has been building airplanes for 20 years.

We join in the vastly increased use of labor and technology in the German aircraft industry. We are thus helping to solve the great tasks of the day, the fulfillment of which will bring about a New Order in Europe.

After the victorious end to this war for European self-determination, we will return to peacetime production. Using the knowledge we have gained, as well as our proven productivity, we will build better planes to meet the high expectations of coming European air traffic.

One of the main goals of the Nazi regime was to increase employment, but this text could also be interpreted as a reference to the slave labor provided by the concentration camp inmates. The text asserts that Germany would win the war and become the dominant economic power within Europe. The visual images used are the swastika and eagle symbol of the Third Reich.

Ford

On the roads of Europe, German Ford trucks testify to the work of German industry. The agile, reliable and easy to maintain Ford truck will be a welcome help in solving the major tasks that await our continent after the war.

The text of this ad assumes German domination of the continent of Europe and reflects the supposed superiority of German products and people. The ad also visually depicts Greek ruins—a theme consistent with Hitler's idealization of ancient, vast, and powerful empires.

UHU Glue

German children: Europe's future inventors!

While courageous men are fighting on the battlefields for the victory that will crown a happy and united Europe, the German home front is already working today on plans to benefit the freed peoples. German youth are preparing for the great tasks of reconstruction and peace. They tinker and build models, engaging in guided and creative learning. Whether it is in shop class at school, evenings at home, or while participating in youth organizations, UHU is everywhere. A special glue developed by the German firm Kunststoff-Chemie, it is in demand as a dependable product.

This ad reinforces the belief that the Germans were in fact liberating Europe, and that Germany would emerge as the dominant force in a united Europe. It also encourages German children to join Nazi youth organizations. The ad visually depicts the Nazi ideal of a German child—male, blonde, productive, and loyal.

Lanz

A Picture of Peace

With their peaceful work, each LANZ-tractor, LANZ-thrasher, and LANZ-harvesting machine helps to guarantee the nutrition of Europe. Our agricultural technology is already showing the way to what will happen when peace comes.

This advertisement reflects the Nazi ideal of Germans nourishing themselves from the Fatherland, getting back to a basic way of life consisting of hard work. It also refers to the German domination of Europe and characterizes Germany as the provider for the rest of Europe. The ad visually depicts an idyllic German countryside, with two farmers diligently laboring.

Other examples of popular advertising that dehumanize disfavored groups can be seen throughout the world. One familiar example is from the Jim Crow era in the United States, which extended from the mid-1870s to the mid-1960s. Many racist forms of advertising served to justify prejudice and discrimination against African Americans. The Aunt Jemima trademark, introduced in 1893 and based on an actual former slave, portrays a black "Mammy" in a kerchief as slow-witted, fat, and ugly. Childlike, subhuman portrayals such as this came to justify the denial of civil rights to blacks and supported the common misconception that blacks were intellectually inferior to whites.

SEE ALSO Art as Propaganda; Art as Representation; Deception, Perpetrators; Incitement; Propaganda; Television

BIBLIOGRAPHY

Advertising Age. "The Advertising Century." Available from http://www.adage.com/century/icon07.html.

Calvin University. "German Propaganda Archive." Available from http://www.calvin.edu/academic/cas/gpa/ads.html.

Davis, Ronald L. F. "Popular Art and Racism: Embedding Racial Stereotypes in the American Mindset—Jim Crow and Popular Culture." Ph.D. diss. Available from http://www.jimcrowhistory.org/resources/lessonplans/hs_es_popular_culture.html.

Greenspan, L., and C. Levitt, eds. (1993). Under the Shadow of Weimar. Westport, Conn.: Praeger Publishers.

Kressel, Neil J. (1996). Mass Hate. New York: Plenum Press.

Amy W. Leith

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Advertising

Advertising

From humble beginnings in the 1700s, advertising has become the tobacco industry's primary mechanism for the promotion of tobacco use to each new generation of smokers. Whereas in 1900 tobacco advertising targeted mainly white Western men, by the year 2000 tobacco was promoted to women, men, and even children, in markets across the globe. Although the influence of tobacco advertising is hotly debated, control of advertising is now at the heart of initiatives to reduce tobacco consumption.

Early Tobacco Promotions

Tobacco manufacturers have, at least from the eighteenth century, used strategies to promote their wares. Trade cards, which were used in tobacco distribution in North America from the seventeenth century, and also tobacco wrappers, featured a range of images including those of American Indians, tobacco leaves, snuff boxes, and other tobacco accessories. Promotion efforts were taken a stage further with the introduction of branding, which was one of the earliest forms of advertising.

