Negative Campaigning

USA Today recently ran (August 26, 2009) a story titled “States Knock Heads to Lure Businesses”. The story showcased a new attack campaign designed to encourage business relocation. This approach to place marketing raises several important questions.

  1. Does negative promotion work?
  2. What might the unintended long-term risks be?
  3. Is it a direction that should be encouraged for economic development?

Here are my thoughts and an overview of what I learned.

Does negative promotion work?

The literature is unfortunately unclear on the subject of negative campaigning. There are a number of references that demonstrate it has been an effective approach for political campaigning. However, I also found a paper that suggested the approach works in politics when there are only two viable candidate choices. The theory is voters will seek to select the lesser of two evils when a campaign goes negative. In addition, it has been reported that negative campaigning may reduce voter turn out suggesting by its nature the approach can be alienating. I could find very little on the impact of attack advertising in the product world (probably because the scholarly focus has been so overwhelmingly on the political application). But, there is information on comparative advertising and we all can cite high profile campaigns like Mac versus PC and the Pepsi Challenge as examples.

What might the unintended long-term risks be?

It appears that when there are more than two viable choices, negative campaigning can backfire. Consumers may select a third alternative option rejecting both the attacked and the attacker. This can have a destructive effect on the image of both locations that should be considered as an offset to any near-term business attraction gains. In the case of state versus state attacks, I believe an unintended risk is that it can also have a destructive effect on Brand America’s image among global capital investors. My personal point-of-view is strong state brands make a strong Brand America. I am concerned that when one state seeks advantage by denigrating the image of another, it may ultimately weaken the image of our country.

Is it a direction that should be encouraged for economic development?

In my opinion, there is nothing wrong with comparative promotion that meets FTC guidelines of being fact based and truthful. But, I do not believe attack campaigns that are designed to gain competitive advantage by destroying the image of another location is an approach I think is in the best interest of the economic development profession or Brand America.
In the spirit of understanding what others in economic development and within the CEO office think, I did a little qualitative research using LinkedIn. You can download the verbatims. This is not a well-controlled market research study and should not be considered as such. The general sentiment ranges from “off putting” to “whatever works in tough times”.

The question of what position the economic development community should take on the practice of negative campaigning is a great one for more formal research and spirited debate. It is also a subject I believe the economic development community could (and probably should) consider taking a formal position on, perhaps as a future amendment to the current IEDC Code of Ethics.

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16 Comments so far

  1. Dorothy C. Beach

    September 13, 2009

    As far as I know none of the business strategy gurus from the best business schools endorse negative branding as a counter-competitive strategy. This isn’t even endorsed when there is a PR crisis such as dealing with tainted product (and then taking advantage of the competitor’s plight). I agreed about the comparitive promotions cited above as long as there is nothing that suggests mud-slinging. Can you imagine the PR nightmare if negative branding backfired?
    “Reasons to believe” in a state’s attractiveness to business is a much better approach that has to be messaged consistently throughout the state’s governmental organization to work. That means the employees also have to become “brand managers” and the attitude the “everyone’s a recruiter” has to be expected. Of course this means that those who concretely push the right message are rewarded. A consistent message that is reflected on interactive websites, phone calls into the government, responses through social media channels and other PR channels is the main problem of state and local government branding issues that should receive far more attention than thoughts on negative branding.

  2. Andrew Levine

    September 13, 2009

    While negative campaigns are not new to economic development marketing, the Nevada Development Authority’s “flying pigs” attack on California takes this to a whole new level.

    The politically correct answer is an easy one: negative campaigns hurt the economic development profession and it should be discouraged.

    But let’s turn to the first question posed by Ed Burghard: Does negative promotion work? Certainly in the short term Somer Hollingsworth and his Las Vegas economic development organization have grabbed headlines across California and indeed across the nation.

    Will they see a favorable return on investment from this million dollar campaign in new business leads, site visits and ultimately investment? Just a guess at this point, but I suspect they probably will.

  3. Nancy Schulz

    September 14, 2009

    It is unfortunate that people, or states, feel they don’t have enough positive qualities that in order to win votes or businesses, they have to say something bad about their competition.

  4. Tonya Britton

    September 14, 2009

    Tearing apart your competitor may buy short-term gains, but asset-based marketing provides far greater long-term returns. Negative campaigining is a tactic which is small-minded, both in the petty, figurative meaning of the term, and literally. It negates future partnerships, it is static, and it is backward looking. It presumes that the current status is the baseline by which all future decisions will be made and it shifts the focus from limitless possibilities to addressing only those needs that are front and center. Most companies have enough genius’s on staff to tell them why something won’t work. Do they really need to hear an EDC rep from another state adding to the list? If I’m lucky enough to get 5 min with the decision-maker, my pitch is going to focus on what the business needs now, where it’s going, and how my town and I can be the ones to get it there. Asset-based marketing is value-added, customer-centric problem-solving and it’s going to appeal to companies who are strategically positioning themselves for the future, who have a vision for how things can be and who need someone who can proactively help bring that vision from plan to reality. Beyond helping a company identify a few of the potholes they might encounter along the way, I just don’t see how negative campaigning can help a company get to where it wants to be.

