$43 billion agreement: Rebranding up next for Fleet/BofA

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Bank of America's $43 billion agreement to purchase FleetBoston Financial is likely to result in huge rebranding costs that consultants said could cost in the "hundreds of millions."

A spokeswoman for Bank of America confirmed last week that part of the acquisition plan was to rebrand all FleetBoston banks-a mammoth task that involves everything from reprinting checkbooks, ATM cards and stationery to changing the in-store look of every branch. FleetBoston has 1,500 branches and 3,400 ATMs.

Commenting on the branding challenge facing Bank of America, Hayes Roth, VP-worldwide marketing and business development at WPP Group's Landor Associates, New York, said, "It takes time and serious investment. It takes millions to change a retail space and do new signage. This is not about what you'd pay a design firm. It is extraordinarily complex and expensive." Landor, however, is not working on the rebranding.

The merger will make Bank of America the No. 2 bank in the country behind Citigroup, according to American Banker.

"The whole success of the acquisition is predicated upon the execution and transition of the Fleet brand to Bank of America," said Charles Wendel, president of New York-based Financial Institutions Consulting. "One positive is that Fleet bank customers are used to change and Bank of America isn't going anywhere. The name changes are over."

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Bank of America has been taking a close look at its marketing resources. The company uses 15 separate marketing agencies, as part of a holding company deal with Interpublic Group of Cos. The lead ad agencies are Deutsch and Gotham, both New York.

FleetBoston has been working with another Interpublic agency, Hill, Holliday, Connors, Cosmopulos, Boston, which launched new work for the client in April. The bank had been planning to spend around $90 million in 2003. Last year it spent $48 million on measured media, as compared to Bank of America's $193 million. Both figures are from TNS Media Intelligence/CMR for 2002.

Before the merger was announced, Bank of America Chief Marketing Officer Cathy Bessant confirmed that her company is looking to hire a consultant to work on a huge evaluation project aimed at both coordinating integration among agencies and minimizing costs. Ms. Bessant did not return calls for comment for this story.

Landor, a Young & Rubicam subsidiary, created the original Fleet branding campaign 20 years ago. While Mr. Roth said customers are used to numerous rebranding efforts because of the high number of acquisitions in the banking industry, there is a danger that brand equity can be lost. "Fleet was an original icon and a nicely run regional brand. Then when they merged with BankBoston it was a mess-up." Mr. Roth added, "It is very important a clear proposition comes through."

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