Branding allowed a manufacturer to sell a range of products but this was dependent on the ability to standardize production: "The Brand acted as a source of information for the nature of the product determined by either advertising, a previous sale, or the connotations provoked by the brand name itself or its image" (Hilton 2000). By the 1850s, tobacco products in the United States and Britain were increasingly given brand names and, through these, specific identities. Cherry Ripe and Wedding Cake were brands of chewing tobacco available in the United States, while in Britain Bishops Blaze and Best Bird's Eye competed for the pipe smoker's attention. Symbols also emerged as branding devices. The image of a bull was used effectively on the wrappings and advertisements for the Bull Durham brand of smoking tobacco manufactured by a North Carolina firm in the 1860s.

Advertising of tobacco products took off toward the end of the nineteenth century in the United States, and afterward in Britain. In the United States, Buck Duke organized his own polo team named after one of his leading cigarette brands, Cross Cut. In Britain, one tobacco company published a magazine, Cope's Tobacco Plant (1870–1879), to promote smoking in general and its products in particular. Sponsorship of events was utilized effectively to promote Bull Durham's smoking mixture in 1877. Advertisements appeared on billboards, and colorful posters that reproduced the images on cigar labels and cigarette advertisements were available from suppliers in the United States and Britain.

Packaging was a particularly important aspect of advertising. For example, from the 1860s to the early 1900s North American cigar boxes were decorated with attractive and technically sophisticated labels that could take up to a month to create. Images of "exotic" women were a common feature of these labels. Cigarette cards , which were used initially to strengthen soft paper cigarette packets, were also well established in the tobacco industry's advertising repertoire by the 1890s. Seductive images of beautiful, and often scantily clad, women were used on cigarette cards on both sides of the Atlantic, although there were also more conservative themes such as the Kings and Queens of England and famous sports personalities. These cards were desirable in themselves and highly collectible.

Twentieth-Century Advertising

The prominence of advertising at the turn of the twentieth century was precipitated by a need for new markets for tobacco products and, in particular, mass-produced cigarettes. Mass demand was required to realize the profit potential of new cigarette manufacturing techniques, in particular the introduction of the Bonsack machine. The "tobacco war" between the American and British tobacco industries in 1901 and 1902 added impetus to cigarette advertising, as did advertising wars inside the United States from 1913. Advertising became a major area of expenditure by tobacco manufacturers in the twentieth century, and the biggest area since 1945.

Image was central to tobacco, and especially cigarette, advertising. Although there are clear taste differences between Turkish, Virginian, and mentholated brands, in other respects cigarettes are "fundamentally homogenous products" (Chapman 1986). To enhance the effectiveness of advertising, the tobacco industry enlisted the help of public relations experts, psychologists, and psychoanalysts. In interwar United States, Washington Hill, the president of American Tobacco, worked with public relations expert Edward Bernays to promote Lucky Strike cigarettes. John B. Watson, one of the founders of behavioral psychology, worked closely with the tobacco industry, and Walter Dill Scott's Psychology of Advertising (1902 and 1921) was one of the guiding texts of the industry.

The media emerged as a principal means of direct and indirect cigarette advertising in the twentieth century and the tobacco industry was quick to exploit new types of media: newspapers, periodicals, film, and television. However, in Australia traditional forms of advertising such as counter displays and shop signs continued to dominate the sale of tobacco for pipes and roll-your-own cigarettes until 1950.

National advertising campaigns became common in the West following the expansion of the popular press. The North American Bull Durham brand was promoted in the 1880s using local newspapers and large dailies. Extensive newspaper advertising appeared during World War I when the U.S. tobacco industry initiated campaigns to provide cigarettes for soldiers. The American Tobacco Company struck a deal with one newspaper for a daily front-page display box along with three or four column articles or displays at the top of an inside page. In Britain, too, newspaper advertising grew in importance from the late nineteenth century, and, by the interwar period, 80 percent of advertising expenditure was spent on the press.

Women's magazines have been an important source of cigarette advertising in the West since the 1930s. Although when television and radio advertising became available in Britain and the United States in the 1950s, magazine advertising slumped; later, when bans were imposed on tobacco advertising in television and radio, cigarette advertisements re-emerged in women's magazines. In the 1970s and 1980s most major U.S. women's magazines took cigarette advertisements and in 1979 cigarettes were the most advertised product in some U.S. magazines. In Britain, a survey of fifty-three magazines aimed at fifteen- to twenty-four-year-old women in 1985 revealed that two-thirds featured cigarette advertising.

The potential of film to promote smoking, especially of cigarettes, was also realized by the tobacco industry. Film stars endorsed De Reszke cigarettes in a string of advertisements in Britain's Vogue magazine in 1919; by the 1930s this was common practice on both sides of the Atlantic. Although smoking appeared in silent films, and was common from the 1930s, there is little explicit evidence of tobacco industry interventions. In the 1980s, however, the tobacco manufacturer Phillip Morris admitted to paying Sylvester Stallone to smoke Kool cigarettes in the action movies Rhinestone (1984) and Rambo: First Blood, Part 2 (1985). Unofficial sources also indicate that films have been used deliberately to advertise cigarettes through product placement. Marlboro vans, for example, appeared in the background of Superman II (1980). An increased occurrence of smoking and of major cigarette brand names has been noted in films released between 1990 and 1996.

