Corporate Advertising is the easiest and fastest option for organizations to communicate their identity. Any corporate advertising campaign should be either strategic, looking toward the future of the company so that is has longevity; or it should be consistent, in keeping with images of products or businesses of the company.
What is Corporate Advertising?
Corporate advertising is the paid use of media that seeks to benefit the image of the corporation as a whole rather than its products or services alone. Product and corporate advertising though should share a common strategy because they both contribute to a company’s image. A major difference between corporate and product advertising is that while corporate advertising is financed through the corporate communication department, product advertising is financed through the marketing department. Corporate advertising generally falls into three broad categories, image advertising, financial advertising, and issue advocacy.
Image advertising is used to strengthen a company’s identity. This can be in order to enhance the current identity or i.e. if the company modifies its long-term strategy and needs to adapt its image respectively. Another reason might be if companies merge or enter new businesses. Image advertising is important, because a company needs to differentiate itself from competitors.
Financial advertising has the purpose to investment. This kind of advertisement shall attract investors and stimulate interest in a company’s stock. Sometimes a strong financially oriented corporate advertising campaign can even increase the price of a company’s stock. A study conducted by the Kellogg School of Business, confirmed that financial advertising indeed does have a statistically significant positive effect on stock prices.
Issue or advocacy advertising has the purpose to influence opinions. It is often used by companies to respond to external threats from either government or special interest groups. Issue advertising became popular in the late 1970’s to meet the challenges of what was perceived as anti-business media. It is difficult though to compose a message that is suitable for everyone, because there is a trade-off between satisfying everyone and dilution of the power of the messages. If a company decides to pursue an advocacy campaign, the entire senior has to be behind it and be able to support the subject of the message with forceful arguments. Therefore, extreme caution and a full understating of the issue are prerequisites if a company decides to pursue such a campaign.
A Brief Historic Insight of Corporate Advertising in America
According to Thomas Garbett, the earliest corporate ad started in 1908 by AT&T. A decade later many companies started running corporate advertisements. By the mid-century it was called “institutional advertising” and was widespread throughout the United States. Some companies, such as Lucky Strike, were doing a hybrid between product and image ad. After the Second World War, corporate advertising faded from view until its revival in the 1970’s. Nowadays corporate advertising is pretty widespread and intensely observed by constituencies. Advertising has also gained recognition by investors and Wall Street analysts regardless of whether it is a financial advertisement or not. Even equity analysts often discuss companies’ advertisement in their research reports.
Who Uses Corporate Advertising and Why?
Over half of the largest industrial and nonindustrial companies in the United States have corporate advertising programs of one sort or another. There is usually a positive correlation between the size of the company and the use of advertising. Companies within controversial industries, such as the cigarette industry, spent even more on corporate advertising than companies from “regular” industries. The relationship between corporate advertising and though is not as clear as the relationship between product advertisement and sales. Yet, corporate campaigns indirectly contribute to an increase of sales. Nevertheless, it is difficult to determine to which part corporate ads contribute to an increase of sales. But generally corporate advertisements primarily contribute into creating a stronger reputation. As mentioned before, corporate advertisement usually addresses to all stakeholders. Employees are stakeholders as well and therefore are also constituencies of the advertisements. Corporate advertisement, does not only help to build moral along employees, it can also arouse future employees’ interest in a company. Furthermore, this can help to attract new and creative talents as future employees.
Examples:
A good example of how advertising can help to enhance reputation is the advertisement of Pepsi in 1993. Pepsi was this time under a crisis due to wrongful accusation that someone had allegedly found a syringe in a Pepsi can. It turned out that this story was a swindle. Thereupon Pepsi run a full page advertisement in over 200 newspapers with the ad reading: “Pepsi is pleased to announce … nothing. As America now knows those stories about Diet Pepsi were a hoax. Plain and simple not true.” Ending with an invitation “Drink all the Pepsi you want. Uh huh.” Pepsi displayed with this advertising that the quality of its products is faultless and could maintain its reputation.
An example where advertising can go wrong is this of Benetton, a clothing company. With very provocative and obnoxiously images, Benetton started a shocking advertising campaign in the 1990’s. The ads were perceived by the public as scandalous and disgusting. The result was that Benetton rapidly lost an enormous amount of market share from which it could never recover.
Experiences:
I remember when this small Italian restaurant opened in the neighborhood. Its meals were delicious and the prices very fair. Almost three months after its opening it could not really establish and build a customer base that would allow this business to exist in the long-run. Finally, the owner decided to advertise, expressively mentioning its lunch-special. Only a couple of days later this place had enormous difficulties to manage the torrents of new customers. This shows how effective advertising (in this case “increase sales advertising”) can be even for small businesses.
One can also experience how pervasive advertising nowadays is, by taking a closer look to phrases that established in everyday use and their origin is from big advertising campaigns running through various media channels.
References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 87-100.
Links:
http://www.ana.net/
http://query.nytimes.com/gst/fullpage.html?res=990CE2D81E3FF930A35751C0A963958260
http://ipsnews.net/news.asp?idnews=39750
http://www.iht.com/articles/2008/04/09/technology/naked.php
http://ezinearticles.com/?Artists-are-Critical-of-Corporate-Advertising-in-a-Hypocritical-Way&id=454601
What is Corporate Advertising?
