Does corporate advertising work in a crisis? An examination of inoculation theory

The primary purpose of this paper is to propose a conceptual framework of consumer evaluation of corporate advertising in a corporate crisis. It also suggests future research propositions by investigating how the so-called inoculation effect from pre-crisis corporate advertising influences consumer response to corporate advertising during a crisis. First, the paper describes how the inoculation effect confers resistance to negative news in a corporate crisis. Next, the paper determines whether the inoculation effect further reduces consumer resistance to corporate advertising during a crisis. Other factors that figure into the broader context of corporate crises are then discussed. These include four other types of external impacts on a crisis situation – the crisis, the corporation, the media, and individual differences. The article concludes with implications for research and practice.     

Can socially irresponsible firms benefit from corporate advertising?

Abstract

Can corporate advertising improve firm performance following a brand crisis borne out of corporate social irresponsibility (CSI)? This article investigates socially irresponsible firms and their corporate advertising expenditures, which can be used to counter negative opinions. First, we examine whether firms experiencing a negative brand image due to socially irresponsible behavior alter their corporate advertising expenditures. Next, we assess the resulting impact of corporate advertising spending by CSI firms on overall performance. Using a sample of firms engaging in socially irresponsible behavior between 1995 and 2011, we find that such firms tend to increase their corporate advertising. Such changes in corporate advertising expenditures ultimately impact firm performance. Specifically, an increase in corporate advertising helps to reduce the negative effect of CSI on firm performance.     

The effects of social media on brand attitude and WOM during a brand crisis: Evidences from the Barilla case

Brand crises endanger companies. Social media are a key platform where stakeholders elaborate and react to crises. This research explores whether social media audience and traditional mass media audience react differently to a brand crisis in terms of their (1) attitude towards the brand and (2) word-of-mouth (WOM). As to the brand attitude, we argue that stakeholders mainly exposed to the brand crisis via social media have a more negative reaction towards the brand compared to those who are principally exposed via traditional media. As to the behaviour, we posit that social media exposure intensifies WOM. By analysing the Barilla crisis, the findings suggest that the social media act as ‘multipliers’ of the reaction of stakeholders to a brand crisis.     

Is Corporate Advertising Effective in a Crisis? The Effects of Crisis Type and Evaluative Tone of News Coverage

The present study examines how consumers respond to corporate advertising during a corporate crisis. In particular, it examines what impact two factors—crisis type and the evaluative tone of a news story—have on consumer responses to corporate advertising. Results of the experimental study suggest that the crisis type—an accident or a transgression crisis—is a critical factor affecting ad credibility and changes, between pre- and post-tests, in perceptions of and attitudes toward the corporation. In addition, the results reveal that while the effect of the evaluative tone of the news story is not statistically significant for each of the dependent variables, the marginally significant effect on the set of dependent variables calls for more careful attention to this issue in future research.     

The impact of the lost decade on advertising in Japan

This study describes the perceptions of Japanese advertising professionals regarding the evolution of advertising planning and execution over a three-decade period. Senior management and creatives from 18 of Japan’s top agencies participated in extensive in-person interviews to compare the traditional nature of Japanese advertising with that of the US, and to explore factors that may have caused a shift in the style of Japanese advertising since the 1980s ‘bubble economy’. A grounded theory approach was utilised as an interpretive methodology. The study finds that the dramatic recession experienced during Japan’s ‘lost decade’ indeed had a strong influence on the nature of Japanese advertising. Along with additional factors such as changes in the media landscape and the adoption of American-born audience measures, economic uncertainty during the 1990s pushed adverting agencies towards a more direct and persuasive selling approach. This trend contrasts sharply with a general societal shift from materialist to post-materialist values in Japan during this period.     

An integrated model of advertising clutter in offline and online media

The rapid growth of online advertising raises concerns about advertising clutter in the online media environment. This paper proposes an integrated model of advertising clutter that addresses the unique characteristics of the online media environment. We review the structural, information processing and functional approaches to advertising clutter, and integrate these approaches into a new comprehensive framework that explains consumer response to advertising clutter by differentiating consumer-centred analysis from media-centred analysis. The differences between online media and offline media are compared in terms of audience control and advertiser control. Attitudes towards advertising in general and in specific media contexts, and task orientations are introduced as mediating factors that affect the perception of and the subsequent response to advertising clutter. This paper offers a set of propositions on the factors affecting perception of advertising clutter, the relationship between physical characteristics and perception of advertising clutter, and how perception of clutter creates negative advertising effects. Managerial and theoretical implications of this framework are discussed.     