The availability of television after 1950 provided important new channels for advertising a range of tobacco products in the West. In the United States in 1968 the largest tobacco company, R.J. Reynolds, concentrated 80 percent of its advertising budget on television promotions, until a ban in 1971. In Britain, too, bans on television and radio advertising closed off these channels as direct forms of advertising. Direct advertising was not, however, the only form of tobacco promotion on television. Indirect advertising also occurred, particularly when the tobacco industry sponsored major sporting or cultural events. This strategy was commonly used to circumvent restrictions on television and radio advertising. During two state football finals in Australia in 1982, tobacco hoardings were on screen 1,412 times each for an average of 3.7 seconds. This amounted to 26.6 percent of total program time.

In the context of increased restrictions on tobacco advertising since the 1960s, indirect forms of advertising have flourished. One strategy that has allowed the tobacco industry to circumvent advertising bans is the practice of "brand-stretching" whereby tobacco-brand logos appear on nontobacco goods such as Camel boots and Salem holidays.

Whom Do Advertisements Target?

Pipe tobacco and cigars were firmly masculine products in the nineteenth century and remained so throughout the twentieth century. Tobacco advertisers therefore targeted men. The cigarette market was also conceptualized almost exclusively as male prior to World War I, although there were sporadic appeals to Western women smokers before 1918. In Britain, advertisements for mass-produced brands such as De Reske and Players targeted women as smokers from 1919. It was not until 1926 that a U.S. advertisement for a mass-produced brand addressed women as smokers, and not until 1927 that a woman was featured actually smoking. By the 1930s, North American advertising routinely featured women smoking cigarettes and even offering them to their male companions. In Australia, too, women smokers were regular features of cigarette advertising by this time. But although roughly one-quarter of all Australian cigarette advertisements included images of women between 1927 and 1937, only 6 percent focused exclusively on them. Since World War II, cigarette advertising has increasingly targeted women on a global scale.

Promotion of cigarettes outside Europe and North America began around 1900. China was the main foreign market for British American Tobacco and, in the early 1900s, cigarettes were promoted using out-door advertising, handbills, wall hangings, posters, and window displays. The global dimensions of cigarette advertising escalated dramatically after World War II. Latin America was targeted in the 1960s and the newly developed countries of Asia in the 1980s. Eastern Europe, territories previously in the USSR, China, and Africa were targeted aggressively in the 1990s. Tobacco brand advertising budgets were some of the largest of any product in countries such as Malaysia, Hong Kong, Kenya, Indonesia, and South China in the late 1980s. In many cases advertising was, and still is, unregulated.

The tobacco industry claims that its advertising does not target children. However, proportionately more ads were placed in U.S. women's and youth magazines between 1960 and 1985 than in those which targeted other groups of the population. In Britain in the 1980s, a study of magazines aimed at women and young people discovered that 58 percent with a readership predominantly under twenty-five years of age featured cigarette advertising, and that of those magazines whose numerically largest readership group was between fifteen and twenty-four years old, 93 percent carried cigarette advertisements. Young people were also being targeted in the 1980s in the new markets of Asia and Africa; for example, a group of teenagers breakdancing appeared in an advertisement on display in Malaysia. Scholars argue that direct advertising is not the only means by which young people are targeted by the tobacco industry. Representations of adult life can also be very appealing to teenagers: "Any marketer of products and services for adolescents knows that to appeal to youth, one needs to construct a campaign that looks as if it is a product for adults" (Chapman). An investigation into the advertising practices of the producers of Viceroy cigarettes in the 1970s revealed that young people were being deliberately courted by the American tobacco industry. Similar results emerged from an inquiry in 2000 into advertising for the U.K. tobacco industry.

Advertising Themes

National identity was a particular prominent theme in British pipe tobacco advertising around 1900 and included images of Queen Victoria, aristocrats, the military, aspects of British heritage and the British countryside. In Australia during World War I, themes of war, nationalism, and masculine identity were used to sell traditional forms of tobacco to men. In interwar Australia, where pipe and roll-your-own tobacco continued to surpass the sale of tailor-made cigarettes, advertisements emphasized masculine identity with stress on defending male space against female intrusion. Advertisements for cigars and pipe tobacco have continued to have male subjects and masculine themes.

Men and masculinities remained a staple of cigarette advertising. In interwar Australia, themes relating to male camaraderie and masculine anxieties were to the fore in the press. Cigarette advertising on Australian radio was also dominated by a series of masculine sea shanties. In the United States, most cigarette advertisements featured men even when women were targeted as smokers from the late 1920s. In Britain, too, men and masculinities were highly visible; indeed the most famous British icon was the sailor that appeared in advertisements for Player's cigarettes. Initially women were featured in tobacco advertisements to add a seductive element, but after 1920 they were increasingly visible as smokers in their own right.

