Herald Tribune, October 07, 2008

Soothing Jittery Investors, One Advertisement at a Time

NEW YORK: It was a daunting task for any ad agency copywriter. In the last days of the life of Washington Mutual - Sept. 15 to Sept. 25 - terrified customers withdrew $17 billion in deposits from the failing savings and loan, which U.S. regulators then took over and sold to JPMorgan Chase for $1.9 billion.

How, then, to create a campaign that would project confidence in an institution that will be remembered as having suffered the largest bank failure of its time? Humor, decided the two banks' agencies, which worked together on ads to promote the fire sale - er, merger.

"We love Chase," reads the headline of an advertisement for Washington Mutual. "And not just because they have a trillion dollars." (The Washington Mutual name will remain on branches for the time being, a Chase spokesman said, but it will be replaced by the Chase name in a year or two.)

The same challenge is playing out in the marketing department of virtually every financial institution. As the stock market falls, investors are watching their paper losses mount and their retirement accounts dwindle. As the most trusted names in banking and brokerage fell like dominoes - despite reassurances from top executives that nothing was wrong - what message or slogan could possibly reassure a jittery public?

"This is not the time for keeping to the course," said Gary Stibel, chief executive of the New England Consulting Group in Westport, Connecticut, which is starting a practice devoted to financial crisis management. "The ads should tell people with money: 'There is every reason to worry. That's why we're here."'

For Washington Mutual, the important message was the happy new marriage to JPMorgan Chase, which provided a handsome dowry. "WaMu & Chase. Safe & secure," said one ad.

The advertisements were necessary, said a spokesman for JPMorgan Chase in Chicago, Thomas Kelly, to help stanch the flood of deposits being withdrawn from Washington Mutual - and they worked.

"There was radio, print, Internet, fliers in banks, all part of saying, 'You're O.K.,"' Kelly said last week. "And we really think we got that message across. On Tuesday and Wednesday, we had positive deposit inflows into WaMu."

The Washington Mutual agency (TBWA/Chiat/Day in Playa del Rey, California, part of the TBWA Worldwide division of the Omnicom Group) and the JPMorgan Chase agency (McGarryBowen in New York) is collaborating on the campaign. Appropriately, the tagline is: "WaMu, now part of Chase."

In advertising, many financial institutions are racing to reassure consumers with soothing messages that focus on important "S" words: strength, safety, stability, security.

"There is a safe and smart place to put your money," ads for Commerce Bank tell newspaper readers.

Simultaneously, some institutions are continuing to communicate as if the recent upheavals had not happened. Ads for Discover Financial Services, for instance, try to coax consumers to sign up for yet another credit card, offering enticements like free balance transfers.

Just as bad as no new message, Stibel of the New England Consulting Group said, is the wrong message, as when "the CEO writes a letter that 'everything's O.K., not to worry, we're in great shape."'

"That's an indication everything isn't O.K.," he said.

Stibel praised ads for Charles Schwab, the discount brokerage firm. They have included open letters from Charles Schwab, the chairman, outlining in plain language his perspective on market conditions.

"The current environment for investors is in many ways unprecedented and clearly unsettling," the text begins on the Web site Schwab.com.

"Is it a tough environment? Yes," the letter continues. "Is it a time to be rash? No."

The straight talk is the right approach, said Andrew Benett, chief executive of Euro RSCG Worldwide in New York, a unit of Havas that is the Schwab creative agency, because "everyone knows how dire the situation is."

"What brands need to do to be successful is to be honest, to have a lot of humility," Benett said. "The consumer has very little tolerance of anything else."

The campaign featuring Schwab is running in addition to the company's regular ads.

"As we've seen anxiety on the part of investors increase," said Rebecca Saeger, executive vice president and chief marketing officer at Charles Schwab in San Francisco, "we've reached out to our own clients, reminding them we're here for guidance and are taking a leadership voice to help individual investors."

"It's hard to be reassuring when nobody knows how it will all pan out," she added, "but the feedback has been very positive."

Saeger demurred at describing customer behavior since the ads began, citing rules against discussing material matters before Schwab reports its third-quarter results. However, "we've seen a tremendous increase in calls to call centers, visits to branches, visits to the Web site," she added, and "a ton of interest in more conservative investment options."

In the same vein, Bank of America decided to alter its advertising, said a spokesman in Boston, Joseph Goode, to "promote our various savings options like our risk-free CDs and high-yield CDs."

Ads for Bank of America by BBDO Worldwide in New York, part of Omnicom, carry headlines like, "A new opportunity to bank with confidence, security and a higher interest rate."

Asked about results, Goode replied, "Like a lot of large banks, we've seen a flight to quality, an increase on the deposit side of our house."

So far, Bank of America has not run ads about its acquisition of Merrill Lynch.

Of course, it is not easy for companies to shift marketing gears so quickly.

"The situation is so fluid, it's hard to figure out what message to put out today that would be relevant tomorrow morning," said Matthew Harrington, U.S. chief executive at the Edelman public relations agency in New York, part of Daniel J. Edelman.

In many instances, "I just don't think they've been hitting the right note," Harrington said of the financial marketers, referring to those "that say, 'Believe in us' without providing data explaining why" or "that say, 'We have all the answers,' which I'm not sure is credible given all the wreckage."

Even the Federal Deposit Insurance Corp., or FDIC, which has found itself in an uncomfortable spotlight lately, is trying to project the right image. Last month Suze Orman, a personal finance writer and television personality, began appearing in a public service campaign for the agency, which regulates banks and insures deposits.

"We wanted to strike the proper tone between being informative and being alarmist," said Andrew Gray, public affairs director at the FDIC. "We certainly didn't want to scare anyone."