Wachovia Corporation

views updated

Wachovia Corporation

FINANCIAL WORLD CAMPAIGN
UNCOMMON WISDOM CAMPAIGN

1 Wachovia Center
Charlotte, North Carolina 28288
USA
Telephone: (704) 374-6565
Fax: (704) 374-3425
Web site: www.wachovia.com

FINANCIAL WORLD CAMPAIGN

OVERVIEW

NOTE: Since the initial appearance of this essay in the 1999 edition of Major Marketing Campaigns Annual, First Union Corporation became Wachovia. The essay continues to refer to the company's former name, as that was the official name of the organization when the campaign was launched.

On September 27, 1998, First Union Corporation debuted a commercial unlike any other in the financial services industry. In this spot the company avoided the stock images of financial services advertising—smiling customers, affluent retirees, and happy families. Instead, First Union depicted a chaotic and disturbing landscape—the "Financial World"—that was filled with symbolic representations. In "Launch," the initial execution, faceless people clad in black coats and bowler hats walk a city of garish neon. When one falls to the ground, his face shatters. Mutual funds are hawked by a fellow carrying a cigarette tray, and a fire-breather comes into view. A voice-over explains this dark scene: "This is a world only a few know well, a world of risk and uncertainty, where the roads can take you to success or prosperity—or sometimes to no place at all. This is the financial world." The images suddenly shift as the camera focuses on a towering edifice of steel and glass, shining in the sun and looming over the sordid scene beneath it. The voice-over concludes: "Yet high above the horizon, another mountain has risen—a mountain called First Union, with 16 million customers, the nation's eighth-largest brokerage and sixth-largest bank. For a new perspective of the financial world come to a mountain called First Union. Or, if you prefer, the mountain will come to you."

Created by the San Francisco-based ad agency Publicis & Hal Riney, "Financial World" was First Union's first national advertising campaign and was intended to introduce First Union to the world. Although a series of acquisitions had made First Union one of the largest financial-services corporations in the nation, few people were aware of the company's scale and range of offerings. "We want people to know that we're a substantial institution—a major player in the financial services world that can meet any financial need," Jim Garrity, First Union's vice president of advertising, told Adweek. With the stated goal of "breaking through the clutter of advertising," Publicis & Hal Riney turned to Star Wars creator George Lucas's company, Industrial Light and Magic (ILM), for cutting-edge special effects. Although some critics blasted the campaign as bleak and intimidating, Garrity averred that "the financial world is not always a warm and fuzzy place…. [W]e wanted to acknowledge what the real world is like and show how our expertise can help customers succeed in it." Each of the five commercials that comprised "Financial World" closed with an explanation of how First Union could assist consumers and with the same tag line: "Come to the mountain called First Union. Or, if you prefer, the mountain will come to you."

HISTORICAL CONTEXT

First Union's growth had been rapid. Beginning in the early 1980s, the Charlotte-based bank, headed by Edward Crutchfield, took over nearly 85 banks to become the sixth-largest bank in the United States. Its retail presence eventually stretched along the East Coast from Connecticut to Florida. In 1994 First Union started to expand into the arena of mutual funds and brokering. Two years later it bought Boston-based Keystone Investments Inc., a large manager of stock, bond, and money market funds. At the time, Crutchfield explained to an interviewer that the company was "trying to build a business that is about 50 percent traditional bank while the other [half] needs to look like [brokerages] Merrill Lynch, Fidelity, and Charles Schwab," according to the Boston Globe.

In 1997 First Union ran a branding campaign on the East Coast, where its retail presence was most strongly concentrated. That effort, which First Union credited with tripling awareness of the company in the area, focused on how the brand provided "smart, straightforward financial solutions in the customer's best interest." But First Union had its sights set higher than being simply a regional power. It believed it could purvey its services to consumers across the country and therefore decided to initiate a national advertising campaign. "We want to build upon that momentum [of the 1997 campaign] so that First Union is on the short list of top financial providers in the mind of every potential customer," Garrity said.