Emancipation was a key theme in early cigarette advertising to British women. Women's liberation re-emerged in the late 1960s and 1970s as a theme in Western advertisements for "female cigarettes," most notably Virginia Slims: "You've come a long way, baby." Emancipation remained a prominent motif in 1980s and 1990s advertising to women in the former socialist countries of central and eastern Europe, plus Japan, Hong Kong, and Africa. Promising liberation as well as westernization to Hong Kong women in the 1980s, an advertisement for Virginia Slims declared, "You're on your way."

In advertisements, cigarette smoking has been associated with a high quality of life: health, leisure, pleasure, sexual attractiveness, affluence. Health and body issues were common themes in interwar advertisements targeted at Western men and women. Craven "A" cigarettes, for example, were marketed widely as "made especially to prevent sore throats." Smoking was also associated with feminine beauty and, in the United States, it was explicitly linked to slimness. Leisure has also been a prominent theme and from the 1930s companionate leisure often provided the context for smoking in advertisements in Australia, the United States, and Britain. Physical activity and the outdoors featured prominently in the 1930s as men and women smoked after a tennis match or while motoring together in the countryside. After World War II, joint leisure activities were more subdued and intimate; for example, bathing on a beach or relaxing by a roaring fire. A Western definition of the "good life" has remained a feature of much advertising to low and middle income countries; in the 1980s, a Fijian advertisement for Rothmans referred to a "great English tradition" while an Indian advertisement for Chesterfield's promoted "the smooth American experience."

From the 1960s, amid widespread publicity about the health risks of smoking, image became increasingly important to cigarette advertising, "not only because it was meant to confer its qualities on the smoker, but because it was designed to blind consumers to the true nature of what they were buying" (Taylor 1985). However, with the introduction of restrictions on tobacco advertising, advertisers have also been forced to rely less on featuring people and to make more inventive use of symbolism as in the 1980s campaigns for Benson & Hedges and Marlboro cigarettes. When advertising restrictions meant that the cowboy could no longer appear in Marlboro advertisements, Marlboro resorted to using the image of wild horses: "They knew that people would look at a pack of Marlboro and still see the cowboy" (Chapman).

Impact of Advertising

Concerns about children's exposure to tobacco advertising are underpinned by the belief that advertising is influential; this influence extends also to adults. Amid knowledge of the health risks of tobacco consumption, the tobacco industry has come under intense criticism for promoting smoking to new groups of potential smokers, especially children and women, and sustaining levels of consumption in established markets.

The influence of advertising is, however, strongly contested by the tobacco industry. The industry's position is that the sole purpose of advertising is to encourage smokers to change their allegiance to brands, and that advertising does not lead people to smoke or hinder their efforts to stop. The scholar Simon Chapman questions the veracity of this claim on three counts. First, all advertising seeks to maximize sales and even advertising industry workers are not convinced that the tobacco industry is any different. Second, advertising is used even in countries where the government has a monopoly on tobacco sales and where there is, therefore, no competition. Third, if advertising only influenced current smokers then it still follows that a ban on advertising may help reduce smoking.

Establishing a causal relationship between advertising and levels of smoking is not, however, straightforward. Methodological problems bedevil attempts to isolate and assess the influence of different types of advertising: "Unlike the effects of nicotine, advertising cannot be dosed and its effects observed physiologically" (Chapman). The reasons why people smoke are complex: "Tobacco advertising is . . . only one factor among many that appears to influence the decision to smoke. These include social, religious, parental, sibling and peer smoking behaviour and attitudes, price and disposable income, age limit proscriptions, measured intelligence and social class" (Chapman).

Isolating the significance of advertising for the promotion of smoking in the past is also difficult, as evident in the debate about the role of advertising in introducing Western women to cigarette smoking before World War II. The sociologist Michael Schudson argues that women did start to smoke prior to the first advertisements that targeted them and that news coverage of smokers helped in "the first instance to legitimise women's smoking"; advertising merely went on to reinforce and "naturalise" this practice (Schudson 1985). Others acknowledge that smoking had appeal for women prior to their direct targeting, but they argue that advertising "indirectly sought women smokers through images that emphasized the sociability and allure of the cigarette" (Brandt 1996). Cheryl Warsh points out that "cigarette advertising could have shaped women's views of what was masculine and therefore what would be an attractive aspiration for 'new women'" (Warsh 1998). Following the initiation of direct appeal to women in the United States, researchers argue, women's smoking increased at a faster rate than before.

Precise measurement of the effect, past and present, of tobacco advertising is elusive. It is, however, widely established that cigarette advertising contributes to a culture in which smoking is normalized and has a positive image. "Whether advertising initiates consumer trends or only reinforces them . . . it is impossible to ignore their wider role in providing people a general education in goods" (Schudson). Unattractive and negative ways of understanding smoking have often been suppressed by threats from the tobacco industry to deprive the media of advertising revenue. This threat is being eroded by the introduction of national bans on advertising. Studies indicate that a comprehensive set of tobacco advertising bans can reduce tobacco consumption, but that a limited set of advertising bans has little or no effect.

