This goes even further than the thesis proposed in Al Ries and Laura Ries’s 2002 book The Fall of Advertising and the Rise of PR.
Have you noticed the link between those institutions spending most on advertising and sponsorship and those now losing their independence?
I started observing this trend a decade ago with Equitable Life. I’d trusted this cautious insurer with my personal pension plan because it came highly recommended by other professionals. Then the company appeared as sponsors of a prime time television comedy, Frasier (remember the tag line, ‘it’s an equitable life, Henry’?); next thing the company was closed to new business and savers took what they could from the wreckage (in those days there was no sympathy for savers and no talk of nationalisation).
Now we have numerous case studies: Northern Rock – sponsors of a professional football team, Newcastle United; AIG, sponsors of Manchester United; Halifax (now part of no-longer-independent HBOS), famous for the singing mortgage adviser (‘as seen on TV’); and bowler-hatted Bradford & Bingley and its TV presence (pride comes before the fall).
I’m not suggesting cause and effect (that the cost of TV advertising or football sponsorship tipped these institutions into insolvency), but I am suggesting a corporate or managerial vanity that should have indicated to investors that their money would be safer elsewhere.
If advertising wasn’t the answer, could PR have done better? It would have taken a very confident and assertive PR adviser to have cautioned against this corporate vanity. Unfortunately, we’re only ever blessed with hindsight once it’s too late.
Out of the wreckage, some institutions will emerge even stronger. I’m suggesting it’s likely they will have been less flashy with their money (our money) in the good times; they may also have some of the better PR advisers in the sector, who will not only have helped save their employers’ independence, but may also have saved them millions on advertising on sponsorship.