CHAPTER ESSENTIALS

• The first American advertising agents were newspaper space brokers, individuals who purchased space in newspapers and then sold it to various merchants. The first modern ad agencies worked mainly for companies that manufactured consumer products, not for the newspapers (p. 324).
• As a result of manufacturers using newspaper stories and ads to create brand names, consumers began demanding specific products and retail stores started stocking desired brands, ushering in product differentiation (pp. 324–325).
• Patent medicine makers in the nineteenth century embraced advertising as a way to differentiate their products, sometimes making outrageous claims or covering up a product’s harmful effects. Such behaviors sparked cynicism and the development of industry codes. At the same time, department stores began advertising heavily in newspapers and magazines, luring people away from small local stores (pp. 325–326).
• By the twentieth century, advertising had transformed American society, creating new markets, shaping values, and influencing the rising consumer culture. This influence catalyzed the first watchdog organizations, such as the Better Business Bureau and the Federal Trade Commission (FTC). To create a more positive image, the advertising industry developed the War Advertising Council, known today as the Ad Council, to support worthy causes. However, with the advent of TV in the 1950s, the industry faced criticism again for its use of subliminal advertising (pp. 326–328).

• Beginning in the 1960s and 1970s, visual design played a more prominent role in advertising. This trend sparked the growth of new types of advertising agencies: mega-agencies—large firms that are formed from the merging of several individual agencies and that maintain worldwide regional offices—and boutique agencies—smaller companies that devote their talents to just a handful of select clients (pp. 328–330).
• Regardless of the type of ad agency, most have similar organizational structures consisting of account planning departments (where planners coordinate market research to assess consumer behaviors and attitudes by studying demographics and psychographics—often relying on focus groups—and conducting Values and Lifestyles [VALS] research); creative development (where writers and artists develop storyboards that show each scene of a potential ad or a viral marketing campaign to be shared online); media buying (staffed by media planners and media buyers who choose and purchase the types of media that are best suited to carry a client’s ads and reach the targeted audience, sometimes by engaging in repetitive saturation advertising); and account management (staffed with account executives who are responsible for bringing in new business and are most vulnerable to account reviews or client assessments of an existing ad campaign) (pp. 330–333).
• The growth of the Internet in the 1990s has changed the advertising industry considerably. New forms of Internet advertising include pop-up ads, and ad spam. Internet ad companies pose a threat to traditional advertising agencies. Ad agencies can track ad impressions and click-throughs and develop consumer profiles. Mobile ad technologies include QR codes (pp. 333–335).

• Ad agencies use a number of persuasive strategies, such as famous-person testimonial (a product endorsed by a well-known person); plain-folks pitch (a product associated with simplicity); snob appeal (an ad that claims using a product will elevate one’s status); bandwagon effect (an ad that claims “everyone is using it”); hidden-fear appeal (a campaign that plays on a consumer’s insecurities); irritation advertising (an ad that creates product-name recognition by being annoying or obnoxious) (pp. 336–337).
• In addition, advertisers also draw on the association principle in which a product is linked with a positive cultural value or image. Others tell stories or narratives that convey a culture’s deepest values and social norms. Still other advertisers focus on product placement—strategically placing ads or buying space in movies, TV shows, comic books, and video games so they appear as part of a story’s environment (pp. 337, 340–341).

• Advertisements consist of commercial speech, any print or broadcast expression for which a fee is charged to organizations and individuals buying time or space in the mass media. The question of whether advertisers are fully protected by the First Amendment remains controversial (pp. 341–342).
• Serious concerns exist over the impact of advertising on children, teens, and people susceptible to eating disorders, smoking, alcoholism, or inappropriate prescription-drug use, which has led to the creation of nonprofit watchdog and advocacy organizations, such as Commercial Alert and the American Legacy Foundation (pp. 342, 344–347).

• Advertising has helped fuel the economy while also creating a consumer society with divisions between those who can afford to buy and those who cannot. It has also raised concerns about the impact of a handful of large media conglomerates controlling commercial speech. Political advertising—the use of ad techniques to promote a candidate’s image and persuade the public to adopt a particular viewpoint—makes us question whether or not we’re getting unbiased information (pp. 347–349).
• Despite these issues, without advertising, many mass media industries would not survive. Given advertising’s pervasiveness, it’s important for the public to be critical consumers of advertising (p. 349).