See Also Sponsorship.

▌ PENNY TINKLER

BIBLIOGRAPHY

Albright, Cheryl L. et al. "Cigarette Advertisements In Magazines: Evidence for a Differential Focus on Women's and Youth Magazines." Health Education Quarterly 15, no. 2 (1988): 225–233.

Alford, B.W.E. W.D. & H.O. Wills and the Development of the U.K. Tobacco Industry 1786–1965. London: Methuen, 1973.

Amos, Amanda, and Margaretha Haglund. "From Social Taboo to 'Torch Of Freedom': The Marketing of Cigarettes to Women." Tobacco Control 9 (2000): 3–8.

Brandt, Allan M. "Recruiting Women Smokers: The Engineering of Consent." Journal of the American Women's Association 51, nos. 1–2 (1996): 63–66.

Chapman, Simon. Great Expectorations: Advertising and the Tobacco Industry. London: Comedia Publishing Group, 1986.

Ernster, Virginia L. "Mixed Messages for Women: A Social History of Cigarette Smoking and Advertising." New York State Journal of Medicine (July 1985): 335–340.

Goodman, Jordan. Tobacco in History. The Cultures of Dependence. London: Routledge, 1994.

Greaves, Lorraine Smoke Screen: Women's Smoking and Social Control. London: Scarlet Press, 1996.

Hastings, Gerald, and Lynn MacFadyen. Keep Smiling, No One's Going to Die: An Analysis of Internal Documents from the Tobacco Industry's Main U.K. Advertising Agencies. Strathclyde: Centre for Tobacco Control Research, University of Strathclyde, 2000.

Hilton, Matthew. Smoking in British Popular Culture 1800–2000. New York: Manchester University Press, 2000.

Howe, Holly. "An Historical Review of Women, Smoking and Advertising." Health Education (May/June 1984): 3–9.

Jacobson, Bobbie. Beating the Ladykillers: Woman and Smoking. London: Pluto, 1986.

Jacobson, Bobbie, and Amanda Amos. When Smoke Gets in Your Eyes. London: British Medical Association Professional Division, Health Education Council, 1985.

MacKinnon, Kenneth, and Laura Owen. Smoking in Films—A Review. London: HEA, 1997.

Mitchell, Dolores. "Images of Exotic Women in Turn-of-the-Century Tobacco Art." Feminist Studies 18, no. 2 (1992): 327–350.

Saffer, Henry, and Frank Chaloupka. "The Effect of Tobacco Advertising Bans on Tobacco Consumption." Journal of Health Economics 19 (2000): 1117–1137.

Schudson, Michael. Advertising: The Uneasy Persuasion. New York: Basic Books, 1985.

Stockwell, Theresa F., and Stanton A. Glantz. "Tobacco Use Is Increasing in Popular Films." Tobacco Control 6 (1997): 282–284.

Tate, Cassandra. Cigarette Wars: The Triumph of "The Little White Slaver." New York: Oxford University Press, 1999.

Taylor, Peter. The Smoke Ring: Tobacco, Money and Multinational Politics. London: Sphere Books, 1985.

Tinkler, Penny. "'Red Tips for Hot Lips': Advertising Cigarettes for Young Women in Britain, 1920–1970." Women's History Review 10 (2001a): 249–272.

——. "Refinement and Respectable Consumption: the Acceptable Face of Women's Smoking in Britain, 1918–1970." Gender & History 15, no. 2 (2003): 342–360.

Tyrrell, Ian. Deadly Enemies. Tobacco and Its Opponents in Australia. Sydney; University of New South Wales Press, 1999.

Warsh, Cheryl K. "Smoke and Mirrors: Gender Representation in North American Tobacco and Alcohol Advertisements before 1950." Social History XXXI, no. 62 (1998): 183–222.

snuff a form of powdered tobacco, usually flavored, either sniffed into the nose or "dipped," packed between cheek and gum. Snuff was popular in the eighteenth century but had faded to obscurity by the twentieth century.

cigarette cards paper trading cards sometimes featuring sports personalities or movie stars packaged with cigarettes and offered as an incentive for purchase.

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Advertising

ADVERTISING

Advertising has existed in one form or another for centuries. From stone tablets to Internet pop-ups, people have advertised goods and services available for the use and benefit of others. In the early years of the United States, most advertisements appeared in printed form, primarily in broadsides or newspapers. Unlike today's advertising, the purpose of these advertisements was to provide information about events or available goods and services rather than to stimulate demand.