  5. Bill Baker

    September 14, 2009

    Given that most locations are operating with very limited economic development marketing resources, it would not seem to be a productive use of those assets to engage them in promoting negatives about other cities and regions. Most places barely have enough resources to project their own strengths to get onto the clients radar, let alone be critical of others. The rigor of the decisionmaking process of most clients usually requires that they assemble a lot of factual information in order to make accurate comparisions. That is to say, there is a lot of process and logic used in decisionmaking, that’s not to say that emotion doesn’t come into the equation. There is certainly not the same level of emotion in politics where emotion has a very influential role in decisions, hence making politics the ideal environment for negative advertising.

  6. Hjortur Smarason

    September 15, 2009

    Good thoughts, Ed. First of all, no matter what you are saying or who you are attacking in your advertising, it will always have a reflection on YOUR character. So focusing on a negative aspect of your competition is generally negative for you. A better approach would be to focus on the fact that you’re better in that matter.

    If we consider negative promotion in general, it usually only works if you’ve got nothing to loose. If you have a low valued or little known brand negative publicity can be very good, if you play it out right. Ryan Air is an example of a company that focuses on negative publicity and “shock marketing”. Their message is basically: you get what you pay for, and don’t expect to get anything from us. Hence, you don’t pay much if you don’t get much. While South-West isn’t competing in the same market, they’ll be doing ok with that strategy.

    If you use the negative publicity to draw attention to something positive regarding your brand it can be a good thing. Here in Iceland where I live, we could have used the attention our whale hunting got to draw attention to how easy it is to go whale watching – making Iceland known as the whale country (but the government did nothing in that direction). Negative is also relative. What one group finds negative another can find positive. Being controversial can be good but when we’re talking about whole communities or countries, that can be a very tricky thing to do.

    Criticizing your neighbour might even be necessary in the case where you consider yourself a spokesperson for some issue, such as death penalty, freedom of speech, democracy, gender equality. By criticizing others in that matter you strengthen your image as a spokesperson or a fighter for that particular matter.

    Overuse of anything will be tiring and negative in the long run.

  7. Eric Swartz

    September 15, 2009

    Denigrating a competing destination as a means of boosting one’s own reveals a poverty of imagination and a lack of long-range strategic thinking. That being said, I think there is a role for comparative advertising as long as it uses humor, irony, hyperbole, and a little self-deprecation to get one’s message across. Still, advertisers with tongues firmly planted in cheek can cross the line as evidenced by the Nevada Development Authority’s campaign that portrays California lawmakers as monkeys and its budget as swine.Talk about mud-slinging motivated by greed and opportunism! I guess the prevailing perception is that there’s not enough to go around when times are tough. Nevada is hurting so it’s turning to its big, affluent, and discontented neighbor to siphon off some low-hanging fruit. Trouble is, California is hurting, too, and the decision to go negative causes bad blood and ends up hurting us all.

  8. Mark Collar

    September 15, 2009

    Nevada’s attack ads have provoked a spirited advertising retaliation from California taking shots at Nevada. In this case, I think back and forth mud slinging hurts the credibility of both slingers, particularly with a public increasingly distrustful of government claims and promises. Lower taxes is a feature of Nevada that will probably recall due to the drama being created, but my guess is that the somewhat sketchy image of Vegas to begin with, will be further enhanced by the tone and treatment of the attack ads and retaliatory response, negating any benefit from lower taxes recall. Net, in my view there is typically no long term benefit to attack ad approaches and potential damage to your own brand equity.

  9. Robert Govers

    September 16, 2009

    Negative campaigning is a bad idea and a sign of weakness. My feeling is that it is more likely to hurt the aggressor and benefit the attacked, than the other way around. These sort of attacks are always based on rational arguments (i.e. financial considerations), but our research shows that irrational or emotional considerations are just as important for target markets (be they investors, tourists, traders, talent). What is the sense of place? How exciting is it there? Does it offer a good lifestyle? Bottom line: would my wife, kids, family and friends enjoy going there? It seems to me that the aggressors in these types of negative campaigns are unable to match the offer of others when it comes to these non-rational considerations and they express their frustration by focusing only on a certain part of the target market requirements. Customers will not be patronized in this way and the result is a focus on weaknesses of all involved, damaging the overall nation brand.

  10. Sean M Duggan

    September 16, 2009

    My experience of working with investment and location promotion agencies suggests that negative camapigining does not constitute good practice. More innovative forms of promotion include:
    1. Running shadow campaigns dsigned to challenge negative or unfavourable perceptions held in the market e.g. Irish Development Agency’s programme to promote iteslf as a European Distribution hub to compat perceptions of Ireland as peripheral to Europe.
    2. Commissioning “independent” research to tackle misperceptions about a location. This can also include use of “talking head” success stories e.g. Think London’s independent studies to demonstrate the impact of foreign investment (their role in it) and reinforce London’s status as a preferred location.
    3. Using events or host location “talent” to alter perceptions e.g. the Olympics in China.
    4. Using unusual “twists” ot bend a location’s profile that might not have a high profile in one area becasue of the weight of perception in another e.g. Hong Kong’s promotion as an exciting tourism destination when the main perception is of a business hub.
    5. Developing events to confront perceptions e.g. advocating for European City of Culture status by locations that have been seen as cultural backwaters e.g. Glasgow and Liverpool.