Responses Toward Corporate Crisis and Corporate Advertising

This article investigates how individual differences affect consumer responses to corporate advertising during a corporate crisis. Study 1, based on qualitative data, showed brand ownership, involvement with the crisis, and news media exposure were important factors in understanding consumer response toward the crisis and the company. Study 2, a survey, empirically demonstrated that prior attitude toward the company was the most critical factor affecting advertising-related behaviors. The study further suggested consumers of the brand were more likely to view the company favorably, to know more about the company, and to be more involved in their following of the crisis.     

产品危机对分销商反应方式及渠道氛围的影响研究

文章认为产品危机导致了一种特殊的渠道情境,会对分销商反应方式及渠道氛围产生影响。通过对模型的构建与验证,文章的二十项假设有十三项获得支持,显示产品危机特征、供应商对产品危机的响应特征及危机前的渠道氛围能够影响分销商实施建设性反应方式和破坏性反应方式的可能性,而分销商的反应方式又影响到危机后的渠道氛围。研究中既考虑了产品危机对分销商反应方式这种短期行为的影响,又考虑了其对渠道氛围这种长期关系基础的影响,实现了对产品危机短期与长期影响后果的综合考虑。     

Exploring antecedents of attitudes and skepticism towards pharmaceutical advertising and inter-attitudinal and inter-skepticism consistency on three levels: an international study

Abstract

Given the increasing relevance of over-the-counter (OTC) drugs to individuals’ health and well-being, this study explores whether selected health variables, as well as consumers’ attitudes and skepticism towards advertising in general, influence their attitudes and skepticism towards pharmaceutical advertising. It extends previous research by building on the theory of inter-attitudinal consistency, examining how three different levels of attitudes and skepticism are interrelated. A field study was conducted on three continents (727 subjects; non-student sample). Results reveal that consumer attitudes and skepticism towards advertising in general, influence attitudes and skepticism towards pharmaceutical advertising in particular, which positively impact the attitudes and skepticism towards four different ad appeal types. The study extends the theory of inter-attitudinal consistency to inter-skepticism consistency. Results further indicate that attitudes and skepticism towards advertising in general can be considered as key antecedents, but that several additional health-related factors also influence consumers’ attitudes and skepticism towards pharmaceutical advertising. Moreover, attitudes and skepticism towards advertising in general, towards pharmaceutical advertising, as well as towards specific pharmaceutical ads, are negatively related. Reasons explaining these results are addressed, as are study limitations and implications for future research.     

Developmental antecedents to children’s responses to online advertising

Many critics have raised concerns about online advertising directed to children. This study investigated the role of several antecedent variables that may impact children’s attitudinal and behavioural responses to online advertising. Specifically, online ad scepticism, family communication patterns, time spent on the internet, and perceived internet competency were examined as factors that may impact children’s online advertising attitudes and behaviours. A survey conducted with a dyad sample of 381 parents-preteens in South Korea revealed that children with high scepticism towards online advertising, who spent less time using the internet and who perceived lower levels of confidence about their internet skills were more likely to have a negative attitude towards online advertising and less likely to disclose personal information to online marketers. However, the relationship between family communication and children’s responses to online advertising found in this study was inconsistent with the previous empirical findings. Implications of findings are discussed and directions for future research suggested.     

An investigation of the influence of cinema environment on advertising effectiveness

Many advertisers are looking to cinema advertising as a nontraditional medium to reach consumers. Although several scholars have examined the effectiveness of this advertising vehicle, there is a dearth of empirically grounded research on how to improve such effectiveness. This study, based on the reactance and the equity theories, is probably the first academic project investigating how to manipulate an advertising environment in a real movie theatre to maximize advertising effectiveness. Results indicated that audiences in a distractive environment held a more positive attitude toward cinema advertising in general, but those in a restrictive environment were more likely to remember the advertised brands. In addition, the provision of ticket price information improved audiences’ acceptance of cinema advertising, but did not enhance recall. Moreover, the influence of ambient scent emitted into the atmosphere in a cinema room on ad recall dissipated when movie viewers became accustomed to such stimuli. Based on these findings, theoretical discussions and recommendations for practising managers were made.     

