INTRODUCTION TO TOPIC

ADVERTISEMENT

Advertising is a form of communication intended to persuade an audience (viewers,

readers or listeners) to take some action. It includes the name of a product or service
and how that product or service could benefit the consumer, to persuade potential
customers to purchase or to consume that particular brand. Modern advertising
developed with the rise of mass production in the late 19th and early 20th centuries.

Commercial advertisers often seek to generate increased consumption of their

products or services through branding, which involves the repetition of an image or
product name in an effort to associate related qualities with the brand in the minds of
consumers. Different types of media can be used to deliver these messages, including
traditional media such as newspapers, magazines, television, radio, outdoor or direct
mail; or new media such as websites and text messages. Advertising may be placed by
an advertising agency on behalf of a company or other organization.

Non-commerical advertisers that spend money to advertise items other than a

consumer product or service include political parties, interest groups, religious
organizations and governmental agencies. Nonprofit organizations may rely on free
modes of persuasion, such as a public service announcement.

In 2007, spending on advertising was estimated at more than $150 billion in the
United States and $385 billion worldwide.

HISTORY
Egyptians used papyrus to make sales messages and wall posters. Commercial
messages and political campaign displays have been found in the ruins of Pompeii
and ancient Arabia. Lost and found advertising on papyrus was common in Ancient
Greece and Ancient Rome. Wall or rock painting for commercial advertising is
another manifestation of an ancient advertising form, which is present to this day in
many parts of Asia, Africa, and South America. The tradition of wall painting can be
traced back to Indian rock art paintings that date back to 4000 BC. History tells us
that Out-of-home advertising and billboards are the oldest forms of advertising.

As the towns and cities of the Middle Ages began to grow, and the general populace
was unable to read, signs that today would say cobbler, miller, tailor or blacksmith
would use an image associated with their trade such as a boot, a suit, a hat, a clock, a
diamond, a horse shoe, a candle or even a bag of flour. Fruits and vegetables were
sold in the city square from the backs of carts and wagons and their proprietors used
street callers (town criers) to announce their whereabouts for the convenience of the
customers.

As education became an apparent need and reading, as well as printing, developed

advertising expanded to include handbills. In the 17th century advertisements started
to appear in weekly newspapers in England. These early print advertisements were
used mainly to promote books and newspapers, which became increasingly affordable
with advances in the printing press; and medicines, which were increasingly sought
after as disease ravaged Europe. However, false advertising and so-called "quack"
advertisements became a problem, which ushered in the regulation of advertising
content.

As the economy expanded during the 19th century, advertising grew alongside. In the
United States, the success of this advertising format eventually led to the growth of
mail-order advertising.

In June 1836, French newspaper La Presse was the first to include paid advertising in
its pages, allowing it to lower its price, extend its readership and increase its
profitability and the formula was soon copied by all titles. Around 1840, Volney
Palmer established a predecessor to advertising agencies in Boston. Around the same
time, in France, Charles-Louis Havas extended the services of his news agency,
Havas to include advertisement brokerage, making it the first French group to
organize. At first, agencies were brokers for advertisement space in newspapers. N.
W. Ayer & Son was the first full-service agency to assume responsibility for
advertising content. N.W. Ayer opened in 1869, and was located in Philadelphia.
An 1895 advertisement for a weight gain product.

At the turn of the century, there were few career choices for women in business;
however, advertising was one of the few. Since women were responsible for most of
the purchasing done in their household, advertisers and agencies recognized the value
of women's insight during the creative process. In fact, the first American advertising
to use a sexual sell was created by a woman – for a soap product. Although tame by
today's standards, the advertisement featured a couple with the message "The skin you
love to touch".

In the early 1920s, the first radio stations were established by radio equipment
manufacturers and retailers who offered programs in order to sell more radios to
consumers. As time passed, many non-profit organizations followed suit in setting up
their own radio stations, and included: schools, clubs and civic groups. When the
practice of sponsoring programs was popularised, each individual radio program was
usually sponsored by a single business in exchange for a brief mention of the
business' name at the beginning and end of the sponsored shows. However, radio
station owners soon realised they could earn more money by selling sponsorship
rights in small time allocations to multiple businesses throughout their radio station's
broadcasts, rather than selling the sponsorship rights to single businesses per show.
This practice was carried over to television in the late 1940s and early 1950s. A fierce
battle was fought between those seeking to commercialise the radio and people who
argued that the radio spectrum should be considered a part of the commons – to be
used only non-commercially and for the public good. The United Kingdom pursued a
public funding model for the BBC, originally a private company, the British
Broadcasting Company, but incorporated as a public body by Royal Charter in 1927.
In Canada, advocates like Graham Spry were likewise able to persuade the federal
government to adopt a public funding model, creating the Canadian Broadcasting
Corporation. However, in the United States, the capitalist model prevailed with the
passage of the Communications Act of 1934 which created the Federal
Communications Commission. To placate the socialists, the U.S. Congress did require
commercial broadcasters to operate in the "public interest, convenience, and
necessity". Public broadcasting now exists in the United States due to the 1967 Public
Broadcasting Act which led to the Public Broadcasting Service and National Public
Radio.

In the early 1950s, the DuMont Television Network began the modern practice of
selling advertisement time to multiple sponsors. Previously, DuMont had trouble
finding sponsors for many of their programs and compensated by selling smaller
blocks of advertising time to several businesses. This eventually became the standard
for the commercial television industry in the United States. However, it was still a
common practice to have single sponsor shows, such as The United States Steel Hour.
In some instances the sponsors exercised great control over the content of the show—
up to and including having one's advertising agency actually writing the show. The
single sponsor model is much less prevalent now, a notable exception being the
Hallmark Hall of Fame.

The 1960s saw advertising transform into a modern approach in which creativity was
allowed to shine, producing unexpected messages that made advertisements more
tempting to consumers' eyes. The Volkswagen ad campaign—featuring such
headlines as "Think Small" and "Lemon" (which were used to describe the
appearance of the car)—ushered in the era of modern advertising by promoting a
"position" or "unique selling proposition" designed to associate each brand with a
specific idea in the reader or viewer's mind. This period of American advertising is
called the Creative Revolution and its archetype was William Bernbach who helped
create the revolutionary Volkswagen ads among others. Some of the most creative
and long-standing American advertising dates to this period.

The late 1980s and early 1990s saw the introduction of cable television and
particularly MTV. Pioneering the concept of the music video, MTV ushered in a new
type of advertising: the consumer tunes in for the advertising message, rather than it
being a by-product or afterthought. As cable and satellite television became
increasingly prevalent, specialty channels emerged, including channels entirely
devoted to advertising, such as QVC, Home Shopping Network, and ShopTV Canada.

Marketing through the Internet opened new frontiers for advertisers and contributed to
the "dot-com" boom of the 1990s. Entire corporations operated solely on advertising
revenue, offering everything from coupons to free Internet access. At the turn of the
21st century, a number of websites including the search engine Google, started a
change in online advertising by emphasizing contextually relevant, unobtrusive ads
intended to help, rather than inundate, users. This has led to a plethora of similar
efforts and an increasing trend of interactive advertising.

The share of advertising spending relative to GDP has changed little across large
changes in media. For example, in the US in 1925, the main advertising media were
newspapers, magazines, signs on streetcars, and outdoor posters. Advertising
spending as a share of GDP was about 2.9 percent. By 1998, television and radio had
become major advertising media. Nonetheless, advertising spending as a share of
GDP was slightly lower—about 2.4 percent.

A recent advertising innovation is "guerrilla marketing", which involve unusual

approaches such as staged encounters in public places, giveaways of products such as
cars that are covered with brand messages, and interactive advertising where the
viewer can respond to become part of the advertising message.Guerrilla advertising is
becoming increasing more popular with a lot of companies. This type of advertising is
unpredictable and innovative, which causes consumers to buy the product or idea.
This reflects an increasing trend of interactive and "embedded" ads, such as via
product placement, having consumers vote through text messages, and various
innovations utilizing social network services such as MySpace.

PUBLIC SERVICE ADVERTISING

The same advertising techniques used to promote commercial goods and services can
be used to inform, educate and motivate the public about non-commercial issues, such
as HIV/AIDS, political ideology, energy conservation and deforestation.

Advertising, in its non-commercial guise, is a powerful educational tool capable of

reaching and motivating large audiences. "Advertising justifies its existence when
used in the public interest—it is much too powerful a tool to use solely for
commercial purposes." Attributed to Howard Gossage by David Ogilvy.
Public service advertising, non-commercial advertising, public interest advertising,
cause marketing, and social marketing are different terms for (or aspects of) the use of
sophisticated advertising and marketing communications techniques (generally
associated with commercial enterprise) on behalf of non-commercial, public interest
issues and initiatives.

In the United States, the granting of television and radio licenses by the FCC is
contingent upon the station broadcasting a certain amount of public service
advertising. To meet these requirements, many broadcast stations in America air the
bulk of their required public service announcements during the late night or early
morning when the smallest percentage of viewers are watching, leaving more day and
prime time commercial slots available for high-paying advertisers.

Public service advertising reached its height during World Wars I and II under the
direction of several governments.

TYPES OF ADVERTISING

Virtually any medium can be used for advertising. Commercial advertising media can
include wall paintings, billboards, street furniture components, printed flyers and rack
cards, radio, cinema and television adverts, web banners, mobile telephone screens,
shopping carts, web popups, skywriting, bus stop benches, human billboards,
magazines, newspapers, town criers, sides of buses, banners attached to or sides of
airplanes ("logojets"), in-flight advertisements on seatback tray tables or overhead
storage bins, taxicab doors, roof mounts and passenger screens, musical stage shows,
subway platforms and trains, elastic bands on disposable diapers,doors of bathroom
stalls,stickers on apples in supermarkets, shopping cart handles (grabertising), the
opening section of streaming audio and video, posters, and the backs of event tickets
and supermarket receipts. Any place an "identified" sponsor pays to deliver their
message through a medium is advertising.

TELEVISION
Main articles: Television advertisement and Music in advertising

The TV commercial is generally considered the most effective mass-market

advertising format, as is reflected by the high prices TV networks charge for
commercial airtime during popular TV events. The annual Super Bowl football game
in the United States is known as the most prominent advertising event on television.
The average cost of a single thirty-second TV spot during this game has reached
US$3 million (as of 2009).

The majority of television commercials feature a song or jingle that listeners soon
relate to the product.

Virtual advertisements may be inserted into regular television programming through

computer graphics. It is typically inserted into otherwise blank backdrops or used to
replace local billboards that are not relevant to the remote broadcast audience. More
controversially, virtual billboards may be inserted into the background where none
exist in real-life. This technique is especially used in televised sporting events Virtual
product placement is also possible.

INFOMERCIALS

An infomercial is a long-format television commercial, typically five minutes or

longer. The word "infomercial" is a portmanteau of the words "information" &
"commercial". The main objective in an infomercial is to create an impulse purchase,
so that the consumer sees the presentation and then immediately buys the product
through the advertised toll-free telephone number or website. Infomercials describe,
display, and often demonstrate products and their features, and commonly have
testimonials from consumers and industry professionals.

RADIO ADVERTISING

Radio advertising is a form of advertising via the medium of radio.

Radio advertisements are broadcasted as radio waves to the air from a transmitter to
an antenna and a thus to a receiving device. Airtime is purchased from a station or
network in exchange for airing the commercials. While radio has the obvious
limitation of being restricted to sound, proponents of radio advertising often cite this
as an advantage.

PRESS ADVERTISING

Press advertising describes advertising in a printed medium such as a newspaper,

magazine, or trade journal. This encompasses everything from media with a very
broad readership base, such as a major national newspaper or magazine, to more
narrowly targeted media such as local newspapers and trade journals on very
specialized topics. A form of press advertising is classified advertising, which allows
private individuals or companies to purchase a small, narrowly targeted ad for a low
fee advertising a product or service.

ONLINE ADVERTISING

Online advertising is a form of promotion that uses the Internet and World Wide Web
for the expressed purpose of delivering marketing messages to attract customers.
Examples of online advertising include contextual ads that appear on search engine
results pages, banner ads, in text ads, Rich Media Ads, Social network advertising,
online classified advertising, advertising networks and e-mail marketing, including e-
mail spam.

BILLBOARD ADVERTISING

Billboards are large structures located in public places which display advertisements
to passing pedestrians and motorists. Most often, they are located on main roads with
a large amount of passing motor and pedestrian traffic; however, they can be placed in
any location with large amounts of viewers, such as on mass transit vehicles and in
stations, in shopping malls or office buildings, and in stadiums.

