Advertising is the easiest and fastest way for organizations to communicate their identity. Any corporate advertising should be:
- Strategic (looking toward the future)
- and consistent (image advertisement should be not viewed as a separate corporate message)
In this blog entry I will describe the role of corporate advertisement of a company and how it can shape an organization’s image.
What is corporate advertisement?
According to the textbook “ 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,” (2007), p. 87. Product and corporate advertisement should reflect a unified strategy. This strategy should contribute to the company image. There are three broad categories of corporate advertisement: Image advertisement, financial advertisement and issue advocacy.
Advertising to Reinforce Identity or Enhance Reputation
Some companies use corporate advertisement to strengthen their identities following structural changes. As companies merge and enter new businesses, they need to explain their new vision, organization, and strategy to constituencies.
Advertising to Attract Investment
Companies can use this type of a corporate advertising to stimulate interest in a company’s stock among potential investors as well as buy-side and sell-side analysts. Especially corporate advertising does have a significant positive effect on stock prices.
Advertising to Influence Opinions
This kind of an advertisement is called issue or advocacy advertisement. The goal of issue advocacy advertising is to influence opinions. It used when a company’s environment challenges the status quo and, by doing this, threatens the company’s business.
History of corporate advertisements in America
AT&T was one of the first companies that used corporate ad. It started it in June of 1908 to defend his monopolist status in the United States. After the World War II, corporate ad faded from view until its revival in the 70s, when oil companies fought against allegations of exorbitant profits. Today this form of advertisement is highly visible and recognized by potential investors and should be aligned with the company’s vision.
Who uses advertising and why?
More than half of the largest companies within the US have corporate advertising programs. Usually there is a correlation between the size of a company and the use of advertisement. It is obvious that companies in controversial industries to enhance their reputation use it more. The goals of corporate advertisement are to increase sales (corporate ad can boost sales), create a stronger reputation or even to recruit and retain employees (very critical communication activity for any corporation).
From my point of view, corporate advertising is very important and essential for the success of any business. All companies use this tool to stimulate their sales or to create a stronger reputation. When Apple invited their new ipod, the company invested a huge amount of money in a advertisement campaign to stimulate their sales. This helped the company to inform new customers about the product and their firm. Another example would be the introduction of a new car. Without any advertisements a car manufacture would not be able to stimulate the sales. They have to make this kind of an ad to increase their sales and to payback their investments.
I worked for a bank in Germany and they created a new product with was almost unknown by all customers. They spend heavily in ads to show the benefits to the customers and employees. On the beginning I thought that this advertisement is not important and that the customers will know about the product in a while. But it was important for the company to gain new customers very shortly. The bank was afraid of imitators.