The Commonwealth Bank (CBA) was understandably upset and angry when their CEO was wrongfully maligned. But does paid advertising to protect a damaged reputation serve any real purpose other than easing a bruised ego?
The story began in November when CBA was the first Australian bank to announce a mortgage rate rise higher than the official interest rate increase. The decision may have been inspired by the bank’s current promotional slogan – “Determined to be different” – but the result was nationwide condemnation.
The vilification reached a climax when the Sydney Daily Telegraph (9 November) ran a front page photograph of smiling CEO Ralph Norris behind the banner headline “You can bank on losing homes.” The story, also carried in other News Limited newspapers, quoted Mr Norris allegedly saying; “it is better to see a few foreclosures than to have an economy hamstrung by a low profit banking system”
Two days later, the CBA issued a statement declaring that the reported comment was “completely false and never made by Mr Norris”
And that weekend, presumably after a great deal of heated discussion, Rupert Murdoch’s newspaper chain issued a blunt apology to Mr Norris. But the same day the CBA took out full page advertisements – in the rival Fairfax newspapers – repeating the “correction,” which appeared over the CEO’s personal signature. (The advertisement was also posted on the banks website, but was subsequently taken down)
The obvious question is: Did the advertisements really progress the issue beyond the apology already extracted from News Limited? Issue or cause-related advertising was once a popular weapon in the issue management arsenal. It used to be quite common to see paid “corporate messages” on public issues of the day, or large newspaper advertisements on social issues paid for by earnest individuals who paid a small contribution to get their name on a long list of signatories.
However, issue advertising has largely gone out of fashion, apart from paid shareholder advertising by rivals in hostile takeovers, or occasional campaigns where industries involve themselves in the election process, such as recent advertising by Australian mining companies against a proposed minerals tax, or by tobacco companies using a front organization against proposed “plain packs” for cigarettes.
One good reason for this change may be that in the brave new world of social media, the credibility of traditional media advertising is continuing a steady decline. In fact a recent study of 2,000 adults in the UK and US for the British company Alterian showed that only 5% of consumers (4% UK, 6% US) trusted advertising, and only 8% (9% UK, 6% US) believe “what the company says about itself”
If it is true that well over 90% of the public don’t believe advertising, perhaps CBA should have remembered the wise old maxim on the subject – Corporate advertising is like wetting yourself in a dark suit. It very briefly gives you a nice warm feeling, but no-one notices.