Standardized Advertising

The support for global advertising is threefold. First, it has significant economic advantages. Standardized advertising lowers the costs of value creation by spreading the fixed costs of developing the advertisements over many countries. For example, Coca-Cola’s advertising agency, McCann-Erickson, claims to have saved Coca-Cola more than $100 million over 20 years by using certain elements of its campaigns globally.

Second, there is the concern that creative talent is scarce, so one large effort to develop a campaign will produce better results than 40 or 50 smaller efforts. A third justification for a standardized approach is that many brand names are global (Burberry being a good example, see the opening case). With the substantial amount of international travel today and the considerable overlap in media across national borders, many international firms want to project a single brand image to avoid confusion caused by local campaigns. This is particularly important in regions such as western Europe, where travel across borders is almost as common as travel across state lines in the United States.

Against Standardized Advertising

There are two main arguments against globally standardized advertising. First, as we have seen repeatedly in this chapter and in Chapter 4, cultural differences among nations are such that a message that works in one nation can fail miserably in another. Cultural diversity makes it extremely difficult to develop a single advertising theme that is effective worldwide. Messages directed at the culture of a given country may be more effective than global messages.

Second, advertising regulations may block implementation of standardized advertising. For example, Kellogg could not use a television commercial it produced in Great Britain to promote its cornflakes in many other European countries. A reference to the iron and vitamin content of its cornflakes was not permissible in the Netherlands, where claims relating to health and medical benefits are outlawed. A child wearing a Kellogg T-shirt had to be edited out of the commercial before it could be used in France, because French law forbids the use of children in product endorsements. The key line “Kellogg’s makes their cornflakes the best they have ever been” was disallowed in Germany because of a prohibition against competitive claims.16 Similarly, American Express ran afoul of regulatory authorities in Germany when it launched a promotional scheme that had proved successful in other countries. The scheme advertised the offer of “bonus points” every time American Express cardholders used their cards. According to the advertisements, these bonus points could be used toward air travel with three airlines and hotel accommodations. American Express was charged with breaking Germany’s competition law, which prevents an offer of free gifts in connection with the sale of goods, and the firm had to withdraw the advertisements at considerable cost.17