GS F224 Print and Audio Visual Advertising Case 1

GS F224: Print and Audio-Visual Advertising

Case 1 - Benetton: The "United Colors" Communications Campaigns

In mid-September 1993, Luciano Benetton, chairman of the Benetton Group, reflected on the
contentious meeting of his company's senior managers that he had just attended at company
headquarters in Ponzano, Italy. During the meeting, questions had been raised that could affect the
planning of Benetton's future communications strategy as the company prepared for a complex stage
in its development as a global enterprise. The time had come to decide the direction Benetton's
current controversial advertising strategy should take, and whether the company's worldwide
communications needs could be met better by other strategies.

Background
The idea for what later became the Benetton Group was born one evening in 1955 in Treviso, Italy
when Luciano Benetton had said to his 18-year-old sister, Giulina, who had established a reputation
as the best worker in a small factory making sweaters near their home: "Why must we work for
others? Why don't we work for ourselves? You create and I'll sell." From that point forward, he had
contributed sales and marketing skills while she oversaw the fashion design of the brightly colored
sweaters that became the hallmark of the company. Growth in sales to department stores and other
retail outlets followed quickly.

In 1960 an event occurred that was to have a profound influence on the young Benetton. While
attending the Olympics in Rome, he was inspired by the diversity of colors and cultures around him.
He also saw stores that specialized in one type of merchandise, and was convinced that he must sell
his sweaters in Rome.

The Benetton's first retail outlet was opened in Belluno, Italy in 1964 while their new factory was still
in the design stages at Ponzano to the south. By this time, younger brothers Gilberto and Carlo
Benetton had become involved in the venture and would eventually concentrate on the
management of finance and manufacturing, respectively. The combination of strong product design
featuring bright colors, innovative retailing, and a highly responsive manufacturing and logistics
system provided the competitive advantage that eventually propelled the company into a leading
position among worldwide manufacturers and retailers of sweaters and other woven wool

garments. By 1993, Benetton had achieved worldwide sales of more than $1.5 billion in 110
countries. It was one of the first foreign companies to open retail stores in countries such as Russia
and more recently Cuba.

The company's efforts met with varying degrees of success in markets around the world. In Japan,
for example, in six years Benetton had become the largest non-Japanese retailer in the country in
cooperation with a Japanese partner, operating approximately 500 stores in 1993. In the United
States, in contrast, the company had entered the market in 1982 by dividing the country into
territories awarded to "agents" (all long-time partners with Benetton in Europe) who received
royalties from sales made to Benetton retail stores. Some agents were also part owners of stores.
This strategy, along with a favorable exchange rate and the enthusiasm of customers who had seen
Benetton's products during travels in Europe, quickly propelled the company into a chain of more
than 700 retail outlets. These stores for the most part were operated by individuals chosen for their
attitudes and enthusiasm rather than for their previous retailing experience.
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However, in the early 1990s the number of Benetton stores in the United States shrank rapidly—in
part because of the increasingly unfavorable exchange rate between the dollar and the lira that
adversely affected Benetton's Italian manufactured goods. By mid-1993, Benetton's products could
be found in the United States in only about 200 stores, although most were larger than the original
stores. The company reportedly lost $10 million in the United States in 1991, and the same amount
in 1992, even though Benetton reported a 12.1% increase in profits worldwide.

According to several reports in the press, additional factors had contributed to Benetton's reversal in
the United States. For example, it was widely suggested that Benetton's U.S. problems were partially
explained by the success of two competitors, The Gap and The Limited, Inc. Analysts and the retail
press had noted that Benetton's early consumer success in the U.S. market had been with teenage
buyers. But in the late eighties teenagers appeared to have "defected" to stores such as The Gap and
The Limited. In response to this trend, the new general manager of Benetton USA announced that in
the nineties Benetton would be focusing on a new target market, the young professional woman,
and featuring more elegant sportswear priced from $50 to $300 in U.S. stores.

Luciano Benetton acknowledged that price was also an issue. In 1992 he announced his intent to
lower prices in the United States, even though most of Benetton's clothing was produced in Italy—as
opposed to Asia for many of its competitors.

Nevertheless, a number of Benetton store licensees in the United States sought additional changes.
They believed that Benetton advertising had been contributing to declining sales and even the
demise of some of their stores, and were especially critical of the 1991 and 1992 series that
appeared in magazines with the "The United Colors of Benetton" logo.

