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Exam 3 Chapters 4/9/19

Advertising and Commercial Culture ● ●

Ad supported TV losing audience, advertising Question: “What will advertisers to to keep people watching ads, especially in a world of digital devices that let us skip ads, and ad-free story services like HBO and Netflix?”

Our Increasingly Sponsored Lives ● ●

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David Foster Wallace’s Infinite Jest College football bowl games ○ Allstate (formerly Nokia, USF&G) Sugar Bowl ○ Goodyear Cotton Bowl (formerly Mobil, Southwestern Bell, SBC) ○ Capital One Orange Bowl (formerly Discover, FedEx) ○ Chick-fil-A Peach Bowl Sports Facilities ○ Coors Field (Denver) ○ Progressive Field (Cleveland) ○ United Center (Chicago) ○ Fleet Center (Boston) ○ Bank One Ballpark (Arizona) ○ Mercedes-Benz Superdome (New Orleans) ○ Hard Rock Stadium (Miami) ○ Levis Stadium (SF) ○ Ford Field (Detroit) Where have you seen ads? ○ She was paid $10,000 in 2005 to have a gambling website name tattooed on her forehead.

Advertising History ● ● ● ● ● ●

3000 B.C. - ancient Babylon, shop owners hung signs U.S: early 1800s -- first ad agencies were space brokers. Bought newspaper space and resold it. 1875: N.W. Ayer, first modern ad agency, Philadelphia. Late 1800s -- department stores and patent medicines as major advertisers. Advertising invented “problems” that needed to be solved by products ○ E.g., Odor Oh No Radio: first ad, 1922 ○ Advertise to people in their living rooms ○ Targeted kids ○ Sell soap on soap operas

Advertising Today ●

Influence of visual design:

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1960s-70s -- European design 1980s -- MTV -- changes visual style for TV ads, makes hit music part of advertising ○ 1990s -- the Internet ■ Google ■ Yahoo! ■ MSN ○ Example: Apple’s influence on ad design Agencies (2016) ○ Mega Agencies -■ WPP Group: $18.96 billion ■ Omnicom: $15.23 billion ■ Publicis: $9.63 billion ■ Interpublic: $7.54 billion ○ GOOGLE: $90.3 billion (2016) Adwords (about 90% of its revenue from advertising) Agencies ○ Boutique Agencies -- like Digital Kitchen and Peterson Milla Hooks The Structure of Agencies ○ Market Research - VALS (Strategic Business Insights) ○ Creative Development ○ Media Selection ○ Account and Client Management

Persuasive Techniques ● ● ● ● ●

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Famous person testimonial (SNL parody) ○ Matthew McConaughey for Lincoln Plain folks ○ “I’m Good” Pepsi Max commercial Snob appeal ○ Polo Ralph Lauren Cologne commercial (this cologne is only for special people) Bandwagon effect ○ Everyone else is buying it, so you should buy it too Hidden fear ○ You need this product to solve a problem ○ Fair and Lovely Advertisement Irritation (more irritation) (even more) ○ Repetition is key ○ Menards Commercial and banjo music Association Principle: associate product with a positive cultural image or value ○ Example: Jack Daniel’s Americana Commercial ○ Chevy Commercial for Dog being Man’s Best Friend Dissociation Corollary ○ Saturn Commercial Liberation Marketing: product takes the language of rebellion, nonconformity ○ Apple Commercial for releasing the very first Mac ○ Microsoft AI commercial Myth Analysis ○ Claude Levi-Strauss- this is the famous Swiss analysis who created the idea of myth analysis

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A myth analysis will contain a: ■ Narrative: tells us a story ■ Binary Opposition = conflict ■ Resolution ● Example: Wisk Detergent Commercial about the ring around the collar ● Example: Old Spice Commercial about comparing your man to the man in the commercial ● Example: Google Commercial about building memories and solving problems by using Google

