When it comes to corporate reputations, it's clear the pharmaceutical industry doesn't quite get it. (Just pick up any newspaper.)
But here's the latest newsflash when it comes to managing a bad rap: You get what you pay for.
What's Your Name Worth?: Most companies that spent more than $10 million on corporate advertising increased their brand power.
Companies that spent less had a difficult time breaking through the communications clutter and truly differentiating their
brand-as evidenced by the cluster of low-spenders in the left-hand corner. However, there were some outliers that spent little
on corporate ads but ranked high, like St. Jude Medical and Novartis, or that spent more but had less brand power, like Wyeth.
You would think that companies that gamble billions on the next blockbuster would think it was a pretty safe bet to spend
a few million to communicate to its investors, employees, and the public who it is and where it wants to go. But that's simply
not the case. In fact, very few companies put a meaningful amount of spending into image campaigns. In a three-year study
of 46 pharmaceutical, healthcare, and diversified-consumer-products companies, 72 percent were found to significantly underinvest
in building their corporate brand.
These findings show, when it comes to managing their reputation, pharmaceutical companies are missing out on the secret. So
we thought we'd tell you:
Corporate advertising allows pharma companies to communicate their mission as a company. Such communications can help impact
the bottom line. Bristol-Myers Squibb has excelled in this department, and its name retains an extremely strong brand equity.
People like what's familiar. And since advertising can acquaint various audiences with the company brand, it can help companies become better known and
better liked. There's also evidence that, for pharma companies, improving popularity translates to better financial outcomes,
such as in Wall Street's valuation of the company and its stock price.
This article explores how corporate brands gain and lose value over time. By using extensive benchmarking data, it provides
insight into how different healthcare companies invest in brand building across the life-sciences landscape. This article
also solidifies the value of corporate brands—which many say have value that is intangible—by quantifying companies' efforts
in managing their reputation.
J&J: Omnipresent Brand Power: Johnson & Johnson has consistently invested in its corporate brand and, in the process, raised
the public's awareness and favorability toward the company. Despite crises in the industry, a change in the market, and the
massive growth of its business, J&J has improved its brand power beyond every competitor.