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Benetton was founded in 1965 in Treviso, Italy, a small town near Venice, by Luciano, Carlo, Gilberto and Giuliana Benetton. As business expanded, Luciano Benetton in 1982 turned to Italian photographer Oliviero Toscani to help create a worldwide ad campaign, naming Mr. Toscani creative director of the company.

In 1984, Benetton expanded its advertising outside Italy and France, entering the international market with a campaign titled "All the Colors of the World." The ads, featuring happy, Benetton-clad youth of varying ethnicities, carried undertones of racial harmony and peace, although the marketer's clothing remained the primary focus.

"United Colors" campaign

In 1989, Benetton refocused its ad strategy and merchandise disappeared from its ads altogether. The "United Colors of Benetton" campaign, a collaboration between Messrs. Benetton and Toscani, featured symbolic photographs—among them, a black woman breast-feeding a white baby, a black hand and a white hand cuffed together and an African-American child dozing on a pile of white teddy bears.

In 1991, Benetton print ads depicting rows pf crosses in a cemetery and launched at the beginning of the Persian Gulf War were rejected in Italy, France, Britain and Germany. Arab countries refused Benetton ads featuring a photo of black, white and Asian children sticking out their tongues, and an ad with a picture of a priest and a nun kissing on the lips incensed the Roman Catholic church. Nevertheless, the company won awards in the advertising industry for its campaigns.

Its next campaign featured actual news photos, including the most controversial ad of the group, "David Kirby," which depicted a skeletal 32-year-old man who had just died of AIDS surrounded by grieving family members.

Proponents saw the company's ads as brave, thoughtful and groundbreaking. Critics, however, argued that the company cheapened social problems by using such images for advertising and attaching the Benetton name to them. Others objected to the fact that ads displayed the Benetton name and phone number but did not include a hot-line number for the causes that they promoted and did not urge people to take action.

Mr. Benetton maintained that the ads appealed to his target market of 18-to-34-year-olds, who lacked the historical framework of the previous generation and were accustomed to the somewhat random use of language and image. He defended the use of the photos, stating that Benetton's advertising was intended to do something much more meaningful than sell a product; the campaigns, he insisted, were designed to spur people into activism.

Because of lagging sales and the belief that the ads had become so shocking that they were hurting business, Benetton USA shifted creative responsibilities to Chiat/Day in 1995. Chiat/Day's ads, reminiscent of the earlier "All the Colors of the World" campaign, featured models of different ethnicities having fun while wriggling in and out of Benetton clothes.

Controversial advertising

While that softer look prevailed in the company's limited U.S. market, the rest of the world continued to see ads created by Mr. Toscani. As Mr. Toscani's work became more edgy, resistance grew among consumers and, especially, retailers. In 1995, the company was sued by a group of German retailers that claimed the ads were undermining their own promotional efforts and affecting sales of all clothing.

Mr. Toscani's most controversial ads came early in 2000; one showed 25 convicted murderers on death row awaiting execution and gave each an opportunity to explain his case. The most extensive version of the "We on Death Row" campaign appeared in Talk magazine in a joint Benetton-Miramax Films venture of which Mr. Toscani was creative director. The ad was in the form of a 100-page insert that appeared in the February 2000 issue. It provoked immediate and widespread condemnation.

In May 2000, Mr. Toscani left Benetton and the death row campaign was pulled; by then, however, the damage had been done. Benetton's U.S. sales had been falling since the mid-1980s, and the marketer was relying on a partnership with Sears, Roebuck & Co. to increase its sales. In summer 1999, Sears launched a private-label line called Benetton U.S.A., but within weeks of the launch of the death row campaign, Sears withdrew from the deal. Moreover, Benetton was sued by the state of Missouri, which alleged that Mr. Toscani had lied to Department of Corrections officials to gain access to death-row prisoners.

In February 2001, Benetton announced it would seek to rebuild its damaged U.S. presence with a fall campaign that would emphasize basic product attributes of color and style.

In 2003, Benetton relaunched its Colors magazine, first introduced to showcase the brand’s social responsibility mission in 1991. Benneton hired Kurt Andersen, founder of Spy magazine, as its editorial director.

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