The company chose the Minneapolis agency to handle the general advertising, direct marketing and consumer promotions portion of its $100 million global account. Dieste & Partners, Dallas, was named its Hispanic ad agency. Block retained the Media Edge, New York, as its media buying agency.
CME's first work will break later this year, said David Byers, senior VP-chief marketing officer, H&R Block. The agency will develop ads across all Block's product lines, including tax preparation, mortgages and brokerage.
"We're a year-round financial services company now," he said. "We were truly looking for an integrated partner . . . to put it all on one platform and communicate it appropriately across all channels."
CME also will handle Block's marketing expansion overseas with help from McCann-Erickson Worldwide, a sibling agency under the aegis of Interpublic Group of Cos. McCann's involvement is not a problem for Block, Mr. Byers said, although McCann already handles both Smith Barney and Deutsche Bank since Block values the experience in financial services advertising the shop brings to the account.
CME Deputy Creative Officer George Halvorson said Block likely would keep the ad campaign developed by Y&R Advertising, Chicago, but that CME and the client would assess the different executions and perhaps come out with some of their own.
"We've yet to have the discussion on which commercials [Block] likes," he said, adding that the timing also is still to be determined. New ads for the country's sixth-largest accounting company likely will focus on its discount brokerage services (the U.S.' fourth-largest) as well as the fact that Block is the country's second-largest software marketer, after Microsoft Corp.
"A big part is taking a brand that people typically thought of as only tax experts and broadening that," Mr. Halvorson said. "Part of our idea was to demonstrate their expertise in other areas -- exposing our audience to who [H&R Block is] today, not what they thought they were. Most people thought of H&R Block as a dusty old tax preparation company."
Block began a review in April to replace Y&R as general advertising agency and sibling Impiric, Chicago, in direct marketing and promotions (AA, April 3). The other portions of the account in play involved New York shops Media Edge (media buying), Bravo Group, (Hispanic advertising) and Nicholson (interactive). Not affected are public relations, handled by Fleishman-Hillard, Chicago; brand identity work, at Landor Associates, San Francisco; and the software design assignment, at VML, Kansas City, Mo.
The review started with the assumption Media Edge would retain the buying assignment, since the Y&R media unit was already buying time for Block during the network upfront season, Mr. Byers said.
CME pitched against DDB Worldwide, Chicago, after Hill, Holliday, Boston, withdrew from the review earlier this month, citing workload concerns. Select Resources International, West Hollywood, Calif., handled the review.
In January, Block announced it would reposition as a year-round financial services provider, and introduced new services including financial planning, brokerage services, mutual funds and mortgages. The services are available through a new network of H&R Block Financial Centers that will be open year-round and via a redesigned Web site (hrblock.com) that also offers online banking and insurance services.
The repositioning was backed by a campaign from Y&R that included TV, print, outdoor and online ads and collateral in the 94 Financial Center locations (AA, Feb. 7). Block plans to have approximately 180 Financial Centers in the U.S. by year-end and continues to expand in foreign markets, as well, particularly Australia, Canada and Europe. Ad spending is expected to grow as the company becomes a year-round advertiser, rather than concentrating its efforts in the tax filing season, February through April.
Financial analysts applauded Block's move into year-round financial services because it compensates for the seasonal swings in its tax business -- it traditionally makes all its profits during one quarter of each year -- and leverages the company's relationship with consumers. Analysts pointed out that, thanks to its tax preparation services, Block has a potential audience of more than 16 million U.S. clients who already look to their tax preparer for advice and a database of financial information it can draw on for its efforts.
In a report late last month, Salomon Smith Barney analyst Michael Millman estimated 43% of Block's customers had asked for more information about the new financial services. In spite of disappointing results for this tax season -- tax preparation fees increased only 12.3% rather than the 15% he expected -- Mr. Millman still rated Block stock as a good buy thanks to its dominant brand name and "new financial products and services' bullish results."
Contributing: Hillary Chura.