An exploratory study of television advertising practices: do profitability and organization size affect clearance formality?

Introduction

Local television station managers have more responsibility for advertising clearance due to the demise of the National Association of Broadcasters Television Code (U.S. v. NAB 1982) and the relaxation of the Federal Communications Commission's deceptive advertising policies (Elimination 1985). But what factors might temper the advertising clearance decisions individual broadcasters make? A national mail survey of commercial television sales managers was conducted to examine if clearance formality varies by organization (or station) size and profitability level. Clearance formality is defined in this study as the number of advertising policies or standards (e.g., political advertising) a station has, the number of sources (e.g., the Better Business Bureau) it usually consults when making advertising policy decisions, the types of ads a station bans and the form (e.g., written or verbal) in which these policies are usually communicated.

The FCC formerly expected stations of greater size and resources to make a correspondingly greater effort to screen deceptive ads (Center 1971), so these stations may still utilize more formal practices. Also, stations in large markets (e.g., the top 25), which are often quite profitable, sell more of their commercial time inventory to national or regional spot advertisers (Wirth 1977). Large market stations may have more types of advertising standards because they deal with more types of advertisers, so their clearance practices may be more formal.

A second goal of this study was to test the preliminary proposal that different types of stations manipulate clearance practices to make their commercial airtime more attractive to viewers (and ultimately advertisers). Advertising may represent one part of the image a station presents to viewers to keep them watching. Broadcast managers believe it is important to maintain an overall vehicle content that produces the largest audience to sell to advertisers (Rotfeld 1990). They consider how well the style of a commercial matches the surrounding program. Managers also find it important to avoid ads which mislead or offend viewers, because such ads might potentially cause a station to lose loyal viewers (Rotfeld, Parsons, Abernethy & Pavlik 1990).

Management concern about viewers' responses appears valid. Viewers notice when the number of spots in a break increases (especially VCR owners, cable subscribers and viewers between 18 and 34) and develop negative attitudes about ads as a result (Mord & Gilson 1985). If viewers notice changes in commercialization levels, they may also notice if a station begins to accept potentially "offensive" ads for contraceptives or infomercials for baldness or impotence cures (Federal Trade Commission 1990; FTC vs. California Pacific 1989). Preliminary evidence provides support, as the residents of one state apparently noticed increases in commercialization, the number of infomercials (or program-length commercials) and the number of "dishonest" ads (Wicks 1990). Experimentation with clearance may make a station less attractive to viewers in relation to cable and VCR. It may also make a station less attractive to advertisers because of the possible loss of a desirable segment of viewers.

A third goal of this study was to build upon previous research and set findings in a theoretical context. Maddox and Zanot (1984) noted that the NAB TV Code's demise shifted the clearance burden from the Code Authority to the network clearance departments, advertising industry and local stations. It thus seems useful to find out which clearance standards are used by stations nationwide. Linton (1987) reported that stations used written and verbal means to communicate advertising policies, most stations have standards for certain advertising problem areas and some still consult the former NAB Code as a policy source. This study replicates Linton's categorization of how ad policies are communicated in a national study. It also expands the number of advertising policy standards and sources local stations were polled about, using the regulatory and self-regulatory literature and former FCC requirements as a base. Zanot (1985) explained the clearance procedures used by major advertisers who use agencies and national media. This study examines local station ad clearance. It complements contemporary ad clearance research (Rotfeld, Abernethy & Butler 1990; Rotfeld, Abernethy & Parsons 1990; Rotfeld, Parsons, Abernethy & Pavlik 1990) by examining different clearance measures and polling sales managers rather than station managers. The study also attempts to explain findings using organizational theory and broadcast policy research.

Literature Review

Review of the Organizational

Literature

Organizational theory suggests why and how differences in clearance formality may exist. Because the sales manager is responsible for reviewing all ad copy and recorded commercials and the traffic manager is responsible for monitoring ad content (McCavitt & Pringle 1986), both may be defined as bureaucrats. Bureaucrats are the members of management who stand between top policy makers and workers (Dubin 1958). Bureaucracy refers to an organization's administrative component, which is responsible to top management for coordinating and executing policy (Beetham 1987).

Size is the most important cause of bureaucracy. As organization size increases, more types of tasks are carried out by more specialized staffs (Dubin 1958). So, the clearance process is diffuse and employees such as the operations manager, legal counsel or clearance officer may be involved. However, sales and traffic are always involved in clearance, because these two departments are primarily responsible for reviewing ad content. Sales personnel negotiate changes in ad content with clients (Rotfeld, Abernethy & Parsons 1990), and the traffic manager (who is supervised by the sales manager) must always be told whether to schedule an ad for broadcast (McCavitt & Pringle 1986). Ultimately, the general manager decides whether to …