Mobile billboard advertising

Mobile billboards are generally vehicle mounted billboards or digital screens. These
can be on dedicated vehicles built solely for carrying advertisements along routes
preselected by clients, they can also be specially-equipped cargo trucks or, in some
cases, large banners strewn from planes. The billboards are often lighted; some being
backlit, and others employing spotlights. Some billboard displays are static, while
others change; for example, continuously or periodically rotating among a set of
advertisements.

Mobile displays are used for various situations in metropolitan areas throughout the
world, including:
Target advertising
One-day, and long-term campaigns
Conventions
Sporting events
Store openings and similar promotional events
Big advertisements from smaller companies
Others

IN-STORE ADVERTISING

In-store advertising is any advertisement placed in a retail store. It includes placement

of a product in visible locations in a store, such as at eye level, at the ends of aisles
and near checkout counters, eye-catching displays promoting a specific product, and
advertisements in such places as shopping carts and in-store video displays.

COVERT ADVERTISING

Covert advertising, also known as guerrilla advertising, is when a product or brand is

embedded in entertainment and media. For example, in a film, the main character can
use an item or other of a definite brand, as in the movie Minority Report, where Tom
Cruise's character John Anderton owns a phone with the Nokia logo clearly written in
the top corner, or his watch engraved with the Bulgari logo. Another example of
advertising in film is in I, Robot, where main character played by Will Smith
mentions his Converse shoes several times, calling them "classics," because the film
is set far in the future. I, Robot and Spaceballs also showcase futuristic cars with the
Audi and Mercedes-Benz logos clearly displayed on the front of the vehicles. Cadillac
chose to advertise in the movie The Matrix Reloaded, which as a result contained
many scenes in which Cadillac cars were used. Similarly, product placement for
Omega Watches, Ford, VAIO, BMW and Aston Martin cars are featured in recent
James Bond films, most notably Casino Royale. In "Fantastic Four: Rise of the Silver
Surfer", the main transport vehicle shows a large Dodge logo on the front. Blade
Runner includes some of the most obvious product placement; the whole film stops to
show a Coca-Cola billboard.
Celebrities
Main article: Celebrity branding

This type of advertising focuses upon using celebrity power, fame, money, popularity
to gain recognition for their products and promote specific stores or products.
Advertisers often advertise their products, for example, when celebrities share their
favorite products or wear clothes by specific brands or designers. Celebrities are often
involved in advertising campaigns such as television or print adverts to advertise
specific or general products.

The use of celebrities to endorse a brand can have its downsides, however. One
mistake by a celebrity can be detrimental to the public relations of a brand. For
example, following his performance of eight gold medals at the 2008 Olympic Games
in Beijing, China, swimmer Michael Phelps' contract with Kellogg's was terminated,
as Kellogg's did not want to associate with him after he was photographed smoking
marijuana.

MEDIA AND ADVERTISING APPROACHES

Increasingly, other media are overtaking many of the "traditional" media such as
television, radio and newspaper because of a shift toward consumer's usage of the
Internet for news and music as well as devices like digital video recorders (DVRs)
such as TiVo.

Advertising on the World Wide Web is a recent phenomenon. Prices of Web-based

advertising space are dependent on the "relevance" of the surrounding web content
and the traffic that the website receives.

Digital signage is poised to become a major mass media because of its ability to reach
larger audiences for less money. Digital signage also offer the unique ability to see the
target audience where they are reached by the medium. Technology advances has also
made it possible to control the message on digital signage with much precision,
enabling the messages to be relevant to the target audience at any given time and
location which in turn, gets more response from the advertising. Digital signage is
being successfully employed in supermarkets.Another successful use of digital
signage is in hospitality locations such as restaurants. and malls.

E-mail advertising is another recent phenomenon. Unsolicited bulk E-mail advertising

is known as "e-mail spam". Spam has been a problem for email users for many years.

Some companies have proposed placing messages or corporate logos on the side of
booster rockets and the International Space Station. Controversy exists on the
effectiveness of subliminal advertising (see mind control), and the pervasiveness of
mass messages (see propaganda).

Unpaid advertising (also called "publicity advertising"), can provide good exposure at
minimal cost. Personal recommendations ("bring a friend", "sell it"), spreading buzz,
or achieving the feat of equating a brand with a common noun (in the United States,
"Xerox" = "photocopier", "Kleenex" = tissue, "Vaseline" = petroleum jelly, "Hoover"
= vacuum cleaner, "Nintendo" (often used by those exposed to many video games) =
video games, and "Band-Aid" = adhesive bandage) — these can be seen as the
pinnacle of any advertising campaign. However, some companies oppose the use of
their brand name to label an object. Equating a brand with a common noun also risks
turning that brand into a genericized trademark - turning it into a generic term which
means that its legal protection as a trademark is lost.

As the mobile phone became a new mass media in 1998 when the first paid
downloadable content appeared on mobile phones in Finland, it was only a matter of
time until mobile advertising followed, also first launched in Finland in 2000. By
2007 the value of mobile advertising had reached $2.2 billion and providers such as
Admob delivered billions of mobile ads.

More advanced mobile ads include banner ads, coupons, Multimedia Messaging
Service picture and video messages, advergames and various engagement marketing
campaigns. A particular feature driving mobile ads is the 2D Barcode, which replaces
the need to do any typing of web addresses, and uses the camera feature of modern
phones to gain immediate access to web content. 83 percent of Japanese mobile phone
users already are active users of 2D barcodes.

A new form of advertising that is growing rapidly is social network advertising. It is

online advertising with a focus on social networking sites. This is a relatively
immature market, but it has shown a lot of promise as advertisers are able to take
advantage of the demographic information the user has provided to the social
networking site. Friendertising is a more precise advertising term in which people are
able to direct advertisements toward others directly using social network service.

From time to time, The CW Television Network airs short programming breaks called
"Content Wraps," to advertise one company's product during an entire commercial
break. The CW pioneered "content wraps" and some products featured were Herbal
Essences, Crest, Guitar Hero II, CoverGirl, and recently Toyota.

Recently, there appeared a new promotion concept, "ARvertising", advertising on

Augmented Reality technology.

CRITICISM OF ADVERTISING
While advertising can be seen as necessary for economic growth, it is not without
social costs. Unsolicited Commercial Email and other forms of spam have become so
prevalent as to have become a major nuisance to users of these services, as well as
being a financial burden on internet service providers.[19] Advertising is increasingly
invading public spaces, such as schools, which some critics argue is a form of child
exploitation. In addition, advertising frequently uses psychological pressure (for
example, appealing to feelings of inadequacy) on the intended consumer, which may
be harmful.

HYPER-COMMERCIALISM AND THE COMMERCIAL TIDAL

WAVE

Criticism of advertising is closely linked with criticism of media and often

interchangeable. They can refer to its audio-visual aspects (e. g. cluttering of public
spaces and airwaves), environmental aspects (e. g. pollution, oversize packaging,
increasing consumption), political aspects (e. g. media dependency, free speech,
censorship), financial aspects (costs), ethical/moral/social aspects (e. g. sub-conscious
influencing, invasion of privacy, increasing consumption and waste, target groups,
certain products, honesty) and, of course, a mix thereof. Some aspects can be
subdivided further and some can cover more than one category.

As advertising has become increasingly prevalent in modern Western societies, it is

also increasingly being criticized. A person can hardly move in the public sphere or
use a medium without being subject to advertising. Advertising occupies public space
and more and more invades the private sphere of people, many of which consider it a
nuisance. “It is becoming harder to escape from advertising and the media. … Public
space is increasingly turning into a gigantic billboard for products of all kind. The
aesthetical and political consequences cannot yet be foreseen.” Hanno Rauterberg in
the German newspaper ‘Die Zeit’ calls advertising a new kind of dictatorship that
cannot be escaped.

Ad creep: "There are ads in schools, airport lounges, doctors offices, movie theaters,
hospitals, gas stations, elevators, convenience stores, on the Internet, on fruit, on
ATMs, on garbage cans and countless other places. There are ads on beach sand and
restroom walls.” “One of the ironies of advertising in our times is that as
commercialism increases, it makes it that much more difficult for any particular
advertiser to succeed, hence pushing the advertiser to even greater efforts.” Within a
decade advertising in radios climbed to nearly 18 or 19 minutes per hour; on prime-
time television the standard until 1982 was no more than 9.5 minutes of advertising
per hour, today it’s between 14 and 17 minutes. With the introduction of the shorter
15-second-spot the total amount of ads increased even more dramatically. Ads are not
only placed in breaks but e. g. also into baseball telecasts during the game itself. They
flood the internet, a market growing in leaps and bounds.

Other growing markets are ‘’product placements’’ in entertainment programming and

in movies where it has become standard practice and ‘’virtual advertising’’ where
products get placed retroactively into rerun shows. Product billboards are virtually
inserted into Major League Baseball broadcasts and in the same manner, virtual street
banners or logos are projected on an entry canopy or sidewalks, for example during
the arrival of celebrities at the 2001 Grammy Awards. Advertising precedes the
showing of films at cinemas including lavish ‘film shorts’ produced by companies
such as Microsoft or DaimlerChrysler. “The largest advertising agencies have begun
working aggressively to co-produce programming in conjunction with the largest
media firms” creating Infomercials resembling entertainment programming.

Opponents equate the growing amount of advertising with a “tidal wave” and
restrictions with “damming” the flood. Kalle Lasn, one of the most outspoken critics
of advertising on the international stage, considers advertising “the most prevalent and
toxic of the mental pollutants. From the moment your radio alarm sounds in the
morning to the wee hours of late-night TV microjolts of commercial pollution flood
into your brain at the rate of around 3,000 marketing messages per day. Every day an
estimated twelve billion display ads, 3 million radio commercials and more than
200,000 television commercials are dumped into North America’s collective
unconscious”. In the course of his life the average American watches three years of
advertising on television.
More recent developments are video games incorporating products into their content,
special commercial patient channels in hospitals and public figures sporting
temporary tattoos. A method unrecognisable as advertising is so-called ‘’guerrilla
marketing’’ which is spreading ‘buzz’ about a new product in target audiences. Cash-
strapped U.S. cities do not shrink back from offering police cars for advertising. A
trend, especially in Germany, is companies buying the names of sports stadiums. The
Hamburg soccer Volkspark stadium first became the AOL Arena and then the HSH
Nordbank Arena. The Stuttgart Neckarstadion became the Mercedes-Benz Arena, the
Dortmund Westfalenstadion now is the Signal Iduna Park. The former SkyDome in
Toronto was renamed Rogers Centre. Other recent developments are, for example,
that whole subway stations in Berlin are redesigned into product halls and exclusively
leased to a company. Düsseldorf even has ‘multi-sensorial’ adventure transit stops
equipped with loudspeakers and systems that spread the smell of a detergent. Swatch
used beamers to project messages on the Berlin TV-tower and Victory column, which
was fined because it was done without a permit. The illegality was part of the scheme
and added promotion.

It’s standard business management knowledge that advertising is a pillar, if not “the”
pillar of the growth-orientated free capitalist economy. “Advertising is part of the
bone marrow of corporate capitalism. “Contemporary capitalism could not function
and global production networks could not exist as they do without advertising.