Trends in Advertising ● Digital and Mobile Advertising ○ Digital advertising Revenue in the United States passes two milestones in 2016 ■ 1) Digital advertising revenue surpassed television advertising revenue for the first time in 2016. Digital advertising (which includes mobile, search, display ads, and digital video) pulled in $72.5 billion in revenue in 2016, edging out television advertising $71.3 billion in domestic revenue. ■ 2) The other milestone is that mobile advertising surpassed all other types of digital advertising in 2016, and accounted for 51 percent of digital advertising 2016 revenue totals. ● Augmented Reality ○ First-Down Line in Football ○ Pokemon Go (2016) ○ Google Translate ○ Cinema ○ Virtual Movies ○ Is there potential for too much augmented reality? Critical Issues in Advertising ●

1) Children and Advertising ○ Influence of $500 Billion in spending each year ■ Advertising in schools ● 2) Health and Advertising ○ Eating disorders (Killing Us Softly 4 Trailer) ○ Tobacco ○ Alcohol ■ Prescription Drugs ● Not advertised until 1997 ● $4.7 billion in 2005 ● FDA enforcement of misleading claims on the decline Advertising and Democracy ● Broadcasters earned from political ads ○ 1996 → 400 million

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2000 → 665 million 2004 → 1.6 billion 2008 → 2.6 billion 2012 → 4 billion 2016 → Clinton bought 75% of TV ads, Trump got a record amount of free media Super Pac Money ○ Known as dark money because it is unknown where the money is coming from ○ The money helps the person who is campaigning ( no limits on donations ) ■ Broadcasters are not concerned over super pac money because they are making money themselves ■ Campaign ads are 10% of local TV total revenue in election years

Public Relations NFL and Public Relations ● What are the PR problems? ○ Black Lives Matter ■ Taking a knee at football games ■ Colin Kaepernick settlement ●

CTE concerns ○ Long term playing football can cause brain injury ■ #MeToo Movement ● Women working in the NFL and report sexual harassment issues

Early Developments in PR ● P.T. Barnum ○ He made “viral” acts that he would tour around america ○ He would put posters up all around town to come see his amazing acts ● Joice Heth ○ He named her the 160 year old nurse that aided Washington ○ She was African American and actually in her 80s ● Tom Thumb ○ An act, he was a little person that Barnum would take around for show ● Jumbo ○ African elephant was publicised ○ He was exceptionally large ○ He bought the elephant from royal British sellers ○ His ashes were stored in a peanut butter jar for good luck after a fire ● Buffalo Bill ○ Bill Cody would go around and reenact cowboy and indian scenes ○ The mythology of “cowboy vs. indian” wild western idea was created through this ■ Cody, Wyoming is named after Bill Cody

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U.S. Railways ○ Helped create a new mode of transportation Modern PR Agents ○ “Poison Ivy” Lee had John D. Rockefeller as a client ○ Standard Oil/Ludlow Colorado ■ After Ida Tarbell’s Standard Oil exposes in Mclure’s ■ Terrible working conditions for immigrants working there ■ Workers went on strike ● State Militia was brought in to calm the strike ■ Ludlow massacre ○ “Poison Ivy” Lee was hired to “repair” Rockefeller’s image ○ Lee discovered he could shape facts to tell whatever he wanted to say, and people would believe him ○ Facts are malleable and can be interpreted ○ Edward Bernays ■ Sigmund Freud’s nephew ■ “Father of Public Relations” ■ He worked for the Government during WWI ■ Developed Option Time at CBS ■ Plan for American tobacco industry ● “Torches of Freedom”

Social Reform and Muckrakers ● 1902, McClure’s Magazine (1893-1933) ○ Ida Tarbell’s book The History of the Standard Oil Company on John D. Rockefeller’s big oil monopoly Lucky Strikes Cigarettes ● Organized “Green Ball” ● Luncheon for fashion editors ○ “New green fashions for fall” ● Convinced historians and psychologist to talk about green ● Organized “Color Fashion Bureau” ● Wrote to interior decorators, department stores, art industry group about “new trend” (on green paper) ● Got department stores to display green dresses in their windows ● Got an established gallery to feature a “green” painting exhibition ● Green became the color of the 1934 season ● Other Clients: ○ Ivory soap: soap carving contest ○ United Fruit Company ■ United fruit = banana republic ■ Paid off governments/brutally exploited Guatemalans ■ When reformist government attempted to reign in United Fruit’s power,

