(FORTUNE Magazine) – THE CAMERA sweeps a California hillside, where a flock of bright yellow-and- ( black butterflies flicker over a spring meadow. These are Bay Checkerspot butterflies, the voice-over says, a threatened species now flourishing in a special preserve, thanks to cooperative efforts by Stanford University, a couple of government agencies, and the environment-minded sponsor of this commercial. So what's this, you ask, a plug for the Sierra Club? No, wait, it's a message from Waste Management Inc. Waste Management? The $1.6-billion- a-year garbage disposal company? The one that got into trouble a couple of years ago for illegal dumping of toxic wastes? No kidding? No kidding. Like dozens of other big companies, Waste Management has been working on improving its image. These days managers who want their companies to be loved, or at least respected, are spending unprecedented sums to woo investors and consumers. Consider the figures: Between 1980 and 1982, according to a research organization called Leading National Advertisers, total spending on image advertising declined 6%, to $403 million. But by 1985 spending had shot up 80%, to $726 million. What exactly does all that corporate advertising buy for companies and their shareholders? The answer isn't clear. Some experts say it's a waste of money even when the new image accurately reflects a new reality. The debate hasn't discouraged Dow Chemical from trying to clean up its image with ads saying Dow is a great place for bright young people to work (FORTUNE, May 12). Nor have the naysayers daunted Navistar, known until recently as International Harvester or, just as frequently, ''the ailing farm-equipment giant.'' Coors, the family-run Colorado brewer, is rolling out a new corporate ad campaign designed to counter a boycott organized by the AFL-CIO. Even Chrysler, well removed by now from the brink of doom, has hired New York image-change consultants Lippincott & Margulies. One of the carmaker's concerns: how to keep Chrysler's triumphant image after Lee Iacocca moves on. Image polishing often goes beyond advertising, all the way to a new name. No fewer than 1,041 U.S. companies changed names in 1985, 20% more than in 1984, according to Anspach Grossman Portugal, a New York ''identity- consulting'' firm. True, more than half these changes resulted from mergers, acquisitions, or other restructurings. But many were so-called straight name changes, intended to give the company a more distinct or interesting public face. One such was Sara Lee Corp., which changed from Consolidated Foods last year. The old name was not only humdrum but also misleading. Sara Lee is anything but consolidated and much more than food: Its widely scattered divisions are highly independent, turning out such consumer wares as Electrolux vacuum cleaners, L'eggs panty hose, and Coach leather goods. Since the Kitchens of Sara Lee division accounts for less than 10% of sales, the name Sara Lee seems an odd choice. But management picked it with image in mind. Among consumers surveyed by the company before the name change, 98% recognized the name Sara Lee and 94% associated it with high quality. SOMETIMES ATTENTION to image has produced almost magical effects, as happened at Pontiac. The General Motors division, whose name in the 1960s was synonymous with sporty, fun gas-guzzlers like the GTO, lost its way in the 1970s when rising gas prices made driving a more solemn proposition. ''We changed,'' says one Pontiac executive. ''We tried to outprice Chevy and outplush Buick and Oldsmobile. We didn't know where we were going.'' Sales growth sputtered, then stalled. By the early Eighties Pontiac was barely breaking even on sales of about 500,000 cars a year, vs. about 800,000 in its heyday. In 1981, then general manager William Hoglund called in 60 Pontiac managers to talk about problems, products, and image. The meeting led to a decision to go back to being a maker of fast, sporty cars, even though that meant leaving the middle-of-the-road family-car market in the dust. With its new racy image in mind, Pontiac began to sponsor rock concerts and aim its TV commercials at young, affluent singles. Instead of changing slogans every year, Pontiac came up with ''We Build Excitement'' in 1983 and plans to stick with it. At the same time the division began introducing a string of cars reminiscent of the good old GTO, including the Pontiac 6000 STE, the Fiero, and the Grand Am. So far the transformation seems to have worked, though Lady Luck deserves some of the credit: Cheaper gas helped the cars shine. Pontiac's sales and market share are accelerating faster than any other GM division's. Pontiac's 1985 sales, for instance, rose 11%, to about 786,000 cars, while Cadillac's fell 5% and Buick's dropped 3%. Pontiac has also drawn the youngest buyers -- median age: 37 -- of any domestic carmaker. Most corporations that set out to change their images don't expect such spectacular results. Usually the benefits of putting on a new corporate face . are maddeningly difficult to measure, though some scholars have tried. ''None of the research is worth anything,'' says Barry Biederman, head of an agency that creates a lot of image-building ads. Biederman & Co. has been running a campaign for ITT since the early Seventies, which is intended to help erase some of ITT's lingering public image of corruption and political intrigue. But how much it has helped is hard to say. ''The tough thing,'' Biederman notes, ''is that the C.E.O. in a company turns to the director of advertising and asks, 'If we spend $1 on corporate advertising, what does it buy us?' What follows is a delicate ritual, because this isn't easy to track. There's a lot of faith healing involved.'' Some skeptics contend that most corporate image advertising is sheer quackery. George Lois, chief executive and creative director of the New York ad agency Lois Pitts Gershon Pon/GGK, calls such ads ''99.9% b.s.'' Lois says that the only way a company can make a lasting improvement in its image is to do a highly original and aggressive job marketing a product. ''Over a period of ten years or so, some companies spend $100 million on corporate advertising,'' he points out. ''Wouldn't that kind of money be better spent on developing new products or services, or improving the old ones?'' MANY BIG companies think so, among them RJR Nabisco, Dun & Bradstreet, and NCR. Stephen Bowen, NCR vice president of corporate communications, points out, ''You can send a corporate message through a product sell. With limited ad budgets, it makes sense to make those dollars work as hard as possible.'' NCR is blitzing the print media with ads for its new mainframe, the 9800. Bowen says the company's TV commercials, featuring