Financial Services

Published on .

Reprints Reprints

Banks and insurance companies sponsored the first financial advertisements. They appeared in newspapers and resembled classified ads—lines of text with no image. Retail banks regularly advertised their locations, hours of operation and savings deposit interest rates, and they promoted mortgage lending and bond sales.

Occasionally an advertiser would use a one-column illustration. Globe Insurance Co. and Mutual Insurance Co. of New York were among the first financial services advertisers to use illustrations in their ads. An ad for Mutual in 1818 displayed an eagle beneath a banner with the word "protection" in bold capital letters across the top.

In 1896, the Prudential Insurance Co. introduced its Rock of Gibraltar logo featuring the rock and an image of its home office. The company's slogan was embedded in the logo, announcing that "The Prudential has the strength of Gibraltar."

In the 1920s, Metropolitan Life Insurance Co. launched an innovative series of ads promoting public health. Rather than using fear of illness to spur sales, the campaigns offered health tips, encouraged parents to take their children to the doctor for regular checkups and urged people to learn about artificial respiration (today known as cardiopulmonary resuscitation, or CPR).

Regulation and the crash of 1929

The stock market crash of 1929 and the Great Depression ushered in an era of regulation, and institutional ads that conveyed information about stock offerings, bond sales, mutual funds and other financial services were subjected to tight government restrictions.

The Securities & Exchange Commission required companies to use "tombstone" ads, named for the black borders that usually appear around the text-oriented design, to attract potential investors sufficiently interested in the advertised offering to request a prospectus.

As a sale had to be made by prospectus, the ads did not include performance or performance-related information. They were limited to simply identifying the existence of the offering and the availability of a prospectus. Sales-oriented promotional language was forbidden. Although restrictions were relaxed for mutual fund advertising, these regulations remained largely in effect in the 21st century.

Throughout the 1930s, the public remained wary of the stock market, insurance companies and banks. A Roper public opinion survey, conducted in 1939, revealed a high degree of distrust, lack of interest and misunderstanding of the financial markets among consumers.

Banks and investment companies worked with ad agencies ranging from the major consumer products shops to agencies that specialized in financial marketing. Among the latter were Doremus & Co. and Albert Frank-Guenther Law, each of which handled so many different clients in banking and investments that the normal rules of client conflict were generally waived for them.

Union Central Life Insurance Co., whose advertising was handled by J. Walter Thompson Co., ran ads appealing to fathers who wanted better lives for their sons. One ad headline read, "The lonely uphill struggle . . . You would like to save your boy," and suggested that "boys braving the handicap of lack of education" would have a more difficult future than "college men." An ad by Penn Mutual Insurance Co. from N.W. Ayer & Son carried the headline, "The boy deserves his turn," and similarly suggested that uneducated youth would face a more difficult future than their educated peers would.

One investment banker, however, saw an opportunity in consumers' distrust. In 1940, Merrill, Lynch, E.A. Pierce & Cassat introduced itself in national ads from Albert Frank-Guenther Law that consisted of a "Statement of Our Basic Policy" and touted the company's nine principles of operation. By the end of the year, the company had increased its customer accounts by more than 20%.

In the 1970s, competition among Wall Street brokerages was fierce. In response, Merrill Lynch broke from the pages of business and financial journals and took to TV. The company launched a campaign during the 1970 World Series that featured a herd of bulls thundering across a beach. Voice-over proclaimed, "Merrill Lynch is bullish on America."

Following Merrill Lynch's lead, E.F. Hutton launched a campaign created by Benton & Bowles that same year. One TV spot featured two well-appointed ladies discussing investments at a garden party. When one mentioned that her broker was E.F. Hutton, a hush fell over the party as the guests turned their heads to eavesdrop. Voice-over then delivered the tagline: "When E.F. Hutton talks, people listen."

Rise of credit cards

The economic boom of the 1950s gave rise to mass consumerism in the U.S., and credit cards offered consumers a convenient method of paying for goods and services. The first charge card, the Diners' Club card, was introduced in 1950. Eight years later, it was followed by the American Express Card and BankAmericard. Master Charge, later MasterCard, arrived in 1966.

In 1975, American Express launched its popular campaign tagged "Do you know me?" from Ogilvy & Mather; TV spots featured achievers whose names were better known than their faces. The commercials ran concurrently with another American Express campaign promoting traveler's checks that had been launched a year earlier. The ads featured actor Karl Malden, who admonished travelers, "Don't leave home without them."