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called in Bernays ● Bernays created a successful PR campaign that led to the CIA’s overthrow of a democratically elected government ■ United Fruit lives on as Chiquita Brands Pseudo-Events: the manufacturing of news ○ Example: press conference, political rallies

The Practice of PR ● In 2012, the PRSA defined public relations as: ○ Public relations is a strategic communication process that build mutually beneficial relationships between organizations and their publics ● PRSA Code of Ethics ○ A member shall: ■ Be honest and accurate in all communications. ■ Act promptly to correct erroneous communications for which the member is responsible. ■ Investigate the truthfulness and accuracy of information released on behalf of those represented. ■ Reveal the sponsors for causes and interests represented. ■ Disclose financial interest (such as stock ownership) in a client's organization. ■ Avoid deceptive practices. ● In 2000, PR Week surveyed 1,705 PR professionals: ○ 25% admit to lying on the job ○ 39% say they had exaggerated the truth ○ 44% are uncertain of the ethics of a task they are required to perform ○ 60% say their work has been compromised by being told to lie. ● Major PR Agencies ■ Weber Shandwick Worldwide (Interpublic) ■ Fleishman-Hillard (Omnicom) ■ Hill and Knowlton (WPP Group) ■ Burson-Marsteller (WPP Group) ■ Incepta (Incepta Group) ■ Edelman PR Worldwide (Independent) ■ Porter Novelli (Omnicom) ■ Ketchum (Omnicom) ■ GCI Group/APCO Worldwide (WPP Group) ■ Ogilvy PR Worldwide (WPP Group) ○ In-house Services Doing Public Relations ●

Six Main Functions ○ 1) Writing and Editing ■ Press releases ■ Social media (Facebook, Twitter, etc.) ■ VNRs ■ PSAs ■ Internet materials

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■ Brochures, etc. 2) Media Relations ■ Promote a client or organization by securing favorable news media coverage ■ Can enhance with social media campaigns ● Example: Heisman trophy candidate 3) Special Events ■ Pseudo-Event: refers to any circumstance created to obtain coverage in the media (publicity stunt) 4) Research ■ Research the way the company is perceived by the public ■ Focus groups, surveys ■ Social media analytics (Google Analytics, Twtrland, Twitter Analytics, Nuvi, etc.) 5) Community and Consumer Relations ■ Create positive image for company ● Example: Rockefeller and dimes ■ Increasing use of social media to build relations, and track with analytics (Google, Twitter, etc.) 6) Government Relations and Lobbying ■ Organizations lobby for favorable legislation and against industry regulation ■ There are more than 34,000 registered lobbyists in Washington D.C. one estimate says more than 63 for each member of Congress (triple the number since 1995) ● NAB: National Association of Broadcasters ● AMA: American Medical Association ● Snack Food Association ● National Potato Council ● The Pharmaceutical Research and Manufacturers of America (PhRMA) ■ “Astroturf Lobbying” -fake grassroots campaign organized by PR firms ● Example: Washington D.C. based Berman and Company ● Creates fronts for astroturf lobbying ● Lobbying for Entire Governments ○ Qorvis: Saudi Arabia ○ Burson Marsteller: Indonesia, El Salvador, Nigeria ○ Hill and Knowlton: Kuwait ○ Paul Manafort (Ukraine), Michael Flynn (Turkey) … but not transparent about their lobbying, nor the payments

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Corporate Social Responsibility programs Corporate Image Branding Social Responsibility ○ Case of “The Gap” -- proactive transparency ○ May 24, releases first ever corporate report on social responsibility ○ Works to monitor labor conditions at overseas factories. Terminates contracts with sweatshops if conditions not improved ○ Apple: Problems with Foxconn ■ Apple: in 2015 met goal to power all U.S. operations (offices, stores, etc.) with renewable energy to reduce carbon emissions. ■ Building more solar capacity in China. Apple uses renewable energy for 87% power at its facilities worldwide. ■ 2/3 paper it uses is recycled, moving toward new paper only from sustainable forests. Bought 36,000 acres of sustainable forests in Maine and NC.