TARGET MARKET

Though many of its competitors aired commercials that targeted a mass market, First Union aimed "Financial World" at a more narrow audience. "We wanted to target the top 5 percent," is how Publicis & Hal Riney's Brad Fogel explained it. In other words, First Union sought to appeal to two major groups—major corporations' chief financial officers (CFOs) and chief executive officers (CEOs) on the one hand, and the most sophisticated of individual investors—those who controlled over one million dollars of investable assets—on the other. "[W]e're reaching a point where we need to attract customers not just by buying institutions but by attracting prospects from around the country to do business with us," Garrity told American Banker.

In its effort to court an audience described by American Banker as "corporate leaders and wealthy people," First Union eschewed typical financial services marketing in favor of the edgy "Financial World" spots. The scenes of chaos and danger were chosen for a reason. "That's the reality," Fogel said. "That's the way [this demographic] see[s] the financial world. We had to speak with credibility." For instance, in "Change," First Union painted a depressing portrait of a system in flux. "In the financial world, banking as we know it has become a thing of the past," the voice-over intoned while images of collapsed neoclassical buildings, broken statuary, and currency drifting haphazardly in the wind flickered across the screen. "Teller windows have become electronic gateways," the narrator continues, and then proceeds to detail the various upheavals wracking the banking industry. By acknowledging the "real world," First Union hoped to earn the respect of experienced individual and corporate investors, those who had both gained and, inevitably, lost money in the course of investing.

"Financial World" also directly addressed corporate investors by discussing the problems specifically confronting corporate investments (and the solutions First Union could provide). "Sharks," for example, depicted a frog attempting to navigate its way across a body of water teeming with sharks and alligators. "Sometimes to defend against larger, fiercer competitors, your best choice is merger or acquisition," the narrator said. "But beware, lest your careful, well-planned strategy should result in failure. In these troubled waters, experience, knowledge, and size are your best allies." As the frog safely reaches a serene pond in the shadow of First Union's magnificent building, the voice-over concludes: "If you're considering strengthening your company through mergers or acquisition, think first of First Union. Wherever you plan to go, we have been there before."

COMPETITION

The financial services sector that First Union was entering had become intensely competitive. In addition to First Union, several other large banks were in the process of staging massive branding efforts. "Historically, they haven't been savvy marketers because they worked in defined territories with a limited set of products," noted Advertising Age. "But as they enter new markets and add products and services, creating a strong brand image is essential." In May 1998 Chase Manhattan Corp., the largest bank in the United States, teamed up with San Francisco-based advertising firm Foote Cone & Belding to "forge a more distinct image for the bank," according to Advertising Age. Dissatisfied with its long-standing tag line, "The Right Relationship Is Everything," Chase opted to build its brand through clever credit card ads in which it showed what people could buy with a Chase card in a weekend.

Bank One Corp. was also seeking to revitalize its advertising. After acquiring First Chicago NBD Corp. in 1998 Bank One ended its decade-long relationship with the Martin Agency. "They're looking for someone that can help them transcend their regional bank image," an analyst told the January 11, 1999, Advertising Age. With its ad account in review, Bank One planned to make its next agency one that could "help it build its image as a major national player in the financial services arena."

In addition to the bevy of emerging mega-banks, First Union's rivals included major brokerages. Foremost among these firms was Merrill Lynch & Company, which—despite its position as the nation's largest brokerage business—met with increasingly stiff competition in the consolidating sector. After ending its partnership of 12 years with Bozell Worldwide in February 1998, Merrill Lynch selected J. Walter Thompson to craft a new campaign. "It's not a problem of people recognizing Merrill Lynch," a company spokesperson told the July 6, 1998, Advertising Age. "But we do need to be more completely understood." In March 1999 Merrill Lynch launched its "Human Achievement" campaign, which was designed to stress the importance of human experience and knowledge in the investing world. One print ad proclaimed, for instance: "We love technology. It's new and it inspires a certain awe. Technology is good at heavy lifting. People are good at heavy thinking…. Computers are plastic and metal and sand. People are brilliance and discernment and vision." Other ads used legendary blues musician B.B. King to convey a similar message.