For communication scientist and media economist Manfred Knoche at the University
of Salzburg, Austria, advertising isn’t just simply a ‘necessary evil’ but a ‘necessary
elixir of life’ for the media business, the economy and capitalism as a whole.
Advertising and mass media economic interests create ideology. Knoche describes
advertising for products and brands as ‘the producer’s weapons in the competition for
customers’ and trade advertising, e. g. by the automotive industry, as a means to
collectively represent their interests against other groups, such as the train companies.
In his view editorial articles and programmes in the media, promoting consumption in
general, provide a ‘cost free’ service to producers and sponsoring for a ‘much used
means of payment’ in advertising. Christopher Lasch argues that advertising leads to
an overall increase in consumption in society; "Advertising serves not so much to
advertise products as to promote consumption as a way of life.
ADVERTISING AND CONSTITUTIONAL RIGHTS

Advertising is equated with constitutionally guaranteed freedom of opinion and

speech. Therefore criticizing advertising or any attempt to restrict or ban advertising
is almost always considered to be an attack on fundamental rights[citation needed]
(First Amendment in the US) and meets the combined and concentrated resistance of
the business and especially the advertising community. “Currently or in the near
future, any number of cases are and will be working their way through the court
system that would seek to prohibit any government regulation of ... commercial
speech (e.g. advertising or food labelling) on the grounds that such regulation would
violate citizens’ and corporations’ First Amendment rights to free speech or free
press. An example for this debate is advertising for tobacco or alcohol but also
advertising by mail or fliers (clogged mail boxes), advertising on the phone, in the
internet and advertising for children. Various legal restrictions concerning spamming,
advertising on mobile phones, addressing children, tobacco, alcohol have been
introduced by the US, the EU and various other countries. Not only the business
community resists restrictions of advertising. Advertising as a means of free
expression has firmly established itself in western society[citation needed].
McChesney argues, that the government deserves constant vigilance when it comes to
such regulations, but that it is certainly not “the only antidemocratic force in our
society. ...corporations and the wealthy enjoy a power every bit as immense as that
enjoyed by the lords and royalty of feudal times” and “markets are not value-free or
neutral; they not only tend to work to the advantage of those with the most money, but
they also by their very nature emphasize profit over all else….Hence, today the debate
is over whether advertising or food labelling, or campaign contributions are speech...if
the rights to be protected by the First Amendment can only be effectively employed
by a fraction of the citizenry, and their exercise of these rights gives them undue
political power and undermines the ability of the balance of the citizenry to exercise
the same rights and/or constitutional rights, then it is not necessarily legitimately
protected by the First Amendment.” In addition, “those with the capacity to engage in
free press are in a position to determine who can speak to the great mass of citizens
and who cannot”. Critics in turn argue, that advertising invades privacy which is a
constitutional right. For, on the one hand, advertising physically invades privacy, on
the other, it increasingly uses relevant, information-based communication with private
data assembled without the knowledge or consent of consumers or target groups.

For Georg Franck at Vienna University of Technology advertising is part of what he

calls “mental capitalism”, taking up a term (mental) which has been used by groups
concerned with the mental environment, such as Adbusters. Franck blends the
“Economy of Attention” with Christopher Lasch’s culture of narcissm into the mental
capitalism: In his essay „Advertising at the Edge of the Apocalypse“, Sut Jhally
writes: “20. century advertising is the most powerful and sustained system of
propaganda in human history and its cumulative cultural effects, unless quickly
checked, will be responsible for destroying the world as we know it.

THE PRICE OF ATTENTION AND HIDDEN COSTS

Advertising has developed into a billion-dollar business on which many depend. In

2006 391 billion US dollars were spent worldwide for advertising. In Germany, for
example, the advertising industry contributes 1.5% of the gross national income; the
figures for other developed countries are similar.[citation needed] Thus, advertising
and growth are directly and causally linked. As far as a growth based economy can be
blamed for the harmful human lifestyle (affluent society) advertising has to be
considered in this aspect concerning its negative impact, because its main purpose is
to raise consumption. “The industry is accused of being one of the engines powering a
convoluted economic mass production system which promotes consumption.

Attention and attentiveness have become a new commodity for which a market
developed. “The amount of attention that is absorbed by the media and redistributed
in the competition for quotas and reach is not identical with the amount of attention,
that is available in society. The total amount circulating in society is made up of the
attention exchanged among the people themselves and the attention given to media
information. Only the latter is homogenised by quantitative measuring and only the
latter takes on the character of an anonymous currency. According to Franck, any
surface of presentation that can guarantee a certain degree of attentiveness works as
magnet for attention, e. g. media which are actually meant for information and
entertainment, culture and the arts, public space etc. It is this attraction which is sold
to the advertising business. The German Advertising Association stated that in 2007
30.78 billion Euros were spent on advertising in Germany, 26% in newspapers, 21%
on television, 15% by mail and 15% in magazines. In 2002 there were 360.000 people
employed in the advertising business. The internet revenues for advertising doubled to
almost 1 billion Euros from 2006 to 2007, giving it the highest growth rates.

Spiegel-Online reported that in the US in 2008 for the first time more money was
spent for advertising on internet (105.3 billion US dollars) than on television (98.5
billion US dollars). The largest amount in 2008 was still spent in the print media (147
billion US dollars).[41] For that same year, Welt-Online reported that the US
pharmaceutical industry spent almost double the amount on advertising (57.7 billion
dollars) than it did on research (31.5 billion dollars). But Marc-André Gagnon und
Joel Lexchin of York University, Toronto, estimate that the actual expenses for
advertising are higher yet, because not all entries are recorded by the research
institutions. Not included are indirect advertising campaigns such as sales, rebates and
price reductions. Few consumers are aware of the fact that they are the ones paying
for every cent spent for public relations, advertisements, rebates, packaging etc. since
they ordinarily get included in the price calculation.
Influencing and conditioning
The most important element of advertising is not information but suggestion more or
less making use of associations, emotions (appeal to emotion) and drives dormant in
the sub-conscience of people, such as sex drive, herd instinct, of desires, such as
happiness, health, fitness, appearance, self-esteem, reputation, belonging, social
status, identity, adventure, distraction, reward, of fears (appeal to fear), such as
illness, weaknesses, loneliness, need, uncertainty, security or of prejudices, learned
opinions and comforts. “All human needs, relationships, and fears – the deepest
recesses of the human psyche – become mere means for the expansion of the
commodity universe under the force of modern marketing. With the rise to
prominence of modern marketing, commercialism – the translation of human relations
into commodity relations – although a phenomenon intrinsic to capitalism, has
expanded exponentially. Cause-related marketing’ in which advertisers link their
product to some worthy social cause has boomed over the past decade.
Advertising exploits the model role of celebrities or popular figures and makes
deliberate use of humour as well as of associations with colour, tunes, certain names
and terms. Altogether, these are factors of how one perceives himself and one’s self-
worth. In his description of ‘mental capitalism’ Franck says, “the promise of
consumption making someone irresistible is the ideal way of objects and symbols into
a person’s subjective experience. Evidently, in a society in which revenue of attention
moves to the fore, consumption is drawn by one’s self-esteem. As a result,
consumption becomes ‘work’ on a person’s attraction. From the subjective point of
view, this ‘work’ opens fields of unexpected dimensions for advertising. Advertising
takes on the role of a life councillor in matters of attraction. (…) The cult around
one’s own attraction is what Christopher Lasch described as ‘Culture of Narcissism.

For advertising critics another serious problem is that “the long standing notion of
separation between advertising and editorial/creative sides of media is rapidly
crumbling” and advertising is increasingly hard to tell apart from news, information
or entertainment. The boundaries between advertising and programming are becoming
blurred. According to the media firms all this commercial involvement has no
influence over actual media content, but, as McChesney puts it, “this claim fails to
pass even the most basic giggle test, it is so preposterous.

Advertising draws “heavily on psychological theories about how to create subjects,

enabling advertising and marketing to take on a ‘more clearly psychological tinge’
(Miller and Rose, 1997, cited in Thrift, 1999, p. 67). Increasingly, the emphasis in
advertising has switched from providing ‘factual’ information to the symbolic
connotations of commodities, since the crucial cultural premise of advertising is that
the material object being sold is never in itself enough. Even those commodities
providing for the most mundane necessities of daily life must be imbued with
symbolic qualities and culturally endowed meanings via the ‘magic system (Williams,
1980) of advertising. In this way and by altering the context in which advertisements
appear, things ‘can be made to mean "just about anything"’ (McFall, 2002, p.162) and
the ‘same’ things can be endowed with different intended meanings for different
individuals and groups of people, thereby offering mass produced visions of
individualism.
Before advertising is done, market research institutions need to know and describe the
target group to exactly plan and implement the advertising campaign and to achieve
the best possible results. A whole array of sciences directly deal with advertising and
marketing or is used to improve its effects. Focus groups, psychologists and cultural
anthropologists are ‘’’de rigueur’’’ in marketing research”. Vast amounts of data on
persons and their shopping habits are collected, accumulated, aggregated and analysed
with the aid of credit cards, bonus cards, raffles and internet surveying. With
increasing accuracy this supplies a picture of behaviour, wishes and weaknesses of
certain sections of a population with which advertisement can be employed more
selectively and effectively. The efficiency of advertising is improved through
advertising research. Universities, of course supported by business and in co-
operation with other disciplines (s. above), mainly Psychiatry, Anthropology,
Neurology and behavioural sciences, are constantly in search for ever more refined,
sophisticated, subtle and crafty methods to make advertising more effective.
“Neuromarketing is a controversial new field of marketing which uses medical
technologies such as functional Magnetic Resonance Imaging (fMRI) -- not to heal,
but to sell products. Advertising and marketing firms have long used the insights and
research methods of psychology in order to sell products, of course. But today these
practices are reaching epidemic levels, and with a complicity on the part of the
psychological profession that exceeds that of the past. The result is an enormous
advertising and marketing onslaught that comprises, arguably, the largest single
psychological project ever undertaken. Yet, this great undertaking remains largely
ignored by the American Psychological Association. Robert McChesney calls it "the
greatest concerted attempt at psychological manipulation in all of human history.

DEPENDENCY OF THE MEDIA AND CORPORATE

CENSORSHIP

Almost all mass media are advertising media and many of them are exclusively
advertising media and, with the exception of public service broadcasting are privately
owned. Their income is predominantly generated through advertising; in the case of
newspapers and magazines from 50 to 80%. Public service broadcasting in some
countries can also heavily depend on advertising as a source of income (up to 40%).
In the view of critics no media that spreads advertisements can be independent and the
higher the proportion of advertising, the higher the dependency. This dependency has
“distinct implications for the nature of media content…. In the business press, the
media are often referred to in exactly the way they present themselves in their candid
moments: as a branch of the advertising industry.

In addition, the private media are increasingly subject to mergers and concentration
with property situations often becoming entangled and opaque. This development,
which Henry A. Giroux calls an “ongoing threat to democratic culture”, by itself
should suffice to sound all alarms in a democracy. Five or six advertising agencies
dominate this 400 billion U.S. dollar global industry.

“Journalists have long faced pressure to shape stories to suit advertisers and owners
…. the vast majority of TV station executives found their news departments
‘cooperative’ in shaping the news to assist in ‘non-traditional revenue development.
Negative and undesired reporting can be prevented or influenced when advertisers
threaten to cancel orders or simply when there is a danger of such a cancellation.
Media dependency and such a threat becomes very real when there is only one
dominant or very few large advertisers. The influence of advertisers is not only in
regard to news or information on their own products or services but expands to
articles or shows not directly linked to them. In order to secure their advertising
revenues the media has to create the best possible ‘advertising environment’. Another
problem considered censorship by critics is the refusal of media to accept
advertisements that are not in their interest. A striking example of this is the refusal of
TV stations to broadcast ads by Adbusters. Groups try to place advertisements and are
refused by networks.

It is principally the viewing rates which decide upon the programme in the private
radio and television business. “Their business is to absorb as much attention as
possible. The viewing rate measures the attention the media trades for the information
offered. The service of this attraction is sold to the advertising business and the
viewing rates determine the price that can be demanded for advertising.
“Advertising companies determining the contents of shows has been part of daily life
in the USA since 1933. Procter & Gamble (P&G) …. offered a radio station a history-
making trade (today know as “bartering”): the company would produce an own show
for “free” and save the radio station the high expenses for producing contents.
Therefore the company would want its commercials spread and, of course, its
products placed in the show. Thus, the series ‘Ma Perkins’ was created, which P&G
skilfully used to promote Oxydol, the leading detergent brand in those years and the
Soap opera was born …

While critics basically worry about the subtle influence of the economy on the media,
there are also examples of blunt exertion of influence. The US company Chrysler,
before it merged with Daimler Benz had its agency, PentaCom, send out a letter to
numerous magazines, demanding them to send, an overview of all the topics before
the next issue is published to “avoid potential conflict”. Chrysler most of all wanted to
know, if there would be articles with “sexual, political or social” content or which
could be seen as “provocative or offensive”. PentaCom executive David Martin said:
“Our reasoning is, that anyone looking at a 22.000 $ product would want it
surrounded by positive things. There is nothing positive about an article on child
pornography. In another example, the USA Network held top-level‚ off-the-record
meetings with advertisers in 2000 to let them tell the network what type of
programming content they wanted in order for USA to get their advertising.
Television shows are created to accommodate the needs for advertising, e.g. splitting
them up in suitable sections. Their dramaturgy is typically designed to end in
suspense or leave an unanswered question in order to keep the viewer attached.

