Do image campaigns need IR input?

On the face of it, corporate image campaigns look like an IRO’s dream: addressing thousands, indeed millions, of investors at once instead of requiring hours of toil over the phone calls, the emails and the one-on-ones. So shouldn’t IR professionals play a more active role in shaping corporate advertising than they do?

CoreBrand CEO James Gregory doesn’t see IR groups participating. ‘They tend not to get it,’ he says. ‘They are at the center of the bull’s-eye and should be the ones most sensitive to this, because there is no question that the brand relates directly to stock performance. They are a little squeamish about taking that on and learning about how it all works and creates value, however, so it all goes back to the corporate communications people.’

The absence is a missed opportunity. Gregory recalls a presentation he gave at a NIRI conference: ‘There was standing room only, and we had a booth where lots of people came and talked to us – but not one of these people came to us afterward.’

It is possible that in many companies there is a delicately negotiated demarcation line between corporate communications and investor relations, which the latter is wary of pushing – not least because IROs are unlikely to have the budget themselves for an ad campaign.

Who is the audience?
It is also potentially much more difficult to construct an investor-targeted campaign. All ads are to some extent going to speak to investors and retail and business customers alike, but there is a big challenge in encapsulating the investment story of a huge company like GE, with products ranging from kitchen appliances to nuclear power.

Indeed, one of the purposes of an image campaign is to help convert the disparate parts of a business into a cohesive brand with its own associations and images. GE’s ecomagination campaign helps achieve a unified image. Observers also point to United Technologies’ long-running ‘Curious?’ campaign as successful; it shows a disassembled graphic plan of a cruise liner, visibly uniting the company’s various technologies at work in a single vessel.

Some advertisements are more obviously focused on investors. Take the case of Italian insurer Generali, whose recent ad in the Economist had a striking slogan that promised ‘Clients first. Shareholders second to none.’ The ad’s combination of a snappy line and hard financial information pushes the buttons of both shareholders and customers.

The message would also cross continents as it reached the magazine’s international readership. ‘Some years ago we were working with a company with an American depositary receipt and we analyzed how its releases compared between New York and Paris,’ says Dana Pillsbury, a brand consultant for GA Kraut. ‘We concluded that a financial release was more important in Europe, but the softer type had more effect in the US.’

Pillsbury agrees that IR departments should be more involved in corporate advertising. ‘Participation can be a useful arrow in the IR department’s quiver, but it’s a supplement to good IR work, not a substitute for it,’ she says. ‘Unlike luxury automobiles or sneakers, you generally can’t create a buzz among institutional investors just with advertising, and ads can’t compensate for failing to walk the talk or for a poorly executed IR program.’

Pillsbury warns against trying to be all things to every audience, however. ‘The value proposition aimed at investors is going to be a bit different from the one aimed at customers, employees or any other audience, but they can’t clash,’ she says. ‘Not only does it create a schizophrenic corporate culture if the company tries to be two radically different things to two different audiences, but you also have to keep in mind that investors read material aimed at customers, and vice versa.’

Finer pitch for investors
Pillsbury’s warning for those who craft corporate campaigns may ring true for many IR professionals. ‘Investors hate having things ‘sold’ to them,’ she cautions. ‘They like to feel they’re the wise guys, and they’re going to judge you. They’re very sensitive to it.’

Pillsbury singles out GE’s ecomagination campaign as ‘a perfect example of laying out the first dot for investors’ and then letting that lead them elsewhere. ‘For the public, it’s spun as cool/leadership plus a touch of green/eco-friendly,’ Pillsbury says. ‘In investor-speak, though, the message is that the company uses innovation to maintain market share and create fuel savings, which translates into either better market position or internal cost savings, both of which boost the bottom line. The campaign isn’t enough by itself, but it is a nice reminder of facts the investor already knows about GE.’

Russell Wilkerson, GE’s director of financial communications, says the tag line, ‘Imagination at work’, plays to the company’s capabilities. ‘It is fairly accessible and comprehensive in who it can reach,’ he explains. ‘People know a lot of things about GE, but this does a really nice job of showing who we are. It shows this imagination in our DNA and our capability for addressing challenges. If we are successful in showing how we can address these global needs, it should appeal to individual consumers and the general public, and highlight the role we play. Investors can then see the value of all that as a potential owner of that company.’

Asked about direct IR input, Wilkerson replies that ‘CEO Jeff Immelt is very involved in this and, as the chief IR official, if you will, he looks at how the company is being positioned. Clearly a lot of those ads are in publications that reach investors, so that lens is always considered before we roll out any of the advertising.’

GE is well aware of the necessity of brand maintenance. ‘We mention in this year’s annual report that the brand value jumped to $52 bn last year from $42 bn in 2003,’ Wilkerson says. ‘That brand value – and customers’ appreciation of it – ultimately plays out in investors’ minds.’

Paul Woolmington, founding partner of Naked Communications, does not favor indiscriminate spending on ads focused on investors, but identifies special appropriate circumstances, such as a foreign company needing a high-profile introduction in a new market or a conglomerate with diversified products that wants to remind investors of who it is. GE’s ads are an ‘overheard message’ for investors without being directly aimed at them, he says.

For Woolmington, authenticity is also key. He cautions that if the headlines in the newspaper mention a crisis but your ads don’t, ‘you can’t camouflage the problem with ads that avoid or evade the issue.’

Investors are not going to believe a stock washes whiter than white just because of clever copy writing. Defensive ads – from oil companies claiming a spurious green image to food companies fending off talk of profiteering and strategic shortages – are unlikely to convince socially concerned activist investors, for example. Such individuals are going to believe what they see on the proxies, not what they read in ads in the wider press.

Budgets vulnerable
Recession presents a danger to corporate branding campaigns. ‘Corporate communications does not show directly on the bottom line, so when times are hard, it’s an easy one to cut – and corporate advertising is even further away from a directly visible effect on the company’s profit and loss,’ says Woolmington.

Gregory agrees some companies might halt work on this front prematurely. ‘Whenever they do engage in this sort of communication, their image and value improves, but then the bean counters come in and say, Let’s save every nickel we can, and they stop explaining their story,’ he points out. ‘They have a few quarters that are good, but then the brand begins to fade away.’

Indeed, in corporate branding and advertising, the ‘winter soldiers’ usually win, Gregory says – even though a recession is not the time to cut corporate advertising. ‘It happens to be a great time for competitors to take advantage,’ he adds. ‘If you can build your brand in hard times, you can make solid headway for when things improve.’