MARKETING STRATEGY

First Union realized that winning over its elite target audience from established competitors like Chase or Merrill Lynch would be no easy task. Therefore, the company's goal for "Financial World" was simply to encourage the investors it wished to reach to consider First Union when planning their financial transactions. To accomplish this aim, the campaign had to get these people's attention. The stunning visual imagery ILM created for the commercials was an important part of this effort. The campaign "keeps hitting you with images and it stops you and it makes you want to look," Steve Beck, the commercials' director, told the San Francisco Examiner. Beck later explained to Bank Marketing that "[w]e've created these 60-second miniature films that will make you want to watch them over and over again." "Financial World" was deliberately different from the marketing of its competitors to ensure that the campaign stood out. It "will not be mistaken for anyone else's," Hal Riney, the chairman of Publicis & Hal Riney, said. Garrity echoed this sentiment. "One of our biggest goals was to break through the clutter of financial services advertising where you typically see smiling people shaking hands."

FINANCIAL INNOVATIONS

Several aspects of First Union's "Financial World" campaign were unique from an advertising perspective. One was the unusual degree of involvement by the founder of Publicis & Hal Riney, the agency that worked on the campaign. Not only did Hal Riney play a large part but he also provided the voice-over in each commercial. Moreover, because special effects were central to the vision of "Financial World," many of the specific details of the commercials were left to the discretion of Industrial Light & Magic (ILM), which created the effects. Riney would provide a conceptual framework, and ILM would draft the script. First Union was the ideal client for an ad agency, Riney's Brad Fogel said. Its only desire was that the campaign be unique and that it help First Union stand out. Everyone involved with "Financial World" was therefore given considerable creative freedom.

Just as the First Union building towered over the urban landscape in the commercials, so too did "First Union want to be perceived differently from other financial institutions," a Riney executive told Brandweek. Although "the conventional wisdom for financial institutions was to use business print and direct mail to target high-end investors," he continued, First Union wanted "a high impact environment." Following the lead of other successful brand builders such as the Coca-Cola Company, First Union turned to television to carry the bulk of its message. After the campaign's launch during National Football League (NFL) games, "Financial World" appeared frequently on sports programming including regular-season NFL and Major League Baseball games, and especially during what Brandweek called "must-see" events—such as the 1999 Super Bowl, baseball's World Series, the NCAA basketball tournament's Final Four games, and Wimbledon tennis. News programs were another important venue—"Financial World" aired during 60 Minutes, Dateline, and 20/20. But cable television was perhaps the most significant part of First Union's advertising efforts. Instead of focusing only on prime-time cable news shoes First Union aimed to hit a "variety of different programs to catch investors at different points in their day," said Brandweek. Some of the shows selected by First Union included CNBC's Today's Business, Power Lunch, and Market Wrap, as well as MSNBC's Morning Line and Fox News Channel's Financial World, which also aired during telecasts of the Academy Awards and Tony Awards because of the more affluent audience those events garnered.

The appearance of "Financial World" during the Super Bowl also reflected a key facet of First Union's strategy. Although the Super Bowl was famous for its ability to capture a mass audience, a Super Bowl ad also represented a prestige decision, since companies that could afford the astronomical cost of airtime during the game received a considerable amount of free media attention in the ubiquitous Super Bowl ad previews and recaps in newspapers such as USA Today and the New York Times. As the Oklahoma City Journal Record explained, the Super Bowl afforded companies "a once-a-year opportunity … to create reputations and flaunt their best." Moreover, because of the game's cachet those businesses that did advertise during the Super Bowl were widely regarded as leaders in their fields—exactly the message First Union sought to convey with the "Financial World" ads themselves. The Super Bowl was part of what Fogel termed First Union's "big dog media campaign." By appearing there First Union demonstrated that it was at least on a par with its more established competitors.

OUTCOME

First Union expressed complete satisfaction with "Financial World." According to Brandweek, national awareness of First Union tripled in the first few months of the campaign. "The feedback from the ads has just been unreal," company spokesperson Sandy Deem told the Washington Times. "It has turned into revenue." On average First Union received about 100 calls a day to the phone number listed in the ads. The company also conducted tracking studies after the commercials aired and found that its target audience understood and was enthusiastic about the message conveyed in "Financial World." Even more interesting was the fact that the mass market outside the company's targeted groups responded well to the campaign and was able to articulate the commercials' premise that First Union was a haven in a turbulent financial world.

