What is Externality
An externality is an expense or reward created by a producer but not directly borne financially by the producer (Corporate Finance Institute, 2022). Creating a good may result in positive or negative externalities depending on the conditions. The costs and benefits may be considered private for an individual or organization, or they may be considered public since they affect the greater community. Since this is the definition of the word, environmental dangers and other threats to public health are thought to be instances of externalities. A corporation has a negative externality if it contributes to pollution that hurts people’s health and property values in a particular location. On the other hand, a positive externality might include limiting the spread of illness or refraining from using lawn pesticides that may wind up in nearby rivers. Rapid plant growth in lakes and rivers might compound the negative effects of runoff.
The Externality Theory
Research Question: How would you explain a negative externality (social costs) associated with the use of sexually suggestive material in advertising?
Attention is a limited resource for any individual. When attention is concentrated on a single task, such as seeing an advertisement, it is unavailable for other tasks. Consequently, each advertisement you see consumes your attention (Wan et al., 2014). Conversely, advertising may give you valuable information, resulting in an advantage. If the drawbacks exceed the benefits, you may be displeased with the marketing, if not enraged. However, marketers do not pay attention since the market is unregulated. Consequently, the marketers do not include the expenses made due to your attention in their calculations. According to Gill (2008), this leads to the negative externality theory. In this environment, the only expenditure that affects marketers’ calculations is advertising space, resulting in the saturation of public spaces with flashing, brilliant electronic advertisements demanding your attention.
Research and Discussion
In today’s society, marketers and advertisers have a daunting challenge: how to attract consumers’ attention by giving them relevant information about the product or service they are advertising. This is typically sexually provocative since it seeks to draw attention. This practice has also been widespread in advertising for quite some time. As time progressed, sexual content grew more accessible, and competition intensified. Companies are utilizing less constrained and more explicit information in their advertising efforts, sometimes exceeding the line between what is socially acceptable and what is not. There is less reliance on current marketers to distinguish their product or service from the competition than on their predecessors to overcome market obstacles.
Even if the unfavorable effects of this method are widespread, only a small number of them stand out. Sexually provocative advertising affects consumers’ ideas of what defines physical beauty and health, regardless of age or gender (Gill, 2008). Women have been the main subject of most sexually suggestive commercial content and have been reduced to attention-getting sexual objects, resulting in distorted and conflicting attitudes toward women. Last but not least, the content is utilized to further the idea of behavior without repercussions, persuading viewers that engaging in sexual activity like that shown in many of these advertisements is okay and will not negatively affect their future.
Advertising and Youngsters
Research Question: Suppose an advertisement includes material that is considered a bit over the top and it includes sexual innuendoes, scantly clothed; what responsibility does the advertiser have for any effect on indirect targets, such as children?
Businesses have often discussed how to market ethically so as not to expose youngsters to anything they might find offensive. However, increased screen time for youngsters might have unintended repercussions on their sexual development. Due to the influence television and internet advertisements may have on impressionable young minds; businesses must engage in ethical and responsible advertising practices.
Drumwright et al. (2009) argue that marketers should be concerned with the ethics of social responsibility if their campaigns influence the behavior of young people who are ignorant that they are being advertised. This is because targeting this disadvantaged segment of society may be unethical. It is essential to emphasize that some commercially affected youngsters possess a solid moral sensibility. These sexually explicit advertisements may influence youngsters, who may emulate the conduct they witness. A corporation must comprehend its target market, including whether or not it includes parents with children. Children’s exposure to sexually provocative advertising is a severe problem, especially regarding social responsibility.
Research and Discussion
When an appeal fails to connect with the specific target market, it distracts the audience from the vital message and humiliates the marketer in the eyes of the customer. This circumstance always brings the standard difficulty of sexually explicit marketing. Consider the window poster displaying a naked woman wearing the advertised clothing. Many believe that creating such an advertisement attracts unwanted consumers and wastes money owing to the social cost they impose on society. When it comes to children, these advertisements may indirectly influence and may even interest them. That is, it can potentially be a waste of marketing funds.
Ethical Safeguards in Advertising
Research Question: How can advertisers protect themselves from this problem?
As businesses are increasingly aware, presenting or using sexually explicit content, particularly in media aimed at minors, may have detrimental repercussions. Advertisers are more cautious with their wording to avoid conveying an incorrect impression (Gretzel et al., 2000). Many nations and regions have established child protection agencies to secure the safety of children. It is a marketing approach to persuade potential clients or donors to support a product or cause. The primary objective is to influence the conduct of others by appealing to their self-interests. Both traditional and digital ads are capable of reaching and influencing a big audience. To avoid offending potential customers, businesses often opt for less sexual advertising by using recognizable celebrities as spokespeople.
Research and Discussion
If a marketer or advertiser falsely claims their product is high quality and affordable, they risk losing consumers and damaging their reputation. It is likewise poor judgment to single out the opponent and insult them (Gretzel et al., 2000). This strategy may fail if it steers customers away from your goods and toward those of your competitors. Strategically match your marketing and business positioning. Every advertising campaign relies on selecting the appropriate audience, and a solid positioning plan accomplishes this. It might function as both a promotion and a defense of the product’s superiority and uniqueness.
Typically, sincerity is the best course of action; this is just another way for marketers to avoid legal issues. When advertising a product or service, the marketer must be moral and trustworthy (Drumwright & Murphy, 2009). There should be legitimate attempts to prohibit the use of misleading methods and fraudulent advertising. In some means, the advertising’s efficacy must be checked. Utilizing desktop publishing tools and computer graphics may make print advertising seem professional if the marketer is willing to invest the time and effort required. Professionals should be hired to conceive, produce, and acquire outdoor advertisements for a fee or a proportion of media dollars spent, regardless of whether the ad is meant for radio or the internet.
References
Biglan, A. (2009). The Role of Advocacy Organizations in Reducing Negative Externalities. Journal of Organizational Behavior Management, 29(3–4), 215–230. Web.
Corporate Finance Institute. (2022). Externality. Web.
Drumwright, M. E., & Murphy, P. E. (2009). The Current State of Advertising Ethics: Industry and Academic Perspectives. Journal of Advertising, 38(1), 83–108. Web.
Gill, R. (2008). Empowerment/Sexism: Figuring Female Sexual Agency in Contemporary Advertising. Feminism & Psychology, 18(1), 35–60. Web.
Gretzel, U., Yuan, Y. L., & Fesenmaier, D. R. (2000). Preparing for the New Economy: Advertising Strategies and Change in Destination Marketing Organizations. Journal of Travel Research, 39(2), 146–156. Web.
Wan, W. W. N., Luk, C. L., & Chow, C. W. C. (2014). Consumer responses to sexual advertising: The intersection of modernization, evolution, and international marketing. Journal of International Business Studies, 45(6), 751–782. Web.