Broadsides were single sheets produced to spread information about a particular topic. They often advertised products available in local stores or services provided by local professionals, but broadsides were more often used to announce something unique and short-term. During the American Revolution, officials used broadsides to recruit soldiers for the Continental Army. The poems that became the songs "Yankee Doodle" and, following the War of 1812, "The Star-Spangled Banner" appeared in broadsides and spread rapidly along the Atlantic Coast. Broadsides could be produced quickly and used to spread information rapidly through a community.

More typical advertisements appeared in the weekly newspapers published in colonial America and the early Republic. From the time the first successful American newspaper appeared in 1704, printers depended on the income from advertising to help keep their publications solvent. Up to one-half of any given issue could be given over to advertisements. To modern readers, the newspaper advertisements of the early Republic look like today's classifieds. Woodcuts of a ship or a hat could indicate the type of advertisement but did not really give much information. Potential customers had to read the advertisements in order to know what was being offered. A great variety of advertisements appeared, ranging from lists of goods for sale in a local shop, to announcements of local dance instructors or dame schools (schools for boys and girls set up by women teachers in their homes), to want ads for various jobs, to announcements of runaway slaves. The advertisements did not appear in any particular order or place but rather were scattered throughout the newspaper wherever they fit.

Two primary factors explain the apparent lack of creativity in newspaper advertising in the early Republic. First, the available technology produced limitations. Printing presses prior to the 1830s had changed little from the days of Gutenberg. Type had to be set by hand and printing across columns was prohibitively expensive. Illustrations could be printed only by using woodcuts that had to be hand-carved. Hence, advertisements appeared primarily in narrow columns with few illustrations. Second, although advertising constituted an important income source and gave readers information they sought, newspaper printers at the time gave as much space as possible to politics. From the beginnings of the arguments with Great Britain in the 1760s until at least the middle of the nineteenth century, newspaper producers aimed the material they published at audiences involved in political debates.

See alsoNewspapers; Print Culture; Printers; Printing Technology .

bibliography

Goodrum, Charles, and Helen Dalrymple. Advertising in America: The First 200 Years. New York: Harry N. Abrams, 1990.

Presbrey, Frank. The History and Development of Advertising. Garden City, N.Y.: Doubleday, Doran, 1929; New York: Greenwood Press, 1968.

Wood, James Playsted. The Story of Advertising. New York: Ronald Press, 1958.

Carol Sue Humphrey

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Cooke, Jay

Jay Cooke

Born August 10, 1821
Portland, Ohio

Died February 16, 1905
Philadelphia, Pennsylvania

Banker, investor, war bonds pioneer

"Newspapers and individuals got into the habit of gloomily deploring the [Civil War] and its ruinous expenditure. I offset this by quoting the fact that every dollar raised by the loans went right back into the hands of the people and was new and vigorous blood permeating all through the body of the nation."

Jay Cooke had a dramatic rise and fall during the Civil War (1861–65) and the Reconstruction era (1865–77). He used innovative methods to help the U.S. government finance (pay for) the Civil War, for which he became known as the "financier of the Union." During the Reconstruction era, Cooke invested heavily in railroads. When the national economy faltered in 1873, Cooke's financial empire of banks was wiped out; they had invested too heavily and could not pay back their depositors (people who saved money in the banks). In little over a decade, then, Cooke had gone from being America's foremost banker to a man who lost his entire fortune. By 1880, however, he was back on his way to being a millionaire.

An eye for money

Jay Cooke was born in present-day Sandusky, Ohio, on August 10, 1821. The town was called Portland at the time of his birth, but the name changed to Sandusky City and then simply to Sandusky. He was the third child and second son of Eleutheros and Martha Cooke. They were well-educated Easterners with pioneering spirits. Cooke's parents lived in New York before undertaking a journey to Ohio and settling in a sparsely populated area. Cooke's father was a prominent lawyer and was later elected to the U.S. House of Representatives. The family home was named "Ogontz" in honor of a Native American chief who had lived on the land. Young Cooke soon developed his lifelong passion for hunting and fishing in the sparsely settled area overlooking Lake Erie.

At fourteen, Cooke became a store clerk in Sandusky. The following year, he traveled to St. Louis, Missouri, but lost his job as a clerk there when his employers lost their business in the Panic of 1837. A panic, in economic terms, is a severe downturn in the economy. Cooke then traveled to Philadelphia, Pennsylvania, to work for his brother-in-law, who ran a shipping business. At the age of eighteen, Cooke joined a bank, E. W. Clark & Company.

At the time, Philadelphia was the financial center of the United States. E. W. Clark served financial institutions by buying and selling banknotes. The U.S. government only issued coins until the Civil War era. Before then, private bankers provided paper currency, but the value of the currency was different in different parts of the country. Bankers for E. W. Clark bought those banknotes with coin—making a profit because the value of coin was stable, while the value of currency fluctuated. To perform his work, Cooke had to be able to judge the worth of paper currency. He showed a talent for keeping track of the value of banknotes from various areas of the country and became expert at identifying counterfeit money.

