1MARKETING AND RESPONSIBILITY Executive Summary The purpose of this report is to analyze the various ethical issues which are related to native advertisements, and attempt to find out recommendations, based on information on what other brands are doing to combat these ethical issues, what the market and consumer data are, and some application of marketing concepts and theories. The issues discussed are insufficiently deceptive native ads and stakeholders dissatisfaction. The report summarizes that brand image through various forms of social marketing and placing properly relevant native ads based on market research are integral for the avoidance of the mentioned issues.
2MARKETING AND RESPONSIBILITY Table of Contents Introduction................................................................................................................................4 Discussion..................................................................................................................................4 Introduction to the ethical issues............................................................................................4 Literature review of CSR activities........................................................................................5 Ulke, A.K. and Schons, L.M., 2016. CSR as a selling of indulgences: an experimental investigationofcustomers’perceptionsofCSRactivitiesdependingoncorporate reputation.Corporate reputation review,19(3), pp.263-280.................................................5 Forbes.com.(2019).TheWorld'sMostReputableCompaniesForCorporate Responsibility2018.[online]Availableat: https://www.forbes.com/sites/vickyvalet/2018/10/11/the-worlds-most-reputable- companies-for-corporate-responsibility-2018/ [Accessed 8 Mar. 2019]...............................5 Lawless, J., 2018. Microsoft and the Future of AI.................................................................6 Literature review of marketing ethics....................................................................................6 Egan, B.D., 2017. Can the sanctity of journalism be maintained in an era of native advertising? Case study of Netflix.Journal of Digital & Social Media Marketing,4(4), pp.339-351.............................................................................................................................6 Findings..................................................................................................................................6 Applicable theories.................................................................................................................7 Market and consumer data.....................................................................................................7 Recommendations......................................................................................................................8 Conclusion..................................................................................................................................9
3MARKETING AND RESPONSIBILITY
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4MARKETING AND RESPONSIBILITY Introduction Ethical issues in marketing are vast and the need to abide by the ethics of marketing and advertising is a necessity for organizations to ensure that they operate responsibly in the market (Bhattacharya 2016). Ethics is important to follow for marketers because it can improve brand image and result in profitability of the brand (Iglesiaset al. 2019). The ethical issues which will be discussed in this report will be based on the ethical issues which have been found in assessment 1, and the report will be attempting at identifying ways in which these issues could be avoided by marketers in a profitable manner. For that purpose, the report will be taking various academic resources and marketing journals to review literature based on CSR, social purpose marketing, social marketing and marketing ethics in order to identify the various practices which marketers have adopted in an attempt to avoid those issues. Recommendations will also be based on consumer and market data to provide a more relevant and effective recommendation policy for the avoidance of the issues. Focus will also be on relevant marketing theories and models, for the purpose of analysing the ways in which the issues could be resolved. The discussion in the report hence, would be including annotated bibliography for the purpose of literature review, and also focus on the consumer and market data in current market dynamics, along with relevant marketing models and theories.The report will be taking the software industry as its focus. Discussion Introduction to the ethical issues The ethical issues which have been identified in assessment 1 involve improper deceptive ads and improper brand placement in native advertising. Deceptive advertisements can make a reader or viewer of the advertisement misinterpret the idea or information which is being communicated by publications and organizations alike, and can lead them to making wrong decisions, or simply make them misinformed (Piccolo, Tedeschi and Ursino 2017). This is an ethical issue which has been prevalent in the ad industry for over decades, and since consumers are the biggest stakeholders for a brand, misinforming or misleading them is a serious ethical issue that exploits the money that they pay. Improper brand placement is also an issue which can violate marketing ethics. Improper brand placement in a publication through native ads can make the reader of the editorial confused regarding the relevance of the brand with the article. This violates the interests of the stakeholders since this is an