In 1977, BankAmericard was relaunched as Visa, with a heavy print and radio schedule aimed at younger consumers. The new moniker also provided greater name recognition worldwide.

Citibank launched an aggressive TV campaign promoting the uniqueness of its Visa and MasterCard credit card offerings, which offered cardholders "Citidollars" earned on all their purchases with the card and other exclusive benefits. By the mid-1980s, credit card companies were among the top three financial service advertisers behind insurance firms and banks.

Deregulation

In 1975, the U.S. Congress passed legislation that eliminated earlier restrictions on brokerage houses and thrift institutions, promoting competition in all financial services industries. With fewer restrictions and changes in federal tax laws, companies could provide an array of products that they had previously been prohibited from offering.

Dean Witter Reynolds, formed in 1978 after a merger, turned to TV and radio to build awareness and to capitalize on its strength in regional markets. Its initial campaign featured happy Dean Witter customers who had just received good news from their broker. The ads used the theme line, "You look like you just heard from Dean Witter," implying that working with Dean Witter brought wealth and relief from worry.

Shearson Loeb Rhoades, which became the No. 2 Wall Street firm after a series of mergers, also rolled out an identity campaign in 1979. Each spot ended with the tagline, "When the question is money . . . the answer is Shearson."

Although Smith Barney was one of the smallest of Wall Street advertisers, its 1979 campaign from Ogilvy & Mather was among the most enduring. The firm hired as its spokesman actor John Houseman, who had recently played the role of a tyrannical Harvard law professor with deep integrity. TV spots featured the actor in various Wall Street situations declaring, "Smith Barney. They make money the old-fashioned way. They earn it."

In 1975, PaineWebber moved to create broader awareness in the upscale consumer market with the "Thank you, PaineWebber" campaign, which showing scenes of people celebrating a child's graduation from college, admiring a new fur coat or lounging poolside, along with the tagline implying that PaineWebber deserved the credit.

Deregulation also gave rise to advertising by direct-to-consumer mutual funds and discount brokerages that previously had been hampered by government restrictions. One mutual fund company, Fidelity Investments, used ads that featured the company's highly successful Magellan fund and its manager, Peter Lynch, who became one of the most recognizable faces on Wall Street. Charles Schwab & Co. became the first discount brokerage to advertise nationally.

Friendly companies

In 1985, Metropolitan Life departed from the typical insurance ad with a campaign that featured the characters from the popular "Peanuts" comic strip as insurance salespeople. The approach stressed reliability but also conveyed warmth and humor. Each of the ads ended with the tagline, "Get Met. It pays."

Ads for John Hancock Mutual Life Insurance Co. tagged "Real life, real answers" featured emotional dramas that combining reality and sentimentality. There was no sales pitch, and the company's name was used only at the end of the ad.

After the stock market crash of 1987, many major investment houses changed their advertising to messages of reassurance about market conditions. Merrill Lynch & Co. continued to run ads using the symbol of the bull to portray strength and stability.

Other firms changed their ads to acknowledge that customers prized service and relationships over discovering how to make money quickly.

PaineWebber dropped its long-running "Thank you, PaineWebber" campaign in favor of new ads that told stories about PaineWebber brokers who were farsighted on behalf of clients. In one ad a daughter discovered that her newly widowed mother would not have to sell the house to pay the bills because her father worked out an investment plan years earlier that provided a steady income to his wife. "How did your broker know?" the ad ends. "He asked," is the reply. The ad closed with the line, "PaineWebber . . . We invest in relationships."

Automation and e-trading

Breakthroughs in communications technology and the advent of the Internet eliminated distance as an obstacle to doing business with financial institutions, giving rise to online brokerages such as E*trade and Ameritrade and provided new outlets for traditional brokerages.

E*Trade Group, one of the first brokers to put stock trading online, took an aggressive approach in its advertising. Copy in page ads in financial publications such as The Wall Street Journal and Barron's read, "Your broker is now obsolete." (E*Trade subsequently dropped the ads at the request of the National Association of Securities Dealers.)

The company also used TV to demonstrate the democratizing power of online investing. In one spot, a basketball player misfires on a slam-dunk and bangs his head into a pole. He blames his shoes, throws them into the trash and uses E*Trade to sell his stock in the fictitious shoe company.

With the bursting of the Internet bubble and the bear market that started off the 21st century, much of the financial advertising was retooled to appeal to skittish investors. In the bear market following the Sept. 11 attacks and a spate of scandals involving stock analysts, many Wall Street firms sharply cut their advertising. Marketing budgets began to recover as the stock market gloom lifted in late 2003.

In this article:
Most Popular