Companies unleash 1999 ad plans
January 4, 1999
There is no single direction in mutual fund company spending on advertising in 1999. But, whatever money companies have budgeted is largely being allocated to send messages aimed at reassuring rattled investors, not bragging about performance. Also companies are focusing on keeping their names prominent in investors' minds rather than on promoting specific products.
Companies are using a variety of approaches instead of the strident trumpeting of performance.
Alliance Capital in New York, is using gentle humor. In one of Alliance's ads, for example, a son is talking with his elderly parents at the breakfast table, commiserating with them that they have not saved enough for a restful retirement and suggesting that his mother go to work for a fast food restaurant to help them get by.
Alliance is also just finishing a new ad campaign whose message will be, now, more than ever you need an adviser,' said Richard Khaleel, senior vice president. But Alliance will also run some ads flaunting funds' performances.
Alliance's ad budget this year will most likely be substantially higher than its 1998 budget of $10 million, said Khaleel. The plan for 1999 includes lots of advertising and intensified marketing efforts to both brokers and consumers.
Its marketing efforts include sponsoring a national contest with a first prize trip for a college student and three classmates. Alliance also plans to advertise by being one of the sponsors of the Fiesta Bowl and other major college bowl games.
Sports sponsorships have become a popular way for financial services firms to build brand awareness. But they are sometimes a gamble. AIM Management of Houston, for example, created a TV commercial with a basketball theme to run in conjunction with its NBA sponsorship. But with the NBA player lockout, AIM shelved the spot, said Marilyn Miller, senior vice president.
Instead, the firm is using five other TV commercials created in the past year. AIM ran the series of TV spots nationally between mid-October and the end of November and planned to continue running them this year. The message is, Peace of mind comes from investment discipline at AIM,' said Miller. The ads will adopt the pop quiz strategy in which readers are asked questions testing their investment knowledge, that was used in print ads last year.
All of these ads are aimed at promoting the AIM name. No product ads or ads promoting performance are planned for TV spots, said Miller. Ads promoting performance will be confined to print, an area in which AIM plans to spend more money this year.
AIM has paired back its 1999 advertising budget to $10 million from its 1998 level of $15 to $16 million, said Miller.
MFS of Boston, meanwhile, will maintain its 1998 ad budget of $4.5 million this year. The firm will continue its successful national print ad campaign, emphasizing the firm's long history (it turns 75 next year) and innovative research, and placing less emphasis on performance, said John Reilly, an MFS spokesperson. MFS will not be doing any TV advertising because it is very expensive and is not effective unless ads are repeated for extended periods, says Reilly.
American Century Investments in Kansas City too is allocating the same amount for advertising this year as it did last year, said Chris Doyle, an American Century spokesperson. Ads early this year will promote the benefits of IRAs and tax-reducing products. Later in the year, ads will become more reassuring, conveying the message to investors that, the company is here to stay and that it is available to help, said Doyle.