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Political Advertising|By Elizabeth Wilner, July 8, 2014
At CMAG, we like to say that advertising is a tell. Of all the ad campaigns funded by Charles and David Koch, their latest comes closest to an admission—that their $115 billion company is at risk of being knocked off-balance by their personal political spending.

“You may not always see our name on the products you use, but we help make better food, clothing, shelter, technology, and other necessities,” says the female narrator of the pair of TV ads that popped up in June. Those ads kicked off a campaign that will run “through 2015 and likely beyond,” e-mails Koch Industries chief communications and marketing officer Steve Lombardo.

By now, and all Citizens United hype to the contrary, corporate America has largely opted against investing further in politics, faced with high-profile examples of it backfiring against brands or alienating shareholders and customers. See: Target, gay rights or Chick-fil-A, same-sex marriage. “For most major corporations, and especially publicly traded ones, it's just not worth the risk to devote serious cash to the types of outside spending legalized by Citizens United,” says Politico chief investigative correspondent Ken Vogel. “They're usually able to get most of what they want from government through more traditional and lower-profile avenues” such as lobbying and PAC contributions.

But the Kochs have pressed ahead, the family business protected from shareholder fallout by being privately owned and from customer and brand blowback by being largely unknown. Like Procter & Gamble, Koch Industries is the lesser-known name behind some well-known household staples (along with, yes, chemicals and other highly regulated products). To get to Koch, though, you must first pass Dixie Cups, Northern or Brawny, and then Georgia-Pacific. Any brand recognition pretty much ends there.

So why the ads, and why now? Koch Industries, the narrator says, employs Americans across “nearly every state” who “build on each other’s ideas” to provide ““innovations that help people improve their lives.” The 60-second version, and the influencer-focused print ad that has since made the rounds of Capitol Hill news outlets, also promote a comprehensive recruiting website which lists job postings for 10 Koch holdings.

“It is important that potential employees of Koch Industries and other members of the general public better understand who we are and what we do,” Lombardo writes. “Koch employs 60,000 people in the U.S. and we currently have over 3,000 open roles.” The natural follow-up question—are perceptions of the Kochs’ political views affecting the company’s applicant pool—went unanswered by my deadline.

Every company, known or unknown, privately held or public, needs a workforce. “As customers are drawn by a company’s reputation, so too are its employees,” says Steve McMahon, a Democratic advertising strategist who works with challenged brands. “Half of [Koch Industries’] customers and half of their employees are likely to be Democrats who probably don’t appreciate their values, their leaders or what they believe in being demeaned and ridiculed” by Koch-funded political advertising.

Charles and David Koch may never have wanted the national profile they now have, suggests Vogel, author of a new book on the explosion of money in politics. But their name recognition has climbed due to aggressive political journalism and attention to one particular spoke of what the Washington Post dubbed their “massive political network:” Americans for Prosperity and its healthcare reform-focused attack ads. AFP’s continuing—if downshifting—ad campaign fed a paid- and earned-media frenzy that helped depress public opinion about the Affordable Care Act during its debut enrollment period.

It also forced a maybe unanticipated Democratic response. CMAG has tracked Democratic TV ads lambasting the Kochs by name and image in 10 races across nine states, with the latest hitting July 1 in the Iowa US Senate race. The anti-Koch TV ad spending amounts to a fraction of AFP’s; ballpark it very roughly at 25%. But like Priorities USA Action’s air “war” against Bain Capital in 2012, Democrats’ anti-Koch campaign, which extends beyond ads to multiple rants by Majority Leader Harry Reid from the Senate floor, has been amplified by earned media.

“We know that employees, especially millennial workers, are very sensitive to working with companies who share their values and beliefs,” says branding expert Oscar Yuan, partner with Millward Brown Vermeer, a brand strategy consultancy. “That is why there are lines of people waiting to work for Apple and Google. The challenge is that Koch Industries leans conservative, a trend that we know is a bit counter for the young workforce.”

The Koch Industries TV ads are airing where millennials and other desirable recruits presumably can still be found across national network, cable and local broadcast in 30-plus markets. The 30 has aired on reality shows and game shows; primetime crime and Modern Family; the World Cup, Wimbledon, MLB, PGA and NASCAR; Katie and Ellen; late night comedy and local news. Nationally, it’s aired during golf coverage and Sunday morning TV, and on cable, mostly on MSNBC, CNBC and CNN. Not so much on FOX News. Not exactly an AFP kind of buy.

The 60, which promotes the recruiting website, has aired on national cable—again, mostly CNBC and CNN—and on spot TV in Koch Industries’ home market of Wichita, where it has appeared mainly during the Big Bang Theory.

Koch Industries may or may not be recruiting in the Washington market (though it has made one or two recent, key hires there, starting with Lombardo), but job creation is a hugely popular bipartisan theme for brands seeking to appeal to, or appease Washington lawmakers, regulators and the opinion elite. The extra step of promoting an actual hiring resource also puts a lot of faces on Koch Industries that aren’t the visages of either Koch.

Democrats who take satisfaction from the possibility of the Kochs needing to advertise for employees should note Lombardo’s suggestion that the campaign will run “likely beyond” 2015. Brand experts, meanwhile, will be able to read over the Kochs’ shoulder as they write this chapter of the playbook for business on how to manage blowback over political activity.

The Koch brothers presumably “want to be known for their business acumen and success,” McMahon says. “What they are becoming known for is their partisan, political campaigns against Democrats.”

CMAG’s Andrew Fitzgerald, Mitchell West and MacKenzie Miller contributed to this column.