Unit 1: Advertising, Revenue and Regulation

Last update:1 April 2024

Key Topics

  • Analysis of advertising regulations
  • Application of regulations to current advertisements
  • Advertising revenue in different forms of media and digital communications companies
  • Ethical issues in following regulations set by different governments
Module 10 MIL

Learning Objectives

After completing this unit, educators and learners will be able to:

  • lnvestigate advertising as an important source of revenue for different forms of content production
  • Examine and assess the purpose and effectiveness of regulations in the advertising industry and the ethical issues involved in following regulations set by different governments
  • Apply existing regulations to current examples of advertising
  • Evaluate the impact of advertising on programming and media and digital content

Generating Revenues Through Advertising

We understand that for many content providers, making proft is a prime concern and one major means of receiving revenues is through advertisement. Different governments have different sets of advertising regulations for the media industry to observe. In this era of social media, individuals and businesses both earn advertising revenues from displaying paid advertisements on their websites, channels, or other platforms surrounding their Internet-based content.

Digital technology has been harnessed to change the character of advertising over the years. Previously, advertising was linked to particular content. An example is the assumption that an audience for stories about fashion would also logically be interested in the messages from clothing companies seeking to sell their wares. Today, as a result of profiling people based on digital data collection, adverts can appear in any content context, because the opportunity to target consumers is based on what is known about them rather than on any single content destination they may visit. This is why many websites ask if individuals accept tracking cookies that will enable them to receive “relevant” advertising wherever they may be online. This system, which is largely automated, often leads to a clash between the messages in advertising and the content messages, which can entail embarrassment to advertising brands which prefer to choose the content environment in which they feature.

Pedagogical Approaches and Activities

In summary: as discussed earlier in this Curriculum (Part 1), various pedagogical approaches are possible. Please review the list in Part 1 and decide which approach to apply to the suggested activities below and others that you may formulate.

The following pedagogical activities are used to explore the issues as described above:

  • Discussion: Given that advertising is a primary source of revenue for many media and digital communications companies; ln what ways can freedom of expression, freedom of the press or free access to information be compromised to please advertisers, big companies, or the government? What are the implications of this? Should government subventions to media and other information providers be transparent? Should publicly or privately funded content providers be answerable to the government upon receipt of advertising revenue?
  • Essay: ‘The primary aim of most content providers such as media and digital communications companies is to make profits.' Discuss this statement. Give arguments for and against this. How do content providers like Wikipedia operate without advertisement? What actions should be taken by citizens if content providers are found to be sacrificing the public good for advertising revenue? What actions could be taken? ls there a difference between a public broadcaster that uses advertising as a means of subsidizing its operations, and a commercial broadcaster which uses advertising as a means to make money for shareholders? ls there a difference in institutional logics between broadcasting to make money, or making money in order to broadcast, or do these begin to shade into each other?
  • Case study: Different governments might have different advertising regulations. Find a social media company (like WeChat) or search engine company (like Yandex) that is available in different countries and look into the advertising regulations set by those countries. Investigate if that social media / search engine follows the possible different regulations set in different countries and discuss issues like a) conflicts between revenues and public interest, b) the ethical issue between revenues and privacy when personal data is used for micro-targeting, and c) the public response to a) and b) in different countries, etc.
  • Research: Using the Internet, investigate the regulations that exist in your region for the advertising industry. Identify where the regulations are located for citizens needing to access this information. Identify what individuals or groups have created these regulations. Summarize the key areas that are covered by the regulations and explain their purpose. Explain how well they support the interests of citizens and consumers or not. Explain the potential impact of these regulations.
  • Apply the regulations to a variety of ads found in local media. Assess to what extent the regulations are being followed. Give specific examples from each ad to support your response. In instances where an advertisement violates the regulations, investigate the recourse available to consumers.
  • lnvestigate whether the needs of advertisers have affected the type or quality of programming or coverage in the media and social media as well as search. Is there an impact on priority placement on digital devices and platforms? Investigate advertising as a revenue model for a particular medium. For example, examine the schedule for prime-time television or radio programming as well as the priority given to certain content by digital communication companies in your region.
  • Comparative study: Use the research findings from above to compare with a selected country / region of your choice to see the similarities and differences between the two and the reasons behind this.
  • lnvestigate: Do basic research about different advertising techniques. Compare and discuss the distinctiveness, similarities and effectiveness of certain techniques. Consider for example techniques such as (there are others):
    • Emotional appeal
    • Promotional advertising
    • Bandwagon advertising
    • Facts and statistics
    • Unfinished ads
    • Complementing customers
    • Folk appeal
    • Patriotism
    • Hidden advertising such as paid-for product placement or undisclosed sponsorships underpinning 'influencer' endorsement
  • Educators should guide learners to apply their media and information literacy skills and own critical intelligence with regard to culturally inherited stereotypes, and to the images of women and men, girls and boys as portrayed in content - film and television, popular music, video and image-sharing platforms, newspapers and magazines. Begin with a review of stereotypes that are associated with men and women of all ages and their possible sources. Guide learners to deconstruct a series of advertisements based on gender representations and answer questions about gender stereotyping in articles they have read. (Adopted from the eGirls Project. See more potential activities in lesson plans )
    • Case study: Select a particular television or radio station and one from the Internet in the same region, and view or listen to a one-hour programme, listening to the ads broadcasted during this time. Explain the reasoning behind the placement of the ads during specific programmes. Also note any advertising or product placements that occur within the programmes themselves. Assess the effectiveness of the advertising strategies used during this time frame for reaching target audiences.
  • Project: Select one television and social media network and determine the products or services that you would choose to advertise during a particular programme or time slot. Explain your choices, identifying the target audience that could be reached during that time.
  • Case study on YouTubers:
    • Research: Make a ranking of the 10 most popular YouTubers and see how much they earn. Investigate how they generate revenue with questions such as: Does YouTube pay YouTubers to upload videos? Does it share ad revenue with them? Do companies pay them for brand placements? Do they survive on donations or patrons?
    • Definitions: Receiving advertising revenues from YouTubers comes in the form of:
      • Brand & Product Placements
      • Brand & Product Integration
      • Product Reviews
      • In-Video Shoutouts/ads
      • Affiliate Marketing
      • Super Chat
      • Patreon

Find out what they mean. See the Glossary Terms at the end of the MIL Curriculum to verify your answers.

Note

This exercise could also be adapted for use with newspapers, magazines, websites, etc.

Assessment & Recommendations

  • Ad analysis and assessment based on the regulations
  • Investigation and assessment of television programming, advertising and revenue

Topics for Further Consideration

  • Dynamic and mobile advertising
  • Social media advertising
  • Behavioural targeting
  • More on modern and digital advertising techniques