Corporate advertising is the paid use of media that seeks to benefit the image of the corporation as a whole rather than its products or services alone. Product and corporate advertising though should share a common strategy because they both contribute to a company’s image. A major difference between corporate and product advertising is that while corporate advertising is financed through the corporate communication department, product advertising is financed through the marketing department. Corporate advertising generally falls into three broad categories, image advertising, financial advertising, and issue advocacy.
Image advertising is used to strengthen a company’s identity. This can be in order to enhance the current identity or i.e. if the company modifies its long-term strategy and needs to adapt its image respectively. Another reason might be if companies merge or enter new businesses. Image advertising is important, because a company needs to differentiate itself from competitors.
Financial advertising has the purpose to investment. This kind of advertisement shall attract investors and stimulate interest in a company’s stock. Sometimes a strong financially oriented corporate advertising campaign can even increase the price of a company’s stock. A study conducted by the Kellogg School of Business, confirmed that financial advertising indeed does have a statistically significant positive effect on stock prices.
Issue or advocacy advertising has the purpose to influence opinions. It is often used by companies to respond to external threats from either government or special interest groups. Issue advertising became popular in the late 1970’s to meet the challenges of what was perceived as anti-business media. It is difficult though to compose a message that is suitable for everyone, because there is a trade-off between satisfying everyone and dilution of the power of the messages. If a company decides to pursue an advocacy campaign, the entire senior has to be behind it and be able to support the subject of the message with forceful arguments. Therefore, extreme caution and a full understating of the issue are prerequisites if a company decides to pursue such a campaign.
A Brief Historic Insight of Corporate Advertising in America
According to Thomas Garbett, the earliest corporate ad started in 1908 by AT&T. A decade later many companies started running corporate advertisements. By the mid-century it was called “institutional advertising” and was widespread throughout the United States. Some companies, such as Lucky Strike, were doing a hybrid between product and image ad. After the Second World War, corporate advertising faded from view until its revival in the 1970’s. Nowadays corporate advertising is pretty widespread and intensely observed by constituencies. Advertising has also gained recognition by investors and Wall Street analysts regardless of whether it is a financial advertisement or not. Even equity analysts often discuss companies’ advertisement in their research reports.
Who Uses Corporate Advertising and Why?
Over half of the largest industrial and nonindustrial companies in the United States have corporate advertising programs of one sort or another. There is usually a positive correlation between the size of the company and the use of advertising. Companies within controversial industries, such as the cigarette industry, spent even more on corporate advertising than companies from “regular” industries. The relationship between corporate advertising and though is not as clear as the relationship between product advertisement and sales. Yet, corporate campaigns indirectly contribute to an increase of sales. Nevertheless, it is difficult to determine to which part corporate ads contribute to an increase of sales. But generally corporate advertisements primarily contribute into creating a stronger reputation. As mentioned before, corporate advertisement usually addresses to all stakeholders. Employees are stakeholders as well and therefore are also constituencies of the advertisements. Corporate advertisement, does not only help to build moral along employees, it can also arouse future employees’ interest in a company. Furthermore, this can help to attract new and creative talents as future employees.
Examples:
A good example of how advertising can help to enhance reputation is the advertisement of Pepsi in 1993. Pepsi was this time under a crisis due to wrongful accusation that someone had allegedly found a syringe in a Pepsi can. It turned out that this story was a swindle. Thereupon Pepsi run a full page advertisement in over 200 newspapers with the ad reading: “Pepsi is pleased to announce … nothing. As America now knows those stories about Diet Pepsi were a hoax. Plain and simple not true.” Ending with an invitation “Drink all the Pepsi you want. Uh huh.” Pepsi displayed with this advertising that the quality of its products is faultless and could maintain its reputation.
An example where advertising can go wrong is this of Benetton, a clothing company. With very provocative and obnoxiously images, Benetton started a shocking advertising campaign in the 1990’s. The ads were perceived by the public as scandalous and disgusting. The result was that Benetton rapidly lost an enormous amount of market share from which it could never recover.
Experiences:
I remember when this small Italian restaurant opened in the neighborhood. Its meals were delicious and the prices very fair. Almost three months after its opening it could not really establish and build a customer base that would allow this business to exist in the long-run. Finally, the owner decided to advertise, expressively mentioning its lunch-special. Only a couple of days later this place had enormous difficulties to manage the torrents of new customers. This shows how effective advertising (in this case “increase sales advertising”) can be even for small businesses.
One can also experience how pervasive advertising nowadays is, by taking a closer look to phrases that established in everyday use and their origin is from big advertising campaigns running through various media channels.
References:
Argenti, Paul A. (2007). Corporate Communication (4th ed.). New York, NY: McGraw Hill, pp. 87-100.
Links:
http://www.ana.net/
http://query.nytimes.com/gst/fullpage.html?res=990CE2D81E3FF930A35751C0A963958260
http://ipsnews.net/news.asp?idnews=39750
http://www.iht.com/articles/2008/04/09/technology/naked.php
http://ezinearticles.com/?Artists-are-Critical-of-Corporate-Advertising-in-a-Hypocritical-Way&id=454601
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