Advertising can turn a company around. There’s no denying that a few cleverly placed ads can do wonders for your product sales, but are they enough to win over the stony heart of the average investor? Research compiled by communications consultancy Corporate Branding suggests that perception of a company’s brand can affect its stock market performance by as much as 5 percent. Yet according to Hope Picker, director of research at communications agency Doremus, ‘Analysts will go to their deathbed denying the relevance of corporate advertising.
‘The more you talk to them, however, the more it becomes clear that corporate advertising and other types of corporate communications play a role,’ Picker continues. ‘Advertising messages can indirectly become part of the overheard conversation. We’ve actually seen language from corporate advertising showing up in analyst’s reports.’
Regardless of whether or not you believe that advertising can influence analysts and investors, companies are stumping up some serious cash for campaigns that go on to appear everywhere – from airports and podcasts to newspapers and TV. According to data published last year by the World Advertising Research Center, global advertising expenditure totaled $451.5 bn last year, with advertising in the US accounting for $155.3 bn and spending in the UK standing at nearly $19 bn. A good portion of that is corporate advertising – that is, advertising that doesn’t necessarily promote a product or service.
Donald Black, vice president of marketing at Barron’s in New York, thinks companies are increasingly recognizing how important it is to get a clear value message out to the marketplace. ‘Corporate advertising allows a company to express its values to the business community in a way uncluttered by interference from others who might interpret their experience differently,’ Black explains.
‘Because there are so many messages in the world today, it’s increasingly difficult to get a clear statement of the company’s economic and social values out to the marketplace.’
The flip side, of course, is that badly thought-out corporate advertising can actually lose you friends. ‘Sometimes people take notice and respond negatively – for instance, when gasoline prices were high. A substantial number of energy companies produced adverts that said they were trying to find new pools of oil.’ This antagonized environmental campaigners who were against further oil exploration, says Black.
New slants, new messages
Among other things, corporate advertising can have a role to play in putting a new slant on an old company or boosting investor confidence pre- or post-merger. When companies are at their most vulnerable, the merest hint of a rumor about a possible merger can send share prices into a state of flux – and sometimes the best remedy is a clear signal to the market that the brand still means business.
According to Nik Mahon, senior lecturer at Southampton Solent University, ‘In general, what you find is that companies tend to remain discreetly behind certain brands when courting the marketplace as opposed to the investor market. This changes when there is the threat of a takeover or when these companies need to boost investment. Suddenly you notice them subtly emerging from behind the brands to demonstrate quite overtly that they own them.’
So how should companies pitch to their wider stakeholder audience as opposed to a consumer audience? Ian Cassie, creative director of advertising agency The Bank and the man behind Orange’s ‘Do you speak Orange?’ campaign, which ran prior to the telecom’s 2001 IPO, says: ‘I think analysts are not dissimilar from human beings. I think if they see something that looks good and has an emotional connection, they will buy it. We believe in giving the same message to investors and analysts as we give to consumers. I think there’s a tendency to say, They’re stuffy, dull people; let’s give them some stuffy, dull advertising. But they’re not, and you shouldn’t.’
Royal Bank of Scotland
When the Royal Bank of Scotland (RBS), a well-established player in the UK market, felt the need to make its mark farther afield, it launched a campaign aimed at reaching the big names in the US.
An RBS spokesman says: ‘We’ve been trying to create a brand image for RBS in the US. Our target audience is the C-suite – CEOs, CFOs and directors of the top US companies, as well as their advisors and influencers. The financial community is a tough audience, and most of our competitors are US-based.’
RBS’ ‘Make it happen’ print campaign featured in the Wall Street Journal, Barron’s, Forbes, Fortune, Time, Newsweek, Business Week and Golf Digest. ‘Our objective was to increase awareness of RBS, with bold advertising that would be different from the usual ‘handshake’ business bank ads,’ says the spokesman.
The campaign was also shown on TV and featured in ads at airports. ‘If you go to Chicago O’Hare or JFK in New York, you’ll see our campaign there,’ says the spokesman. ‘When we started doing the campaign, we did a test on our target audience to see what our brand recognition was like; it has gone up in multiples since then. The company’s share price has also increased significantly.’
United Technologies
United Technologies (UTC) felt the need to embark on a corporate advertising campaign to fight widely held misconceptions about the range of businesses that it was involved in. According to Picker, UTC had become ‘pigeonholed as a defense and aerospace company, with all the baggage that is associated with that – it’s cyclical, based on defense contracts and so on.’
So UTC launched its ‘You can see everything from here’ campaign, going to great lengths to show the breadth of industries it’s involved in, from jet engines to elevators.
Picker comments: ‘The idea behind the campaign was to explain the incredible balance UTC has across industries and globally. Inevitably, when we tested this with investors, they said, Boy, I didn’t realize they did all this. Clearly, the campaign was effective.’
Picker and her colleagues also noted that the campaign’s influence appeared to materialize in some unlikely places. In October 2005, a Bank of America analyst gave UTC a buy rating. The tag line of UTC’s campaign had been ‘This is momentum,’ and the the sub-heading on the analyst’s report was ‘This really is momentum.’
Marks & Spencer
Some analysts have called UK retail chain Marks & Spencer’s (M&S) restoration to a healthy share price and a strong brand image a clear example of an ‘advertising-led recovery’. The share price has reached an all-time high of around £7, a startling recovery from its low of £3.19 in June 2005.
The real impetus for M&S’ ‘Look behind the label’ brand advertising rethink came in the wake of Phillip Green’s attempted hostile takeover back in 2004, when he offered shareholders £4 a share. After a period of disappointing profits and share performance, CEO Stuart Rose set out on a mission to convince the company’s institutional shareholders that M&S could again be a force to be reckoned with.
‘The creative process began with a recognition that we needed to do something pretty big and substantial to really demonstrate change to the City, journalists and consumers,’ says Lucy Howard of advertising agency Rainey Kelly Campbell Roalfe Y&R, who worked on the campaign.
Howard notes that M&S now makes a more concerted effort to integrate its marketing strategy. ‘In previous years, M&S had a kind of scattergun approach with no real kind of consistency across the different business units, which operated quite separately from a communications perspective. The new work has bags more confidence.’
AT&T
After AT&T and SBC Communications merged in November 2005, AT&T set about launching a campaign to let the world know about it. The company says brand awareness has more than tripled since the advertisements started rolling on December 31 of that year. An AT&T spokesman says: ‘The campaign has had a notable impact in the marketplace. Customers have a much better understanding of what the new AT&T is about. Customers, shareholders, employees and the industry at large are all important audiences for this campaign.’
AT&T’s ‘The world according to…’ campaign involved a sustained assault on the mass media, with features appearing in print, TV, online and out-of-home components in more than 14 countries around the world.
The overall effect has been substantial: unaided brand awareness of the new AT&T has more than tripled and unaided advertising awareness has more than quadrupled since the beginning of the year. The company has also put an emphasis on advertising at major sporting events – it appeared at the World Cup in summer 2006 and has plans to feature at the 2008 Beijing Olympics.
