Determinants of advertising expenditures: aggregate and cross-media evidence

Advertising expenditures account for 1 per cent of developed country GDP, having grown at an average real rate of 5 per cent p.a. over the 1980s. Trends in New Zealand have been similar to trends overseas. Hence analysis of the determinants of advertising in New Zealand should assist understanding of the determinants of advertising expenditures in other developed countries. We discuss changes in NZ's advertising industry and use a multi-equation co-integration framework to model the determinants of NZ advertising expenditure, both in total and across different media. We find that expenditure on advertising in all media is strongly pro-cyclical, that the allocation of expenditures depends on circulation patterns, and that press and magazines are complementary media and are substitutes for TV advertising.     

How divergent beliefs cause account team conflict

An exploratory, qualitative study of leading London and New York advertising agencies suggested that the differing disciplinary perspectives account team professionals bring to the advertising development process may have a deeper basis. Analysis of in-depth interviews suggested that they conceived of their respective roles in terms of implicit models of the consumer. These models were represented through particular epistemologies of consumer knowledge. The contrasting ‘epistemological models’ held by account team professionals were apparent in the differing stances on the role and function of consumer research in advertising development. The paper attempts to substantiate these speculative models with the dual aim of generating insight into the underlying dynamics of account teams and also of contributing to extant work on implicit theory in advertising practice.     

Commonalities in the Reasons for Switching Advertising Agencies: Corroboratory Evidence from New Zealand

Our replication study in New Zealand of failed advertising agency-client relationships provides findings to support previous UK and US research that a common set of reasons appears to exist, both between countries and over time, to explain why breakups occur. Advertisers responsible for over half of advertising account switches in New Zealand between 1993 and 1994 gave identical rankings to their counterparts in the UK and USA on the general factors explaining breakups, and also similar ratings on the relative importance of the thirty-five detailed variables associated with failure.     

An Analysis of Consumer Complaints about Social Marketing Advertisements in Australia and New Zealand

While social marketers are rarely targeted in discussions of the ethics of advertising, we are increasingly becoming aware of the importance of ensuring that social marketing messages are developed and conveyed in an ethical fashion. The article reviews complaints made by members of the general public in Australia and New Zealand to the advertising regulatory bodies in those two countries for the five years 2000–2004; examining the number, type, and nature of these complaints – including the categories of advertising, and the types of appeals, which generate complaints from the general public in both countries. We find that, as for commercial advertising, there is a need for further research to explore “community standards” in relation to social marketing messages; and that there is a clear need for social marketers to consider consumer attitudes towards advertising when developing communication strategies and messages.     

Die geplante neuordnung des konsumentenkreditrechts in der schweiz

The planned reform of consumer credit law in Switzerland. The author discusses the bill of a new Swiss Act on Consumer Credit. It is the intention of the bill to protect consumers engaged in all forms of direct or indirect acquisition on credit of goods and services. The bill contains detailed regulations in order to realize the consumer's freedom of entry into contract. There are rules concerning advertising, the duty to inform the consumer about effective credit cost, the protection against unfair clauses, and restrictions with regard to the duration of the credit period. The bill enacts rules concerning the default of consumers, too: Excessive interest rates in case of default are banned; the consumer may apply for adelai de grâce. Finally, the bill will improve the possibilities of preventive protection and of legal action on the part of the consumer. There will be criminal sanctions if the creditor does not fulfil his obligations. He may also loose his contractual rights. Consumer organizations may proceed against abuses in the advertising by consumer credit lenders.     

Deceptive advertising and third-person perception: The interplay of generalized and specific suspicion

The present research examines the extent to which consumers perceive deceptive advertising claims as effective (i.e., affect one's purchase decision) for themselves and others. Results in two experiments suggest that consumers tend to consider an advertising claim more effective for others than for themselves, when they realize the claim is highly deceptive. In contrast, when perceived deceptiveness is moderate or low, the self–others difference is moderated by consumer dispositional difference in skepticism toward advertising. The effect appears to be driven by the interplay of generalized and specific suspicion, which has a stronger impact on consumer judgment about the effect of deceptive advertising on the self than on others.     

What's Wrong with "Deceptive" Advertising?

In this paper I present a moral account of the legal notion of deceptive advertising. I argue that no harmful consequences to the consumer need follow from a deceptive advertisement as such, and I suggest instead that one should focus on the consequences of permitting the practise of deceptive advertising on society as a whole. After a brief account of deceptive advertising, I move to discuss the role of the reasonable person standard in its definition. One interpretation of this standard is empirical, aiming to objectify the quality of misleadingness in the advertisement. I offer an alternative normative interpretation which aims to draw the line between the advertiser's responsibility and that of the consumer, between misleading and miscomprehension. I then examine and reject several possible moral grounds for condemning and prohibiting deceptive advertising. These include: harm, in the sense of welfare, to the misled consumer; harm to competitors; and a violation or a reduction of the consumer's autonomy. Finally, I explain how the effect of the practise of deceptive advertising on society as a whole should inform our normative line-drawing between misleading and miscomprehension, and how it provides the basis for the moral evaluation of deceptive advertising.     