5MARKETING AND RESPONSIBILITY uncalled brand placement in a place where it does not belong (Barbieri, Silvestri and Lalmas 2016). The market identified in assessment 1 is the digital media market. Literature review of CSR activities Ulke, A.K. and Schons, L.M., 2016. CSR as a selling of indulgences: an experimental investigationof customers’perceptionsofCSRactivitiesdepending oncorporate reputation.Corporate reputation review,19(3), pp.263-280. This article by Ulk and Stohl considers the link between CSR activities and public perception of a brand. The article takes Amazon’s CSR activity as a reference to the topic, and suggests that the company has been experimenting with a diverse set of CSR activities over the years. Amazon’s CSR activities include education, women empowerment, feeding the needy, and financially supporting charitable organizations. The authors point out that despite having a vast range of CSR activities, the company never boasts or markets its activities. Word of mouth does a better job for the company in this case. The perception which Amazon creates here is that of an authentic socially responsible brand. It keeps the line required between social responsibility, and marketing. This indicates that the brand does its activities in a credible manner and not just for the sake of brand image. This speaks of the ethics of the brand and in turn increases its brand image and reputation (Ulke and Schons 2016). Forbes.com. (2019).The World's Most Reputable Companies For Corporate Responsibility 2018. [online] Available at: https://www.forbes.com/sites/vickyvalet/2018/10/11/the-worlds-most-reputable- companies-for-corporate-responsibility-2018/ [Accessed 8 Mar. 2019]. In this report published by Forbes, the author states that Google is one of the most well reputed companies in the word in terms of CSR. The company has a variety of CSR activities which range from China’s youth competition of social change, to funding the top charitable organizations in the world for social change. Referring to this, the author states that the company has managed to cement its brand image and positioning through its CSR activities. The company positions itself as a leading innovative IT company. They preach of development. However, technological development is not enough to bring about overall development in the world. This is where the vast range of CSR activities of Google fills the
6MARKETING AND RESPONSIBILITY gap between global development and technological development. This assures that the CSR activities of the company are totally in conformity with the philosophy of the company, making it one of the most credible companies in the world(Forbes.com 2019). Lawless, J., 2018. Microsoft and the Future of AI. This article by Joe Lawless focuses solely on the CSR activity strategies of Microsoft and analyses how the company effectively communicates their messages to the target audience which in turn increases their brand value and image. The research finds that the company focuses on reaching out to the socially impacted areas and attempts at educating the youth of those places. This fits the company perfectly since they launch softwares which need education to operate. Therefore it is also important for them to promote the education which is required in the global community, so that they are known in the world as a company which promotes the development of the requirement which they promote through their business (Lawless 2018). Literature review of marketing ethics Egan, B.D., 2017. Can the sanctity of journalism be maintained in an era of native advertising? Case study of Netflix.Journal of Digital & Social Media Marketing,4(4), pp.339-351. In this journal of social media marketing, the author lists Netflix as a practitioner of ethical native marketing. Netflix has always maintained a line between the content of a publication and its brand name alongside it. They also do not sponsor content which have no relevance to the philosophy of the brand. This makes Netflix a trusted and appreciated native marketer in the global community. The company has always believed in satisfying its stakeholders by sponsoring appropriate content, which does not look misleading (Egan 2017). Findings From the above annotated bibliography, what can be concluded is the fact that the brands which have been mentioned, have taken a step forward to reduce the impact of any bad reputation which they might come across in the market. Through marketing initiatives like CSR and social marketing, brands like Google, Microsoft and Amazon have created a positive brand image for themselves, which completely eliminates the chances of the public ever catching their deceptive adverts. Hence, it can be said that the trend in the brands is to