Cooke's Memories of His Childhood Home

In a speech delivered on October 3, 1900, at the Firelands Historical Society (of Northern Ohio), Jay Cooke reminisced about his childhood days in Sandusky, Ohio (excerpted from the Jay Cooke Family Website).

From my earliest boyhood I have roamed the waters of Sandusky Bay, and this island region and every portion of it is most familiar to me. I have explored every hunting and fishing ground. I have camped out for a week at a time, and on occasions in the forests and marshes bordering the lake and bay and upon many of the islands, I have captured every variety of game and fish.

In August 1844, Cooke married Dorothea Elizabeth Allen. They would have two sons and two daughters.

Begins investing

When Cooke reached his thirties during the 1850s, he began to invest in business ventures. He bought land from the U.S. government in Iowa and Minnesota for low prices, speculating (predicting) that it could be sold at a higher price as more people entered the region. Iowa had become a state in 1848, but Minnesota was just beginning to attract settlers and would win statehood in 1858. Cooke bought large tracts of land for little more than $1 per acre. The land was sold to people coming into the area to create farms, usually at $3 or more per acre. Cooke became very wealthy from his land speculation deals and retired from E. W. Clark in 1857, at the age of thirty-six.

Cooke had traveled regularly between Philadelphia and New York for business and pleasure since the late 1830s, and also regularly returned to his hometown of Sandusky. In between stays in Ohio, where Cooke could enjoy the outdoors as a hunter and fisherman, he began planning his own banking business. In 1861, he founded Jay Cooke & Company.

Cooke proved to have excellent timing and good connections. The Civil War had begun and the federal government was in financial trouble. The country had had budget deficits (debts) since 1857, and the expense of a war made the deficit even greater. President Abraham Lincoln (1809–1865; served 1861–65) took office in March 1861; his secretary of the Treasury, Salmon P. Chase (1808–1873), had been governor of Ohio and was acquainted with Cooke's brother, Henry, who was involved in politics in Ohio. Needing to find ways to pay off the deficit and to collect money to spend on the war, Chase turned to Cooke for financial advice.

Cooke and Chase decided that selling bonds would support the war effort. When a consumer purchases a government bond, the money spent goes to the government to be used or invested. Meanwhile, the bond increases in value over an extended period of time; the longer the consumer waits to redeem the bond, the more money he or she will receive. Chase wanted to promote bonds as a way for citizens to support the Union war effort. When the Union army was defeated at the First Battle of Bull Run in July 1861, Northerners began to realize that the Civil War would last for awhile.

Cooke secured $2 million from Philadelphia bankers to begin a bond-selling operation, and he collected another $50 million from a group of New York City banks to back the bonds. The bonds sold by Cooke were an attractive means for people to support the Union effort during the Civil War. Secretary of the Treasury Chase, as the saying goes, used the war to sell the bonds, but used the bonds to sell the war.

The marketing campaign by Cooke and Chase helped inspire over six hundred thousand people to buy war bonds. During one period, more than one million dollars worth of bonds sold daily. By February 1862, Jay Cooke & Company opened an office in Washington, D.C., to better serve its connections with the government. Cooke used the services of twenty-five hundred subagents across the nation to sell bonds. Five hundred million dollars was raised through bonds by the end of 1863. According to Cooke, "Newspapers and individuals got into the habit of gloomily deploring the [Civil War] and its ruinous expenditure. I offset this by quoting the fact that every dollar raised by the loans went right back into the hands of the people and was new and vigorous blood permeating all through the body of the nation. Thus by using the newspapers and pamphlets and circulars to disseminate [spread] these facts thoroughly and constantly all over the land I soon dispelled all gloom and brought about a more cheerful condition of public opinion."

"Jay Cooke invented the bond drive," wrote John Steele Gordon in the Wall Street Journal Interactive Edition on October 7, 1998. Gordon added that bonds have been used to secure war funds in most major wars involving the United States since the Civil War. "Cooke sold bonds in denominations as small as $50 to ordinary people, and allowed them to pay on an installment plan," continued Gordon. (An installment plan allows a buyer to make regular payments over a specified time period.) Cooke persuaded millions of people to take small savings and put them into government bonds. Cooke, Gordon concluded, "made Jay Cooke & Company the most powerful and prestigious bank in the country and himself its most famous banker."

When Chase left the government in 1864, his replacement, William P. Fessenden (1806–1869), began a new sale of bonds, but was able to sell just over $130 million in bonds over seven months. To spur sales, he appointed Cooke to a position in the Treasury Department so that Cooke could administer the program. After Cooke came on board, the government sold another $600 million in bonds in less than six months. When the Civil War ended in April 1865, Cooke had three banking houses—in Philadelphia, New York, and Washington—and each with a separate group of partners.

