Corporate Advertising

Corporate advertising is defined as the use of paid media to enhance the company’s image rather than just promote its products or services. Corporate advertising should brand a company the way product advertising brands a product. Bigger the company, the more likely it is to have a corporate advertising program. It is also used heavily by companies within more controversial industries like cigarette, oil, pharmaceutical companies etc. It presents a clear identity based careful assessment of its overall communication strategy and generally falls into three broad categories:

• Image advertising
• Financial advertising
• Issue advocacy
  

Purposes of corporate advertising

Strengthen or rebuild image

Corporate advertising helps in the formation of an identity for the organization. It also provides means for differentiating itself from competitors. Companies also use corporate advertising to reinforce their identity following structural changes like merger or after a crisis. Examples are Tyco using corporate advertising to rehabilitate its image after the corporate fraud by former CEO Dennis Kozlowski and former CFO Mark Swartz. In 2005, Tyco won the best corporate advertising award from IR Magazine.

To attract investment

Financial-relations corporate advertising is one important tool companies use to enhance their images in the financial community. This kind of advertising can stimulate interest in a company’s stock. Among different criteria “strength of management” was the number one factor in influencing decisions to invest in a company. James Gregory of Corporate Branding LLC explains that the CEO’s ability to paint a picture of the company’s future is the linchpin of a successful corporate advertising campaign. Hence companies’ CEOs are often featured in corporate advertisements aimed at financial communities. Thomas Garbett also asserts that corporate campaign ensures that company’s shares are not overlooked or undervalued.

To influence opinions

This type of advertising is often called issue or advocacy advertising. It is used by companies to respond to external threats from government or special interest groups such as environmentalists. Amway ran a series of ads that positioned the company as environmentally aware. Another famous example is Mobil Oil’s series of issue advertisements which ran for over 20 years. When sending across a message companies also needs to make sure that it does not leave any room for criticism.

To increase sales

The relationship between corporate advertising and sales is not very clear. Corporate advertising eventually boosts sales but not immediately or directly. ROI are usually not immediate and this creates a problem for managers trying to introduce corporate advertising into companies that have a heavy financial orientation.

Create a stronger reputation

Good corporate advertising creates goodwill and enhances reputation. Good advertising lets constituents know what the organization is about. Reputation is enhanced if it provides benefits people are not aware of. It is also done through the endorsement of a third-party-organization. One very important aspect is credibility of the advertisement.

Recruit and retain employees

Communicating with employees is one of the most critical activities for any organization. It also indirectly boosts morale among employees. Good corporate advertising also attracts the best talents both at the entry level and senior positions.


References:

Suzanne Vranica, “Tyco Aims to Put Its Woes Behind It,” The Wall Street Journal, June 15, 2004.

James R. Gregory, “The Impact of Advertising to the Financial Community,” BusinessWeek special publication, 1999.

Thomas F. Garbett, “When to Advertise Your Company,” Harvard Business Review, March-April 1982, Corporate Advertising