comedian Dom DeLuise, have helped raise consumers' awareness of NCR as a major maker of computers. Then why is image advertising on the rise? Corporate advertising managers generally give two reasons. First, while image ads may not arouse interest in the company's stock, they may at least fix the name in investors' minds. Says Mark Albion, a marketing professor at the Harvard Business School, ''If a broker calls to recommend the stock, the investor has at least heard of it, which helps.'' The second reason: Some companies have such a terrible image that they must do everything they can to fix it. Most companies cite the first reason for image advertising, and many note the example of W.R. Grace & Co. The $7.3-billion-a-year diversified chemical maker started its image campaign in 1970 after selling off its shipping lines. The company's first image ads got lost in the crowd. Senior Vice President Antonio Navarro explains, ''If you just run a bunch of ads saying, 'We're changing,' you compete with 200 other equally rich, equally interesting companies all saying the same thing.'' So Grace looked for a gimmick and soon found one: public policy issues. During the Carter Administration, Grace began an ad campaign attacking the idea of a higher capital gains tax, then picking up popularity in Congress, as a threat to the entrepreneurial spirit in America. From there Grace's ads went on to tackle declining productivity and the federal deficit. In 1982 President Reagan put Chairman Peter Grace in charge of the President's Private Sector Survey on Cost Control, better known as the Grace commission. Navarro says the whole effort has gained the company not only the name recognition it sought, but also a big dose of prestige. The precise benefit to shareholders is, as usual, hazy. United Technologies has turned up the lights on its corporate image in a less contentious way. Readers of the Wall Street Journal are probably familiar with the company's free-form inspirational sermons, in simple black type floating on an entire page, with titles like ''Aim So High You'll Never Be Bored,'' ''The Slim Margin of Success,'' and ''Don't Quit.'' Richard Kerr, an independent advertising consultant, brought the idea to the company, which was looking for a way to give itself a friendly, recognizable face. Senior Vice President Raymond D'Argenio, in charge of advertising, recalls: ''When we ran the first one in 1979, I predicted we'd get 200 or 300 letters asking for reprints. I was laughed out of the dining room. But we got 14,000.'' Since then the ads, which the company has collected in a book called Gray Matter, after Chairman Harry Gray, have drawn 762,000 letters from readers. D'Argenio's office has mailed out 3.9 million reprints. ''It's interesting,'' muses D'Argenio. ''The impact of these ads violates every tenet of advertising wisdom.'' An increasing number of companies seem to be launching image overhauls for that second reason: The company is well known but not well liked. Adolph Coors Co., the $1.3-billion-a-year brewer, began its first-ever corporate advertising campaign in May. Its theme: ''Getting Together With America.'' Print ads and radio spots in Colorado, Michigan, and Virginia trumpet the company's commitment to hiring veterans, ex-convicts, blacks, Hispanics, and the hard-core unemployed, and portray the company as a champion of democratic values. The earnest all-American ads are an attempt to deal with an image problem that started eight years ago, when management ended a 20-month strike by calling a worker election that resulted in the decertification of an AFL-CIO local at the brewery in Golden, Colorado. The union retaliated with a boycott. Then in 1984 the press quoted some snide remarks about blacks supposedly made by the company's archconservative chairman, William Coors, whose spokesman says the quotes were taken out of context. Now Coors, long a regional brand in the West, is vying to sell its beer nationwide and is battling bitter boycotters everywhere. As usual when a company pushes into new markets, pitching Coors in more places has been costly: The company spent $165 million, almost 13% of sales, on advertising the beer last year, compared with chief competitor Anheuser-Busch's ad budget of about 7% of sales. Coors will probably have to keep on spending. The AFL-CIO is already organizing boycotts in Pennsylvania, New Jersey, and New York, three states where Coors has yet to set foot. Navistar is struggling to shake off a stigma that is economic rather than ideological. The company, which hasn't seen a full year's profit since 1979, had no choice but to change its name: It sold the International Harvester name and logo to Tenneco last year, along with its sickly farm-equipment operations. In casting off the money-losing part of its business and concentrating on prospering truck operations, Navistar has chopped away at its old image as well. The company's ads in major magazines proclaimed in bold black type: ''On the very first day of its existence, this will be a 3.5 billion dollar company with the number one position in its industry.'' The company chose the new name from thousands of computer-generated possibilities because ''Navi'' suggests navigating, which truck drivers and, in a larger sense, corporate managers think about all the time, while ''star'' has lots of positive connotations and is already in several of the company's truck-model names, such as Loadstar. THE EXPERTS on how to shine up a corporate image, including managers in companies whose image-buffing efforts have worked, agree that no amount of advertising or other ballyhoo will fool anybody if the corporation behind it is trying to throw dust in the public eye. ''The No. 1 rule is that you must match the reality with the image you are trying to create,'' says Clive Chajet, chairman of Lippincott & Margulies, the New York firm credited with inventing the business of developing corporate identities, and numbering American Express, Xerox, RCA, Amtrak, and a host of others among its clients. ''You can't get away with a dissonance between the image and the reality -- or at least, not for long.'' If Pontiac, for instance, had not developed new, genuinely sportier cars to go along with its glitzy ad pitches, all the world's rock concerts could not have produced those dazzling sales increases. As for Waste Management, the company's telephone-survey research shows that the garbage collector's reputation with the public in the markets it serves has improved handsomely in the past two years. Perhaps that is partly because the company has cleaned up some toxic waste sites the EPA condemned in 1982. Without news like that, even those Bay Checkerspot butterflies could not have made Waste Management lovable.