The campaign won several awards, including four Clios. But while many commentators applauded the campaign's bold images and innovative strategy, others did not. Advertising Age lambasted "Financial World" as "suicide" on First Union's part and concluded that the campaign presented the bank as "the prince of financial darkness." The New York Times called the commercials a "low point" of 1998 and characterized the campaign as "overblown, overbusy."

Other events made it difficult to gauge the effect "Financial World" had on First Union's bottom line. The company's fiscal earnings during the campaign's run proved lower than had been forecast as a result of the effects of First Union's numerous acquisitions. Consequently, the company's share price plummeted in the face of Wall Street's concern about the firm's future profitability. In this environment focus on the innovative ad campaign quickly gave way to speculation that First Union's merger mania might lead to the company being taken over itself.

UNCOMMON WISDOM CAMPAIGN

OVERVIEW

In 2001 First Union Corporation, based in Charlotte, North Carolina, acquired its smaller in-state rival, Wachovia Corporation, and the new entity took the Wachovia name. The merger, which made Wachovia the nation's fourth-largest bank, was followed by a large, multi-year branding effort. Conceived by the Winston-Salem, North Carolina, office of Mullen Advertising, the "Uncommon Wisdom" campaign broke in the summer of 2002 with the intent of raising the brand's profile and introducing, in stages, the various capabilities that Wachovia, a company composed of a range of corporate and retail financial-services divisions, offered as a result of the merger.

Employing both print and television advertising, the campaign used common occurrences and objects—motorcycle handlebars and haircuts, for instance—as metaphors to communicate the idea that wisdom could be found everywhere but that Wachovia had the unique ability to identify and use its wisdom on behalf of its customers. This concept was applied to individual company divisions in turn, beginning in July 2002 with spots supporting Wachovia Securities, the conglomerate's brokerage arm. That winter a portion of the campaign devoted to Wachovia's retail businesses was launched to coincide with the gradual conversion of First Union branches, beginning with Florida and moving north. In early 2003 Wachovia Wealth Management ads, aimed at investors, began appearing in national print publications and markets along the East Coast. Wachovia further supported its branding campaign with high-profile sports sponsorships in individual markets. The campaign cost an estimated $60 to $75 million in its first year and approximately $160 million in its second.

During the time that "Uncommon Wisdom" ran, Wachovia continued to expand, primarily through mergers and acquisitions, and the newly branded company was well positioned to compete with other banks that were steadily consolidating. In 2005 Wachovia executives claimed that the company profits had grown at an annual rate of 13 percent over the four-year period after the merger with First Union.

HISTORICAL CONTEXT

Wachovia Corporation had been expanding its banking operations regionally throughout the late 1980s and 1990s, and in the late 1990s it entered global banking, underwriting, and capital-formation markets. Prior to the 2001 merger with First Union Corporation, it had also expanded into New York and Florida.

Meanwhile, as a result of its policy of aggressive acquisition, First Union Corporation had become a major financial-services force. During Edward Crutchfield's 1988–2000 tenure as CEO, First Union absorbed more than a dozen separate banks and assorted financial services companies, including CoreStates Financial in 1998, an acquisition that, at the time, was the largest bank merger in history. After Crutchfield stepped down, and while First Union was still recovering from complications related to the cumbersome CoreStates merger, the new CEO, G. Kennedy Thompson, surprised analysts by bidding for Wachovia. First Union competed against SunTrust Banks for the purchase of Wachovia, acquiring the smaller company in a 2001 shareholder vote. The new entity, which chose Wachovia Corporation as its name, covered the East Coast from Florida to Connecticut.

After the merger Wachovia was the nation's fourth-largest bank, with operations spanning private banking, asset management, and brokerage, but its brand name was little known outside the southeastern United States. Wachovia's competitors, too, had been consolidating, so that the industry as a whole was perceived as increasingly faceless and corporate. At the same time the public's view of financial-services firms was distinctly colored by the 2001 stock-market crash and the waves of corporate scandals that followed. Though Wachovia, in its branding effort, had to operate amidst this climate of widespread public skepticism of financial institutions, it had not been involved in any of the scandals, and its banking heritage distinguished it from competitors, many of whom were identified with Wall Street.

