Advertising

Advertising traditionally has been used as a tool of marketing to inform and persuade potential customers to buy a particular product or service. Advertising is also used to reinforce beliefs among existing customers. Advertising typically is seen as brand communication using various persuasive strategies and tactics to enthuse or entice the target audience through paid space and time by using one or more mass media channels. At the same time, one sees many advertising campaigns that are not really talking about any brand per se but about companies that manufacture or service those brands. This is so because the potential of advertising has been recognized in helping position an organization in a manner that its reputation is enhanced. Some recent empirical research studies suggest that a good corporate image and reputation may lead to better customer loyalty.

Corporate image can be described as the overall impression on the minds of the public about a company. The image is constructed on many variables, including the experience a customer has had with the brand. Some research studies suggest that companies that set aside higher budgets for marketing communication, particularly advertising, are able to achieve high intangible market-based assets and better financial performance, which in turn helps build a stronger corporate reputation. The ad budgets of companies now often reflect exclusive funds for a specific genre of advertising known as corporate advertising, with the aim of building a desired image.

An empirical study on consumer behavior released in 2012 among consumers in 15 markets around the world with a sample of 10,000 respondents by APCO (Margery Kraus founded APCO Associates in 1984 as a subsidiary to Arnold & Porter, an international leading law firm), a global public affairs and communications firm, has led to some significant insights on the impact reputation has on the sales of 500 global brands. The top brands were represented by a cross section of industries, including retail, automotive, and consumer packaged goods, besides tech companies such as Apple, Dell, HP, Google, Yahoo, and China’s Baidu.

Seventy-seven percent of the respondents believed that companies had a bigger impact on their lives at the time of the survey than a decade previously. Fifty percent felt that global companies had a bigger impact on their lives than the government. Sixty percent felt that companies now undertook functions that previously fell in the domain of governments.

When asked if it was as important for them to know how a company operated as it was to know what it sold, 25% “strongly agreed” and 42% “somewhat agreed.” A higher percentage of respondents from countries with developed economies agreed that companies now play a bigger role in society and thus have larger obligations. There was evidence to suggest that this trend was growing in developing economies, as 56% of respondents from these economies felt that companies had a bigger impact on their life than government, compared with 36% of respondents from developed economies.

Corporate advertising, which is also known as institutional, public relations (PR), advocacy, cause-related, or issue advertising, is used in the belief that good reputation earns goodwill and achieves better profitability for the organization. Companies have used corporate ad campaigns at various times and in various situations, such as at launch time, during acquisitions or mergers, while taking a stand over an issue of propriety, or when combating criticism. A corporate ad campaign could include a company’s core characteristics and traits, such as its core values, human assets, policy, facilities, ideas and standards, skills, technology, stock market position, share value, and social contribution. It is not uncommon for critics of advertising to characterize corporate advertising as a costly self-indulgence and a waste of money.

The research company Benson and Benson has identified 14 distinct major subjects and more than 200 subtopics under what can be termed as corporate advertising. The agency made this analysis in preparation of its codes for the systematic tracking of corporate advertising. The subject list covered diversity, technology, ecology, corporate social responsibility, major capital investment, consumerism, financial performance, economic factors and regulations, recruitment and labor relations, acquisitions and mergers, name change or protection, productivity, and corporate activity.

This entry discusses the objectives and benefits of corporate advertising and three types of corporate advertising: (1) institutional advertising, (2) PR advertising, and (3) cause-related advertising. It then provides some detailed examples of cause-related advertising and further discusses the relationship between advertising and corporate reputation.

