Advantages and Disadvantages of Corporate Advertising

A number of reasons for the increased popularity of corporate advertising become evident when you examine the advantages of this form of communication:

1. It is an excellent vehicle for positioning the firm. Firms, like products, need to establish an image or position in the marketplace. Corporate image ads are one way to accomplish this objective. A well-positioned product is much more likely to achieve success than is one with a vague or no image. The same holds true of the firm. Stop and think for a moment about the image that comes to mind when you hear the name IBM, Apple, Johnson & Johnson, or Procter & Gamble.

Now what comes to mind when you hear Unisys, USX, or Navistar? How many consumer brands can you name that fall under ConAgra's corporate umbrella? (Swiss Miss, Wesson, La Choy, and many others.) While we are not saying these latter companies are not successful—because they certainly are—we are suggesting their corporate identities (or positions) are not as well entrenched as the identities of those first cited. Companies with strong positive corporate images have an advantage over competitors that may be enhanced when they promote the company overall.

2. It takes advantage of the benefits derived from public relations. As the PR efforts of firms have increased, the attention paid to these events by the media has lessened (not because they are of any less value, but because there are more events to cover). The net result is that when a company engages in a public relations effort, there is no guarantee it will receive press coverage and publicity. Corporate image advertising gets the message out, and though consumers may not perceive it as positively as information from an objective source, the fact remains that it can communicate what has been done.

3. It reaches a select target market. Corporate image advertising should not be targeted to the general public. It is often targeted to investors and managers of other firms rather than to the general public. It doesn't matter if the general public does not appreciate this form of communication, as long as the target market does. In this respect, this form of advertising may be accomplishing its objectives.

Some of the disadvantages of corporate advertising were alluded to earlier in the chapter. To these criticisms, we can add the following:

1. Questionable effectiveness. There is no strong evidence to support the belief that corporate advertising works. Many doubt the data cited earlier that demonstrated a correlation between stock prices and corporate image advertising. A study by Bozell & Jacobs Advertising of 16,000 ads concluded that corporate advertising contributed to only 4 percent of the variability in the company's stock price, compared with a 55 percent effect attributable to financial factors.45 A second study also casts doubts on earlier studies that concluded that corporate advertising worked.46

2. Constitutionality and/or ethics. Some critics contend that since larger firms have more money, they can control public opinion unfairly. This point was resolved in the courts in favor of the advertisers. Nevertheless, many consumers still see such advertising as unfair and immediately take a negative view of the sponsor.

A number of valid points have been offered for and against corporate advertising. Two things are certain: (1) No one knows who is right, and (2) the use of this communications form continues to increase.