TARGET MARKET

The first "Uncommon Wisdom" advertisements centered on Wachovia Securities, the company's brokerage division, and used noticeably high production values and metaphors meant to appeal to the sensibilities of the wealthy. Examples included a TV commercial depicting a middle-aged couple in a canoe, a metaphor for maintaining balance in one's investments, and a spot called "Handlebars," featuring a Harley Davidson and illustrating what handlebars could teach people about financial relationships (the answer was "You have to reach out to make them work"). The message of everyday wisdom and stability positioned Wachovia to appeal to investors anxious about market conditions. Furthermore, the products featured, such as expensive motorcycles, were obviously intended to appeal to the wealthy. Beyond this initial targeted appeal, the first phase of the campaign functioned, according to Wachovia's Jim Garrity, as "a big coming-out party" meant to create awareness and prepare the way for the ensuing mass-market push.

The retail-focused portion of "Uncommon Wisdom," which broke in Florida and migrated north along the East Coast as branches were converted to the Wachovia name, continued to use metaphors that signified strategies for achieving financial well-being, but this phase primarily emphasized brand recognition—especially in markets where the bank had no prior presence—through the simple act of teaching consumers how to pronounce Wachovia. Additionally, the metaphor concept was given a more down-to-earth spin and broader potential appeal. The TV spot "Salon" used the act of getting a haircut to explain Wachovia's principles for working with small businesses, such as its commitment to careful listening. Other spots illustrated financial knowledge through images of children in a school play and on carnival rides. For the Florida portion of the campaign, Wachovia employed Hispanic agency Zubi Advertising of Coral Gables to "transcreate" ads whose metaphors appealed specifically to Spanish-speaking residents of that state.

Ads supporting Wachovia Wealth Management, which followed on the heels of the retail push, used the ongoing "Uncommon Wisdom" message to target investors "who are looking for financial advice, have $1 million of investable assets, and have $2.5 million or more of assets in all," according to American Banker. Wachovia marketing officer Raj Madan posited that such individuals placed a premium on access and advice, concerns that were answered with advertising such as a print ad that appeared in 2003. It featured a stained-glass window and the question, "What can a stained-glass window teach us about managing assets?" The answer was, "Sometimes you have to step back to see the whole picture." The copy elaborated, "If you were asked where you stood financially, how many calls would it take to answer? Accountant. Attorney. Broker. Banker." Because of the merger and the ensuing evolution of the company, Wachovia was able to offer wealthy individuals exactly such a big-picture view of their finances, and it had wealth management teams in close proximity to all the major markets this portion of the campaign targeted: Florida, New Jersey, Connecticut, the New York City suburbs, Philadelphia, and Washington, D.C. Additionally, the continuing emphasis on brand awareness was meant to let high-net-worth individuals know that they were doing business with a major player in the financial-services world.

COMPETITION

Citigroup Inc. was the largest company of its kind in the world, and—like most of the major financial-services companies at the time—it continued to grow as a result of large-scale mergers and acquisitions. Though its purchases were not as flashy as those of its top competitors, Citigroup understood the need to maintain a human face in this era of consolidation. Likewise, a weak market for investment banking encouraged Citigroup, like other banks, to renew its focus on retail customers. The marketing results of this banking milieu were popular and critically acclaimed Citibank advertising campaigns, such as "Live Richly" and "Identity Theft Solutions." "Live Richly" focused on the idea that there was more to life than money, and "Identity Theft Solutions" comically dramatized the idea of identity theft by showing victims speaking in the lip-synched voices of those who had stolen their identities. Both campaigns tried to assure consumers that Citibank cared about their interests and understood what was important to them.

America's second-largest bank, JP Morgan Chase & Co., was a product of the 2001 merger of retail-banking giant Chase Manhattan and investment-banking stalwart JP Morgan. In 2002 the company, in line with industry-wide trends toward customer-centered advertising, launched a TV campaign that used the tagline "The right relationship is everything" and that focused on customer relationships rather than on specific products or services. The campaign was adapted in 2003 for ads aimed at African-Americans, Hispanics, and Asian-Americans. In 2004 JP Morgan Chase swallowed up the country's sixth-biggest bank, Bank One, extending its reach into the South and the Midwest, and initiated a media review process for selecting agencies to handle post-merger advertising.

