infrastructure brand advertising? why?
March 16, 2009 7:54 PM Subscribe
Why do infrastructure / commodity brands need to advertise to the general public?
I'm finally getting around to watching the first season of Mad Men, and in one episode Bethlehem Steel is spending money on a large-scale advertising campaign (magazine ads, billboards, etc.) The ad agency is pitching a campaign where they have posters of cities, like a poster saying "CHIGAGO! Brought to you by Bethlehem Steel."
Of course, we still see stuff like this, TV ads for ALCOA, or ADM, not advertising a specific product, but rather letting us know that their company supplies stuff that we use in our day to day lives. These ads are targeted at the general public, even though most members of the public (for instance, me) will never call up ADM and place an order for 30 tons of textured soy protein.
My question is...why spend money on stuff like billboards or magazine ads? I can see spending money to go to industry conferences, trade magazines, etc, but can someone tell me why it's important to these companies that *I* know that most of the crap I eat comes from ADM?
I'm finally getting around to watching the first season of Mad Men, and in one episode Bethlehem Steel is spending money on a large-scale advertising campaign (magazine ads, billboards, etc.) The ad agency is pitching a campaign where they have posters of cities, like a poster saying "CHIGAGO! Brought to you by Bethlehem Steel."
Of course, we still see stuff like this, TV ads for ALCOA, or ADM, not advertising a specific product, but rather letting us know that their company supplies stuff that we use in our day to day lives. These ads are targeted at the general public, even though most members of the public (for instance, me) will never call up ADM and place an order for 30 tons of textured soy protein.
My question is...why spend money on stuff like billboards or magazine ads? I can see spending money to go to industry conferences, trade magazines, etc, but can someone tell me why it's important to these companies that *I* know that most of the crap I eat comes from ADM?
In some cases, to counterbalance bad press elsewhere. "ADM is a great despoiler of the environment through industrialized farming? No, no, they're the fine folks who bring us textured soy protein and support This Week With David Brinkley."
There are also commodity boards that market a general category, e.g. milk, to encourage more consumption of it even though many different suppliers bring the commodity to market. Milk is a prime example - the ubiquitous "Got Milk?" campaign was done by the California milk marketing board to encourage more milk drinking. Not all the extra milk consumed will be from California, but more overall consumption will be good for their sales. In some cases, those commodity boards simply amount to lobbying organizations getting money from producers in an industry who voluntarily pool their money, figuring they can do better with a bigger pool. In other cases, there are state mandates that commodity producers put a certain percentage or fee-per-unit into the commodity boards, with California being the prime example of that. Same logic applies there - more consumption, more sales, pooling money to get advertising that each of the smaller players couldn't afford. (Insert reservations about agribusiness here.)
posted by el_lupino at 8:09 PM on March 16, 2009
There are also commodity boards that market a general category, e.g. milk, to encourage more consumption of it even though many different suppliers bring the commodity to market. Milk is a prime example - the ubiquitous "Got Milk?" campaign was done by the California milk marketing board to encourage more milk drinking. Not all the extra milk consumed will be from California, but more overall consumption will be good for their sales. In some cases, those commodity boards simply amount to lobbying organizations getting money from producers in an industry who voluntarily pool their money, figuring they can do better with a bigger pool. In other cases, there are state mandates that commodity producers put a certain percentage or fee-per-unit into the commodity boards, with California being the prime example of that. Same logic applies there - more consumption, more sales, pooling money to get advertising that each of the smaller players couldn't afford. (Insert reservations about agribusiness here.)
posted by el_lupino at 8:09 PM on March 16, 2009
Alcoa, ADM, and Bethlehem Steel are (or were) publically traded companies. If you notice the shows they advertise on, the demographics are pretty clearly rich, older, audiences (mostly sunday week in review shows, CNBC, and golf events). In other words, they are advertising to the investor class. They really aren't targeted at the general public, it's a byproduct of trying to reach investors and business partners.
posted by jenkinsEar at 8:11 PM on March 16, 2009
posted by jenkinsEar at 8:11 PM on March 16, 2009
The other thing is that advertising brings them good word of mouth which can help with community relations and things like recruiting.
posted by mmascolino at 8:57 PM on March 16, 2009
posted by mmascolino at 8:57 PM on March 16, 2009
Out of sight, out of mind, easier to tax. Indirectly this kind of publicity aids their lobbying efforts.
posted by Chocolate Pickle at 9:19 PM on March 16, 2009
posted by Chocolate Pickle at 9:19 PM on March 16, 2009
Response by poster: jenkinsEar, that makes a lot of sense, actually. I wonder how much of it is investors saying "oh wow this company sells a lot of soy protein, let's invest in them" or rather "oh wow this company can spend $[LOTS] buying ads for this golf tournament, they must be doing okay, lets invest!"
anyway all of these answers are helping me understand this way better, thanks!!!
posted by capnsue at 9:24 PM on March 16, 2009
anyway all of these answers are helping me understand this way better, thanks!!!
posted by capnsue at 9:24 PM on March 16, 2009
And sometimes what's at stake is something that Congress or the President is considering; perhaps protection against foreign steel imports, or changing agricultural subsidies, or whether to continue or discontinue a particular military weapons system. The company may see the ad campaign as a way to influence the opinions of potential voters (constituents). Or maybe (to be more cynical) it's a way of subtly telling Congressfolk that the company has a lot of money, and isn't reluctant to spend it, and wouldn't it be nice if the Congressfolk were to (continue to) get campaign contributions from the company's political action committee (PAC) and executives and lobbyists?
posted by WestCoaster at 6:26 AM on March 17, 2009
posted by WestCoaster at 6:26 AM on March 17, 2009
This type of advertising is called "institutional advertising." The purpose is to communicate the company's mission or philosophy, and differs from ordinary advertising in that it does not call upon the consumer to act.