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Tensions Between PR and Press ○ Pay issues ○ Indermining facts and blocking access (“flack”) ○ Promoting publicity and business as news

Crisis Management ●

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Bad ○ 2018: Facebook ○ 2015: Volkswagen and Chipotle ○ 2010: BP Deepwater Horizon explosion and oil spill ○ 2010: Toyota response to car problems ○ 2005: U.S. Government response to Hurricane Katrina ○ 1989: Exxon Valdez oil spill, Alaskan coast Good ○ 2005: Tulane University and LSU response to Hurricane Katrina ○ 1982: Johnson & Johnson, Tylenol poisoning case Example: Dawn Dishwashing Detergent campaign BP Oil Campaign

Media Economics Media Mergers in the News ● ● ● ● ● ●

CBS sells radio stations to Entercom AT&T bought by TIme Warner Time Inc. sold to Meredith Disney buys most of Fox Sprint and T-Mobile porpose merger FC overturns Net Neutrality policy in 2017

Top 3 U.S. Media Companies ● ● ●

1) Comcast : $94.51 billion in annual revenue 2) Disney : $59.43 billion 3) AT&T : $47.99 billion

The Rise of Digital Media Companies ● ● ● ● ●

Apple : $265.6 billion Amazon : $232.89 billion Microsoft : $110.36 billion Google : $110.00 billion Facebook : $55.8 billion ○ These companies now rivaling and surpassing the traditional media companies ○ Digital economy favors small, flexible start-ups ■ Example: Instagram, Foursquare, Twitter, Zynga ○ Either grows fast, gets bought, or flames out

BrandZ Top 100 Most Valuable Brands ● ● ● ● ● ● ● ● ● ●

Google Apple Amazon Microsoft Tencent Facebook Visa McDonald’s Alibaba Group AT&T

Bigger Media Corporations...Why? ●

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Economics of Scale: the idea that increasing production levels reduces the cost of each product ○ Yet, it never happened for the price of music CDs. CDs have been around since the 1980s, but major recording companies dropped prices only beginning in 2003… Why? ■ The arrival of MP3 music became more popular and stores had to compete with cheap single prices for $1 for a single versus $18 for an album Synergy: the promotion and scale of a product (and all of its versions) through the various subsidiaries of a media conglomerate ○ Sometimes this works, but no always ■ AOL Time Warner merger ineffective ■ Viacom buys, and later spins off CBS

Problems of the Economic Structure ●

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Flexible markets and the Decline of Labor Unions ○ 1955: 35% of American workers belong to union ○ 2017: 10.7% (34.4% in public sector; 6.5% in private sector) ■ 2015: Median Weekly earning of nonunion workers ($776) were 79 percent of earnings for workers who were union members ($980). = $40,352 vs. $50,960/year. Minimum Wage ○ $15 dollars per hours @ 40 hours per week = $31,200 a year ○ $7.25 per hour @ 40 hours per week = $15,080 a year Downsizing and Wage Gap ○ Top CEOs can earn more than 500 times the wages of ordinary workers ■ Even more crazy $80million for 6 weeks of work ○ From textbook: Disney CEO earns $29 million per year vs. entry level employee at $26,000 a year. ○ One CEO = 1,115 employees ■ In 2014, he earns $34.4 million ○ CEOs often pay taxes at a lower rate than their secretaries (investment income taxed at lower rate) From the beginning of the recession in December 2007 through 2009, the U.S. lost more than 8.4 million jobs (affecting 6.1% of all employed), creating the highest