Developments in Consumer Protection in India

This paper surveys the major developments in the field of consumer protection in India since 1984, when the statutory provisions for regulating unfair trade practices were incorporated for the first time.Among the developments described in the paper is the strengthening of provisions for consumer protection through amendments to the Act regulating restrictive and monopolistic trade practices (the MTRP Act). Public-sector undertakings and co-operative societies have been brought within the purview of the Act, and consumers have obtained the right to participate in inquiry proceedings before the MRTP Commission.Consumers and their associations have been given the right to seek redress of grievances arising out of the violation of certain pieces of legislation, including the Drugs and Cosmetics Act. The Consumer Protection Act, 1986, was enacted in order to provide speedy and inexpensive redress of consumers' grievances. Redress can now be sought before any consumer court also for negligence or deficiency in medical services.The Bureau of Indian Standards Act, 1986, has strengthened the measures for the standardisation and quality control of manufactured goods.A Consumer Welfare Fund has been set up to provide financial assistance to voluntary consumer organisations and for the general development of consumer movement in the country. A spurt in voluntary consumer organisations in different parts of the country can also be observed.Other developments include the establishment of a separate Department of Consumer Affairs in the Union Government and the setting up of a Consumer Product Testing Laboratory.     

Saying Nothing With Words

Good legislation depends on clearly articulated policy objectives. This paper argues that a significant threat to effective consumer protection is posed by fuzzy thinking at the policy-making stage. Three major Australian law reform initiatives are examined: the Contracts Review Act 1980 (New South Wales); new uniform truth in lending laws; and product liability legislation. In each case, effective policy choices were left unresolved, either because the choice was politically too difficult or simply because of a failure by the policy makers to perceive that there was a choice needing to be made. In each case, the problem has been disguised by resort to drafting at a high level of abstraction, and this serves to make rhetorical claims in support of the legislation seem plausible. The truth, however, is that legislation drafted this way is bound to be indeterminate and it is left to the courts to invent policy as part of the interpretation process. This is not a legitimate judicial function.     

Deceptive advertising and abnormal stock returns

This study examined the impact of deceptive advertising on the abnormal stock returns of firms. Using an event study analysis with 101 cases from the FTC database over the period 1987–2005, the FTC rulings on deceptive advertising were found to have the negative effects on the abnormal stock returns of firms. Among the firm-specific factors examined in this study, the amount of advertising expenditures played a role in alleviating the impact of deceptive advertising on the abnormal stock returns, and the firms charged with consent agreements alone were found to lose less firm value than those charged with additional actions by the FTC. Results also showed that the negative effects on the abnormal stock returns created by the FTC actions did not quickly disappear afterwards. These results imply that marketing managers should exercise caution in designing advertising messages that may or may not intend to violate the FTC rules and regulations on deceptive advertising.     

Group Action in the Baltic States

The article is based on a study which aimed at examining the existence and use of group actions in consumer issues in the Baltic states. It was part of a larger research project in which the same questions were studied in all Central and Eastern European countries. Besides group actions in courts, administrative group actions were also studied.A starting point for the study was an overview of substantive consumer protection legislation in the Baltic states. In spite of the fact that there has been a rapid development in this field during recent years, the main finding was that many substantive law elements of consumers' collective interests, which in the EU Member States are often protected by different kinds of group actions, are as yet not regulated at all in the Baltic states or not regulated in a sufficiently detailed way in the Baltic states.The study showed that several kinds of group action exist in these countries. Firstly, there are administrative group actions for injunction. They are applied mainly in cases concerning product information, product safety, and unfair competition. Secondly, a group action by a consumer organisation for injunction in a court is, in principle, possible in Estonia and Lithuania, but not in Latvia. So far, no case law exists, however. A genuine group action for compensation is not possible in the Baltic countries, but a consumer organization may represent an individual consumer or a specified group of consumers in a court and may claim compensation on their behalf. The study showed that administrative group actions are a functioning part of the present consumer protection system in these countries, whereas court actions so far exist only on paper. It also showed that in the Baltic states, procedural means are in some matters better developed than substantive consumer law, whereas in many western countries, the exact opposite is the case. The article concludes with some recommendations as to how the Baltic states could develop their consumer protection legislation.     