Benetton's "United Colors" Strategy

The United Colors of Benetton was the brainchild of Oliviero Toscani, a well-known photographer
who was introduced to Luciano Benetton in 1981 by a mutual friend, Elio Fiorucci, a fashion
designer. Toscani talked of the need for Benetton to spread its message, to reflect a particular
lifestyle in its communication. He told Benetton: "People know the product and the shops, but
Benetton doesn't have an image; it hasn't created capital through our image."

A year and a half later, Benetton felt that the time was right for the company to develop such an
image and called Toscani. Three days later Toscani presented plans for a communications campaign
featuring children of various races dressed in Benetton clothing. According to Benetton, ,”Without
any hesitation, I agreed to it. Like all inspirations, it was simple, brilliant, and almost—but
it was that "almost' that made the difference—obvious."
The text that appeared with the first ads was simply: "Benetton—All the Colors of the World."
By 1985 this had evolved to 'United Colors of Benetton," with the phrase always written in
English. This campaign was devised to suggest the design continuity of the worldwide Benetton
collection. Appearing primarily on billboards or as shelf-talkers in retail stores, the early ads
included national flags and symbols and suggested a theme of racial harmony. (See Exhibit 1.)
One ad that was to prove prophetic depicted two young people, one dressed as an Israeli and
the other wearing a headdress that suggested Arafat, with their hands placed together on a
globe. During these early years, Benetton's ads attracted considerable attention and acclaim.
The 1988 campaign was clearly indebted to the "United Colors" advertising, but was marked
by two new events. Benetton had introduced a new line of clothing for children that was called
the "012" collection, and new advertising for the Spring/Summer season featured children of
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many races interacting with animals or playing with animal masks. The tag, "United Friends of
Benetton" was adopted for this campaign.
It was clear that with the increasing complexity of the Benetton product line, which now included
several thousand items of clothing as well as accessories and even eyeglasses, it was becoming
increasingly difficult to portray the range of the company's products in its advertising. Toscani
also believed that by now people around the world were familiar with Benetton products and
that the time had come to go beyond product advertising and turn to thought-provoking images
that would also stimulate recall of the Benetton name. Toscani intended to communicate ideas
related to the "United Colors" one-world theme, but no longer feature company products.
Luciano Benetton, who was ultimately responsible for the decision, was also convinced that
company advertising could stir social awareness and at the same time evoke recall of the Benetton
name and logo. Benetton was also confident in Toscani's judgment and ability to create
memorable images. The first ads to step beyond product introduced a one-world theme in the
Fall/Winter 1988-89. The campaign was intended for adults and young adults, and featured
multiracial portraits side by side. Each ad included the tag, "United Contrasts of Benetton."
In 1989 Benetton's advertising departed sharply from fashion and fashion themes, and
pushed further into social statement with a new campaign. One image depicted the hand of
a black man handcuffed to the hand of a white man. (See Exhibit 2.) A second ad showed a
black woman breast-feeding a white baby. The only text on these ads was the "United Colors
of Benetton" logo. However, it was these images that prompted the first major public
criticism of Benetton advertising. Because of the strong and immediate outcry from African-
Americans, the campaign was quickly dropped in the United States.
In 1990, Benetton presented softer and less controversial images such as the hand of a black child
resting in the palm of a white hand, and a white relay runner passing a baton to a black teammate.
Then, in 1991, Benetton returned to more controversial images: an array of colorful condoms
(Exhibit 3); a rack of tubes of blood labeled with the names of world leaders (Exhibit 4); and a
placenta-covered baby with the umbilical cord still attached (Exhibit 5).
Laura Pollini, Benetton's director of Images and Communications, commented that it was
often difficult to predict the reactions that ads might evoke. For example, Europeans seemed
most offended by the image of the new born baby. One outraged caller reached Pollini in
Ponzano and insisted that her children had never looked like that when they were born, and
what, she asked, could Benetton be thinking to show a baby in such a condition. Whereupon
Pollini replied, "And tell me, just how did your children look when they were born?”
Meanwhile, in the United States, the July 22, 1991 issue of Advertising Age reported that six U.S.
magazines had refused to publish one or more of the ads. (Magazines accounted for about half of
Benetton's $7 million U.S. advertising budget, which was approximately 10% of the company's
worldwide spending for advertising.)
Benetton began 1992 with a campaign featuring its most controversial ads to date. One ad pictured
an albino Zulu woman who was being shunned by the black women standing nearby. However, the
most discussed ad portrayed a grief-stricken family at the bedside of David Kirby, an emaciated AIDS
victim who was obviously close to death. (See Exhibit 6.) The company collected positive and negative
reactions to this ad and eventually published them under the title, “What does AIDS have to do with
sweaters?" in its publication, News, a Benetton publication circulated both internally and externally
through its stores. In 1993, one hundred letters addressing various issues raised by Benetton
advertising were collected and published in book form. Comments ranged from "Your advertising is
a dung heap," "Counterproductive," and "Exploiters of the human condition," to "You're wonderful,
fabulous, I wish I knew you," "Shock! . . . Boom! Whack! Bullseye!," and ".. . without you we would be
GS F224 Print and Audio Visual Advertising Case 1

