Wednesday, July 2, 2008

Corporate Advertising

Corporate Advertising is a paid use of media used by the companies to communicate their messages to a wide audience quickly and effectively. Unlike Product Advertising, Corporate Advertising not intended to increase sales of a particular product, but it seeks to benefit the image and reputation of the corporation as a whole. It brands the company the way product advertising brands the products and services. While the product advertising relates to marketing aspects of the business, the corporate advertising falls within the corporate communication area.

Corporate Advertising falls into 3 broad categories:

1. Image Advertising:

This kind of advertising is done to reinforce Identity or enhance reputation. It strengthens the identity of the company, following any structural changes like mergers, acquisitions etc where the company needs to communicate its new mission, vision and strategy to various constituents. Effective image advertising also allows companies to differentiate themselves from rivals.

2. Financial Advertising:

A strong investor relations function is very important for any organization. Financial advertising is one of the tools that companies use to enhance their image in the financial community. It can also stimulate interest in a company’s stock among potential investors. Overall, a strong financially oriented corporate advertising can actually increase the stock prices of the company.

3. Issue Advocacy:

This kind of advertising is used by the companies to respond to external threats from government or special interest groups. It typically deals with controversial subjects and is a means through which a company responds to those who challenge the status quo of the company.

History of Corporate Advertising in America:

According to Expert Thomas Garbett, the earliest corporate ad, paid for by the AT&T had a headline, “Telephone service, a public trust”. By giving this advertisement, AT&T tried to defend its monopoly status and combat the assumption that it couldn’t possibly be acting in the public interest given the lack of competition. Almost a decade later, many more companies were running corporate advertisements. Today, it is highly visible and intensely scrutinized by constituencies, which reinforces the notion that corporate advertising should be aligned with company’s vision and consistent across advertising media like print, television, web etc.

Who uses Corporate Advertising and Why?

Almost all the big organizations today, use corporate advertising to enhance their image and reputation, because they tend to be more diversified and thus have a greater need to establish a coherent reputation out of a variety of activities. Controversial Industries like cigarette, oil, pharmaceuticals, food etc are more prone to having image problems to deal with. Due to this, they use corporate advertising extensively to develop a stronger reputation and deal with the problematic situations.

To enhance sales:

It is also used by the companies to eventually boost sales, create a stronger reputation and goodwill by letting constituents in on what the organization is all about, particularly if it does beneficial things that people might not be aware of.


Small companies also try to enhance their image by using endorsements from a third party organization (TPO) who can provide ratings and rankings of these companies or its services.

To recruit and retain employees:

Corporate advertising can be helpful to employees by explaining in simple terms, what a large, complex organization is all about. It is an indirect way of building morale among employees. It also helps companies to attract the best talent at the entry level and also for the senior management level.

However, if all the above goals for corporate advertising are met, it will ultimately improve a company’s financial situation.

Example of a corporate advertisement

Personal experience:

When I read any financial newspaper, or watch a business news channel, I come across more corporate advertisements rather than product advertisements. May be this is because the people who occasionally read financial journals and newspapers or watch business news are those who either have stakes in any company or they are potential investors. They are also the people who are interested and are keen about knowing what is happening in the corporate world. And therefore, this is the best channel of media one can go for corporate advertising.


Corporate communication, 4th edition, Paul A. Argenti, The Tuck School of Business, Dartmouth College.

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