The movie system, at one time outside the direct influence of the broader marketing
system, is now fully integrated into it through the strategies of licensing, tie-ins and
product placements. The prime function of many Hollywood films today is to aid in
the selling of the immense collection of commodities. The press called the 2002 Bond
film ‘Die Another Day’ featuring 24 major promotional partners an ‘ad-venture’ and
noted that James Bond “now has been ‘licensed to sell’” As it has become standard
practise to place products in motion pictures, it “has self-evident implications for what
types of films will attract product placements and what types of films will therefore be
more likely to get made.
Advertising and information are increasingly hard to distinguish from each other.
“The borders between advertising and media …. become more and more blurred….
What August Fischer, chairman of the board of Axel Springer publishing company
considers to be a ‘proven partnership between the media and advertising business’
critics regard as nothing but the infiltration of journalistic duties and freedoms”.
According to RTL-executive Helmut Thoma “private stations shall not and cannot
serve any mission but only the goal of the company which is the ‘acceptance by the
advertising business and the viewer’. The setting of priorities in this order actually
says everything about the ‘design of the programmes’ by private television. Patrick
Le Lay, former managing director of TF1, a private French television channel with a
market share of 25 to 35%, said: "There are many ways to talk about television. But
from the business point of view, let’s be realistic: basically, the job of TF1 is, e. g. to
help Coca Cola sell its product. (…) For an advertising message to be perceived the
brain of the viewer must be at our disposal. The job of our programmes is to make it
available, that is to say, to distract it, to relax it and get it ready between two
messages. It is disposable human brain time that we sell to Coca Cola.

Because of these dependencies a widespread and fundamental public debate about

advertising and its influence on information and freedom of speech is difficult to
obtain, at least through the usual media channels; otherwise these would saw off the
branch they are sitting on. “The notion that the commercial basis of media,
journalism, and communication could have troubling implications for democracy is
excluded from the range of legitimate debate” just as “capitalism is off-limits as a
topic of legitimate debate in US political culture”.

An early critic of the structural basis of US journalism was Upton Sinclair with his
novel The Brass Check in which he stresses the influence of owners, advertisers,
public relations, and economic interests on the media. In his book “Our Master's
Voice – Advertising” the social ecologist James Rorty (1890–1973) wrote: "The
gargoyle’s mouth is a loudspeaker, powered by the vested interest of a two-billion
dollar industry, and back of that the vested interests of business as a whole, of
industry, of finance. It is never silent, it drowns out all other voices, and it suffers no
rebuke, for it is not the voice of America? That is its claim and to some extent it is a
just claim...

It has taught us how to live, what to be afraid of, what to be proud of, how to be
beautiful, how to be loved, how to be envied, how to be successful.. Is it any wonder
that the American population tends increasingly to speak, think, feel in terms of this
jabberwocky? That the stimuli of art, science, religion are progressively expelled to
the periphery of American life to become marginal values, cultivated by marginal
people on marginal time?

THE COMMERCIALISATION OF CULTURE AND SPORTS

Performances, exhibitions, shows, concerts, conventions and most other events can
hardly take place without sponsoring.[citation needed] The increasing lack arts and
culture they buy the service of attraction. Artists are graded and paid according to
their art’s value for commercial purposes. Corporations promote renown artists,
therefore getting exclusive rights in global advertising campaigns. Broadway shows,
like ‘La Bohème’ featured commercial props in its set.

Advertising itself is extensively considered to be a contribution to culture. Advertising

is integrated into fashion. On many pieces of clothing the company logo is the only
design or is an important part of it. There is only little room left outside the
consumption economy, in which culture and art can develop independently and where
alternative values can be expressed. A last important sphere, the universities, is under
strong pressure to open up for business and its interests.
Competitive sports have become unthinkable without sponsoring and there is a mutual
dependency.[citation needed] High income with advertising is only possible with a
comparable number of spectators or viewers. On the other hand, the poor performance
of a team or a sportsman results in less advertising revenues. Jürgen Hüther and Hans-
Jörg Stiehler talk about a ‘Sports/Media Complex which is a complicated mix of
media, agencies, managers, sports promoters, advertising etc. with partially common
and partially diverging interests but in any case with common commercial interests.
The media presumably is at centre stage because it can supply the other parties
involved with a rare commodity, namely (potential) public attention. In sports “the
media are able to generate enormous sales in both circulation and advertising.

“Sports sponsorship is acknowledged by the tobacco industry to be valuable

advertising. A Tobacco Industry journal in 1994 described the Formula One car as
‘The most powerful advertising space in the world’. …. In a cohort study carried out
in 22 secondary schools in England in 1994 and 1995 boys whose favourite television
sport was motor racing had a 12.8% risk of becoming regular smokers compared to
7.0% of boys who did not follow motor racing.

Not the sale of tickets but transmission rights, sponsoring and merchandising in the
meantime make up the largest part of sports association’s and sports club’s revenues
with the IOC (International Olympic Committee) taking the lead. The influence of the
media brought many changes in sports including the admittance of new ‘trend sports’
into the Olympic Games, the alteration of competition distances, changes of rules,
animation of spectators, changes of sports facilities, the cult of sports heroes who
quickly establish themselves in the advertising and entertaining business because of
their media value and last but not least, the naming and renaming of sport stadiums
after big companies. “In sports adjustment into the logic of the media can contribute
to the erosion of values such as equal chances or fairness, to excessive demands on
athletes through public pressure and multiple exploitation or to deceit (doping,
manipulation of results …). It is in the very interest of the media and sports to counter
this danger because media sports can only work as long as sport exists.

OCCUPATION AND COMMERCIALISATION OF PUBLIC

SPACE

Every visually perceptible place has potential for advertising. Especially urban areas
with their structures but also landscapes in sight of through fares are more and more
turning into media for advertisements. Signs, posters, billboards, flags have become
decisive factors in the urban appearance and their numbers are still on the increase.
“Outdoor advertising has become unavoidable. Traditional billboards and transit
shelters have cleared the way for more pervasive methods such as wrapped vehicles,
sides of buildings, electronic signs, kiosks, taxis, posters, sides of buses, and more.
Digital technologies are used on buildings to sport ‘urban wall displays’. In urban
areas commercial content is placed in our sight and into our consciousness every
moment we are in public space. The German Newspaper ‘Zeit’ called it a new kind of
‘dictatorship that one cannot escape’. Over time, this domination of the surroundings
has become the “natural” state. Through long-term commercial saturation, it has
become implicitly understood by the public that advertising has the right to own,
occupy and control every inch of available space. The steady normalization of
invasive advertising dulls the public’s perception of their surroundings, re-enforcing a
general attitude of powerlessness toward creativity and change, thus a cycle develops
enabling advertisers to slowly and consistently increase the saturation of advertising
with little or no public outcry.

The massive optical orientation toward advertising changes the function of public
spaces which are utilised by brands. Urban landmarks are turned into trademarks. The
highest pressure is exerted on renown and highly frequented public spaces which are
also important for the identity of a city (e.g. Piccadilly Circus, Times Square,
Alexanderplatz). Urban spaces are public commodities and in this capacity they are
subject to “aesthetical environment protection”, mainly through building regulations,
heritage protection and landscape protection. “It is in this capacity that these spaces
are now being privatised. They are peppered with billboards and signs, they are
remodelled into media for advertising.

SOCIO-CULTURAL ASPECTS: SEXISM, DISCRIMINATION AND

STEREOTYPING

“Advertising has an “agenda setting function” which is the ability, with huge sums of
money, to put consumption as the only item on the agenda. In the battle for a share of
the public conscience this amounts to non-treatment (ignorance) of whatever is not
commercial and whatever is not advertised for. Advertising should be reflection of
society norms and give clear picture of target market. Spheres without commerce and
advertising serving the muses and relaxation remain without respect.[neutrality is
disputed] With increasing force advertising makes itself comfortable in the private
sphere so that the voice of commerce becomes the dominant way of expression in
society. Advertising critics see advertising as the leading light in our culture. Sut
Jhally and James Twitchell go beyond considering advertising as kind of religion and
that advertising even replaces religion as a key institution.

"Corporate advertising (or commercial media) is the largest single psychological

project ever undertaken by the human race. Yet for all of that, its impact on us
remains unknown and largely ignored. When I think of the media’s influence over
years, over decades, I think of those brainwashing experiments conducted by Dr.
Ewen Cameron in a Montreal psychiatric hospital in the 1950s (see MKULTRA). The
idea of the CIA-sponsored "depatterning" experiments was to outfit conscious,
unconscious or semiconscious subjects with headphones, and flood their brains with
thousands of repetitive "driving" messages that would alter their behaviour over
time….Advertising aims to do the same thing.

Advertising is especially aimed at young people and children and it increasingly

reduces young people to consumers. For Sut Jhally it is not “surprising that something
this central and with so much being expended on it should become an important
presence in social life. Indeed, commercial interests intent on maximizing the
consumption of the immense collection of commodities have colonized more and
more of the spaces of our culture. For instance, almost the entire media system
(television and print) has been developed as a delivery system for marketers its prime
function is to produce audiences for sale to advertisers. Both the advertisements it
carries, as well as the editorial matter that acts as a support for it, celebrate the
consumer society. The movie system, at one time outside the direct influence of the
broader marketing system, is now fully integrated into it through the strategies of
licensing, tie-ins and product placements. The prime function of many Hollywood
films today is to aid in the selling of the immense collection of commodities. As
public funds are drained from the non-commercial cultural sector, art galleries,
museums and symphonies bid for corporate sponsorship. In the same way effected is
the education system and advertising is increasingly penetrating schools and
universities. Cities, such as New York, accept sponsors for public playgrounds. “Even
the pope has been commercialized … The pope’s 4-day visit to Mexico in …1999
was sponsored by Frito-Lay and PepsiCo. The industry is accused of being one of the
engines powering a convoluted economic mass production system which promotes
consumption. As far as social effects are concerned it does not matter whether
advertising fuels consumption but which values, patterns of behaviour and
assignments of meaning it propagates. Advertising is accused of hijacking the
language and means of pop culture, of protest movements and even of subversive
criticism and does not shy away from scandalizing and breaking taboos (e.g.
Benneton). This in turn incites counter action, what Kalle Lasn in 2001 called
‘’Jamming the Jam of the Jammers’’. Anything goes. “It is a central social-scientific
question what people can be made to do by suitable design of conditions and of great
practical importance. For example, from a great number of experimental
psychological experiments it can be assumed, that people can be made to do anything
they are capable of, when the according social condition can be created.

Advertising often uses stereotype gender specific roles of men and women reinforcing
existing clichés and it has been criticized as “inadvertently or even intentionally
promoting sexism, racism, and ageism… At very least, advertising often reinforces
stereotypes by drawing on recognizable "types" in order to tell stories in a single
image or 30 second time frame. Activities are depicted as typical male or female
(stereotyping). In addition people are reduced to their sexuality or equated with
commodities and gender specific qualities are exaggerated. Sexualized female bodies,
but increasingly also males, serve as eye-catchers. In advertising it is usually a woman
being depicted as
servants of men and children that react to the demands and complaints of their loved
ones with a bad conscience and the promise for immediate improvement (wash, food)
a sexual or emotional play toy for the self-affirmation of men
a technically totally clueless being (almost always male) that can only manage a
childproof operation
female expert, but stereotype from the fields of fashion, cosmetics, food or at the
most, medicine
as ultra thin, slim, and very skinny.
doing ground-work for others, e.g. serving coffee while a journalist interviews a
politician

A large portion of advertising deals with promotion of products that pertain to the
"ideal body image." This is mainly targeted toward women, and, in the past, this type
of advertising was aimed nearly exclusively at women. Women in advertisements are
generally portrayed as good-looking women who are in good health. This, however, is
not the case of the average woman. Consequently, they give a negative message of
body image to the average woman. Because of the media, girls and women who are
overweight, and otherwise "normal" feel almost obligated to take care of themselves
and stay fit. They feel under high pressure to maintain an acceptable bodyweight and
take care of their health. Consequences of this are low self-esteem,eating disorders,
self mutilations, and beauty operations for those women that just cannot bring
themselves eat right or get the motivation to go to the gym. The EU parliament passed
a resolution in 2008 that advertising may not be discriminating and degrading. This
shows that politicians are increasingly concerned about the negative impacts of
advertising. However, the benefits of promoting overall health and fitness are often
overlooked. Men are also negatively portrayed as incompetent and the butt of every
joke in advertising.