Congruence Effects in Post-crisis CSR Communication: The Mediating Role of Attribution of Corporate Motives

Corporate social responsibility (CSR) has grown on the corporate agenda and is at the heart of today’s corporate culture. While much research has examined CSR strategies and effects, the effects of post-crisis CSR communication have received relatively little academic attention. Therefore, this paper uses two experimental studies to examine several key contingency factors that influence consumers’ responses to post-crisis CSR initiatives. Results suggest that consumers demonstrate more favorable responses when a company launches a CSR initiative congruent with the crisis issue, or when the crisis is the result of an accident rather than a transgression. Further, the congruence between the crisis issue and the pre-crisis CSR initiative moderates the consistency effects between pre- and post-crisis initiatives. Such findings should be understood by considering the mediating role of corporate CSR motives’ consumer attributions, which was evidenced in this study. This study theoretically contributes to an improved understanding of the underlying mechanism of the post-crisis CSR information process and managerially contributes to the strategic development of effective post-crisis CSR initiatives given a particular situation.     

Development of TV advertising literacy in children

This study investigates the role of physical appearance (body mass index (BMI), body shapeperception, self-esteem) and variables related to eating habits (food choice, critical attitude towards food, parents’ attitude towards food) in the development of advertising literacy in children focusing on food advertising. Based on the concept of self-esteem and the theory of cognitive dissonance, a research model is developed and tested in an empirical study with 249children aged 7 to 11. Using PLS path modelling, self-esteem and critical attitude towards food are identified as factors influencing advertising literacy directly. Self-esteem is significantly influenced by children’s BMI and body shape perception, while critical attitude is determined by children’s food choices and children’s perception of their parents’ attitude towards food. Evidence was found that the influence of body shape perception on advertising literacy is fully mediated by self-esteem. The results link variables related to physical appearance and eating habits to how children deal with advertising. Implications for academic research and public policy are discussed, and the study raises issues for children’s advertising literacy support and training.     

Crisis leadership in economic recession: A three-barrier approach to offset external constraints

An economic recession is a type of crisis originated from external factors that may imperil an organization’s survival depending on the intensity and duration of the crisis. In peripheral European countries, such as Portugal, the recent financial crisis had devastating effects on various business activities. As a result, Portugal represents an important case study in examining how some corporate leaders have handled the economic recession successfully. I interviewed 20 corporate managers to capture their perceptions of the leadership traits and behaviors exhibited by their CEOs in guiding their companies through the recession. In economic recessions, negative constraints do not affect the most effective leaders, who instead erect barriers against the high-pressure conditions to create a supportive, positive work environment. In order to achieve maximum effectiveness, leaders must act as blocking agents against the negative social impacts of the economic crisis, including the fragility of trust in organizational life (i.e., a barrier against distrust), uncertainty of the future (i.e., a barrier against uncertainty), and toxic emotions (i.e., a barrier against toxic emotions).     

Ethical Rationality: A Strategic Approach to Organizational Crisis

In this paper, we present an ethical and strategic approach to managing organizational crises. The proposed crisis management model (1) offers a new approach to guide an organization’s strategic and ethical response to crisis, and (2) provides a two-by-two framework for classifying organizational crises. The ethically rational approach to crisis draws upon strategic rationality, crisis, and ethics literature to understand and address organizational crises. Recent examples of corporate crises are employed to illustrate the theoretical claims advanced. Finally, the paper provides guidelines for a morally optimal outcome for the organization and its stakeholders. Peter Snyder is a Ph.D. student in Organizations and Strategic Management at the University of Wisconsin-Milwaukee. His research interests include strategy making and corporate governance. Molly Hall is an attorney who practices international and environmental law in Milwaukee, Wisconsin. She teaches adjunct courses in business ethics, environmental policy, and the European Union. Joline Robertson is a Ph.D. candidate in Organizations and Strategic Management at the University of Wisconsin-Milwaukee. Her research interests include international business. Tomasz Jasinski is a Ph.D. student in Organizations and Strategic Management at the University of Wisconsin-Milwaukee. His research interests include strategic alliances. Janice S. Miller received her Ph.D. from Arizona State Univerity in Business Administration with a concentration in Human Resource management. She has been on the faculty at the University of Wisconsin-Milwaukee UWM since 1996 and has served as the Associate Dean for Academic Programs in the School of Business Administration since 2002. Dr. Miller’s primary research interests include performance management, compensation and ethical issues in organizations.     

