Institutional Advertising

Institutional advertising consists of promotional activities that aim to improve reputation, create a positive image or encourage support of an organization. The term applies to actions oriented to promote the firm itself.

Institutional advertising differs from the most common advertising because the latter has the purpose of selling a particular product or service. When promoting the organization, the activities are designed to create certain mindset about it like trustworthiness or respectability. The ultimate objective is to make people more willing to think positively about the organization. In some cases, these actions might result in higher consumer preference when deciding about a purchase.

Like any other type of advertising, the company must define a target group, a message, means or methods to communicate it and expected results. Many times, institutional advertising is reactive after an event or situation has damaged the company image. However, other firms carry out proactive, planned institutional advertising as a complement of institutional relations. Public Relations are an important part of institutional advertising.

Objectives of Institutional Advertising

1. The first and foremost objective of Institutional Advertising is to promote the image of a business as a whole rather than of a single product or service.
2. The business also tries to promote its mission, vision as well as its philosophies and principles.
3. Institutional advertising is also an effective way to create and maintain goodwill about the organization in the market.
4. Organizations also use this kind of advertising to promote good qualities such as reliability, low prices or good customer care, that distinguish it from its competitors.

Types of Institutional advertising

1. The first kind of Institutional advertising is in Print and digital media. This includes brand promotion through advertisements placed in Newspapers, magazines, emails, text messages and others.
2. The second kind of institutional advertising is on Television and Radio and consists of specially created infomercials and commercials.

Advantages of Institutional Advertising

1. Increase awareness of the organization

Building the Organization’s image through institutional advertising helps the organization build brand awareness. For example, if an organization dealing with luxury household goods wants to target customers with high income, it will craft an advertisement that has several symbols of luxury, like the fine wine or fancy homes, and thus entice its target consumers who will end up splurging on their high-end goods.

2. Building brand identity

If institutional advertising is aimed to follow a single theme, a cohesive brand identity is built. An example here would be a brand targeting its demographic consumer the modern working. If its advertisements also include symbols of men or children, it would send a mixed signal to the demographic consumer and thus decrease the effect of its advertisement.

3. Countering Negative attitude

Institutional advertising is one of the most effective ways to counter negative perception of consumers. A large majority of firms use this kind of advertising to counter a negative image of their company. ITC is one of the best examples here. In the example mentioned above, it used institutional advertising to counter customer perception about its tobacco products.

4. Develop a subtle sales pitch

Institutional advertising also helps develop a subtle sales pitch. The target consumers, who are subjected to this kind of advertising, do not realize that they are being indirectly being attracted to the products of the company.

Disadvantages of Institutional advertising

1. Since institutional advertising only aims to promote the organization as a whole and not any specific product, some experts are of the opinion that they simply add to the advertising cost of the organization without substantial returns on investment in the short run.
2. Institutional advertising and product advertising are similar in the characteristic that they tend to mislead consumers. Hence, consumers might feel cheated by the organization.
3. Institutional advertising might sometimes lead to Monopoly in the market. When an organization of a single industry starts to aggressively pursue institutional advertising, it might lead to a situation where it starts ruling over its competitors and thus creates the monopoly. This might become dangerous for the market.