Meanwhile, in 1864, Cooke purchased Gibraltar Island in Lake Erie and built a home he called "Gibraltar." The Cooke family traveled there often for pleasant vacations. The house, which was later referred to as "Cooke's Castle," was given by the Cooke estate to Ohio State University. The university restored the home to its original form.

A Long Way from Sandusky

Jay Cooke reached prominent heights during the Abraham Lincoln administration—a long way from his days as a teenaged store clerk in Ohio. One morning while Cooke was conducting business at the Washington, D.C., home of Salmon P. Chase, secretary of the Treasury, a servant announced that Attorney General Edward Bates (1793–1869) and President Abraham Lincoln were outside waiting in a carriage. Cooke and Chase joined them, and the four men met General George B. McClellan (1826–1885) to review his troops, soon bound for battle.

In 1866, Cooke purchased a second home, which he called "Ogontz," in honor of his parents' home and the Native American chief for which it was named. The location chosen by Cooke reflected his passion for business and the outdoors: The home was near Philadelphia, as well as a wilderness area with good hunting grounds and good fishing on the Delaware River. Cooke later lost the house, then repurchased it and converted it into a school for girls. A devout Christian, Cooke regularly gave 10 percent of his income for religious and charitable purposes. He donated funds for the building of several Episcopal churches.

Reversal of fortune

Following the Civil War, Cooke turned his interest to the booming business of railroads. As an investment banker, Cooke sold loans to banks and small investors. In this capacity, Cooke introduced two new ideas to banking. He established banking syndicates (smaller, local banks that could quickly address financial issues in a certain area) and he took an active, daily role in the operations he was helping to finance. In 1869, Cooke became the banker of the Northern Pacific Railroad, which was building a cross-country line from Duluth, Minnesota, to Tacoma, Washington. Cooke made short-term loans to the railroad from his own banking house. Construction on the railroad reached eastern Montana when disaster struck in 1873.

As the national economy turned downward in early 1873, Cooke could not make money through investments to support the loans he had provided. By summer, Cooke's banks and his banking syndicates could not compensate customers who had deposited their money with them. On September, 18, 1873, the New York office of Jay Cooke & Company and all the syndicate banks were closed for business. The collapse of Cooke's firm started the large-scale financial recession called the Panic of 1873. Stocks quickly lost value. On September 20, 1873, the New York Stock Exchange announced that it would close for the first time in its history and did so for ten days. The Cooke empire quickly collapsed and Cooke's personal fortune was wiped out.

The stunning reversal of fortune was swift. The nation's most prominent banker was bankrupt. After the Panic, industrial plants shut down and over half of the railroads defaulted on their bonds. An economic depression followed. On the morning the offices of Jay Cooke & Company closed, Cooke was entertaining President Ulysses S. Grant (1822–1885; served 1869–77; see entry) at his Philadelphia mansion.

Cooke's position as the nation's most powerful banker was quickly assumed by J. P. Morgan (1837–1913). Morgan swiftly merged the Susquehanna Railroad he had recently purchased, stepped in to consolidate and reorganize railroads that had failed in the Panic of 1873, and became the new high financier of the federal government.

Cooke, meanwhile, spent several years sorting out debt. He reemerged in 1880 as an investor in western mines. A small amount of money he staked in a silver mine brought him a new fortune, as the mine struck a huge deposit at a good time. During the 1880s and early 1890s, silver had become more valuable as many small farmers and people of modest income demanded that additional currency be made available in the United States with its value backed by silver. In 1890, the Sherman Silver Purchase Act increased the amount of silver that could be coined. This act was repealed in 1894, but by then Cooke had sold his holdings in the silver mine for over $1 million.

During the last two decades of his life, Cooke lived comfortably in Philadelphia and continued to visit Sandusky. In 1899, he spoke to an Ohio historical society and noted it was the first speech he had given in fifty years. Cooke died in 1905 in Philadelphia.

For More Information

Books and Periodicals

Gordon, John Steele. "History Repeats in Finance Company Bailouts." Wall Street Journal (October 7, 1998).

Harnsberger, John L. Jay Cooke and Minnesota: The Formative Years of the Northern Pacific Railroad, 1868–1873. New York: Arno Press, 1981.

Josephson, Matthew. The Robber Barons: The Great American Capitalists, 1861–1901. New York: Harcourt, Brace and Company, 1934. Reprint, 1995.

Larson, Henrietta M. Jay Cooke, Private Banker. New York: Greenwood Press, 1968.

Web Sites

"Cooke Castle: Jay Cooke: The Man." Ohio State University.http://www.osu.edu/cookecastle/theman.html (accessed on June 21, 2004).

Jay Cooke Family Website.http://www.jaycooke.com/ (accessed on June 21, 2004).

Kangas, Gene. "Jay Cooke, the Banker from Philadelphia." Creekside Art Gallery.http://www.creeksideartgallery.com/articles/jcooke/jcooke.html (accessed on June 21, 2004).

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