Testing the waters

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It looks as if financial advertisers have some fight left in them, after all.

Heading into the final stretch of 2001, the sector is showing pockets of unexpected activity as financial companies-many of whom had cut budgets in early 2001-are about to put a careful toe back in the water.

Although most financial companies typically scale back their efforts in summer and resume marketing full-force after Labor Day, all bets were off this year. Hobbled by the weak economy, many had saved their money for efforts such as promotions and direct mail. According to Taylor Nelson Sofres' CMR, financial services advertisers spent $2.12 billion in measured media in January through May of 2001, compared to $2.48 billion in the same period in 2000.

"The key question for all of us in financial services is: Have we hit bottom?" said David Byers, chief marketing officer of H&R Block, which last week signed an alliance with AOL Time Warner that includes an exclusive deal to manage the Tax Center on America Online and participation on Time Warner Cable promotions and AOL Time Warner direct mail efforts.

Block had already increased its $100 million annual marketing budget by about 20% to support its expansion into year-round financial services and is evaluating an additional fourth-quarter outlay to promote its financial advisory business and the AOL alliance, said Mr. Byers.

But Block-which reported, on the same day as the AOL deal, fiscal first-quarter results that beat analysts' earnings estimates-has little company among financial advertisers. Big spenders such as Ameritrade Corp., E-Trade Group and Charles Schwab & Co. had all scaled back their broad-scale advertising efforts in the first half and focused on cross-selling to existing customers via Interactive and direct marketing (AA, April 16).

Many now have plans to break new advertising. Ameritrade introduced a new campaign Aug. 28, focused on its execution of stock trades, while Schwab is expected to break a new effort from Omnicom Group's BBDO Worldwide, New York, in late September and E-Trade is working on new TV ads with its agency, Omnicom's Goodby Silverstein & Partners, San Francisco.

"We felt this was a good time to talk about some things that are top-of-mind this year," said Anne Nelson, chief marketing officer of Ameritrade, which in April announced plans to cut $50 million out of its $200 million marketing budget. In Ameritrade's case, the message is the company's ability to execute trades, which it's emphasizing in the new campaign from WPP Group's Ogilvy & Mather Worldwide, Chicago. The effort includes TV, print and content on Ameritrade's investor education website. "It's important to be out [advertising] in the market, but at the same time, it's important to pay attention to market conditions," said Ms. Nelson. "Being totally out of the market can cause you to spend more at a later date." It's not believed, however, that Ameritrade is reinstating any of the funds it cut this year.

Many advertisers are trying on strategies to squeeze more out of their shrinking budgets. Realizing TV time is not as "priceless" as its tagline, MasterCard International, which spent $215.8 million on U.S. measured media last year, began experimenting with 15-second ads for a back-to-school effort. The first two spots went into MasterCard's regular ad rotation in August and Interpublic Group of Cos.' McCann-Erickson Worldwide, New York, will continue producing 15-second spots during 2002.

Some activity is also coming from new entries and expansion among smaller players, who are raising their profiles while their competitors' marketing is on hiatus.

"We think this is a fine time to take a high profile," said Victor Lipman, second VP-corporate communications at MassMutual Financial Group. The company launched a $10 million print and TV campaign from Interpublic's Lowe Lintas & Partners, New York, Aug. 27.

Even while brokerage activity falters, Brut, an alternative stock-trading system owned by 26 Wall Street firms, broke its first national effort in September magazines, a $5 million campaign from Chadwick Communications, New York. Another advertiser, Commerce Bank, Cherry Hill, N.J., will open the first two of 130 projected branches in the New York area Sept. 14, backed by an ad campaign from Interpublic's Tierney Communications, Philadelphia.

Expanding into the home turf of megabanks such as J.P. Morgan Chase and Citigroup in a financial recession sounds risky, but Commerce plans to benefit from the large banks' focus on cutting costs and branch closings, said David Flaherty, VP-corporate communications. Its business model is built on constantly increasing deposits, so it must market itself aggresssively.

"Our success is in our ability to bring customers into our stores," he said. "We have to let people know we're there. ...We have to create a buzz in New York."

And the buzz now is: Hitting bottom or not, it's time to get off the bench. "Everyone is debating when will customers come back," said Block's Mr. Byers. "Everybody wants to be there when they come back."

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