In a move that sets it apart from most of its Fortune 500 colleagues, Bank of America Corp., the nation’s third-largest bank, said it will raise its advertising budget in 2002 to $145 million, up 45% from the $100 million it will spend this year.
BofA is the second Fortune 500 company in recent months to reveal plans to significantly boost ad spending, despite the grim economic picture. IBM Corp. said in March it would increase its ad budget by 10% to $110 million.
BofA’s ads will target b-to-b clients, including those of its struggling Global Corporate and Investment Banking unit, as well as consumers. Details regarding the 2002 ads, to be produced by Bozell New York, weren’t available.
Focusing on b-to-b units
A few days after announcing last week that it would boost its ad budget, Charlotte, N.C.-based BofA revealed it was exiting the consumer sub-prime lending business. It’s a clear sign that BofA plans to concentrate on its potentially lucrative but underperforming b-to-b businesses, including investment and commercial banking and equity investment management.
BofA has been running cable TV ads in key markets where it has a b-to-b presence but not a significant consumer customer base, including New York and Boston, said Scott Scredon, a company spokesman. "We certainly want to reach [b-to-b] audiences," he said.
He added that the company wants its New York and Boston ads to reach the analyst and asset management communities. BofA needs to raise its profile with that audience to be seen as capable of competing with established players such as Goldman Sachs & Co., J.P. Morgan Chase & Co. and Credit Suisse First Boston Corp.
Steven Addis, CEO of Berkeley, Calif.-based branding agency Addis, said that while BofA’s move could cause its bank competitors to boost spending, it probably wouldn’t have much effect on advertisers in other business lines.
Other banks’ spending
Susan Weeks, a spokeswoman at Citigroup, the world’s largest bank, couldn’t project that company’s 2001 ad spend and wouldn’t forecast the 2002 budget. According to Competitive Media Reporting Inc., Citigroup spent $76.8 million in the first quarter, the most recent period for which figures are available.
Officials at the nation’s second-largest bank, J.P. Morgan Chase & Co., didn’t return calls. J.P. Morgan spent $11.2 million in the first quarter, according to Competitive Media Reporting.