CHILDREN AND ADOLESCENTS AS TARGET GROUPS

The children’s market, where resistance to advertising is weakest, is the “pioneer for
ad creep. Kids are among the most sophisticated observers of ads. They can sing the
jingles and identify the logos, and they often have strong feelings about products.
What they generally don't understand, however, are the issues that underlie how
advertising works. Mass media are used not only to sell goods but also ideas: how we
should behave, what rules are important, who we should respect and what we should
value. Youth is increasingly reduced to the role of a consumer. Not only the makers
of toys, sweets, ice cream, breakfast food and sport articles prefer to aim their
promotion at children and adolescents. For example, an ad for a breakfast cereal on a
channel aimed at adults will have music that is a soft ballad, whereas on a channel
aimed at children, the same ad will use a catchy rock jingle of the same song to aim at
kids. Advertising for other products preferably uses media with which they can also
reach the next generation of consumers. “Key advertising messages exploit the
emerging independence of young people”. Cigarettes, for example, “are used as a
fashion accessory and appeal to young women. Other influences on young people
include the linking of sporting heroes and smoking through sports sponsorship, the
use of cigarettes by popular characters in television programmes and cigarette
promotions. Research suggests that young people are aware of the most heavily
advertised cigarette brands.

“Product placements show up everywhere, and children aren't exempt. Far from it.
The animated film, Foodfight, had ‘thousands of products and character icons from
the familiar (items) in a grocery store.’ Children's books also feature branded items
and characters, and millions of them have snack foods as lead characters. Business is
interested in children and adolescents because of their buying power and because of
their influence on the shopping habits of their parents. As they are easier to influence
they are especially targeted by the advertising business. “The marketing industry is
facing increased pressure over claimed links between exposure to food advertising
and a range of social problems, especially growing obesity levels. In 2001, children’s
programming accounted for over 20% of all US television watching. The global
market for children’s licensed products was some 132 billion US dollars in 2002.
Advertisers target children because, e.g. in Canada, they “represent three distinct
markets:
Primary Purchasers ($2.9 billion annually)
Future Consumers (Brand-loyal adults)
Purchase Influencers ($20 billion annually)

Kids will carry forward brand expectations, whether positive, negative, or indifferent.
Kids are already accustomed to being catered to as consumers. The long term prize:
Loyalty of the kid translates into a brand loyal adult customer.

The average Canadian child sees 350,000 TV commercials before graduating from
high school, spends nearly as much time watching TV as attending classes. In 1980
the Canadian province of Québec banned advertising for children under age 13. “In
upholding the consititutional validity of the Quebec Consumer Protection Act
restrictions on advertising to children under age 13 (in the case of a challenge by a toy
company) the Court held: ‘...advertising directed at young children is per se
manipulative. Such advertising aims to promote products by convincing those who
will always believe. Norway (ads directed at children under age 12), and Sweden
(television ads aimed at children under age 12) also have legislated broad bans on
advertising to children, during child programmes any kind of advertising is forbidden
in Sweden, Denmark, Austria and Flemish Belgium. In Greece there is no advertising
for kids products from 7 to 22 h. An attempt to restrict advertising directed at children
in the US failed with reference to the First Amendment. In Spain bans are also
considered undemocratic.

OPPOSITION AND CAMPAIGNS AGAINST ADVERTISING

According to critics, the total commercialization of all fields of society, the

privatization of public space, the acceleration of consumption and waste of resources
including the negative influence on lifestyles and on the environment has not been
noticed to the necessary extent. The “hyper-commercialization of the culture is
recognized and roundly detested by the citizenry, although the topic scarcely receives
a whiff of attention in the media or political culture”. The greatest damage done by
advertising is precisely that it incessantly demonstrates the prostitution of men and
women who lend their intellects, their voices, their artistic skills to purposes in which
they themselves do not believe, and …. that it helps to shatter and ultimately destroy
our most precious non-material possessions: the confidence in the existence of
meaningful purposes of human activity and respect for the integrity of man. “The
struggle against advertising is therefore essential if we are to overcome the pervasive
alienation from all genuine human needs that currently plays such a corrosive role in
our society. But in resisting this type of hyper-commercialism we should not be under
any illusions. Advertising may seem at times to be an almost trivial of omnipresent
aspect of our economic system. Yet, as economist A. C. Pigou pointed out, it could
only be ‘removed altogether’ if ‘conditions of monopolistic competition’ inherent to
corporate capitalism were removed. To resist it is to resist the inner logic of
capitalism itself, of which it is the pure expression.

“Visual pollution, much of it in the form of advertising, is an issue in all the world's
large cities. But what is pollution to some is a vibrant part of a city's fabric to others.
New York City without Times Square's huge digital billboards or Tokyo without the
Ginza's commercial panorama is unthinkable. Piccadilly Circus would be just a
London roundabout without its signage. Still, other cities, like Moscow, have reached
their limit and have begun to crack down on over-the-top outdoor advertising. “Many
communities have chosen to regulate billboards to protect and enhance their scenic
character. The following is by no means a complete list of such communities, but it
does give a good idea of the geographic diversity of cities, counties and states that
prohibit new construction of billboards. Scenic America estimates the nationwide
total of cities and communities prohibiting the construction of new billboards to be at
least 1500. A number of States in the US prohibit all billboards:
Vermont - Removed all billboards in 1970s
Hawaii - Removed all billboards in 1920s
Maine - Removed all billboards in 1970s and early 80s
Alaska - State referendum passed in 1998 prohibits billboards
Almost two years ago the city of São Paulo, Brazil, ordered the downsizing or
removal of all billboards and most other forms of commercial advertising in the city.

Technical appliances, such as Spam filters, TV-Zappers, Ad-Blockers for TVs and
stickers on mail boxes: “No Advertising” and an increasing number of court cases
indicate a growing interest of people to restrict or rid themselves of unwelcome
advertising.

Consumer protection associations, environment protection groups, globalization

opponents, consumption critics, sociologists, media critics, scientists and many others
deal with the negative aspects of advertising. “Antipub” in France, “subvertising”,
culture jamming and adbusting have become established terms in the anti-advertising
community. On the international level globalization critics such as Naomi Klein and
Noam Chomsky are also renown media and advertising critics. These groups criticize
the complete occupation of public spaces, surfaces, the airwaves, the media, schools
etc. and the constant exposure of almost all senses to advertising messages, the
invasion of privacy, and that only few consumers are aware that they themselves are
bearing the costs for this to the very last penny. Some of these groups, such as the
‘The Billboard Liberation Front Creative Group’ in San Francisco or Adbusters in
Vancouver, Canada, have manifestos. Grassroots organizations campaign against
advertising or certain aspects of it in various forms and strategies and quite often have
different roots. Adbusters, for example contests and challenges the intended meanings
of advertising by subverting them and creating unintended meanings instead. Other
groups, like ‘Illegal Signs Canada’ try to stem the flood of billboards by detecting and
reporting ones that have been put up without permit. Examples for various groups and
organizations in different countries are ‘L'association Résistance à l'Agression
Publicitaire’ in France, where also media critic Jean Baudrillard is a renown author.
The ‘Anti Advertising Agency’ works with parody and humour to raise awareness
about advertising. and ‘Commercial Alert’ campaigns for the protection of children,
family values, community, environmental integrity and democracy. Media literacy
organisations aim at training people, especially children in the workings of the media
and advertising in their programmes. In the US, for example, the ‘Media Education
Foundation’ produces and distributes documentary films and other educational
resources. ‘MediaWatch’, a Canadian non-profit women's organization works to
educate consumers about how they can register their concerns with advertisers and
regulators. The Canadian ‘Media Awareness Network/Réseau éducation médias’
offers one of the world’s most comprehensive collections of media education and
Internet literacy resources. Its member organizations represent the public, non-profit
but also private sectors. Although it stresses its independence it accepts financial
support from Bell Canada, CTVGlobeMedia, CanWest, TELUS and S-VOX.[96]

To counter the increasing criticism of advertising aiming at children media literacy

organizations are also initiated and funded by corporations and the advertising
business themselves. In the US ‘The Advertising Educational Foundation’ was
created in 1983 supported by ad agencies, advertisers and media companies. It is the
“advertising industry's provider and distributor of educational content to enrich the
understanding of advertising and its role in culture, society and the economy.
sponsored for example by American Airlines, Anheuser-Busch, Campbell Soup,
Coca-Cola, Colgate-Palmolive, Walt Disney, Ford, General Foods, General Mills,
Gillette, Heinz, Johnson & Johnson, Kellogg, Kraft, Nestle, Philip Morris, Quaker
Oats, Nabisco, Schering, Sterling, Unilever, Warner Lambert, advertising agencies
like Saatchi & Saatchi Compton and media companies like American Broadcasting
Companies, CBS, Capital Cities Communications, Cox Enterprises, Forbes, Hearst,
Meredith, The New York Times, RCA/NBC, Reader’s Digest, Time, Washington
Post, just to mention a few. Canadian businesses established ‘Concerned Children's
Advertisers’ in 1990 “to instill confidence in all relevant publics by actively
demonstrating our commitment, concern, responsibility and respect for children”.
Members are CanWest, Corus, CTV, General Mills, Hasbro, Hershey’s, Kellogg’s,
Loblaw, Kraft, Mattel, McDonald’s, Nestle, Pepsi, Walt Disney, Weston as well as
almost 50 private broadcast partners and others. Concerned Children's Advertisers
was example for similar organizations in other countries like ‘Media smart’ in the
United Kingdom with offspring in Germany, France, the Netherlands and Sweden.
New Zealand has a similar business-funded programme called ‘Willie Munchright’.
“While such interventions are claimed to be designed to encourage children to be
critical of commercial messages in general, critics of the marketing industry suggest
that the motivation is simply to be seen to address a problem created by the industry
itself, that is, the negative social impacts to which marketing activity has
contributed…. By contributing media literacy education resources, the marketing
industry is positioning itself as being part of the solution to these problems, thereby
seeking to avoid wide restrictions or outright bans on marketing communication,
particularly for food products deemed to have little nutritional value directed at
children…. The need to be seen to be taking positive action primarily to avert
potential restrictions on advertising is openly acknowledged by some sectors of the
industry itself…. Furthermore, Hobbs (1998) suggests that such programs are also in
the interest of media organizations that support the interventions to reduce criticism of
the potential negative effects of the media themselves.

FUTURE

GLOBAL ADVERTISING

Advertising has gone through five major stages of development: domestic, export,
international, multi-national, and global. For global advertisers, there are four,
potentially competing, business objectives that must be balanced when developing
worldwide advertising: building a brand while speaking with one voice, developing
economies of scale in the creative process, maximising local effectiveness of ads, and
increasing the company’s speed of implementation. Born from the evolutionary stages
of global marketing are the three primary and fundamentally different approaches to
the development of global advertising executions: exporting executions, producing
local executions, and importing ideas that travel.
Advertising research is key to determining the success of an ad in any country or
region. The ability to identify which elements and/or moments of an ad that
contributes to its success is how economies of scale are maximised. Once one knows
what works in an ad, that idea or ideas can be imported by any other market. Market
research measures, such as Flow of Attention, Flow of Emotion and branding
moments provide insight into what is working in an ad in any country or region
because the measures are based on the visual, not verbal, elements of the ad.

Trends

With the dawn of the Internet came many new advertising opportunities. Popup,
Flash, banner, Popunder, advergaming, and email advertisements (the last often being
a form of spam) are now commonplace.

In the last three quarters of 2009 mobile and internet advertising grew by 18.1% and
9.2% respectively. Older media advertising saw declines: -10.1% (TV), -11.7%
(radio), -14.8% (magazines) and -18.7% (newspapers ).

The ability to record shows on digital video recorders (such as TiVo) allow users to
record the programs for later viewing, enabling them to fast forward through
commercials. Additionally, as more seasons of pre-recorded box sets are offered for
sale of television programs; fewer people watch the shows on TV. However, the fact
that these sets are sold, means the company will receive additional profits from the
sales of these sets. To counter this effect, many advertisers have opted for product
placement on TV shows like Survivor.

