Corporate advertising

Corporate advertising

One of the easiest and fastest ways to communicate an organization’s identity is through advertisement. To be successful any corporate advertisement should be strategic and consistent. Strategic means looking at the company’s future and consistent means that the advertisement must fit with the company’s vision.

What is corporate advertising?

According to the book “Corporate Communication”, by Paul A. Argenti corporate advertising can be defined as “paid use of media that seeks to benefit the image of the corporation as a whole rather than its products or services alone.” Product advertising in contrast brands only the product itself. A major difference between corporate and product advertising is, who is paying for it. Product advertising will be charged to the marketing department whereas corporate advertising is paid by the corporate communication department or the CEO’s office.
There are three categories of corporate advertisement: Image advertisement, financial advertisement and issue advocacy. Those different advertisement purposes are used to reinforce identity, enhance reputation, to attract investment and/or to influence opinions.

History of corporate advertisement in America

In 1908 the first corporate advertisement was initiated by the American Telephone and Telegraph Company (AT&T). With this advertisement it tried to defend its monolist status in the United States. A decade later many companies followed their idea. However, after World War II corporate advertisements disappeared until the 1970´s. Today, corporate advertising is highly visible and scrutinized by the public.

Who uses corporate advertising and why?

Over half of the largest companies in the USA do have corporate advertising programs. There is obviously a correlation between company size and corporate advertisement, which makes sense since lager companies have more discretionary income. Another observation is, that companies in controversial industries (e.g. cigarettes industry) are more likely to create corporate advertising programs, to enhance their reputation.
The reasons for companies to invest in corporate advertisement campaigns are to increase sales, to create a stronger reputation, and/or to recruit and retain employees.

Conclusion

Corporate advertising helps a company to communicate its messages to its constituencies. it is a quick and efficient way of communication but unfortunately at very high costs. The high costs combined with the difficulties in measuring the effects of corporate advertising will shy away some managers. However if the goals, aimed by corporate advertising, are met it will improve a company’s financial situation.


In Class:

In class we talked about the difference between corporate and product advertisement. Corporate advertisements think long-term in contrast to most product advertisements and have to be consistent with the company’s vision. Afterwards we viewed pictures of several advertisements and discussed which purpose they are having.

Product advertisement:

Corporate advertisement:

The purpose would then be one of the corporate advertising goals, increase sales, create a stronger reputation, and/or recruit and retain employees. The second thing we looked at was whether this advertisement was a corporate or a product advertisement. If it was a corporate advertisement we further distinguished between the different kinds of corporate advertisement, as there are reinforce identity, enhance reputation, attract investment and/or influence opinions. Last but not least we decided which constituents are addressed with the advertisement.


Examples / Experience:

A good example for corporate advertising is the company Bayer AG. This company always had corporate advertisements, but especially after the Lipobay scandal, they tried to improve their damaged company image, through advertisements for Bayer itself.

Another example of corporate advertising, are maybe also the TV advertisements for universities in the USA. In Germany I have never seen any commercial for a university. In the USA universities are promoting their university, with the purpose of attracting new students.


Links:

AT&T advertisement of 1908:
http://www.corp.att.com/history/milestone_1908.html

Definition of corporate advertising:
http://en.mimi.hu/marketingweb/corporate_advertising.html

Homepage of the Bayer AG:
http://www.bayer.com/en/Homepage.aspx