Overview

In short: corporate image or prestige advertising, usually found in business press. Kind of PR advertising, used to establish reputation.

Institutional, or corporate, advertising (the terms are used interchangeably) is advertising whose objective is to make favorably known the organization behind the product or service being marketed and not the product or service itself.

Such advertising features information about the organization and its functions, so that people will have more confidence in it and in the products or services the company provides.

Institutional advertising was one of the earliest types of public relations advertising. Used often by the business corporation, its goal is to communicate to the public the activities of the organization that might otherwise go unreported through other media channels.

A business firm, for example, may want to let the public know about its extensive research facilities, its hiring practices, or its active role in community affairs. Some have referred to this type of advertising as “image” advertising or even “corporate image” advertising, owing to its use by corporations.

There are three basic types of institutional advertising an organization can use to achieve its objectives:

1. patronage institutional,
2. public relations institutional, and
3. public service institutional.

Each of these types has a different general objective.

Patronage institutional advertising gives reasons why the consumer or business user should patronize the corporation other than the product or service sold. It is based on patronage buying motives and promotes the corporation as a good one to buy from because of such factors as excellent research, convenience of location, and reputation.

Public relations institutional advertising tries to develop a friendly attitude toward the company and its management. It is often used to communicate such ideas as the company is a good place to work, a good citizen of the local community, and the like. It may be written for one or more of the company’s customer segments or publics.

Public service institutional advertising promotes noncontroversial topics that are in the general interest of the public, such as prevention of forest fires, reducing the risk of heart attack, or stopping air pollution.

Benefits

The ultimate benefit of improved image is to help an organization develop and maintain satisfactory sales and profits. The goal of institutional advertising is to develop and protect not the brand image or the store image but the corporate image.

The corporate image can, in one respect, be the most important of the three images developed and positioned by advertising. Products can be replaced by better models with new names and images more easily than the corporation can change its image.

The totality of impressions people have about a company is its corporate image. The corporate image can also be considered to be the personality of the organization as perceived by its various publics. This personality is formed not on the basis of objective evidence but by impressions received and subjective evaluations made by the various corporate publics.

Products, packages, trademarks, brand names, the company name, employees, the marketing program, graphics, and other factors combine to make up the corporate personality. “Every company has a corporate identity from the moment it opens its doors—an identity which represents what it has done to convey to the public what it is.”

No company can afford to be without a strong corporate image. Some corporations, such as Hershey Foods and Gillette, rely more on their company names than on their brand names. Others use their corporate image and symbol to give an overall image to a vast array of divisions and subsidiaries spread over the world.

Consumerism and a growing public demand for product quality and integrity are further reasons for the development of favorable corporate advertising.

Implementation

1. The first step in implementing an institutional advertising program is research. Studies conducted by individual divisions of the company on behalf of their own products or services may already exist. While these can be helpful, they usually are not adequate alone for corporate purposes. Therefore, a study should be conducted among those publics vital to the entire corporation as well. It probably would include customer groups, community, stockholders, the financial community, channel members, and others.
2. The second step is to develop the corporation’s own corporate mission. The executive responsible for corporate advertising should help corporations develop some internal consensus on what position the corporation ideally desires.
3. The third step is to do positioning analysis with regard to competitors’ position. Corporations can be positioned in a similar fashion to products with respect to their individual marketers.
4. The fourth step is to set executive advertising objectives. As in other advertising campaigns, budget considerations are part of the analysis.
5. The fifth step is to ensure persistence and unity of message. The carefully chosen positioning strategy can only be achieved with the use of consistent messages over a reasonable length of time. This demands that every message – even product advertising – matches the company’s position in its institutional advertising program.

Evaluation

The institutional advertising program is monitored by tracking studies conducted regularly at appropriate intervals. Depending upon the objectives, the time period may be as short as three months or as long as two years.

The original research of the corporate image is used as a base or benchmark against which the current image can be compared. It may not be necessary to repeat the entire study, a simplified form may be sufficient.

Not only do tracking studies serve as report cards for the entire program, they also are a source of feedback to be folded into the program as it continues.

Conclusion

Institutional, or corporate, advertising is advertising whose objective is to make favorably known the organization behind the product or service, not the product or service itself.

In small corporations, institutional advertising may be handled by the advertising department; in large corporations, by the public relations department. The institutional advertising budget is frequently separated from the product advertising budget and is commonly much smaller.

An image may be defined as a mental picture formed by people concerning a product, service, corporation, or retail store.

Images exist whether they are planned and promoted by an organization or allowed to develop by the unguided reactions of people to an organization and its products.

Images are built up through the years by the quality of the product produced or handled, the services provided, and the organization’s reputation, policies, and marketing efforts. Competitors find it much more difficult to imitate images than products.

Applications to Small Business

The difference between store image and corporate image is probably small or nonexistent; therefore, the small businessman must achieve all the same goals as larger institutions.

A small firm will need to position its overall image in the local community or regional market or with distributors just as major corporations do.

On the local level “corporate image” means company reputation, so that local department stores might reap as much benefit from advertising their return policy or 50th anniversary as they would advertising a product or sale.