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7MARKETING AND RESPONSIBILITY create a positive brand image in advance, so that future ethical issues can be compromised by the public, and misleading advertisements can never be something which these companies can be accused of, due to their contributions to the society.Netflixon the other hand has always been devoted towards appropriate marketing. They have never tried at advertising their brand on a platform that does not match their brand philosophy. This indicates that they have always satisfied their stakeholders by placing their brands properly in appropriate content. Applicable theories The first concept of marketing which could be applied to the issues is the stakeholders analysis. Stakeholdersanalysistakes a serious of events, which starts from gathering information about the interests of the stakeholders and then grouping them for the purpose of future reference, to determine how to formulate a message to suit the interests of each of those stakeholders, and also which message should be targeted to which stakeholder in particular. This helps the company or brand to formulate marketing strategies and messages which would coincide with the interests of the stakeholders that are concerned with the marketing strategy of the brand (Ferretti 2016). Firstly, this can be helpful for brands in formulating a proper message by the brands, which would not offend the interests of the stakeholders. It is important to note that a company has various internal stakeholders who are more or less equally important to impress by the marketing strategies of the brand, since if that does not happen, the entire marketing strategy goes in vain. It is important that brands do the stakeholders mapping as well to analyse which group of stakeholders are of the highest priority in terms of serving their interests with a marketing strategy (GarcÃa-Nieto 2015). Another theory which could be applied is consumer segmentation. This is for the purpose of effective deceptive advertising. This concept involves proper segmentation of the consumer base of a specific market in order to formulate the message accordingly. The idea is to gather information regarding the demographic, psychographic and also the behavioural aspects of the consumer base and segment them into groups, to properly identify who actually the target audience is and how to effectively send the messages to them which would prove to be effective and would also be appealing to them. This can be linked to the practice of deceptive advertising. Brands must gather the information required regarding their target audience and segment them into demographic, psychographic and behavioural characteristics. This is to gain the insights into the consumer base. Research suggests that elements like humour in an advertising can completely make the audiences overlook the product or the
8MARKETING AND RESPONSIBILITY brand, and simply pay attention to the message itself (Öztayşi 2017). This is critical for effectively putting forward a deceptive ad in native advertising. The content should be such that relevance of the product or the brand advertised is completely overlooked and not judged by the audience, creating no room for ethical concerns. Market and consumer data As per the market data, native ads consume a total of 58% of all the forms of digital marketing present on the internet. This is a lot since there are a lot advertisers put up more than a million ads on the digital platform every month across the world. Of these ads, native ads are clearly more than five hundred thousand. This indicates the level of competition that exists between native advertisers to be put up on the internet. This means that a majority of the editorials that readers get to view are sponsored by some advertiser. As per the consumer data, research shows that of 97 people who were interviewed on whether they believe in what they are shown in advertisements, 78 people claimed that they either sometimes do, or never do at all(Marketing-schools.org 2019). This represents the high level of skeptism that exists in the consumer base of any given organization. Recommendations From the literature review, the marketing concepts and the market and consumer data whichhavebeendiscussedinthereportsofar,therecommendationscanbemade accordingly. Firstly, brands should involve in CSR activities and make their campaigns known to the world. This is how many companies have made a social impact in the minds of the public, thereby enhancing their brand image as well. The main idea which has been conveyed through the annotated bibliography of the report, suggests that brand image plays a crucial role in making people believe in the brand and their advertisements and reduces the chances of possible crises due to any accidental ethical issues which it might face in the future of its operations. This also involves social purpose marketing, and social marketing. The report also discusses how Netflix keeps its stakeholders in mind before an advertising campaign. This ethics should be adopted by other brands as well since the interests of the stakeholders can make them satisfied with the marketing tactics of a brand, and failing to do so would mean that the brand has committed an ethical mistake by formulating a strategy that does not comply with the interests of the stakeholders themselves.
