Ethical Questions and Promotions Assignment
Regine C. Rhine
School of Business, Liberty University
Externalities are among the main reasons governments intervene in the economic sphere.
Consumption, production, and investment decisions of individuals, households, and firms often
affect people not directly involved in the transactions. Sometimes these indirect effects are tiny.
But when they are large they can become problematic—what economists call externalities.
Negative externalities occur when the consumption or production of a good causes harmful effect
to a third party. This often results in an increased social cost as costs increases along with
production.
The two primary types of negative externalities are production and consumption,
meaning that companies overproduce goods or that consumers over-consume goods. Common
examples of negative externality include; Loud music played at night as an interruption to those
surrounding you. Production of chemicals that cause pollution as a side effect, and results in
fishermen becoming unwilling to catch fish and generate revenue. Congestion on a highways that
may impose on other people, and the building of a new road that may result in loss of existing
beneficial landscape (Montolio, 2019).
There are several methods for overcoming negative externalities that harmfully affect
populations. Imposing taxes is the first method which encourages businesses to use less harmful
materials when creative their material to reduce the negative externality that may be imposed on
others. Implementing rules and regulations such as no-smoking rules, are an example of another
method used in places of business, parks, public transportation, and other places which
encourages people to participate in safe healthy activities that don’t hold negative implications
on those surrounding them (Somerville, 2022). Giving charitable donations is another method
used by individuals and businesses to support organizations that help reduce or eliminate
altogether negative externalities. Lastly, requiring permits is a controlled method used to
overcome negative externalities in places such as bars, and factories to encourage safer operation
for the environment and others.
One particular negative externality not often discussed is oversexualized material in
uncensored advertisements. While this type of externality does not outwardly effect the economy
such as the examples above, the lack of censorship in material has a huge cognitive effect on
viewers of all ages. Ads often feature provocative images of sexualized women and men in
revealing outfits and postures selling products such as perfume, clothing, alcohol, and beauty
products. Major brands such as Calvin Klein, Victoria's Secret and Pepsi use these images to
cultivate a sexy media presence. Organizations believe sexualized content creates a strong brand
impression and positively influences consumer perception and loyalty. Whether the attention is
positive or negative, sex attracts the attention of an audience, and leads to more exposure of an
ad. In a UGA study, the former head of the Department of Advertising and Public relations
gathered that sexual imagery was found in 20% of ads published in the years 1983, 1993, and
2003 across popular magazines (Keller, 2020).
The inclusion of explicit ads has become so common, most consumers may not realize
the negative externalities associated with the content. Although it has been found that people
remember ads with sexual appeals more than those without, the effect does not extend to every
brand or product. It is obvious for some organizations such as charities, nonprofits, computer and
tech companies, education companies, and many more, sexual content is not an appropriate
approach. More significantly, sexually explicit content visible to children has negative
externality impacts. In a recent study, Primary school children were exposed to advertisements
that portrayed sexualized vs. non-sexualized children and then were asked to complete a math
test (Study 1 and Study 2) preceded by a working memory test (Study 2). As predicted, exposure
to sexualized images of girls hampered girls', but not boys', math performance (Study 1, N=79).
Findings from Study 2 (N=102) replicated Study 1's results for girls and demonstrated that
sexualized ads of boys disrupted boys' math performance as well, thus indicating that same-
gender sexualized images are disruptive for both girls' and boys' cognitive performance.
Moreover, the detrimental effect of same-gender sexualized images on both girls' and boys' math
performance was mediated by a reduction in working memory resources. These findings clearly
demonstrate the damaging effects of sexualized advertisements on children's cognitive
performance and suggest the urgency of implementing interventions aimed at combating
sexualization in early childhood, which transmits the cultural message that having a sexy (young
or adult) body is extremely important (Pacilli, 2016).
Futhermore, Advertisements to children are conveyed through several media, including
print, the Web, cell phones, movies, videos, and television. The effect of television viewing on
children has been studied, and described as contributing to subpar school performance, obesity,
increased requests for advertised products, and increased aggression. Using a nationally
representative data set, researchers found that each hour of daily television viewing before 3
years of age is associated with adverse cognitive outcomes at 6 and 7 years of age, even when
controlling for maternal education, IQ, and cognitive stimulation by the parents throughout early
childhood. Further evidence suggests that media have the ability to promote adult behaviors in
children, including tobacco and alcohol use and sexual activity. In particular, researchers found a
twofold increase in the rate of sexual intercourse in adolescents who had what was considered a
high level of exposure to sexual content on television. This finding is more worrisome in light of
an additional finding that 83% of television programs directed at adolescents include sexual
content (Leder, 2006).