Wachovia's hometown rival, Bank of America, was the third-largest bank in the United States and, with approximately 5,800 locations in 30 states and the District of Columbia, the leader among retail banks. A 2004 merger with FleetBoston set the stage for a massive rebranding push. In light of the challenges posed by the blockbuster acquisition, Bank of America—which had more than 15 separate advertising agencies on its roster—hired a third-party consultant to help maximize its estimated $180 million marketing budget.

MARKETING STRATEGY

The idea behind the "Uncommon Wisdom" campaign came from Mullen's successful 2001 pitch for the post-merger Wachovia account. The campaign's first spots, supporting Wachovia Securities, appeared in May 2002 and ran in financial magazines such as Fortune and Forbes and in newspapers such as the Wall Street Journal and USA Today. The television portion of the campaign began on July 20 of that year, during the British Open golf tournament, and the series of six initial spots subsequently appeared primarily on weekend sports, financial, and public-affairs programs. Spending during the campaign's first year was estimated at $60 to $75 million.

BUT WHAT DOES IT MEAN?

"Wachovia" (wah-KO-vee-yah) refers to an area of North Carolina settled by Moravian religious dissenters in 1753. The land, given to them by the English nobleman and North Carolina landowner Lord Granville, reminded them of a German river valley called Der Wachau. Wachovia is the Latinized form of the German word.

The fallout from the numerous reports of corporate malfeasance during this period made it "a tricky time to be marketing wealth management services," according to U.S. Banker, but Wachovia Securities—a bank brokerage able to distance itself from Wall Street and accounting firms—was positioned to offer itself as a trustworthy alternative to some of its larger competitors. The campaign thus emphasized everyday life as a source of wisdom and cast Wachovia as a steady presence intent on gleaning that wisdom for the sake of its customers. As Wachovia's Kirt Hibbits told American Banker, "This new campaign shows Wachovia as a company that cares about its customers and wants to take all that they know and all that we have learned to create shared success."

At the outset of the campaign another challenge facing Wachovia and Mullen was the disparity between Wachovia's new size and the relative obscurity of the brand name. The campaign's launch, therefore, rolled out the company's brokerage services while serving the ongoing goal of establishing Wachovia as a known quantity in the banking world. That goal took center stage in the retail phase of the campaign, which included advertising teaching customers in new markets how to pronounce the company name. Eight TV spots, some of which were in Spanish for the Florida market, led the retail portion of the campaign and were supported by print, radio, and outdoor ads.

In the campaign's second year, ad spending roughly doubled, reaching an estimated $160 million. The retail push gradually reached local markets, from Florida to Connecticut, and the company introduced another series of ads in support of Wachovia Wealth Management. The Wachovia Wealth Management phase of the campaign consisted of print ads in regional publications and in national magazines such as Forbes, Fortune, and Fast Company, and it also featured PBS and NPR sponsorships. In the summer of 2003 Wachovia sponsored the Wachovia Championship, a professional golf tournament in Charlotte, and continued to enhance its name recognition in key markets by sponsoring sports teams, including the Miami Dolphins and the New York Giants.

OUTCOME

During and after the "Uncommon Wisdom" campaign, Wachovia remained the fourth-largest bank in the United States, keeping pace with competitors. Maintaining this position was more than a matter of simply holding on, however. Wachovia's continued growth—like that of Citigroup, JP Morgan Chase, and Bank of America—was primarily the result of a constant diet of mergers and acquisitions, the most prominent being the takeover of SouthTrust, a bank based in Birmingham, Alabama, in late 2004. Wachovia's profits grew at a 13 percent compound annual rate between 2001 and 2005, and the company was prepared to meet the challenges of a merger-heavy banking market. In a 2005 Forbes story on the company's positioning and outlook, CEO G. Kennedy Thompson, architect of post-merger Wachovia's rebranding and growth, offered the following prediction about the future of the banking industry: "I think there will be a handful of universal banks, and I think Wachovia will be one."