Fund Ads Expand Into Wider Media
January 24, 2000
Mutual fund advertisements are turning up outside of their usual venues in The Wall Street Journal, Forbes, Fortune and other publications largely catering to individual investors.
Dreyfus of New York, for instance, is running print ads in Vanity Fair, Fidelity Investments of Boston is trying to lure shareholders amongst the photo-studded pages of A&E cable's Biography magazine and Morgan Stanley Dean Witter of New York is running broadcast ads on the "Martha Stewart Living" syndicated show.
Mutual funds expanded into an unprecedented array of print media in 1999 including Garden Design, Boating, McCall's, Shape Magazine, and Wired, said Lynne Fava, marketing associate of Competitive Media Reporting, a media tracking firm, of New York.
Although mutual fund companies' budgets in these magazines are miniscule compared to the $20 million they collectively spend in Money magazine or the $4 million to $5 million they spend in other such magazines, fund companies began in 1998 and 1999 to spend a small portion of their advetising budgets on mainstream media, Fava said.
Boating magazine received $20,000 worth of advertising insertions from mutual fund companies in the first three quarters of 1999, while Shape magazine received $80,000 worth of such ads for the same period, Fava said.
"Mutual fund firms have come out with more daring, interesting campaigns than ever before," said Martha Brown, communications director for the American Association of Advertising Agencies in New York. "They are placing advertisements in non-traditional, prime-time and high-end consumer publications to reach the demographics of who they feel they should reach.
"More so than the creative [content], the decisions of the media planners in where they are willing to place their messages" is showing increasing creativity on the part of mutual fund advertisers, Brown said.
"It's definitely a new trend," said Robert Powell, managing director of Dalbar, a mutual fund research and consulting firm in Boston. "You've got SunAmerica in Grand Central Station and Yankee Stadium, T. Rowe Price in Advertising Age and Brand Week, and American Express in Black Enterprise. There are all sorts of companies trying to break through the clutter.
"Just because you are a mutual fund investor, doesn't mean you don't have other interests," he said.
Mutual fund companies "have been looking for the Holy Grail" of where to find the next new investor, he said. "If, for instance, they were to find out 50 percent of all fund investors are cat lovers, it would make sense for them to reach them using Cat Lovers magazine, and they will continue to have that advantage until [a competitor] realizes that advantage."
A Dreyfus spokesperson confirmed that the firm had never before advertised outside of the business press, prior to its current Vanity Fair run.
"We wanted to stand out," the spokesperson said.
Fidelity did not return calls seeking comment on its advertising in general-interest publications, and a Morgan Stanley spokesperson declined comment on the firm's non-traditional advertising.
Many mutual fund and other financial service companies have been running print and broadcast ads at sporting events, such as golf, tennis, football and even the Super Bowl. Charles Schwab & Co. of San Francisco launched a campaign late last fall including sports stars making fun of their advantage over their teammates when it comes to their investment knowledge.
One Schwab commercial had U.S. tennis pro Mary Joe Fernandez trying to understand Russian tennis pro Anna Kournikova. The twist was that Kournikova was not speaking Russian, but about Schwab investments.
Another spot included Denver Broncos tight end Shannon Sharpe, known for taunting other players on the field, yelling, "Your mother pays full commission! You can't even spell Dow Jones!"
"You will see more and more of it," Powell said. "Large financial firms will look to cross-sell funds [and other products]. And at some point you will see them going to even odder places - anywhere there is good demographics."