missing something essential." At the same time, The Advertising Standards Authority in Britain, a not-
for-profit monitoring organization, advised British publications not to carry the ad depicting the AIDS
victim, and several did not. 1
In January of 1993, Benetton ran ads that showed Luciano Benetton wearing only his glasses but with
his hands folded modestly in front of him. (See Exhibit 7.) The caption, "I want my clothes back,"
referred to the used clothing drive sponsored by the company. Most Benetton stores in the United
States and Europe had agreed to serve as collecting points for clean, serviceable clothing that was to
be donated to the Red Cross or other charitable agencies.
Meanwhile, Toscani had been invited to submit his photographic work for display in the Bienniale de
Venezia international art exhibition to be held early in 1993. One piece he intended to submit
featured small individual photographs of 28 male and 28 female genitals of various shapes and colors.
He showed this piece to Luciano Benetton, and told him that because he (Toscani) regarded his
photographs as commercial work, he would participate in the Bienniale only if Benetton would use
the work in its advertising. Luciano Benetton agreed. However, the resulting advertisement appeared
in only one publication, the French newspaper Liberation.
Then, in the fall of 1993, Benetton launched a new campaign that returned to the AIDS theme.
Individual ads depicted a naked made torso, a forearm (where needle marks on narcotic users often
are found), and a lower torso with pubic hair—each stamped with the words "H.I.V. Positive." Each
also contained the "United Colors of Benetton" logo. (See Exhibit 8 for a sample ad.) These ads
sparked controversy in the H.I.V. Positive community. The outcry was particularly strong in France,
where several thousand French citizens had recently learned they had been infected by a
contaminated blood supply, and there were threats of picketing of Benetton shops in France, Italy,
and other countries as well. On the other hand, the company had received one letter from a H.I.V.
Positive person that had ended with the words, "Grazie Toscani."