Objectives of Corporate Advertising

A corporate ad campaign may be launched by a company with one or more of the following objectives:

• To educate, inform, or enthuse stakeholders with regard to the company’s policies, functions, facilities, ideals, and standards
• To create a favorable opinion about the company by stressing its core competence in one or more fields
• To help build a reputation of being a responsible corporate citizen
• To create confidence in the investing community
• To attract good talent for future employment
• To motivate internal stakeholders and create a sense of respect for the company for which they work

Benefits of Corporate Advertising

Corporate advertising may not be measurable in tangible terms but is seen as a good return on investment. Some of the benefits in the long run include the following:

• It informs the outside world about the contributions the organization has made beyond commercial interests.
• It provides a human face to the organization.
• It creates a sense of pride and belonging among employees.
• It subtly conveys the organization’s role in making the society a better place to live in.
• It creates empathy among the communities surrounding the organization.

Types of Corporate Advertising

Institutional Advertising

Institutional advertising entails creating a promotional message keeping in view one or more aspects of a company’s core philosophy or its contribution that would place it in a unique position vis-à-vis its competition and enhance its reputation in society.

The reason why a large organization or a business conglomerate with diverse business interests uses institutional advertising is often to establish a coherent reputation across its various businesses. Through such advertising, the aim is to gain the positive opinion of the stakeholders so that any brand from its stable would be perceived as a quality brand.

As a part of image buildup, a company may leverage a corporate social responsibility gain in its institutional ad campaign to create a certain image for the organization. For instance, Coca-Cola Company, which has faced criticism from many nongovernmental organizations (NGOs) and civil society groups for depleting the local water table in some water-scarce states in India, undertook water-harvesting projects under its corporate social responsibility program to help local communities overcome the water scarcity. The company has leveraged these projects through its testimonial institutional ads from time to time.

Another example of institutional advertising is Apple’s “Think Different” campaign, launched in 1997, which won it critical acclaim. In this ad campaign, Apple wasn’t even talking about itself, but there was no mistaking that the ad reflected the DNA of the company.

With a voice-over rendered by Richard Dreyfuss, the text went as follows:

Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes…. And while some may see them as the crazy ones, we see genius. Because the people, who are crazy enough to think they can change the world, are the ones who do. (Apple, n.d.)

The one-minute commercial featured black-and-white footage of some legendary personalities of the 20th century representing various fields, including Albert Einstein, Martin Luther King Jr., Thomas Edison, Muhammad Ali, Ted Turner, Mahatma Gandhi, Amelia Earhart, Alfred Hitchcock, and Pablo Picasso. The commercial ended with the image of a young girl opening her closed eyes, followed by “Think different” and the company’s symbol—a partly bitten apple. Analysts said that the advertisement was meant to signal that its founder, Steve Jobs, was back at the company after being ousted from it in 1985 and to play up Jobs’s iconoclastic image.

Some institutional ad campaigns may also aim at creating awareness about the legacy of the company to project a robust image among the external publics. For instance, the Tata Group, an Indian conglomerate, after completing 100 years ran an elaborate campaign in the mainstream media talking about the contribution of the founders of its various businesses. Tata brands often carry the tagline “A product from Tata’s,” thus subtly communicating Tata’s promise of quality for its various old and new products and service brands. In addition, during the 1990s, Tata released an institutional ad campaign in which it encouraged internal stakeholders to speak their mind and not fall prey to sycophancy in the larger institutional interest of achieving excellence.

PR Advertising

Managing corporate reputation traditionally has been the function of PR. To enable a company to communicate a desired image in a coherent manner, PR often has used paid space with controlled messaging to reach out to its constituent publics, which is generally not possible through free coverage or third-party endorsement. A PR ad campaign may be undertaken to inform the public specifically about an issue to garner support or understanding. At other times, a PR ad campaign may be undertaken after a crisis situation, such as a product boycott, a critical media report, or an NGO exposé, that puts it in a bad light. In circumstances such as these, companies often use the paid-communication route to present their point of view without the fear of the media not reporting on the point of view expressed in a press release.