Particularly since the rise of "entertaining" advertising, some people may like an
advertisement enough to wish to watch it later or show a friend. In general, the
advertising community has not yet made this easy, although some have used the
Internet to widely distribute their ads to anyone willing to see or hear them.
Another significant trend regarding future of advertising is the growing importance of
the niche market using niche or targeted ads. Also brought about by the Internet and
the theory of The Long Tail, advertisers will have an increasing ability to reach
specific audiences. In the past, the most efficient way to deliver a message was to
blanket the largest mass market audience possible. However, usage tracking, customer
profiles and the growing popularity of niche content brought about by everything
from blogs to social networking sites, provide advertisers with audiences that are
smaller but much better defined, leading to ads that are more relevant to viewers and
more effective for companies' marketing products. Among others, Comcast Spotlight
is one such advertiser employing this method in their video on demand menus. These
advertisements are targeted to a specific group and can be viewed by anyone wishing
to find out more about a particular business or practice at any time, right from their
home. This causes the viewer to become proactive and actually choose what
advertisements they want to view.

In the realm of advertising agencies, continued industry diversification has seen

observers note that “big global clients don't need big global agencies any more”. This
trend is reflected by the growth of non-traditional agencies in various global markets,
such as Canadian business TAXI and SMART in Australia and has been referred to as
"a revolution in the ad world".

In freelance advertising, companies hold public competitions to create ads for their
product, the best one of which is chosen for widespread distribution with a prize given
to the winner(s). During the 2007 Super Bowl, PepsiCo held such a contest for the
creation of a 30-second television ad for the Doritos brand of chips, offering a cash
prize to the winner. Chevrolet held a similar competition for their Tahoe line of
SUVs. This type of advertising, however, is still in its infancy. It may ultimately
decrease the importance of advertising agencies by creating a niche for independent
freelancers.

Advertising education has become widely popular with bachelor, master and
doctorate degrees becoming available in the emphasis. A surge in advertising interest
is typically attributed to the strong relationship advertising plays in cultural and
technological changes, such as the advance of online social networking. A unique
model for teaching advertising is the student-run advertising agency, where
advertising students create campaigns for real companies. Organizations such as
American Advertising Federation and AdU Network partner established companies
with students to create these campaigns.

ADVERTISING RESEARCH

Advertising research is a specialized form of research that works to improve the

effectiveness and efficiency of advertising. It entails numerous forms of research
which employ different methodologies. Advertising research includes pre-testing
(also known as copy testing) and post-testing of ads and/or campaigns—pre-testing is
done before an ad airs to gauge how well it will perform and post-testing is done after
an ad airs to determine the in-market impact of the ad or campaign on the consumer.
Continuous ad tracking and the Communicus System are competing examples of post-
testing advertising research types.

Multi-level marketing (MLM), (also called network marketing, direct selling, referral
marketing, and pyramid selling[ is a term that describes a marketing structure used by
some companies as part of their overall marketing strategy. The structure is designed
to create a marketing and sales force by compensating promoters of company
products not only for sales they personally generate, but also for the sales of other
promoters they introduce to the company, creating a downline of distributors and a
hierarchy of multiple levels of compensation in the form of a pyramid.

The products and company are usually marketed directly to consumers and potential
business partners by means of relationship referrals and word of mouth marketing.

MLM companies have been a frequent subject of controversy as well as the target of
lawsuits. Criticisms have focused on their similarity to illegal pyramid schemes,
price-fixing of products, high initial start-up costs, emphasis on recruitment of lower-
tiered salespeople over actual sales, encouraging if not requiring salespeople to
purchase and use the company's products, potential exploitation of personal
relationships which are used as new sales and recruiting targets, complex and
sometimes exaggerated compensation schemes, and cult-like techniques which some
groups use to enhance their members enthusiasm and devotion. Not all MLM
companies operate the same way, and MLM groups have persistently denied that their
techniques are anything but legitimate business practices.
SETUP

Independent, unsalaried salespeople of multi-level marketing, referred to as

distributors (or associates, independent business owners, dealers, franchise owners,
sales consultants, consultants, independent agents, etc.), represent the company that
produces the products or provides the services they sell. They are awarded a
commission based upon the volume of product sold through their own sales efforts as
well as that of their downline organization.

Independent distributors develop their organizations by either building an active

customer base, who buy direct from the company, or by recruiting a downline of
independent distributors who also build a customer base, thereby expanding the
overall organization. Additionally, distributors can also earn a profit by retailing
products they purchased from the company at wholesale price.

This arrangement of distributors earning a commission based on the sales of their

independent efforts as well as the leveraged sales efforts of their downline is similar
to franchise arrangements where royalties are paid from the sales of individual
franchise operations to the franchiser as well as to an area or regional manager.
Commissions are paid to multi-level marketing distributors according to the
company’s compensation plan. There can be individuals at multiple levels of the
structure receiving royalties from a single person's sales.

LEGALITY AND LEGITIMACY

MLM businesses operate in the United States in all 50 states and in more than 100
other countries, and new businesses may use terms like "affiliate marketing" or
"home-based business franchising". However, many pyramid schemes try to present
themselves as legitimate MLM businesses.
Because pyramiding (getting commissions from recruiting new members including
"sign-up fees") is illegal in most states, to remain legitimate in the U.S. a company
that uses multi-level marketing has to make sure commissions are earned only on
sales of the company's products or services if they cross state boundaries. If
participants are paid primarily from money received from new recruits, or if they are
required to buy more product than they are likely to sell, then the company may be a
pyramid scheme, which is illegal in most countries.

In a 2004 United States Federal Trade Commission (FTC) Staff Advisory letter to the
Direct Selling Association states:

Much has been made of the personal, or internal, consumption issue in recent years.
In fact, the amount of internal consumption in any multi-level compensation business
does not determine whether or not the FTC will consider the plan a pyramid scheme.
The critical question for the FTC is whether the revenues that primarily support the
commissions paid to all participants are generated from purchases of goods and
services that are not simply incidental to the purchase of the right to participate in a
money-making venture.

The FTC offers advice for potential MLM members to help them identify those which
are likely to be pyramid schemes.

However there are people who hold that all MLMs are nothing more than pyramid
schemes even if they are legal rendering the whole issue of a particular MLM being
legal moot.

COMPENSATION PLANS

Companies have devised a variety of MLM compensation plans over the decades.
Unilevel plans This type of plan is often considered the simplest of compensation
plans. As the name suggests, the plan allows a person to sponsor one line of
distributors, called a "frontline." Every distributor the person sponsors is considered
to be on that sponsor's frontline and there are no width limitations, meaning there is
no limit to the amount of people one can sponsor in the frontline. The common goal
of this plan is to recruit a large number of frontline distributors and then encourage
them to do the same. This is due to the fact that commissions are normally paid out on
a limited depth, which typically means sponsor can earn commissions on sales
between 5 and 7 levels deep.
Stairstep Breakaway plans This type of plan is characterized as having representatives
who are responsible for both personal and group sales volumes. Volume is created by
recruiting and by retailing product. Various discounts or rebates may be paid to group
leaders and a group leader can be any representative with one or more downline
recruits. Once predefined personal and/or group volumes are achieved, a
representative moves up a commission level. This continues until the representative's
sales volume reaches the top commission level and "breaks away" from their upline.
From that point on, the new group is no longer considered part of his upline's group
and the multi-level compensation aspect ceases. The original upline usually continues
to be compensated through override commissions and other incentives.
Matrix plans This type of plan is similar to a Uni-Level plan, except there is also a
limited number of representatives who can be placed on the first level. Recruits
beyond the maximum number of first level positions allowed are automatically placed
in other downline (lower level) positions. Matrix plans often have a maximum width
and depth. When all positions in a representative's downline matrix are filled
(maximum width and depth is reached for all participants in a matrix), a new matrix
may be started. Like Uni-Level plans, representatives in a matrix earn unlimited
commissions on limited levels of volume with minimal sales quotas.
Binary plans: A binary plan is a multilevel marketing compensation plan which
allows distributors to have only two front-line distributors. If a distributor sponsors
more than two distributors, the excess are placed at levels below the sponsoring
distributor's front-line. This "spillover" is one of the most attractive features to new
distributors since they need only sponsor two distributors to participate in the
compensation plan. The primary limitation is that distributors must "balance" their
two downline legs to receive commissions. Balancing legs typically requires that the
number of sales from one downline leg constitute no more than a specified percentage
of the distributor's total sales.
Hybrid plans are compensation plans that are constructed using elements of more than
one type of compensation plan.

INCOME LEVELS

Several sources have commented on the income level of specific MLMs or MLMs in
general:
The Times: "The Government investigation claims to have revealed that just 10 per
cent of Amway’s agents in Britain make any profit, with less than one in ten selling a
single item of the group’s products.
Scheibeler, a high level "Emerald" Amway member: "UK Justice Norris found in
2008 that out of an IBO [Independent Business Owners] population of 33,000, 'only
about 90 made sufficient incomes to cover the costs of actively building their
business.' That's a 99.7 percent loss rate for investors.
Newsweek: based on Mona Vie's own 2007 income disclosure statement "fewer than
1 percent qualified for commissions and of those, only 10 percent made more than
$100 a week.
Business Students Focus on Ethics: "In the USA, the average annual income from
MLM for 90% MLM members is no more than US $5,000, which is far from being a
sufficient means of making a living (San Lian Life Weekly 1998)
USAToday: "While earning potential varies by company and sales ability, DSA says
the median annual income for those in direct sales is $2,400.

CRITICISM OF MLM

The Federal Trade Commission (FTC) issued a decision, In re Amway Corp., in 1979
in which it indicated that multi-level marketing was not illegal per se in the United
States. However, Amway was found guilty of price fixing (by requiring
"independent" distributors to sell at the low price) and making exaggerated income
claims.
The FTC advises that multi-level marketing organizations with greater incentives for
recruitment than product sales are to be viewed skeptically. The FTC also warns that
the practice of getting commissions from recruiting new members is outlawed in most
states as "pyramiding". In April 2006, it proposed a Business Opportunity Rule
intended to require all sellers of business opportunities—including MLMs—to
provide enough information to enable prospective buyers to make an informed
decision about their probability of earning money. In March 2008, the FTC removed
Network Marketing (MLM) companies from the proposed Business Opportunity
Rule:

The revised proposal, however, would not reach multi-level marketing companies or
certain companies that may have been swept inadvertently into scope of the April
2006 proposal.

Walter J. Carl stated in a 2004 Western Journal of Communication article that "MLM
organizations have been described by some as cults (Butterfield, 1985), pyramid
schemes (Fitzpatrick & Reynolds, 1997), or organizations rife with misleading,
deceptive, and unethical behavior (Carter, 1999), such as the questionable use of
evangelical discourse to promote the business (Hopfl & Maddrell, 1996), and the
exploitation of personal relationships for financial gain (Fitzpatrick & Reynolds,
1997).

Because of encouraging recruits to further recruit their competitors, some people have
even gone so far as to say at best MLMs are nothing more than legalized pyramid
schemes with one stating "Multi-level marketing companies have become an accepted
and legally sanctioned form of pyramid scheme in the United States" while another
states "Multi-Level Marketing, a form of Pyramid Scheme, is not necessarily
fraudulent.
Company Profile
RCM & Amway
 COMPANY PROFILE
RCM (Right Concept Marketing)

Fashion Suitings Pvt. Ltd.

RCM World, Hamirgarh Road , RIICO Growth Centre,
Bhilwara-311001 (Rajasthan)
INDIA
Phone: +91 1482 670101 (For Hindi)
Phone: +91 1482 670102 (For English)
PUC/DEPOT/BAZAR/RSP/ONLINE Service: +91 1482 670103
Fax Sercie: +91 1482 249388
Email: [email protected]

RCM Business has been set up by Fashion Suitings Pvt. Ltd., Bhilwara (Rajasthan)
belonging to the reputed Chhabra Group, engaged in textile business since 1977. The
group has entered into it's own production in 1986 and at present it's annual capacity
is 3 crore meter. Thus it stands among top five in india in suiting manufacturing.

Now, this sapling is growing its branches wide and far, and farther ever-since, with
more than 7 million distributors, more than 75 depots, more than 4000 PUCs, more
than 800 Bazaars & Shopping Points and more than 600 quality products and now
blooming upto its standing highest and hugest in the field of MULTI-LEVEL
MARKETING. The Distribution Centers were given an altogether new profile and the
whole system was presented an epitomized outlook. By having its competence in the
Techniques and Technologies and having made all operations online, the company
proudly claims of prioritizing Quality over Quantity, and this requires intensive
outreach of advance literature and extensive research.

