IROs exhausted by the grind of investor and analyst days or even more labor-intensive one-on-one meetings might wish to know there is an easier way to sell a stock. It’s called corporate brand advertising. This avenue is a bit indirect, but many think it can do a lot to support investor interest in a company’s shares. And while most companies aim their brand advertising directly at consumers, they’re happy with the spillover effect it has on potential investors.
Few readers of the business pages could miss recent global image campaigns from HSBC (‘Your point of view’), United Technologies (‘Curious?’) or Hitachi (‘True stories’). Their placement in Barron’s and the Economist, in business class airport lounges or commuter train stations in classy suburbs is no accident. ‘That’s where to reach institutional investors and economic decision-makers,’ says Katy Giffault, director of advertising and marketing communications at United Technologies (UTC).
Giffault’s strategy involved a zip code analysis of Wall Street Journal subscribers to home in on a specific audience of financial analysts. Having found them clustered in southern Connecticut in an area served by Metro-North trains, Giffault blitzed the rail stations with billboards and UTC-branded giveaways on the same days the campaign was promoted with banner ads on WSJ.com.
Not all operations are this pointed, but brand impact analyst Jim Gregory, CEO of CoreBrand, says even at a lower intensity, he’s sure these ‘corporate statements’ are effective outreach.
‘There’s no question this type of campaign has an impact on market capitalization, even though that’s not always the reason for the campaign,’ Gregory notes. ‘There are multiple audiences for these campaigns – they make customers feel better, get employees more in tune with what the company is doing, and get investors to pay attention, either by buying the stock or sticking with it.’
Indeed, according to IR magazine’s Investor Perception Study, US 2007, corporate advertising pushed more than half of retail investors to investigate a company as a possible investment. Professional investors were less influenced; even so, 29 percent of the buy side and 15 percent of the sell side still checked out a company after seeing this type of advertisement.
The study also notes that these investigations were not pointless undertakings: nearly 75 percent of retail investors and two thirds of the buy side bought stock after reviewing the corporate advertising.
Gregory cites his own study of a corporate image campaign: since launching a branding effort in 1997, Aflac’s name has become synonymous with its icon, the Aflac duck, and its advertisements have helped solidify its reputation and the perception of its service. Spending $196 mn on corporate communications from 2002 to 2005, Aflac increased its market capitalization by $8 bn to $23 bn, and went from trailing the pack in the supplementary insurance sector to leading it, Gregory adds.
With those results, it is no wonder there are so many companies attempting to imprint an image of their corporate brand on investors, especially megaliths that don’t register in the public consciousness or are misunderstood. Take the case of Hitachi, which is trying to raise its profile with North American audiences.
‘Hitachi is not very well known; most folks think of us as a TV manufacturer,’ says Gerard Corbett, vice president of branding for Hitachi in the Americas. ‘But that’s a very small part of our business – only about 10 percent.’
True stories
In reality, Hitachi has a complex business and wanted a campaign to reflect that. ‘We’re the 23rd largest company in the world,’ Corbett points out. ‘We make over 20,000 products and serve a lot of different industries.’
As the brand is so complicated, Hitachi needed to go deeper than a one-page ad. The company deployed the web for a series of five short documentary-style online films conceived by the ad agency McCann-Erickson. These focused on true stories about the impact of Hitachi technology on people’s lives.
For example, the first film, Small-town Oregon logs on, shows residents of a remote coastal town discussing what happens when they get the country’s fastest broadband internet connection delivered via Hitachi technology. In the second film, A new breed of bloodhound, South Carolina law enforcement officials explain how Hitachi data storage systems help them track cyber-criminals.
Hitachi is running some print ads highlighting these film shorts, and doing 15-30 second trailers on the web to drive traffic to its main website. The scope of the campaign, as well as its multimedia approach, is a big departure from the last major advertising effort two years ago, a mainly print campaign focused on automotive products. It also adds a social-networking element, inviting viewers to contribute films describing Hitachi’s positive impact on their lives, or at least discuss it.
Corbett says it was important to try something new. ‘People are getting the majority of their information from the web,’ he states. ‘It’s one of our key tools of engagement.’ Hitachi is measuring not just web traffic, but also how many people are actually watching and downloading the videos.
‘We should have a good idea by mid-May how much we’ve moved the needle,’ Corbett says. ‘We’re focused on media read by business decision-makers, online as well as in print. Our main focus is getting business decision-makers to better understand Hitachi, appreciate us and have an interest in what we do. This includes investors – that’s always part of our thinking.’