While amount of over sexualized content seen by children, and the negative external
effects of too much consumption of this material is often deemed as a responsibility of the
parent, advertisers hold a clear responsibility in this issue. Children process content and material
different than adults as seen by the studies mentioned previously. If advertisers take the time to
research these cognitive effects and set censors in place for content that harm society’s children,
the first step of taking responsibility of this issue will be set in place. Law makers across many
states are in action to introduce bills that limit content deemed problematic, sexual, or offensive
from sites across webs. However, the legal issue comes into play as we examine the rights of
large digital companies who have high brand awareness. Protections should: Limit children's
exposure to unhealthy content through social media and other platforms curated by algorithms.
curb incentives to push inappropriate ads and other disturbing, even illegal, content to kids. And
control algorithmic amplification and UX/UI design that undermines users' choices and amplifies
negative content (Chen, 2019).
While this is a desirable step for technology, and the encouragement of ads being under tougher
censorship, companies can take an extra step by notifying users in fine print that their material is
not suitable for children. Companies who administer ads to consumers for businesses such as
Google have taken actionable steps for corporations to consider before uploading their content
and reaching their target audience. For sexual content specifically, Google ensures that that their
advertising policies states that the following is not allowed: Text, image, audio, or video of
graphic sexual acts intended to arouse and content promoting underage, non-consensual, or other
illegal sexual themes, whether simulated or real. Content that may be interpreted as promoting a
sexual act in exchange for compensation, along with content that is made to appear appropriate
for a family audience but contains adult themes, including sex, violence, vulgarity, or other
depictions of children or popular children’s characters, that are unsuitable for a general audience
is also not allowed. The company also places a limit to shocking content that has been seen to
have negative effects on children. This includes Promotions containing violent language,
gruesome or disgusting imagery, or graphic images or accounts of physical trauma, promotions
containing obscene or profane language and promotions that are likely to shock or scare.
Encouraging this censorship and mandating the policy for businesses is the first step to
advertisers taking responsibility to limiting the share of content that hold negative externalities
on a mass amount of people.
Ultimately, the encouragement of marketing researchers conducting further risk analysis
that their creative strategies and approach will have on their target market will reduce the
cognitive effects on vulnerable audiences. Companies make use of sexual appeal in advertising
now more than ever and lack the responsibility of providing censorship to avoid negative effects
of obscene content in children. Conducting qualitative analysis on how advertising effects
behavior along with investing in credible resources that provide information on the adverse
effects of mature content will likely lead to a more mindful approach and brand representation.
References
Chen, Y., & Yang, D. Y. (2019). The impact of media censorship: 1984 or brave new world? The
American Economic Review, 109(6), 2294-2332. https://doi.org/10.1257/aer.20171765
Keller, M., Walker, M., & Reutner, L. (2020). Sex sells? the role of female agency in sexualized
advertisements. Social Psychological Bulletin, 15(1)https://doi.org/10.32872/spb.2643
Leder, M. R., & French, G. M. (2006). Children's exposure to sexual images in the media, and
how to help protect your patients. Contemporary Pediatrics, 23(12),
55+. https://link.gale.com/apps/doc/A456345120/AONE?
u=anon~d3f6ecdb&sid=googleScholar&xid=5acec955
Montolio, D., & Planells-Struse, S. (2019). Measuring the negative externalities of a private
leisure activity: Hooligans and pickpockets around the stadium. Journal of Economic
Geography, 19(2), 465-504. https://doi.org/10.1093/jeg/lbx041
Pacilli, M. G., Tomasetto, C., & Cadinu, M. (2016). Exposure to sexualized advertisements
disrupts Children’s math performance by reducing working memory.Sex Roles, 74(9-10), 389-
398. https://doi.org/10.1007/s11199-016-0581-6
Somerville, T., & Wetzel, J. (2022). Environmental hazards: The microgeography of land‐use
negative externalities. Real Estate Economics, 50(2), 468-497. https://doi.org/10.1111/1540-
6229.12352
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