Mutual funds rarely spawn funny ads, and Vanguard has focused mainly on straightforward search and online display whose results can be readily measured. So how did the company's head of retail advertising and prospect marketing, Michael Ma, get license to run funny movie-trailer spoofs on cinema screens?
He did so by acing the biggest test of all: Delivering profit in a unit that 's required to operate with a profit-and-loss statement just like the rest of the business, Mr. Ma told the Advertising Age CMO Strategy Summit July 18.
Even without the profit mandate from senior management, Mr. Ma has plenty of people looking over his shoulder. When the client-owned firm launched radio ads in 2010, he got messages from concerned client-owners that he may be wasting money.
Only after years of strong results in delivering new households to the Vanguard family of funds at a steadily declining cost per household -- largely through search and display ads with payback monitored through clicks or extensive attribution analysis via Visual IQ -- did Mr. Ma try the riskier cinema-ad gambit.
"By running things as a P&L, if you think long term you will actually get credit and capital to do some creative things," Mr. Ma said.
Some of those creative things, coming from Kirshenbaum Bond Senecal & Partners, New York, have included a magazine ad asking people which of two things they'll remember: the birth of a child or a 200-point gain on the Dow. The horror-flick spoof aimed to drive home the point about Vanguard, long a bastion of low-churn, buy-and-hold index funds, as the place for drama-free investing.
"It wasn't until we ate our vegetables, that we got our business in line, that management was OK with this," Mr. Ma said. Even then, the funny ads were a big leap.
"This was a big deal for us," he said. "I remember thinking this was a terrible idea. I'm so fired."
But in part by tracking business results geographically where the cinema ads were running and using marketing analytics from ThinkVine, which analyzes how various media work separately and in tandem with target consumers, Vanguard was able to determine that the funny ads worked. When they were used in the opening of a semi-annual investor meeting last year, that provided some additional validation that Mr. Ma had won over senior management.
All of it ties in with Mr. Ma's philosophy of measuring everything and targeting the hardest-to-achieve metric. He said new households have been that key metric in part because with net-promoter scores of 60 to 70 that rank north of such loyalty magnets as Apple and Harley Davidson, Vanguard has little trouble keeping new investors once it wins them.