TV Commercials Play on Accounting Credibility Crisis

Congressional lawmakers, the Securities and Exchange Commission and the accounting profession are all struggling to restore confidence in the financial reporting process, but Madison Avenue advertising agencies seem to be going off in the other direction. They hope to capitalize on the credibility crisis by building business for their clients on the basis of investors' fears and doubts.

Attempts to leverage accounting scandals and economic recession have already resulted in several TV commercials, including one rejected by a major television network as being in too poor taste to run in prime time.

  • Charles Schwab is reportedly promoting its business through commercials that play on the negative publicity surrounding financial reporting and securities analysts in competing firms. A key Schwab ad depicts a brokerage firm hyping stocks to unsuspecting customers and using the phrase, "Let's put some lipstick on this pig." CBS found this imagery too negative to run and refused to air the commercial. But other networks apparently find it perfectly acceptable and have given it plenty of airplay.

  • IBM's marketing managers are said to have embraced an ad campaign that builds on negative images of accounting/consulting firms from whom it hopes to win market share. One IBM ad uses the metaphor of a basketball team, whose owners and coaches are saddened, though frankly not surprised, that the chalkboard-diagramming "expert" charges them $4 million, and he's not even sticking around to see his recommendations through. Another IBM ad shows nervous business executives trying to create an advertising jingle that will distract customers from their company's terrible customer service and financial condition.

AdWeek notes that businesses have traditionally shied away from negative ads, such as the Schwab and IBM ads, because they tend to turn customers off. But, it says, IBM reasons that clients are already looking for reasons to distance themselves from the Big Five, and it is simply providing a helpful rationalization for making the safer choice. ("Going Negative: Advertising Learns to Leverage Scandal and Recession," AdWeek, August 5, 2002.)

-Rosemary Schlank

You may like these other stories...

A proposal issued by the Governmental Accounting Standards Board (GASB) last week explains how fair value measurement should be defined for state and local government financial reporting.The exposure draft, Fair Value...
By Jason Bramwell The board of trustees of the Financial Accounting Foundation (FAF) finalized a new policy on November 19 that provides the Governmental Accounting Standards Board (GASB) with direction on what...
By Jason Bramwell The Governmental Accounting Standards Board (GASB) is now offering a free online toolkit designed to assist preparers and auditors of state and local government pension plans with implementing new...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.