Posts Tagged 'Bank of America'

Welcome to the Decade of Narrative Marketing

Marketing is undergoing a transformation.

Marketing is being re-invented.

The so-called “22 immutable laws of marketing” have mutated.  They’ve been broken.  Now they are being repealed.

Bold moves by companies such as Samsung, Apple, Google, Hyundai, Adidas, JetBlue and McDonald’s — to name some of the most visible ones — are re-writing the marketing playbook.

The innovation is coming from the corporate side and from bold thinkers .  To name just a few — Douglas Holt, Marc Gobé, Gerald Zaltman, Larry Light, Joan Kiddon, Joseph Plummer, Jae Hang Park.  There are many others.   We can all learn from the example of Philip Kotler, the father of modern marketing, who is continually seeking a better framework for marketing as the world evolves (Marketing 3.0 is his newest explanation of this third wave in reinventing marketing).

The future of marketing is built on a better understanding of how the human mind works.  The future of marketing is based on new learning into the sheer power of metaphors and story telling to shape the very way we understand the world.  It is based on the breakthroughs being made by neurologists who are able to study our brains in ways unimaginable 15 years ago.  fMRI and other technology are opening new windows into our brain, giving us a better view of what happens inside.   This is not a tale from a Avatar or some other 3-D science fiction film.  It is well-known from the work of Steven Pinker, Oliver Sacks and others.

The future of marketing is based on the simple principle of co-creation.  That means the consumer is central to the process. It recognizes the essential role consumers have in co-creating meaning and value.

The future of marketing includes that essential 4th dimension — time.   It will no longer look at the world in a 2 x 2 grid.  It is flexible, dynamic.   New marketing will replace old marketing the way that steel replaced iron; the way that LCD flat screen TVs replaced vacuum tube TVs

The future of marketing embraces technology as a strategy, not just an execution.  The new new thing –QR codes, social media, hyperlocal marketing — the technologies of the moment will continuously change.  Marketing will break down the internal silos that agencies & corporations erect around the digital world of online and mobile to separate them from the analog world of TV and Radio.  The future of marketing looks at the ways a story jumps from one medium to another, the way a book becomes a movie becomes a Broadway musical becomes a video game becomes a theme park attraction becomes an app, becomes an iPad iBook, becomes….

The past of marketing is static (position), focused on the competitor (different) and not the consumer, reductive, minimalist, simplistic to the point of trying to summarize everything into a single word.

The future of marketing is narrative.  It will:

A) Tap the power of metaphor and story telling

B) Co-create

C) Be alive, living in time

E) Embrace new technology to tell stories in new ways

1/1/11 is the start of the Decade of Narrative Marketing.  The future is an open book.  Go ahead, write the next chapter.

Can a brand be valued by the stock price?

Back in the dark ages of 1987 I was working at an ad agency where my clients were The Prudential and its stockbrokerage, Prudential Bache.  Our offices were on the 20th floor of 1515 Broadway, overlooking Times Square itself.  It was a glorious view from there, particularly at night.  The military recruiting station was still there.  The seedy parts of the neighborhood were still in ascendance. While we didn’t have the internet we had something even better — the news ticker on the side of the One Times Square.

One Times Square, perhaps a little before 1987

One day my boss called me over the windows looking out on the square.  On the news ticker was the announcement of the stock market crashing, dropping hundreds of points.  By the end of trading the market was down about 508 points — over 22%.  It was stunning.

When we could pull ourselves away from the windows, we turned to the business of setting up a market research study for our clients to assess the impact of this drop on willingness for people to buy stocks, mutual funds and universal life insurance. Back then, a relatively small percentage of people actually owned stocks or even mutual funds.

The agency quickly rushed out new Prudential Bache advertising to reassure investors with the tagline, “Rock solid.  Market wise.”

No one was particularly thinking that the stock market collapse would have any bearing on the strength, equity and value of brands in general.  What did the stock market have to do with brand valuation?