Continue reading here: Measuring the Effectiveness of Corporate Advertising

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Readers' Questions

  • Niklas
    What is the advantage and dis advantage of corporate advertising?
    1 year ago
  • Advantages of corporate advertising: 1. Brand recognition: Corporate advertising can help create a strong brand identity and increase brand recall among consumers. This can lead to higher trust and loyalty towards the company and its products or services. 2. Increased sales: Effective corporate advertising has the potential to drive sales by attracting new customers and convincing existing ones to make repeat purchases. 3. Competitive edge: Through advertising, a company can differentiate itself from its competitors and position itself as a leader in the industry. This can help gain a competitive advantage and potentially capture a larger market share. 4. Enhanced reputation: Strategic corporate advertising can enhance the company's reputation by highlighting its positive values, social responsibility initiatives, and commitment to customer satisfaction. This can improve public perception and create a positive image for the company. Disadvantages of corporate advertising:
    1. High costs: Corporate advertising campaigns can be expensive to develop and implement, especially if they involve multiple platforms and extended durations. These high costs may not be feasible for small or financially struggling businesses.
    2. Ineffectiveness: Not all corporate advertising campaigns yield the desired results. Sometimes, the intended message may not resonate with the target audience, leading to inefficient use of resources and a low return on investment.
    3. Negative publicity: If not executed carefully, corporate advertising can attract negative attention or backlash from consumers and stakeholders. Any controversial or misleading claims made in advertisements can harm the company's reputation.
    4. Limited impact on sales: While corporate advertising can raise brand awareness and improve reputation, it may not directly translate into increased sales. Consumers may still choose products or services based on factors other than advertising, such as price or product quality.
    5. Inability to target specific audiences: Corporate advertising often targets a broad audience and may not effectively reach specific niche markets or demographics. This can result in wasted effort and resources, as the message may not reach the intended target audience.
    • T
      What are the adventage of media?
      1 year ago
    • Advantages of Media include:
      1. Easy Access to Information: The internet, television, radio, social media, and other forms of media provide easy access to a wealth of information.
      2. Improved Communication: Media helps us communicate quickly and effectively with people around the world.
      3. Increased Connectivity: Media helps to connect people, even those living in remote areas, with the rest of the world.
      4. Greater Awareness: Media helps people stay informed about current events, trends, and opinions.
      5. Enhanced Learning: Media can be used to supplement traditional learning methods, such as textbooks and lectures.
      6. Entertainment: TV, films, games, music, and other forms of media provide entertainment and help to pass the time.
      7. Promotional Opportunities: Media can be used to promote products and services to specific target audiences.
      8. Increased Job Opportunities: Media related jobs, such as journalism and marketing, are on the rise and have created new employment opportunities.
      • mike
        What are the disadvantages of corporate public ralations?
        1 year ago
        1. Negative Public Perception: Corporate public relations efforts can backfire if the company is not perceived as honest and ethical in its dealings. If any kind of scandal or controversy becomes linked to a brand, this can cause customers to distrust the product or service, leading to a decrease in sales.
        2. High Costs: Corporate public relations can be expensive, especially if a company chooses to advertise and promote its products or services via television, radio, print and other media outlets.
        3. Reputation Damage: With corporate public relations comes the risk of negative news or opinions. If a company’s public image takes a hit due to a scandal, lawsuit or other incident, it can be difficult to repair the reputation and rebuild trust.
        4. Time Consuming: Corporate public relations takes an extensive amount of time and effort. Developing messages, coordinating press releases and attending events can take up a significant amount of a company’s resources.
        • simone
          WHAT ARE DISADVANTAGES OF CORPORATE IMAGE?
          1 year ago
          1. Corporate image can be difficult to maintain - Corporate ima
          • Arthur
            What is cooporate advertising?
            1 year ago
          • Corporate advertising refers to the promotion of a business’s products or services to its target market. Corporate advertising strategies can range from traditional media such as television, radio, and print to digital strategies such as online videos, website banners, and social media ads. The primary objective of corporate advertising is to build brand awareness and create a positive image for the company.
            • Eija-Riitt
              What is the adventage and disadventage of companies under corporate advertising?
              1 year ago
            • Advantages: 1. Establish Brand Awareness: Corporate advertising is often used to create and maintain brand awareness in the marketplace. This type of advertising helps familiarize potential customers with a company’s goods and services and can build trust in the brand. 2. Improve Customer Loyalty: Corporate advertising can help rewards long time customers for their loyalty to the company by offering discounts, special promotions, and other incentives. 3. Increase Sales: Corporate advertising can be used to increase demand for a company’s goods and services. Through this type of advertising, a company can effectively promote its offerings and motivate buyers to purchase them. Disadvantages:
              1. Expensive: The costs associated with creating, running, and maintaining a corporate advertising campaign can be extremely high. Additionally, monitoring the success and results of a campaign can be both costly and time consuming.
              2. Risky: Corporate advertising can be very risky since it offers no guarantee of success. Companies can lose a significant amount of money if their campaign fails to generate the desired results.
              3. Limited Reach: Corporate advertising campaigns often have limited reach since they are designed to target a specific audience. This can limit the impact of a campaign and result in fewer sales than initially anticipated.
              • d
                What is advertisement adventages on it?
                1 year ago
              • Advertising can have a number of advantages, including: •Creating brand awareness – Advertising can help to create a strong brand and make your business more memorable to customers. •Reaching a larger audience – Advertising is an excellent way to reach a large number of potential customers. •Building customer relationships – Advertising can be used to build relationships with customers by providing them with information about your products and services. •Generating leads – Advertising can help to generate leads by encouraging people to inquire about or buy your products or services. •Increasing sales – Advertising can help to increase sales by getting more people to purchase your products or services. •Improving customer loyalty – Advertising can help to improve customer loyalty by providing customers with helpful information about your products and services.