Consumer attitudes and interactive digital advertising

This research examines consumer attitudes towards four sub-types of interactive digital advertising: internet-based e- and email advertising, and mobile-phone-based SMS- and MMS-type advertising. The differences in attitudes among these four sub-types of interactive digital advertising are also compared. Data are collected from three universities in Taiwan. Data analysis extracts three attitudinal forms (common factors) towards interactive digital advertising, namely, ‘informative’, ‘entertaining’ and ‘irritating’. Consumer attitudinal forms towards e-advertising and MMS-type m-advertising are both similar and positive (i.e. informative and less irritating and entertaining). Their attitudinal forms towards email advertising and SMS-type m-advertising are less positive (more irritating and less informative and entertaining). Furthermore, the three attitudinal forms towards the four sub-types of interactive digital advertising are compared. Consumer ‘informative’ and ‘entertaining’ attitudinal forms towards e-advertising and MMS-type m-advertisingare similar, while their attitudinal forms towards email advertising and SMS-type m-advertising are equal and lower than towards the previous two sub-types of interactive digital advertising. As for the ‘irritating’ attitudinal form, consumers feel more ‘irritated’ towards email advertising and SMS-type m-advertising, while their attitudinal forms towards e-advertising and MMS-type m-advertising are equal and less irritated.     

China myths and advertising agencies

One of the fastest growing sectors in China's transforming economy is advertising. Within the industry, large numbers of ‘advertising agencies’ are typically reported. This article charts growth in the industry and classifies agencies by type, in order to establish a more accurate understanding of agency numbers and growth. Advertising agencies are but one type of organization among the huge number of licensed ‘advertising practitioners’ in China, which are often erroneously referred to as agencies.     

Strategic choice during economic crisis: Domestic market position,organizational capabilities and export flexibility

This study examines how sudden shrinkage of domestic demand affects firm-level export performance. Using the Asian economic crisis as a natural experiment, we show that while the industrial organization (IO) economics and resource-based view (RBV) apply well in the pre-crisis period, the real options perspective does a better job in explaining firms’ efforts to increase exports in the post-crisis period. Specifically, using a real options perspective, we show how sudden change in domestic demand provides benefits to those firms that have invested in flexible capabilities while those firms that are locked in with inflexible resources fail to change. We find that the positive relationship between a firm's domestic market position and export intensity becomes stronger in the post-crisis than the pre-crisis period. Further, we find a positive relationship between non-location-bound flexible capabilities such as R&D and export intensity and a negative relationship between location-bound inflexible capabilities such as advertising and export intensity. These relationships become more pronounced in the post-crisis period.     

The myth of big data: Chinese advertising practitioners’ perspective

A qualitative study was conducted to explore Chinese advertising practitioners’ perceptions and interpretations of big data in the Chinese market. Twenty-two in-depth interviews were conducted to collect the data. Four overarching themes emerged regarding the interviewees’ perception of the Chinese advertising market, the definition of big data, the application of big data and the future development of big data. Based on the themes, a theoretical framework was developed to demonstrate big data's application and development in the Chinese market. Theoretical and practical implications were offered.     

The impact of online display advertising and paid search advertising relative to offline advertising on firm performance and firm value

This research examines the impact of online display advertising and paid search advertising relative to offline advertising on firm performance and firm value. Using proprietary data on annualized advertising expenditures for 1651 firms spanning seven years, we document that both display advertising and paid search advertising exhibit positive effects on firm performance (measured by sales) and firm value (measured by Tobin's q). Paid search advertising has a more positive effect on sales than offline advertising, consistent with paid search being closest to the actual purchase decision and having enhanced targeting abilities. Display advertising exhibits a relatively more positive effect on Tobin's q than offline advertising, consistent with its long-term effects. The findings suggest heterogeneous economic benefits across different types of advertising, with direct implications for managers in analyzing advertising effectiveness and external stakeholders in assessing firm performance.