Flash forward to 2008 when the stock market tanks.  By this time there are well established measures and indexes of brand value tied directly to stock values.  For more than a decade brand consulting companies such as Interbrand have been selling brand valuation studies showing how many billions of dollars this or that brand is worth.  This listing is published every year in a the top global brands in Business Week.

In this past 2008 ranking Citi was valued at $20 billion.  The stock market valuation of Citi today is about $14 billion.

Does that mean if you took the Citi brand away that the rest of the company is worth negative $6 billion?  

Or that the Citi brand itself is now worth a negative $6 billion?  In other words, the bank would be better off without the Citi name attached to it.  Certainly in Wednesday’s testimony the head of AIG indicated that they would be better off without their brand.  At Citi the recent advertising campaign of “Live Richly” have contributed to making the company a target.  And the same is true for Bank of America’s “Bank of Opportunity” campaign.

The standard approach to marketing, the Brand Positioning approach, would say that you cannot change the minds of people about these brands.  You need to change the brands since you cannot change minds.

So we now see two standard marketing tools failing companies today.  Brand valuation is setting up the wrong benchmark.  And Brand Positioning is directing companies to dump their brands instead of changing their marketing approach.

Rather than changing the brands, it would be more effective for the banks to change their approach to marketing.  If they reinvent marketing so that it is better integrate and aligned with the rest of the organization, then they would begin to see a change in how people perceive them.  It would not solve the underlying financial problems.  But it would go a long way to creating public sympathy instead of the current anger.

Should Citi be advertising with Federal bailout money?

It’s an outrage!

With people suddenly saving more money than any time in the past 6 years, why don’t the big banks can cut their advertising and promotional spending?

Why don’t they shift their dollars into more effective forms of advertising?  Or adopt a more effective set of marketing tools to replace the old brand positioning approaches?

Citi has now taken over $350 billion in a combination of direct capital infusions from the Federal TARP funds and Federal guarantees.  That a lot of billions.  

Why is Citi spending nearly $400 million dollars for naming rights to the new Mets stadium, according to our friends at the NY Times?

For that matter, the same goes for Bank of America, Wells Fargo and everyone else who has received Federal funds both on Wall Street and elsewhere.

Now Citi says that none of the TARP money is going into advertising and sponsorships.  That they have a wall separating out these funds.  And that might be true, technically.  But certainly TARP funds into one side of the bank frees up funds in other areas.  

In these dramatic times, Citi can stand apart by taking bold approaches to their marketing.

There is a good case to be made that Citi could cut all of their television advertising by 2/3rds, introduce more effective marketing approaches such as Narrative Branding, and see an improvement in their ROI on marketing.

That would also buy them invaluable good will with Congress and the White House — their most important audience today.

Bank of Missed Opportunity?

It seems like Bank of America is in the right place at the wrong time.  

For nearly two years they have embraced a brand positioning about opportunity.  

At the same time we read online about their request for a multibillion dollar bailout.  The US government now owns about 6% of the bank.  And there are untold billions more at risk due to the acquisition of Merrill Lynch.  So whose opportunity are we talking about?

From the Bank of America website:

Our Brand Positioning
Bank of America’s brand positioning, “Bank of Opportunity,” is emblematic of what Bank of America has always strived for throughout our history ― to create opportunities for the people we serve. 

It is a brilliant idea that is just completely out of step with consumers today.  

So what is a company to do when their brand positioning has boxed them into a corner?  Do they compound the problem by trying to “reposition” the brand?

This is an example of how the inflexibility of brand positioning can amplify the problems of a company instead of reducing risk.  Unless Bank of America can change the discourse, they run the risk of being out-of-step with their customers.

The reality is that people have memories.  We all understand that the current financial crunch is beyond the control of any bank, even one as large as Bank of America.  What we need is a really good narrative line about what role Bank of America will realistically play in our lives, in our communities, in our country.  The narrative needs to adapt to the reality.  

It also raises a very delicate question.  When companies are receiving billions of government aid, should they be spending any of it on advertising?

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