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unemployment contraction since the Great Depression. Increasingly companies want people to be more flexible (in terms of their commitment to their workforce) and more profitable Corporate profits good, but jobs and pay still lag In 2011, the National Employment Law Project reported “more than one in four private sector jobs (26 percent) were low-wage positions paying less than $10 per hour.” This translates to a salary of about $20,000 a year or less. The U.S. Bureau of Labor Statistics estimated in 2012 that 70 percent of the leading growth occupations for the next decade are low-wage ones. Powerful media firms ○ Control over storytelling ○ Hegemony: acceptance of dominant values by those who are in subordinate position ■ Accept the way things are as “natural” or “common sense” ■ Edward Bernays called this “engineering of consent” ■ Examples: ● smoking as “freedom” (not addiction) ● giving tax breaks to wealthiest as “job creation” (and not view as payback to campaign benefactors)

Three Common Organizational Structures in Media Industry ● Monopoly: a single firm dominates a particular industry in production or distribution. ○ Can be locally or nationally ○ Most local newspapers have a monopoly ○ Most large cable companies operate MANY local monopolies ● Oligopoly: just a few firms dominate an industry. ○ Internet: Google, Yahoo!, and Bing (Microsoft) Control 95.5% of search ○ Radio: Most local markets in U.S. have 2-3 dominant owners ○ TV: News Corp (Fox), CBS, NBC (Comcast), Disney (ABC) own the dominant stations in the top markets ○ Cable: Comcast, Charter, and Cox control most markets. (DirecTV and DISH Network control all DBS TV). Charter Cable may grow. ○ Movies: Big 6 control 95% of major movie releases in U.S. ○ Also Oligopolies in Newspapers, Magazines, Books, Recorded Music, and Advertising/PR ● Limited Competition: many producers and sellers, but little differentiation in the industry. ● What happens when so few corporations control so much of the mass media? ○ There might not be enough competition ○ You lose diversity and newer ideas being generated ○ Synergy reduces risk for corporations, but results in “more of the same” for us ■ Example: Camp Rock, Demi Lovato and the Jonas Brothers ● More Disney Synergy ○ Good Morning America, 2012: ○ Nov. 12: feature on book by Jake Tapper (ABC News reporter) ○ Nov. 13: 15th Anniversary of Broadway musical “The Lion King” ○ Nov. 14: the latest “Dancing with the Stars” castoffs ○ Nov. 15: sneak preview of “Modern Family” Product Placement

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Skyfall (2012): One-third of $200 million budget covered by product placement Heineken beer, Omega watches, Sony cell phones, Swarovski crystal, Coke Zero, Honda, Caterpillar, Adidas, Aston Martin, Walther guns...more than $65 million in product placement fees, plus over $45 million in cross-promotional campaigns.

Anti-Competitive Practice ●

Example: The News Corporation Sold the The X-Files (Fox Series) to subsidiary (FX) at less than the market rate’

Information Control ●

The case of Disney news about Disney World ○ Disney was hiring pedophiles to work at their parks

Antitrust Laws ● ● ●

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Trust: a group of corporations that seek to reduce competition and/or control prices; a cartel Antitrust: opposing or regulating business trusts 1890s Industrial Empires ○ Vanderbilt : shipping and railroads ○ Carnegie : steel ○ Rockefeller: oil ■ Outlaw monopoly practices and corporate trusts that fix prices and force competitors out of business ■ Prohibit manufacturers from selling only to dealers who have agreed to reject the products of business rivals ■ Limit corporate mergers and joint ventures that reduce competition Since the 1970’s ○ Deregulation of all industries, including the media ○ Lax enforcement of antitrust laws ○ Massive media consolidation But some recent enforcement of antitrust merger laws: ○ In 2002, the FCC declined to approve the merger of DISH Network and DirecTV, which would have created just one DBS company in the U.S. ○ In 2012, the U.S. Justice Dept. rejected AT&T’s plan to buy T-Mobile, which would have left the U.S. with just 3 major mobile...