Policies and practice in Denmark and Sweden

Abstract: Danish laws regulating banking and financial services organizations have no consumer protection provisions, although there is one law regulating a particular kind of payment instrument, the Payment Cards Act. However, general consumer protection law applies to banks and other financial services organizations, as well as other kinds of business. In particular, the Marketing Practices and Price Marking and Price Display Acts give responsibilities to the consumer ombudsman. This legal framework is complemented by guidelines issued – after consultation – by the consumer ombudsman, for example on conduct of business in bank advice, mortgage business and distance selling involving payment cards. The Danish system may be summarized as providing for standards of business behaviour laid down in general terms by law, backed by a supervisory authority with little power of coercion but playing an important role in influencing businesses to adopt high consumer protection standards and in negotiating solutions to problems as they emerge. The Swedish system is generally similar, but less advanced in the use of guidelines for the conduct of business. Both countries provide consumers who have unresolved complaints with easy access to alternative dispute resolution systems and the courts are rarely used to establish case law.     

The Self-regulation of Advertising in Europe

The extent of the self-regulation of advertising in Europe may come as a surprise to some readers. The main purpose of this paper is to put self-regulation and legislation into perspective and to give an overall picture of the means of regulating advertising throughout the whole of Europe. The regulation systems are placed in four broad bands: countries with no self-regulation, those with weak self-regulation, those with strong legislation, and finally the ten countries with strong self-regulation. Information is also given about the control bodies, their structures and their powers.     

The Hungarian Cocktail of Competition Law and Consumer Protection: Should It Be Dissolved?

Hungary, a candidate country expecting to join the EU in 2004, has to approximate its laws and economic policies to those of the EU. However, it is not certain whether the Brussels standards will always improve national rules.This article will discuss one possible case. It concerns the special Hungarian legislation on competition law and certain consumer protection rules in the Competition Act of 1990 and the amended Act of 1996. The inclusion of rules governing consumer interests in the Acts greatly contributed to the recognition and the enforcement of consumer interests in Hungary.Nevertheless, the European Commission and the OECD increasingly argue that the Hungarian Office of Economic Competition should pass its competence in consumer related cases to another institution and instead pay more attention to more prominent fields of competition law such as horizontal agreements and mergers.This article will contest this argument. Although it is an understandable approach, there are several reasons why it should be carefully reconsidered. These include the position of consumers, which is still weak, the general system of consumer protection in Hungary, and the strong standing of the Office for Economic Competition. The comprehensive nature of the Hungarian Competition Act of 1996 is one of the cases in which the European guidelines should be considered with caution in order to determine whether their implementation would improve or damage a system that already functions well.     

Taiwanese students' attitudes towards and beliefs about advertising

This study aimed to investigate college students' attitudes towards advertising in Taiwan using a survey method. This study applied two advertising constructs and their operationalizations which were developed in the USA: beliefs about advertising and attitudes towards advertising in general (AG). Specifically, this paper intends to determine whether the factor structure of these beliefs is similar to those in the USA and other South Asian countries. It also measures whether Taiwanese consumers' beliefs about advertising predict their AG. Six belief factors were extracted and they accounted for 56.5% of the variance. While the results from the factor analysis did not replicate the results from the USA and other South Asian countries perfectly, the similarities were large enough to conclude that the belief structure underlying AG is similar to these regions. By regression analysis, four of the six factors contributed significantly to the prediction of consumers' AG. Three out of four predictor factors matched those found in other Asian countries. These findings indicated that Taiwanese consumers had the same AG as those in five South Asian countries. These consistent findings provide a benchmark for future study on crossnational consumer beliefs about advertising and AG.     

Opinions about advertising in Australia: a study of complainants

Advertising expenditure has risen globally and in Australia there has been a 2.7-fold rise in the last 10 years. It is suggested that some advertisements may be ‘unacceptable’, that is unfair, misleading, deceptive, offensive, false or socially irresponsible. Industry and regulatory responses to consumer complaints about these problems must be addressed. This research is concerned with consumer behaviour and consumer complaint behaviour specifically in the area of advertising in Australia. The general findings from the reviewed literature indicated that complainants tend to be older, have attained higher levels of educational qualifications, earn a higher gross weekly income, possess greater degrees of wealth, have higher participant levels of local community involvement and, in general terms, have more resources to avail themselves of in order to allow them to take action when dissatisfied. The results from this research engender a better understanding of the complaining public. Empirical analyses were used for determining the characteristics of people who complain to the Advertising Standards Board and inferred that their opinions regarding advertising differ from members of the general population in four key areas. This research will afford regulatory bodies a better understanding of the complaining public as well as educating marketing communications strategists in effectively reaching their target markets.