9MARKETING AND RESPONSIBILITY Doing a stakeholders analysis can be a very effective way of doing so. Firstly, a stakeholders map should be created by the brand, and the priority of the stakeholders should be analysed on who to impress with a particular marketing strategy. This will help the brand in effectively mapping out the interests which their marketing strategy would need to coincidewith.Thiswouldreduceallthechancesofethicalconcerns.Aconsumer segmentation of the target audience can also help in choosing a message or a content that would be so much appealing to them that the relevance of the sponsorship of the native ads will be completely overlooked in terms of deceptive advertising. Further market and consumer data suggest that brands should be placing native ads on the basis if the relevance of the article or editorial. This is because not only would it suffice the ethical concerns, but would also make the sponsorship competitively relevant in a market of countless native ads. Consumer data suggests that the public hardly ever believes an ad completely. The skeptism in the market is the reason why brands should be very much aware of the content which they are sponsoring. An improper and inappropriate sponsorship would only create a feeling in the viewers that the publication is influenced and unauthentic. Conclusion From the above discussion, it can be concluded that the practice of native advertising can be ethically wrong at times, especially due to the increasing number of native ads which are taking place every day. Ethical concerns include insufficiently deceptive advertising and non-compliance with stakeholders interests. Many organizations likeNetflixand Microsoft have always aimed at making a good brand image through various forms of CSR marketing as a preventive measure, so that they can gain the trust of the public in a market full of ethical concerns and skeptism. Consumer segmentation and stakeholders analysis should be done by brands before placing a native ad, as per the recommendations in the report. Market and consumerdatasuggeststheimportanceofproperandappropriatesponsorship,since competition in the market and skeptism among consumers are ridiculously high. It is important to note that these strategies which have been recommended are for the brand image of the companies, which implies that consideration of profitability have been done prior to the formulation of the recommendations.
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10MARKETING AND RESPONSIBILITY References Barbieri, N., Silvestri, F. and Lalmas, M., 2016, April. Improving post-click user engagement on native ads via survival analysis. InProceedings of the 25th International Conference on World Wide Web(pp. 761-770). International World Wide Web Conferences Steering Committee. Bhattacharya, C.B., 2016. Responsible marketing: Doing well by doing good.GfK Marketing Intelligence Review,8(1), pp.8-17. Ferretti, V., 2016. From stakeholders analysis to cognitive mapping and Multi-Attribute Value Theory: An integrated approach for policy support.European Journal of Operational Research,253(2), pp.524-541. GarcÃa-Nieto, A.P., Quintas-Soriano, C., GarcÃa-Llorente, M., Palomo, I., Montes, C. and MartÃn-López,B.,2015.Collaborativemappingofecosystemservices:Theroleof stakeholders׳profiles.Ecosystem Services,13, pp.141-152. Iglesias, O., Markovic, S., Singh, J.J. and Sierra, V., 2019. Do customer perceptions of corporate services brand ethicality improve brand equity? Considering the roles of brand heritage, brand image, and recognition benefits.Journal of Business Ethics,154(2), pp.441- 459. Kamerer, D., 2017. Native advertising: A close look at an emerging advertising unit.Journal of Digital & Social Media Marketing,5(3), pp.303-316. Lawless, J., 2018. Microsoft and the Future of AI.
11MARKETING AND RESPONSIBILITY Marketing-schools.org. (2019).Ethical Marketing | What is Ethical Marketing?. [online] Availableat:http://www.marketing-schools.org/types-of-marketing/ethical-marketing.html [Accessed 4 Mar. 2019]. Öztayşi,B., Gokdere,U., Simsek,E.N. andOner,C.S.,2017. Anovelapproachto segmentation using customer locations data and intelligent techniques. InHandbook of Research on Intelligent Techniques and Modeling Applications in Marketing Analytics(pp. 21-39). IGI Global. Piccolo, S., Tedeschi, P. and Ursino, G., 2017. Deceptive advertising with rational buyers. Management Science,64(3), pp.1291-1310. Donghua University Press. Egan,B.D., 2017. Can the sanctity of journalism be maintained in an era of native advertising? Case study of Netflix.Journal of Digital & Social Media Marketing,4(4), pp.339-351. Forbes.com. (2019).The World's Most Reputable Companies For Corporate Responsibility 2018. [online] Available at: https://www.forbes.com/sites/vickyvalet/2018/10/11/the-worlds- most-reputable-companies-for-corporate-responsibility-2018/ [Accessed 8 Mar. 2019]. Ulke, A.K. and Schons, L.M., 2016. CSR as a selling of indulgences: an experimental investigation of customers’ perceptions of CSR activities depending on corporate reputation. Corporate reputation review,19(3), pp.263-280.