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.
- Does negative promotion work?
- What might the unintended long-term risks be?
- 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.