Popular global chocolate brand Cadbury found itself in a huge crisis of negative public perception in India in 2003 after a couple of its chocolate bars were found infested with worms. One of the business channels in fact showed crawling worms in a bar. The first reaction of the company was that it was not at fault; the reason for infestation could be the storage conditions at the retail outlets. With this statement, the company not only annoyed thousands of its retailers but also ran the risk of projecting itself as a buck-passing and noncaring company. It soon realized its folly, but it needed an action plan to win back the people’s trust. Cadbury first took the corrective action of double packaging the chocolates, which was followed by a public information ad campaign named Project Faith, explaining why infestation would not happen again, using popular veteran Indian film actor Amitabh Bachchan in its ads. The brand is said to have made up its lost sales in about six months’ time. However, Cadbury may have been less likely to withstand the crisis had it not been for decades of building relationships with key stakeholders; customers may have seen the incident as an aberration and not the rule.

Yet another version of PR advertising seen very frequently in countries such as India occurs when central and state governments issue large ads periodically on their “achievements” in an exercise of image building. Two NGOs challenged these ads in India, and in 2015, the Supreme Court in India issued a ruling restricting the use of photographs of political leaders and other prominent persons in government-funded advertisements. The court said the photos link individuals with government projects, creating the potential for a “personality cult.”

PR-based ads, unlike brand ads, mostly consist of copy with little or no graphic support. At times, it could even be the full text of the press release issued to the media. The language often is simple, concise, and straightforward, with a view to inform and educate and not necessarily to stimulate an action.

Cause-Related/Advocacy/Issue Advertising

A communications approach wherein an organization takes up or supports a cause and associates itself publicly with such a cause is known as cause-related/advocacy/issue advertising. In some respects, it may resemble PR advertising, except that the message represents advertisers’ point of view on the subject. The examples that follow illustrate various reasons and strategies behind such campaigns.

Focusing on Issues to Advertise Brand

Fashion and lifestyle company Benetton’s brand campaigns do not talk about its merchandise but about issues such as racism, the impact of war, forbidden love, and HIV/AIDS, among others. The brand has garnered criticism on more than one occasion for its provocative visuals, but it has not changed its decision to use relevant issues in its campaigns. Coming from a lifestyle and fashion company, this seemed odd in the beginning, but there is no gainsaying that the strategy has paid off well in giving a unique positioning plank to the brand.

Advertising to Promote Image of Responsibility

There are companies that market products, such as tobacco and liquor, that can’t be advertised in some countries. These companies often take up cause-related advertising with an aim to subtly fight negative perceptions because of the products they are associated with and to be seen as responsible corporate citizens. For instance, Bacardi Limited had Michael Schumacher, the seven-time Formula One winner, appear in ads that were part of its campaign “Champions Drink Responsibly.” The campaign appeared in 35 markets on television, in print, and in online media. The basic crux of the campaign was that drinking and driving don’t mix. So the message was “If I go out for a drink, someone else does the driving.”

Using Public Events in Advertising

An unprecedented happening in the society may also draw a response from the corporate world to express its angst or stand. After the communal riots in India in 1992, some organizations released campaigns that expressed their sentiments. For instance, the public sector company Steel Authority of India released a print ad depicting a smear of blood with this copy:

Chances are your child will see blood on this page, not ink. There’s a lot we need to teach our children. To read. To write. To work for a better life. To care for people around them. To live in harmony and peace. Let’s act today to solve our tomorrow. With the will of steel. (Steel Authority of India, n.d.)

Advertising and Corporate Reputation

A greater demand for accountability and transparency from businesses and the proliferation of blogging and social networking sites have served as a wakeup call for companies to invest in reputation management. Some research studies in India have reflected an increase in corporate advertising budgets vis-à-vis brand advertising in recent years. The ad measurement research agency TAM Adex reflected a 40% jump in the volume of corporate image advertising on television in 2011 over 2010. Commenting on the trend, the Indian business newspaper The Economic Times wrote,

At a time when questions are increasingly being raised over corporate governance and corporate greed, companies are turning to advertising that focuses on their core values and contribution to society rather than just the products or services they seek to sell. (Dewan, 2011)

It is expected that in the future the return on investment on corporate advertising vis-à-vis the reputation of companies will be a subject of scrutiny and scientific analysis.