The paper represents an attempt to study inductively the effects of institutional advertising on the consumer. A sample of thirty institutional advertisements were selected and shown to 267 respondents. The respondents rated the advertisements on fifteen seperate dependent variables. The responses were factor analyzed, resulting in two factors--a content and physical appearence factor. The scores were then submitted to cluster analysis, and six clusters of advertisements were obtained. The variables making up each factor were summed in each cluster to obtain a mean favorability score for the cluster. Analysis of variance CANOVA) was then utilized to determine if any signiftcant differences existed between the clusters on each factor. The ANOVA analysis revealed that a significant difference existed between clusters on both factors. An examination of the clusters revealed that 1. the variables of the content factor, such as intelligence, trustworthiness, and influence, were strongly related to the written content of the advertisements. An advertisement that presented an innovative product or pictured a product in an innovative way was highly favored. Advertisements which were written such that they posed negative implications for consumers were poorly received by respondents 2. the variables of the physical factor, such as attraction, interest, and complexity, were strongly related to the physical dimensions of an advertisement. Advertisements were perceived most favorably on these variables if the advertisement. possessed only one page, had medium sized print, utilized a lot of pictures, had few lines per 6olumn, and had a few columns per page.Business Administratio