Reactions in the United States

The controversy over Benetton's "issues" advertising appeared to be particularly strong in the United
States. The magazines that had rejected the ads depicting a black man handcuffed to a white man,
and a black woman breast-feeding a white child, had done so believing that African-
American readers would find them exploitative and offensive. Later, in 1992, The New Yorker lThe
New York Times, January 29,1992, p. D17. decided not to run the Benetton ad containing the image
of the albino Zulu woman, partially because the issue scheduled for the ad was to contain what the
editor, Tina Brown, called "a subtle and complex piece about Malcolm X." However, Brown also said
that she would have rejected the ad photo of the dying AIDS victim if it had been proposed for The
New Yorker.
When the ad featuring the dying David Kirby appeared in Vanity Fair, Vogue, and other magazines,
AIDS organizations and gay rights advocacy groups accused Benetton of insensitivity and exploitation.
In April 1992, Peter Fressola, communications director of Benetton Services in New York, announced
that Benetton had decided to become the first major retailer to advertise in Out, a publication for gay
readers. He also acknowledged that the company had decided to publish and distribute 585,000
copies of a brochure called "A Guide to Safe Sex" that had been written by the Gay Men's Health Crisis
in New York. But Fressola insisted that these two decisions were not a result of the gay community's
reaction to the Kirby ad. Subsequently, in December 1992, in a brief assessment of the '"Best and
Worst Ads of 1992," USA Today gave Benetton's AIDS advertisement top billing in the 'Worst" column.
USA Today commented: fXJnder the guise of generating discussion of difficult issues, the company
continued to hurt and offend with images that were painful without being thoughtful or helpful."2
In November 1992, Benetton published an eight-page retrospective of its advertising over the years
in Rolling Stone; in a special edition, for subscribers only, Rolling Stone included the image of the black
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woman nursing a white child. Also included in the eight pages was an essay written by the noted
African-American filmmaker, Spike Lee. In return for a Benetton donation of $50,000 to the United
Negro College Fund, Lee had written on the social value of controversy. "If it [Benetton advertising]
is provocative enough," he wrote, "it might make people sit down and discuss it, talk about the
message."
Advertising professionals commented that Benetton had been one of the first retail companies to
generate relatively high press mention with advertising budgets of approximately one-third the
amount of its competitors.3 Several media watchers also noted that Benetton was not the only
company to use provocative images to call attention to a name in fashion. In the fall of 1991, Anne
Klein ran a television commercial that depicted a bride walking down the aisle, then turning to face
the groom with an expression that hinted she might be having second thoughts. Meanwhile, a
narrator was informing the audience that the bride-to-be had hidden a long, black leather motorcycle
jacket in the choir room of the church. That same season, Benetton competitor Esprit was running a
television and print campaign with a reported budget of $8 million that featured young women giving
answers to the question: "If you could change the world, what would you do?" One ad and
commercial featured a young black woman who had answered, "End racism and the killing of my
people in the streets."
But while media and fashion watchers were sorting the differences between what some saw as bold
innovation and others as crass insensitivity, some Benetton shop-owners were telling the press and
Benetton that the shock ads were either missing their target or driving customers away. "Our market
is now the 25- to 49-year-old woman," said one Tennessee store owner, "and she isn't impressed to
see the teeny-bopper ads."
"It's not our function as retailers to raise the consciousness of people. I've had long, hard fights with
Italy over the advertising," a Florida store owner added. The Tennessee owner had closed two of his
five stores, while his Florida counterpart had lost 12 of 27 family-owned stores.

Benetton's Global Image and Communications Effort

The United Colors campaigns were only one part of a more extensive Benetton communications
strategy. The foundation for the strategy was the retail stores themselves. Designed to highlight the
company's merchandise and make it easily visible from the street, the stores were regarded as 7,000
important points of product advertising.
Apart from the stores, core elements of the strategy consolidated under Pollini's direction included
advertising (largely media buying), "institutional press" (public relations in fashion publications), and
communications (largely through the press but also including nominal responsibility for other
activities).
Benetton adapted its advertising to the customs of various countries, relying heavily on billboards in
many countries. In addition, its advertising appeared in several hundred magazines published in as many
as 50 languages worldwide. In fashion magazines, these often were related to public relations pieces
appearing in many of the same publications. More recently, daily newspapers were used to launch new
campaigns, in color where possible. Color newspaper ads were first used during the clothing redistribution
campaign featuring a nude image of Luciano Benetton in January, 1993.
By mid-1993, Benetton received mentions, on the average, in some 200 publications daily somewhere
in the world. Most of these were in newspapers. And they included, in addition to commentary on the
company's United Colors issues campaigns, reports on the performance of the company's Formula One
racing team or its professional athletic teams competing in several Italian leagues. Pollini's group also had
nominal responsibility for the budget for Colors, a new magazine containing provocative photos and
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articles aimed at Benetton's core market and intended for distribution both through Benetton stores and
other channels. Recently, plans had been announced for a company-sponsored design school, Fabrica,
to be established in a villa near Benetton's headquarters that would house 30 "students," accomplished
artists and designers from all over the world, who would have full access to Benetton's design studios
and factories while studying relationships between art and technology.

All of this was accomplished by an image and communications group comprising 18 people. While all
reported to Pollini, two spent much of their time traveling and working with Oliviero Toscani. In total,
Benetton's budget for all of these activities represented only 5.5% of the sales of the Benetton Group in
1993.