Now in every corner of country RCM meetings and seminars are organized. Quality
education material are also available in the form of CDs, cassettes and books. To
update distributors with current information monthly RCM Times is also published.
RCM Business has made remarkable progress and has grown up in multi dimensions.
Good quality products and best services to consumer constitute the company's
objectives. This clearly demonstrates that the group is genuinely concerned and
dedicated to the overall progress of distributors and shall be bringing out more quality
products to enhance their business volume.

Products

FMCG
Eatables
Computers
Accessories

Footwears
Plastic wares
MARKETING PLAN

The best part of this concept is that you do not have to do anything different from
what you have been doing till now. All you are required to do is to purchase RCM
Products(Business Kit) and get your registration through internet. And from then
onwards, use RCM Products, because :-
You are getting best quality at reasonable price.
No chance of duplicate goods.
It also provide a source of income.

After using the product and feeling satisfied with quality and concept you can share
your views with your friends and relatives. This way they will also start using the
products and so on. Thus the company does not require any advertisement or
middlemen for selling its products. The amount saved will be distributed between you
and the people who associate to the company because of you. Day by day as your
group will expand your income will also increase.

Company distributes upto 30% Performance bonus, upto 6% royalty and on

qualification, upto 4% technical bonus and upto 1% leadership bonus on total
Business Volume.

Business Volume is the actual value on which all the calculations for commision is
done. It may be equal or less than M.R.P.
There are Three ways to get Income in RCM Business:
Purchases for self requirement.
Purchases by your down liners.
Business kit purchased by new Distributors/Associates.
AMWAY CORPORATION

Amway India Enterprises Pvt. Ltd,

Ground & First Floor ,
Elegance Tower, Plot No. 8 ,
Jasola , New Delhi - 110025.

Amway is more than an income opportunity or a company or products. It’s about

putting people in control of their lives. It’s about connecting people to others who
respect them, who share their goals and aspirations. It’s about supporting people in
their achievements.
Amway is about people connecting people to a better way of life.
Amway Corporation is one of the world's largest direct selling companies. Originally
founded by Jay Van Andel and Rich DeVos, Amway operates in more than 88
countries and territories in Asia, Africa, Europe and the Americas. Amway products
and services are marketed through independent business owners worldwide. Amway
is a wholly owned subsidiary of Alticor Inc.

PEOPLE
Amway has more than 6000 employees worldwide. In addition, Amway has more
than 3.6 million Independent Business Owners (IBOs) around the world. In China,
Amway products are sold by Amway sales representatives.

PRODUCTS AND SERVICES

Over 450 unique, high-quality products carry the Amway name in the areas of
nutrition, wellness, beauty and home, as well as commercial products and a variety of
services. In addition, Amway independent business owners in selected markets sell
additional brand-name goods through local merchandise catalogues, plus a variety of
services and educational products. All products are backed by a customer satisfaction
guarantee.

GOVERNANCE AND MANAGEMENT

Doug DeVos is the President of Amway and Steve Van Andel is the chairman.
FACILITIES
Amway operates out of Alticor's world headquarters located at 7575 Fulton Street
East, Ada, Michigan 49355, USA.

COMMUNITY SERVICES
Amway, its Independent Business Owners and employees are involved in improving
the communities in which they do business. Specific and current information is
available upon request.

AFFILIATIONS
Amway is a prominent and active member of the regional and national direct selling
associations worldwide. Doug DeVos is a member of the U.S. Direct Selling
Association Board of Directors. Former Alticor President Dick DeVos is the current
Chairman of the World Federation of Direct Selling Associations (WFDSA).
Globally, direct selling is an industry with approximately $80 billion in sales and
more than 30 million salespeople.

FOUNDER'S FUNDAMENTAL
Rich DeVos and Jay Van Andel built the Amway business on the following
principles, which they and their families believe constitute a sound foundation for a
meaningful life.

FREEDOM
Provides conducive environment in which to live, work, achieve and grow. The
Amway business recognizes, supports and expands freedom, which is both personal
and economic. It gives the freedom to operate as independent business people and
conduct a full-time or part time business.

FAMILY
The family is our primary social structure, providing love, heritage and legacy. The
Amway business respects and supports the family, as evidenced by the Amway Board
of Directors and the prominence of “family” in Amway business. Amway provides
the opportunity to build a family-owned business which can be passed on to
generations.

HOPE
Hope gives us the power to transform our lives in positive ways. It is a force that
allows us to envision dreams, establish goals, and achieve great things. By offering
hope, we open windows of possibility for others, irrespective of social status,
profession or educational background.

REWARD
Reward involves the shared action of giving and receiving. Reward helps us grow,
either as the giver or the recipient, and there are many ways we are rewarded. Reward
is integral to the Amway business as we help each other grow as people and as
entrepreneurs. Hard work is followed by high rewards.
Amway India Factsheet
Amway promotes individual entrepreneurship through its innovative direct selling
approach of world class consumer products. Amway India is the country’s leading
direct selling FMCG-company which manufactures and sells world-class consumer
products. Its business opportunity and all its products are covered by 100% Money
Back Guarantee. Amway sources all its products from within India, thereby providing
stimulus to the local manufacturing industry.

CORPORATE CREDENTIALS
Amway India is a wholly owned subsidiary of US $ 7.2 billion Amway Corporation,
Ada, Michigan, USA. Amway Corporation is one of the largest Direct Selling
companies in the world. It has a presence in 80 countries & territories.
Established in 1995, Amway India commenced its commercial operations in May
1998 and has emerged as the largest Direct Selling FMCG Company. The Company is
headquartered at the National Capital Region of India - New Delhi.
Amway has invested in excess of US $ 35 million (Rs. 151 crore) in India of this; US
$ 6 million (Rs. 26 crore) is in the form of direct foreign investment.
Amway India has 400 full time employees and has generated indirect employment for
1,650 persons at all the contract manufacturer locations.
The Company has provided income generating opportunity to over 4,50,000 active
independent Amway Business Owners.
Amway India provides free and unlimited training to all its distributors to help them
grow their business. Amway India conducted over 29,000 training sessions during in
the past 12-months with an attendance of over 1.5 million Amway Business Owners
and prospects.
Amway India recorded a sales turnover of over Rs. 800 crore during January’07 –
December’07.
Amway India is a member of the Indian Direct Selling Association (IDSA). The
IDSA is an industry regulatory body, with several reputed international and Indian
Direct Selling companies as members.
Amway India is also a member of the Confederation of Indian Industries (CII) and
Federation of Indian Chambers of Commerce (FICCI).
The World Blind Union presented an award and citation to Amway India in 2003, for
its peerless work for the blind children.

NATIONAL PRESENCE
In ten years of commercial operation, Amway India has established a nation-wide
presence in over 125 offices and 55 city warehouses and four regional mother
warehouses. The distribution and home delivery network set up with the support of
independent logistics partners is spread across over 3,000 locations.

MANUFACTURING
Almost all Amway India products are manufactured in the country through 7 third
party contract manufacturers. To bring the identified contract manufacturers’
production facilities and skills to international standard, Amway has invested in
excess of US$ 4 million (approx. Rs. 17 crore). The transfer of this state-of-the-art,
world-class technology, has been free of cost.

PRODUCTS
At present, Amway India offers over 105 products in four categories. They are
Personal care category, Home Care category, Nutrition & Wellness category and
Cosmetics category.
With the exception of Cosmetics range (Artistry*) and some products in Nutrition and
Wellness category, all Amway India products and bottles are manufactured in India.
The products match Amway’s global quality standards. They carry a tamper-proof
seal and a ‘100% Money Back Guarantee'. If not completely satisfied with the
product, the consumer can return it for a refund. Amway products are environment
friendly, and are not tested on animals. Amway encourages the return of its used
product bottles for re-cycling and to prevent their misuse.

THE HISTORY OF AMWAY

What does the word Amway mean? Amway is an abbreviation for "American Way"
and was coined in 1959 by company founders, Jay Van Andel and Richard DeVos.
Short, unique and easy to remember, Amway has been registered as a corporate name
and trademark ever since.
In the following decades, Amway Corporation successfully established itself as a
leading multilevel marketing business, built on strong values and founding principles
that continue to sustain our company today. The business is built on the simple
integrity of helping people lead better lives.
Today, Amway is a multibillion-dollar international business representing freedom
and opportunity to millions of people in more than 88 countries and territories around
the world. Amway generates US$6.4 billion (September’04 - August’05) in sales at
estimated retail through this global product distribution network. We offer over 3
million Business Owners the inspiration to grow those businesses, and we work hard
to provide new and better ways for them to achieve their life goals.

AWARDS
As a corporate leader in promoting environmental awareness and education, Amway
received the prestigious United Nations Environment Programme Achievement
Award in 1989.
Corporate Citizenship Award - On November 08, 2005, the United States Chamber of
Commerce awarded Alticor with the Corporate Citizenship Award in the category of
International Community Service for the One by One Campaign for Children.

A SOLID FOUNDATION
Rich DeVos and Jay Van Andel's friendship actually began with a business
proposition, when Rich struck a deal with Jay for a ride to school for 25 cents a week.
After high school they entered the military, but they planned to start a business
together after separate tours of duty. A friendship formed and became a business
relationship that has lasted to this day.

THE EARLY YEARS

Amway quickly outgrew its original facilities in the basements of Rich DeVos's and
Jay Van Andel's homes. In its first full year of business, Amway's sales were more
than half a million dollars.

THE DECADE OF GROWTH

As vowed by Jay Van Andel the night of the 1969 disaster, Amway rebuilt the aerosol
plant and went on. The '70s began with sales of more than $100 million at estimated
retail, and kept going strong. After a lengthy investigation, the FTC verified that
Amway is a genuine business opportunity and not a "pyramid."

THE BILLION-DOLLAR DECADE

The '80s will be remembered for the first Billion Dollar Year at estimated retail in
1980. Building expansion at Amway World Headquarters continued at breakneck
speed as Amway scrambled to keep pace with demand, opening its new cosmetics
plant in Ada, Michigan.

THE NEXT GENERATION

As carefully planned by Rich and Jay, the second generation Van Andel and DeVos
families took the helm during the ' 90s. The Policy Board was formed and Steve Van
Andel and Dick DeVos succeeded their fathers as Chairman and President.
Distributors witnessed a similar trend, with the second generation of many distributor
families taking on important leadership roles.,

NEW HORIZONS
In 2000, Amway prepared for a new century and a new exciting era.
Almost 50 years after Amway began, the DeVos and Van Andel families created a
new structure to meet the challenges of this new century. A parent company, Alticor,
was established with subsidiaries Amway, Quixtar and Access Business Group—the
latter to consolidate manufacturing and distribution for the enterprise. At the helm of
Alticor are Steve Van Andel (Chairman) and Doug DeVos (President), jointly holding
the Office of the Chief Executive. Today each area of the business, including Amway,
has the freedom to build on its strengths.
Amway continues to be a leading company in the direct selling industry. Its
fundamental principles—freedom, family, hope and reward—hold as true today as
they did in the very beginning.

AMWAY 50TH ANNIVERSARY

Plan now to join us as we celebrate a half-century of innovation & achievement.
Amway and Quixtar will invite qualified Executive Diamonds and above to our first
ever 50th Anniversary Global Executive Diamond Council in Grand Rapids and Ada,
Michigan, May, 2009. Immediately after, qualified Diamonds and above will join us
in Las Vegas, Nevada for the 50th Anniversary Global Diamond Forum.
Enjoy exclusive events with world-renowned entertainment and speakers. Get the
latest on company developments, One by One initiatives and growth strategies. This
will be a truly unique event, fifty years in the making.
Join us at the Grand Gala Golden Anniversary.
Look for more details in the near future.
50 Years. Two Cities. A Once-In-A-Lifetime Gala Event
Plan now to join us as we celebrate a half-century of innovation & achievement.
Amway and Quixtar will invite qualified Executive Diamonds and above to our first
ever Global Executive Diamond Event in Grand Rapids and Ada, Michigan, May,
2009. Immediately after, qualified Diamonds and above will join us in Las Vegas,
Nevada for the Global Diamond Forum.
Enjoy exclusive events with world-renowned entertainment and speakers. Get the
latest on company developments, One by One initiatives and growth strategies. This
will be a truly unique event, fifty years in the making.
Join us at the Grand Gala Golden Anniversary.
Look for more details in the near future.