The purpose of institutional advertising is public relations, but not for the reason you may think. Typically institutional advertising campaigns are deployed when the company believes it is taking action that the public may not view as positive or beneficial to society. For example, institutional advertising was very popular in the 20's, 40's and 70's when industrial companies were having labor problems. By forming the image that the company was benefiting society in some vague way ("Chicago!" implies that Bethlehem Steel is helping Chicago to expand and progress, very good things which the audience will hopefully keep in mind as the company's labor problems emerge in the paper), the hope is that it will bias the public in the company's favor when the company finds itself embroiled in controversy.
But there is another, more useful purpose for institutional advertising - to sell commodity products that are themselves uninteresting and largely undifferentiated from the competition. Beginning in the late 1980's, major US manufacturers began purchasing white label manufactured goods from Japan, Korean, and now China. These products, mostly appliances and other durable goods, were manufactured by foreign companies, but produced under supply contract to companies like GE, Whirlpool, Kenmore (Sears), etc.
So there was little to no difference between similarly priced products in the same market segment branded as different companies, because they were in many cases actually manufactured by the same foreign company.
Furthermore, the supply agreements were rarely longer than two years, so there was no point in advertising specific products that would change in a year or two. By employing institutional advertising, the consumer believes the product has the features touted in the advertising - quality, innovation, etc.
GE's institutional ad strategy, particularly in the 90's, is legendary. GE would advertise jet engines and submarines to housewives, because doing so would convince the target consumer that the same level of precision and innovation to its microwaves and dishwashers. This connection was so brilliantly executed that to this day, houses for sale are advertised as having GE appliances, despite the fact that GE by and large does not manufacture its own applicance products. GE continues to do this to this day with it's "ecomagination" ads for engines, wind turbines, and other things you will never ever buy. But because you know that GE is working on environmentally friendly energy, you are likely to think that it's applicances are environmentally friendly as well, which is something that consumers now appear to care about.
Institutional advertising is similar to, but not the same as "image advertising." Image advertising conveys nothing product oriented, and merely seeks to create an emotional connection between the consumer and the brand divorced from any product related features. Nike's "Just Do It" campaign is an excellent example of image advertising. The ads have nothing to do with the shoes whatsoever. Contrast this with GE's "We Bring Good Things To Life" ads, which promote GE quality, product innovation, and customer service. (but not directly or in relation to any specific product that a consumer would actually buy.)
posted by Pastabagel at 1:46 PM on March 17, 2009 [4 favorites]
The purpose of institutional advertising is public relations, but not for the reason you may think. Typically institutional advertising campaigns are deployed when the company believes it is taking action that the public may not view as positive or beneficial to society. For example, institutional advertising was very popular in the 20's, 40's and 70's when industrial companies were having labor problems. By forming the image that the company was benefiting society in some vague way ("Chicago!" implies that Bethlehem Steel is helping Chicago to expand and progress, very good things which the audience will hopefully keep in mind as the company's labor problems emerge in the paper), the hope is that it will bias the public in the company's favor when the company finds itself embroiled in controversy.
But there is another, more useful purpose for institutional advertising - to sell commodity products that are themselves uninteresting and largely undifferentiated from the competition. Beginning in the late 1980's, major US manufacturers began purchasing white label manufactured goods from Japan, Korean, and now China. These products, mostly appliances and other durable goods, were manufactured by foreign companies, but produced under supply contract to companies like GE, Whirlpool, Kenmore (Sears), etc.
So there was little to no difference between similarly priced products in the same market segment branded as different companies, because they were in many cases actually manufactured by the same foreign company.
Furthermore, the supply agreements were rarely longer than two years, so there was no point in advertising specific products that would change in a year or two. By employing institutional advertising, the consumer believes the product has the features touted in the advertising - quality, innovation, etc.
GE's institutional ad strategy, particularly in the 90's, is legendary. GE would advertise jet engines and submarines to housewives, because doing so would convince the target consumer that the same level of precision and innovation to its microwaves and dishwashers. This connection was so brilliantly executed that to this day, houses for sale are advertised as having GE appliances, despite the fact that GE by and large does not manufacture its own applicance products. GE continues to do this to this day with it's "ecomagination" ads for engines, wind turbines, and other things you will never ever buy. But because you know that GE is working on environmentally friendly energy, you are likely to think that it's applicances are environmentally friendly as well, which is something that consumers now appear to care about.
Institutional advertising is similar to, but not the same as "image advertising." Image advertising conveys nothing product oriented, and merely seeks to create an emotional connection between the consumer and the brand divorced from any product related features. Nike's "Just Do It" campaign is an excellent example of image advertising. The ads have nothing to do with the shoes whatsoever. Contrast this with GE's "We Bring Good Things To Life" ads, which promote GE quality, product innovation, and customer service. (but not directly or in relation to any specific product that a consumer would actually buy.)
posted by Pastabagel at 1:46 PM on March 17, 2009 [4 favorites]
To clarify my answer to your question, the ADM, ALCOA, etc ads you see belong both in the "advertising for an undifferentiated product segment" as well as the "bias the public in our favor" categories. Soybeans and aluminum literally are commodities - they are traded on the commodities exchange. But ADM's real business is agi-biotech and genetic engineering which the consumer is terrified of, and aluminum mines are a ecological disaster. So the idea is that you will hear the commericial before you see the 60 Minutes expose, and you will think "Well, they are doing good work."
posted by Pastabagel at 1:50 PM on March 17, 2009 [1 favorite]
posted by Pastabagel at 1:50 PM on March 17, 2009 [1 favorite]
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posted by Mitheral at 8:08 PM on March 16, 2009 [1 favorite]