  11. Rachel Duran

    September 16, 2009

    One way to look at things would be to take the regional approach, such as the border communities in these states banding together to promote the regional advantages. Northern California dislikes being lumped with Southern California, and vice versa.
    As you know, with the regional concept, when one community wins, surrounding communities also win. And in today’s marketplace, you are branding yourself to the world. Many communities don’t seem to understand this. (A region that does this well is in Pullman, Wash., and Moscow, Idaho. Two major university towns less than 10 miles apart.)
    In regard to the branding concept, groups from Alabama, Mississippi and northern Florida marketed themselves as one aerospace region at the Paris International Air Show this summer. They had a booth together, I believe.

  12. Matthew Fenton

    September 17, 2009

    Negative advertising in general says far more about the attacker than the attackee. If you’re interested in presenting your region/municipality/whatever as a smug, spiteful, mean-spirited place to work and live, this is probably a useful approach to take. If not, you can do better. Stand on your merits. Provide reasons to believe. Tell a story.

    If you’ve got the goods, present them. If you have to resort to tearing down your neighbors, it suggests you don’t have a compelling case of your own.

  13. Tim Guen

    September 18, 2009

    The difference between this state vs state negative marketing campaign and a political campaign is that this doesn’t end on an ultimate election day. There are no voters making a choice on beliefs, values or programs. It’s just a marketing strategy intended to motivate a business prospect to make an unlikely decision. The tactics are unseemly to many (myself included), but you have to admire the passion the NDA is bringing to their message. The campaign will end when one of three things happen: the NDA exhausts their ad budget, the ad campaign doesn’t produce results, or CA emerges from their economic despair and narrows the gap in business incentives to blunt the argument.

    The impact on state feuds on Brand America is negligible, in my view. Foreign trade policy (e.g. NAFTA) is far more important to the perception of America’s reputation as a positive force (or not) for the world economy and the world at large. Bordering US states have their share of friction and tribalism, but it pales in comparison to the intense animosity that exists between states in Europe, the Middle East and Africa. There, conflicts are resolved with guns, tanks and genocide. Does anyone remember the old Yugoslavia brand?

    With regards to economic impact, the universal laws of business will moderate any large scale migration of businesses across state borders. Any state governor will be adequately attentive to insure that there are sufficient incentives for their resident corporations to stay put. I think it’s more likely that regional alliances will emerge among bordering states with similar commercial interests, as a friction-less market (to quote Tom Friedman) is likely to create greater efficiencies and drive out unnecessary costs. This opportunity for state collaboration leading to greater prosperity for all could put a tremendous amount of wind in the sails of Brand America.

  14. Jeffrey Finkle

    September 30, 2009

    In terms of negative advertising in economic development, it is important to note that unlike the political realm, choosing a location is rarely the choice between the lesser of two evils – as is often the case in politics – but there are clearly qualities that attracted the business to want to set-up shop in one place or another in the first place. So, while I understand that everyone needs the revenue and jobs that a new business can bring to a community, any gain from a negative campaign is a short-term fix only – that is, if the locality is even successful in recruiting the business. In the longer term, effects could be detrimental to future attraction, as well as marring retention efforts. Business already located in the community could be turned-off by such a negative approach and chose not to be associated with it in the future.

    As Andy Levine of DCI pointed out in a September 2008 edition of ED Now, “what others say about your community is more important than what you say about yourself”.

    We all know that when it comes down to choosing between locations, once issues like cost of doing business, quality of workforce, logistics, tax breaks and incentives are ironed out, intangibles such as personal relations and feeling good in a place play a role. So, at the end of the day, even if a community does lose a bid, positive marketing increases the locality’s value, leaving a favorable memory with corporate leaders and leaving open the opportunity for ‘next time’.

    And, let’s not forget that workforce mobility – among leadership in both the EDO and the corporation – means that in a couple of years, the CEO of company X may become the CEO of company Y and would be happy to set-up his new firm’s plant in your town!

    Moreover, it is important to consider that at a time that the economic development community is encouraging regionalism, it makes little sense to insult your neighbor today, when tomorrow you may need to partner with that same neighbor in order to compete for business for the region. This also has implications in terms of strengthening Brand America, thereby highlighting everyone’s assets.

    Economic developers should be investing in innovative approaches to brand their unique strengths, making the case of why their locality is the best choice, rather than slandering the competition. Strategies should be based on long term goals of attracting and retaining capital and people, showcasing a community’s competitive advantages for an excellent quality of life and business growth potential, and not as an alternative to the ‘the other guy’.

  15. […] authored a blog post entitled “Negative Campaigning”  to raise the question about using attack advertisements to promote a location. I felt […]

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