Celebrate Achievement

1959
Amway Corporation founded by Jay Van Andel & Rich DeVos
Launch of LOC Cleaning Product

1960
SA8 Laundry Detergent Introduced

1962
Nutrilite brand introduced

1963
Gross sales over $6 million

1968
Launch of Artistry brand

1971
Amway expands
Australia
Europe
Japan
Korea
Thailand
Malaysia
1980
Sales pass the $1 billion mark

1981
Amway Grand Plaza Hotel opens

1984
State-of-the-art cosmetic plant opens

1985
Amway expands to Latin America

1989
Sales force surpasses 1 million

1995
Amway expands to China

1997
Sales force surpasses 3 million
Amway expands to Africa

2000
eSpring logo

2001
1 online health & beauty sales – business 2.0 magazine

2003
One by One Campaign for children started

2005
Sales reach $6.4 billion
Amway expands to Russia
2006
Nutrilite Health Institutes Center for Optimal Health Opens
We own farms in:
Brazil
Mexico
United States
Nutrilite is the world’s leading brand of dietary supplements
A global leader in prestige beauty

2009
50 years
Of growth and innovation
Of quality product brands
Of helping people live better lives

50 years
Celebrate achievement
Celebrate the future
Celebration events in Grand Rapids and Las Vegas May 2009

50 years in the making

A once in a lifetime celebration May 2009

Founders Council plus

Global Executive Diamond Council plus
Global Diamond Forum plus
Equals
A 50th Anniversary Celebration you won’t want to miss!

2 cities

Las Vegas, Nevada

The home of entertainment
Ada, Michigan
The home of Amway
See our future

Be inspired

Be entertained

Be our guest

Make Diamond
Make History

Celebrate achievement…celebrate the future

CORPORATE RESPONSIBILITY

AMWAY OPPORTUNITY FOUNDATION (AOF)

Amway Opportunity Foundation (AOF) a registered non-profit organisation which

looks after Amway India’s Corporate Social Responsibility (CSR). Amway
distributors are also volunteers of AOF and they have enthusiastically participated in
all AOF activities. Globally, Amway’s CSR campaign is known as the One By One
Campaign for Children.

PROMOTING FREE ENTERPRISE AND SELF-EMPLOYMENT

Amway has conducted several seminars on ‘Entrepreneurial Development and Direct

Selling’ in concert with the Confederation of Indian Industries (CII) and the All India
Management Association (AIMA) on the benefits of organised direct selling.

MEMBER - IDSA (Indian Direct Selling Association)

Amway India Enterprises Pvt Ltd is a member of the India Direct Selling Association.
The Indian Direct Selling Association is an association of companies engaged in the
business of direct selling in India. Its members are of high national and international
repute having set standards in delivering quality goods and in following ethical
business practices.

Our Values

Vision
Inspiring people to live better lives.

Mission
To provide the best business opportunity. To deliver exceptional quality products to
urban and semi urban homes in the areas of nutrition and wellness, cosmetics,
personal care, home care, home tech and insurance.

OUR VALUES
Amway has established some simple shared values that unite the entire company, and
all of the Business Owners that are associated with Amway. We believe that these
values guide our actions and help us to achieve everything we are capable of without
compromise or harm.

INTEGRITY
We will uphold the highest personal and professional integrity which demonstrates
honestly, loyalty, respect and high ethical standards in all our responsibilities,
obligations and other activities. We are committed to behave at all times in
accordance with the ethical practices of the organization.

TRUST
Building reliability and dependability for self by displaying commitment, honesty,
confidentiality and consistency in all actions.
TRANSPARENCY
We will promote a culture of openness and mutual trust by interacting objectively and
without underlying personal interests.

SERVICE ORIENTATION
We are committed to serve our customers to fulfill their needs by focusing efforts on
discovering and thereby meeting stated and unstated requirements.

PARTNERSHIP
We will collaborate across boundaries and find common ground by sharing ideas and
resources, with a wide range of stakeholders. We will develop networks and build
long term alliances with internal and external customers.

RECOGNITION
We are committed to honor, encourage and support individuals and teams who
contribute, through their behavior and actions, to the success of the organization.

SALES AND MARKETING PLAN

The Amway Sales and Marketing Plan is a low risk, low start-up cost business
opportunity that is open to everyone. It allows you to build your business through
retailing products and sponsoring other people who, in turn, can retail products and
offer the business opportunity to others. By passing your sales and marketing
knowledge to your developing team, you not only build your own business network
but also enable others to build one of their own.
The Amway Sales and Marketing Plan has been operating for over 40 years and is
available in over 80 countries and territories around the globe.
The core of the Amway Sales and Marketing Plan's income opportunity is the sale of
quality AMWAY products to retail customers. As your Amway business grows, the
rewards you earn grow in proportion. The Amway Sales and Marketing Plan does not
compensate anybody for simply recruiting others as Amway Business Owners.
 Objectives
The objective of the project are as follows:
1. To understand the concept of advertising.
2. To go in depth with RCM & Amway.
3. Role of advertising in MLM
4. How MLM works
5. To ascertain that advertisement is important for MLM companies too.
 Research Methodology

Research methodology is a way to systematically solve the Research

Problem. It may be understood as a science of studying how research is done
scientifically. It is necessary for the Researcher to know not only the Research
Methods, techniques but also the Methodology. Researcher also need to
understand the assumption underlying various techniques and they need to know
the criteria by which they can decide that certain techniques and procedures will
be applicable to certain problems and others will not.

TITLE OF THE PROJECT

The project is entitled “comparative analysis of advertisement strategy of RCM &

Amway”

SOURCES OF DATA COLLECTION

There are two types of data collection:
-primary data collection
-secondary data collection

PRIMARY DATA COLLECTION:

Primary data are those data which are collected afresh and happen to be original in
character. For the purpose of this project work the methods used to collect the primary
data were:

• Through Questionnaire
• Through personal meeting with customers

SECONDARY DATA COLLECTION:

Secondary data are those data, which are already collected before by someone else. I
collected the secondary data for my survey is as follows:

• Through Internet
• Through company’s handbook and pamphlets

DATA COLLECTION INSTRUMENT:

The instrument used for data collection was through questionnaire and personal
interview.

PRE TESTING
To know the feasibility of the questionnaire, before collecting the data, a rough
draft of questionnaire was tested on a few respondents drawn at convenience. As
per the feedback received, some relevant questions were added and some
irrelevant questions were dropped and necessary modifications were made to make
it free from ambiguity.

PROBLEM FACED DURING DATA COLLECTION:

• Non-cooperation of the customers/respondents

• Non-availability of the respondents.
• Time limit

UNIVERSE:
The universe of the study is members of RCM & Amway.

SAMPLE SIZE:
Sample size of this marketing study is 50.

Data Analysis
&
Interpretation
Q.1: Do your company advertise?

Yes 50%
No 50%

Yes
No
50% 50%

Interpretation: 50% respondents said that the company use to advertise and 50%
respondents said that their company does not advertise.
Q.2: Are you satisfied with the advertisement of your products?

Satisfied 70%
Not Satisfied 30%

30%

Satisfied
Not Satisfied

70%

70% respondents are satisfied with the advertisement of the product, whereas 30% are
not satisfied.
Q.3: Do the advertisement helps in the MLM business?

Yes 40%
No 60%

40%
Yes
No
60%

60% respondents said that advertisement doesn’t play any role in MLM business,
whereas 40% have the opinion that advertisement do help inn their business.
Q.4: Which media you suggest to company for advertisement?

Electronic Media 30%

Print Media 20%
Both 50%

60%
50%
50%

40%
30%
30%
20%
20%

10%

0%
Electronic Media Print Media Both

30% respondents suggest for electronic media, 20% suggest print media and 50%
suggest both media for advertisement to reach the maximum crowd.
Q.5: What are the main causes of non advertisement in MLM system?

Cost cutting 30%

More benefit to field associates 60%
Not required 10%

70%
60%
60%

50%

40%
30%
30%

20%
10%
10%

0%
Cost cutting More benefit to field Not required
associates

60% respondents said that the MLM companies don’t advertise because company
wants to give more benefits to the field associates, 30% said that due to cost cutting
and 10% said that advertisement is not required in such companies.
Q.6: How you rate the quality of products of the company?

Good 70%
Average 30%
Poor 0%

80%
70%
70%

60%

50%

40%
30%
30%

20%

10%
0%
0%
Good Average Poor

70% respondents rated the quality of their product as good, 30% rated as average and
no respondents said against the product they are selling.
Q.7: What percentage of profit should be utilized towards advertisement?

0%-5% 20%
5%-10% 50%
10%-20% 20%
More than 20% 10%

60%
50%
50%

40%

30%
20% 20%
20%
10%
10%

0%
0%-5% 5%-10% 10%-20% More than 20%

The majority of respondents i.e. 50% said that 5-10% of net profits should be utilised
towards advertisement, 20% said 0-5%, 20% said 10-20% and only 10% said more
than 20%.
Q.8: Do you agree that sponsoring an event or program is more effective than
regular advertisement?

Strongly Agree 40%

Agree 10%
Disagree 20%
Strongly Disagree 30%

45%
40%
40%
35%
30%
30%
25%
20%
20%
15%
10%
10%
5%
0%
Strongly Agree Agree Disagree Strongly Disagree

40% respondents strongly agree that sponnsering an event or program is more

effective than regular advertisement, 10% agree 20% disagree and 30% strongly
disagree.
Q.9: Comparing the advertising strategies of both companies, which you prefer?

RCM 50%
Amway 50%

RCM
50% 50%
Amway

Both RCM and Amway is preferred by same proportion of the respondents i.e. 50%
each.
Q.10: What factor does a new member consider while purchasing the plan?

Advertisement 30%
Income Plan 40%
Quality of product 30%

45%
40%
40%
35%
30% 30%
30%
25%

20%
15%
10%
5%
0%
Advertisement Income Plan Quality of product

40% respondents thinks that when a new member joins the company he is mainly
attracted by the income plan, 30% said that advertisement changes the mind of the
customer. 30% said that the customer first look on the quality of the product.
 Findings
1. The members of both the companies are very much sincere towards their
company, product and marketing plan.
2. Advertisements do affect the business of MLM.
3. The MLM companies doesn’t advertise because its members are always
ready to work for it.
4. A new customer is always attracted by the income plan provided by the
company.
5. 5%-10% of the net profit should be spent for the advertisement.
6. sponsoring an event may be more effective than regular advertisement.
 Limitation

As study was undertaken in one city the results need to be understood keeping that
aspect in mind. Following are the limitation :

 Sample survey of customer is small which may create distortion.

 In some cases consumers were hesitant to give their views hence some
variation may occur.
 Sample size is confined to restricted areas.
 Data received from different sources are quite different in nature.
 Both companies are MLM based and the no member of either company
likes to talk against the company.
 Suggestion

1. The company must advertise the products on both electronic as well as

print media to facilitate the members.
2. The company must make the income plan more effective as maximum
customer think for the income level in any MLM company.
3. The company must spend 5-10% of its profits towards the advertisement.
 Conclusion

On the basis of the survey I may conclude that:

1. The MLM business is a rapidly growing concept in Indian market.
2. Advertisement doesn’t play any role in the expansion of the business as the
members tries their hard to attract the new customer.
3. The companies doesn’t advertise because it use to give the amount to its
members rather than spending it on advertisement.
4. Both the companies are well preferred among their members whether it
advertise or not.
5. The income level is the foremost factor that attract a customer.
 Bibliography

www.google.com
www.mbaguys.com
www.wikipedia.com
www.scribd.com

books and manual of company

ANNEXURE
Q.1: Do your company advertise?

Yes No

Q.2: Are you satisfied with the advertisement of your products?

Satisfied Not Satisfied

Q.3: Do the advertisement helps in the MLM business?

Yes No

Q.4: Which media you suggest to company for advertisement?

Electronic Media Print Media

Both

Q.5: What are the main causes of non advertisement in MLM system?

Cost cutting More benefit to field associates

Not required

Q.6: How you rate the quality of products of the company?

Good Average
Poor

Q.7: What percentage of profit should be utilized towards advertisement?

0%-5% 5%-10%
10%-20% More than 20%
Q.8: Do you agree that sponsoring an event or program is more effective than
regular advertisement?

Strongly Agree Agree

Disagree Strongly Disagree

Q.9: Comparing the advertising strategies of both companies, which you prefer?

RCM Amway

Q.10: What factor does a new member consider while purchasing the plan?

Advertisement Income Plan

Quality of product