Creating and Communicating Issues Advertising

Laura Pollini, the department's director, commented on the process by which the company's "social" or
"issue" ad campaigns were developed and approved:
When we are ready for a new group of images, Oliviero Toscani will bring them to us.
Images are never rejected on the basis of an issue. We accept all of the issues. We don't
take a position. This is a reflection of the trust that Luciano Benetton places in Toscani.
Toscani's work was also leveraged for maximum impact by selecting themes from previous work that were
relevant to current events in various parts of the world. For example, at the time of the large oil spill near
the Shetland Islands, Benetton reran a previously published ad in the British media showing a strangely
beautiful oil-covered bird with only a pink eye visible under the coat of oil. At the time of the fall 1993
signing of the agreement between the Israelis and the PLO, Benetton took out ads in Italian newspapers
the next day featuring the 1985 ad of the young Israeli and young Arab described above, with the caption,
"Questa e stata la nostra campagna nel 1985." ("This was the status of our campaign in 1985.") (See
Exhibit 9.)
Pollini was also responsible for making sure that the introduction of each Benetton "issue" advertising
campaign was a newsworthy event—especially in the cities where Toscani and Luciano Benetton had
scheduled appearances. Press coverage was a particular challenge in cities such as Paris and New York,
where the press had many other things to cover. During the "H.I.V. Positive" campaign, David Kirby's
parents had joined Toscani and Benetton at a New York Public Library presentation, and had told the
audience that "Benetton didn't use us. We used Benetton. The advertising gives our son [pictured on his
death bed] a chance to explain again and again how awful this disease is." The event was attended by
more than 300 reporters and generated a great deal of coverage.
Each day, Pollini's staff of 18 assembled a thick file of press mentions from newspapers and magazines
around the world. In addition, her staff developed product advertising for fashion magazines, and
produced the shelf-talker displays (for approximately 7,000 stores) that consti- tuted the core of
Benetton's product advertising. By 1993, it was generally agreed that Benetton's logo was one of the best
recognized throughout the world.
In 1992, according to ADWEEKf Benetton allocated $80 million for worldwide advertising and promotional
efforts. But when Benetton's allocations in specific countries were compared with those of competitors, it
was evident that Benetton was typically spending less than half what its competitors were spending. In
the United States, for example, Benetton's 1992 budget was estimated at $8 million for print and
billboard, while The Gaps was $27 million.7
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The Management Meeting

The management meeting at which Benetton's communications and reactions to it were discussed was
held in mid-September 1993. Attendees included about a dozen of Benetton's senior managers, virtually all
of whom had been recruited over the previous decade from other major Italian companies. Several
managers who attended the meeting expressed concern about what they thought was the progression of
increasingly provocative and controversial ads appearing with the company’s logo, and the sales
effectiveness of these ads. Not all were in agreement, however, either about the ads or the actions taken by
the company.
Benetton's Managing director, Aldo Palmeri, had joined the company in 1982 from Banco dltalia (Italy's
central bank). Palmeri opened the discussion with comments in which he acknowledged the contributions
of the communication strategy to the success of the company over the preceding years. He then raised the
question of how far the current image advertising campaign could be taken in promoting the Benetton
name, a question prompted in part by his return from a recent tour of presentations to financial analysts
who had expressed concerns about the company's advertising. Some of the others among the dozen in
attendance echoed Palmeri's question.
One senior manager commented that Benetton's agents (the company's intermediaries with store owners)
around the world were indicating that in some places protesters were about to organize picketing in front of
Benetton shops. This observation was echoed by those reporting information about the delivery of goods to
the shops. Some store managers, particularly in the United States, were reported to have requested a return
to "older-style product advertising."
Oliviero Toscani, who also attended the meeting, asked whether managers really thought that Benetton
should return to old-style product advertising. He pointed out that during the period of the advertising in
question, Benetton's sales had risen significantly. As the meeting progressed, the discussion became
increasingly heated. Throughout the meeting, Luciano Benetton was observed by several managers sitting
to the side smiling to himself as he listened to the discussion. He did not take part. At the end of the
discussion, he thanked everyone for their comments and said, "It's very strange that you think we should
change. I thought we were just beginning...." To himself, he promised to give their comments concerning the
company's image campaigns additional thought.
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List of Exhibits(ads)
1. Early Racial Harmony Ad
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2. Two Men in Handcuffs

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3. Condoms
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4. Test Tubes of Blood

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5. Newborn Child
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6. AIDS Victim and Family

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7. "I Want My Clothes Back"

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8. Arab/Israeli Harmony