Advertising and reputation

The 26 companies and the national government specifically studied for the Top Companies Reputation Index (TCRI) are the biggest spenders on traditional advertising in South Africa.

Though they may advertise through different media, may target different groups and may differ in whether they focus on products or general branding, all are continuously pushing a positive message into the market.

However, the sheer level of advertising spend is the first thing that can be discarded when it comes to teasing out just what makes for a good or bad reputation.

The top 30 spenders did not necessarily jump to mind naturally when either consumers or businesses were asked to name those companies they thought had good reputations; the likes of Woolworths also popped up. And it wasn’t just consumers; business representatives were far more likely to name Woolworths than any other company, and also brought up the likes of Anglo American and Discovery Health, which are not among the top spenders.

There is some indication that how advertising money is spent, rather than just the volume of money, could be quite important to reputation. Though a clear winner among both consumers and businesses, Coca-Cola, came in at only number five in spontaneous advertising recall.

“Coca-Cola’s television advertising during the FIFA World Cup was highly visible and perhaps capitalised on national solidarity and attentive ears at that time,” Plus 94 Research says.

Awareness does not preclude a bad opinion—as the many people who cited the SABC as having a poor reputation showed—nor does obscurity prevent it, as is illustrated by the number of business respondents who brought up mining company Aurora, a very troubled entity that was in the news for all the wrong reasons at the time, but doesn’t advertise.

It is also clear that quality of advertising, at least in so far as its ability to stick in the mind, does not determine reputation. Respondents asked what advertising they recalled were most likely to name MTN, even though it ranked only number five in the index, and nearly as likely to mention KFC, which came in at number 12 on the index.

Vodacom advertising was less likely to be recalled than either MTN or KFC, even though it is a strong second on the overall index. While the quality of products and services comes into play, reputation is not necessarily determined by what a company does or makes.

Three of the big four banks ranked very close to one another in the index, with only 1.53 points separating FNB, Standard Bank and Absa in positions six, seven and eight respectively. Nedbank breaks the trend, though, coming in at number 14 thanks to a score 2.25 points behind that group.

Vodacom, at number two, and Telkom, in 11th place, not only play in the same space but were, until recently, quite closely linked. And if Distell is at number 21 of the top 30 because anyone objects to it selling alcoholic products, it would be a real puzzle how beer-maker SABMiller ended up in third.

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