Corporate Advertising

Corporate Advertising

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  Of the many options available for organizations to communicate their identity, paid corporate advertising is the easiest and fastest. Any corporate advertising campaign should be:-
  Strategic – Looking toward the future of the company so that it will have longevity and won’t become stagnant or “old news.”
  Consistent – Image advertising cannot be viewed as a separate corporate message; rather it must fir with company vision.
  
  The History of Corporate Advertising in America
  
  According to expert Thomas Garbett, the earliest corporate ad paid for by the American Telephone and Telegraph Company (AT&T), started its run in June of 1908. The ad had, as its headline, “Telephone service, a public trust.” This ad had to be proliferated to defend its (then) monopoly status and combat the assumption that it couldn’t possibly be acting in the public’s interest because of the lack of competition.
  A decade later, many companies were running corporate advertisements. By midcentury, “institutional advertising,” as it was called, was widely used throughout the United States. During the World War II, use of this form of ad had increased because the company’s were unable to produce products for public; they were busy producing for the Army. But after the World War II, corporate advertising faded from view until its revival in the 1970s, when oil companies found themselves battling allegations of exorbitant profits during the oil crisis and companies again turned to corporate advertising to defend themselves.
  Today, corporate advertising is highly visible and intensely scrutinized by constituencies. Magazines from Advertising Age to Business Week to IR Magazine feature annual “best of” lists praising corporate campaigns deemed to be best overall or most memorable.
  
  How is it different from Product Ads?
  
  A major difference between corporate and product advertising is who pays for each of the two types of advertising. A company’s marketing department typically is responsible for all product-related advertising and pays for such ads out of its own budget. Corporate advertising, on the other hand, falls within the corporate communication area and either comes out of that budget or, in some cases, is paid for by the CEO’s office.
  
  
  
  
  Corporate advertising generally falls into three broad categories:-
  
  Image Advertising
  Financial Advertising
  Issue Advocacy
  
  Image Advertising – Many companies use corporate advertising to strengthen their identities following structural changes like entering a new business or merging with any other company. Since the company needs to explain their new vision, organization and strategy to constituents who may have known them well in an earlier incarnation but are struggling to understand the new organization.
  Tyco used corporate advertising to rehabilitate its image in the wake of corporate fraud by former CEO Dennis Kozlowski and former CFO Mark Swartz.
  
  Financial Advertising – This kind of corporate advertising can stimulate interest in a company’s stock among potential investors as well as buy-side and sell-side analysts. In a survey of 200 research analysts – “strength of management” was the number-one factor influencing the decisions to invest in a company. James Gregory of Corporate Branding LLC explains, “the CEO’s ability to paint a picture of the company’s future is the linchpin of a successful corporate advertising campaign.”
  The television campaign run by W.R. Grace in the early 1980s – “Look into Grace” series, highlighted the company’s financial and business attributes and then asked, “Shouldn’t you look into Grace?”
  
  Issue Advocacy – Issue or advocacy advertising is used by companies to respond to external threats from either government or special interest groups. Issue advertising typically deals with controversial subjects: it is a way for companies to respond to those who challenge the status quo. By taking issues directly to the consumer, companies can compete with journalists for a share of the reader’s mind. As a result, issue advertisements often are purposely placed on op-ed pages in prominent newspapers.
  Amway ran a series of ads that positioned the company as environmentally aware. One had a photograph of five Amway distributors and the headline “Find the environmental Activist.” The copy goes on to explain that everyone in the ad is an environmental activist and that all Amway distributors are committed to the cause of environmental awareness. The tag line reads “And you thought you knew us.”
  
  
  
  Who Uses Corporate Advertisements and Why?
  
  Cigarette companies, oil companies, pharmaceuticals and other large industrial companies all have image problems to deal with, from concerns about health, to drug recalls, to pollution. Overall, heavy industry spends more on corporate advertising than consumer-packaged-goods firms, which lead all other industries in product advertising.
  A good corporate advertising program can clarify and enhance a company’s reputation, and the absence of one can hurt packaged goods companies and retailers as well.
  
  Reasons companies invest in corporate advertising campaigns:-
  
• Increase sales – Through corporate advertising, companies can draw out features about themselves that they think will appeal to the public and, as a result, make consumers want to buy products from them.
• Create a Stronger Reputation – The best corporate ad creates goodwill and enhances reputation by letting constituencies in on what the organization is all about, particularly if it does beneficial things that people might not be aware of.
• Recruit and Retain Employees – Corporate advertising is an indirect way of building morale among employees. It can also help companies attract the bests and the brightest both at the entry level and for senor positions.