                • tommy
                  What are the advantages of corporate communication?
                  1 year ago
                  1. Increased productivity: Corporate communication can help to create an environment of collaboration and cooperation amongst employees, leading to greater productivity and better results.
                  2. Improved relationships: Effective corporate communication is key to building positive working relationships both within and outside of the organization.
                  3. Increased loyalty: When employees feel informed and involved in decision-making and strategic objectives, they are more likely to be loyal and committed to the organization.
                  4. Enhanced reputation: Providing timely, accurate and relevant communication to stakeholders helps to improve and maintain a positive reputation of the company.
                  5. Reduced costs: Clear communication channels, regular updates, and efficient processes help companies save on time, resources and money.
                  • MASSIMO
                    What is the advantages of corporate marketing?
                    1 year ago
                    1. Increased Brand Visibility: Corporate marketing helps to increase the visibility of a company's brand, which can lead to increased awareness, brand loyalty, and, ultimately, more customers.
                    2. Greater Ability to Reach Target Audiences: Corporate marketing allows companies to customize their marketing strategies to reach specific target audiences. This allows companies to tailor their campaigns to be more effective and to reach the right consumers.
                    3. Increased Profits: Corporate marketing efforts have the potential to generate more revenue for companies by increasing their customer base, creating more sales opportunities, and increasing their brand recognition.
                    4. Improved Brand Identity: Corporate marketing helps to create a positive perception of a company’s brand, which can result in improved customer relationships and better customer retention.
                    5. Cost Savings: Corporate marketing enables companies to invest in more cost-effective marketing tactics, reduce overhead costs, and promote their business faster and more efficiently.
                    • anna
                      What are the advantages and the disadvantages of corporate advertising as of media relations?
                      1 year ago
                    • Advantages of Corporate Advertising 1. Increased Brand Awareness: Corporate advertising is an effective tool for creating brand awareness for a business. It uses various methods, such as television commercials, radio ads, print ads, billboards, and other digital marketing strategies, to reach a wide range of people and create a strong brand presence. 2. Targeted Approach: Corporate advertising allows businesses to target specific audiences with specific messages. It allows businesses to craft their message to appeal to the ideal customer and make an emotional connection that resonates with the audience. 3. Cost-Effective: Corporate advertising is a cost-effective way to reach a large number of potential customers. It’s much cheaper than other types of advertising and can be used to reach a wide range of people. Disadvantages of Corporate Advertising 1. High Production Costs: Corporate advertising requires a large amount of money to produce. The high costs of media production, such as television and radio, can be prohibitively expensive. 2. Lack of Engagement: Corporate advertising can be difficult to measure, as it’s often difficult to measure the engagement of an audience. It’s also difficult to gauge the success of a campaign, as it’s hard to determine whether the audience has taken action after seeing the ad. 3. Image Management: Corporate advertising can be difficult to control. It’s hard to ensure that the message you’re sending out is the one you want to send. If the message isn’t well-received, it could harm the image of the brand. Advantages of Media Relations
                      1. Increased Visibility: Media relations is an effective tool for raising the visibility of a business. It involves building relationships with members of the media and pitching stories and ideas to help get a business’s message out there.
                      2. Targeted Approach: Media relations allows businesses
                      • ulysses
                        What are the adventage of corporate advertising?
                        1 year ago
                      • Advantages of Corporate Advertising include:
                        1. Brand Awareness: Corporate advertising helps create brand awareness and establish a corporate identity in the minds of customers, potential customers and other stakeholders.
                        2. Reach New Markets: Corporate advertising is a great way to penetrate new markets and target potential customers.
                        3. Drive Sales: Corporate advertising can help drive sales by highlighting products and services and showcasing why customers should choose them over competitors.
                        4. Boost Employee Morale: Corporate advertising can help boost employee morale by providing positive reinforcement and reassurance that the company takes its public image seriously.
                        5. Communicate Your Message: Corporate advertising can be used to communicate the company’s values and mission statement to potential customers and stakeholders.
                        6. Build Relationships: Corporate advertising can help the company build relationships with vendors, suppliers, distributors, and customers.
                        7. Promote Business: Corporate advertising helps to promote the business by highlighting its competitive advantages and successes.
                        • edwin brown
                          What are the advantages and disadvantages of corporate advertising?
                          1 year ago
                        • Advantages 1. Increased Brand Recognition: Corporate advertising can help a company gain recognition and visibility with its target consumers, which drives brand recognition. 2. Increased Market Share: Corporate advertising can help a company gain market share by introducing new products or services to its target market. 3. Greater Visibility: Corporate advertising can help a company gain visibility with both its current and potential customers. 4. Increased Sales: Corporate advertising can help create awareness and interest in a company’s products and services, which can lead to increased sales. Disadvantages
                          1. High Cost: Corporate advertising is often very expensive in terms of not only the advertising costs, but also the cost of media production, creative services, and other factors.
                          2. Limited Reach: Corporate advertising is often limited in terms of its reach, due to budgetary constraints and other factors.
                          3. Negative Reactions: Corporate advertising can lead to negative reactions from customers because of the perception that a company is simply trying to sell something.
                          4. Loss of Brand Loyalty: Corporate advertising has the potential to backfire when customers perceive that a company is trying to manipulate them. This can lead to a loss of brand loyalty, as customers may switch to another brand.