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Economic Functions of Advertising

• Generating profits by selling products or services
• Fostering brand name recognition
• Establishing corporate ‘good will’ or corporate image for social responsibility
• Supporting the economic status quo

Social History of Advertising

• Earliest known ad 1000 BC offered a “whole gold coin” for the return of a runaway slave
• Only began in mass form with the printed press after Gutenberg
• Associated with the rise of mass production techniques in capitalism especially in 20th century
• Needed to stimulate mass demand, synchronize or aggregate demand with oversupply

Economic Characteristics

• A function of the gross domestic product: tied to business cycle
• Segmented by global/national/local markets
• Newspapers and Radio: mostly local retail
• TV mostly national/ international

Economic Paradox

• Just under half of world advertising spending is from US
• Yet 2/3rds of world population cannot afford the goods the US advertises

Economic Characteristics 2

• Ad rates rise in condition of monopoly/oligopoly
• Ubiquitous
• Less than 5% of all TV signals are non commercial
• Few magazines, news or other sources are without ads

Economic Characteristics 3

• Mainstream, ad supported media exist to make money from advertisers
• Content and style are often reshaped to comply with demands of ads in a highly segmented market
• How? Ads laid out first on a newspaper, then text
• How? Media often reposition to appeal to a better market segment ( eg. Jake)

Theories of Advertising

• Neo liberal or pro market view
• Reform Liberal or pro regulation view
• Critical or anti consumption view