Banking On The Internet For Better Brand-building

Financial-services companies, long among the leading spenders on Internet advertising, are changing how they view the Web, with big advertisers like Charles Schwab, Chase and Visa looking to it as a place to build their brand images as much as an efficient customer acquisition channel.

Many advertisers are making branding a larger part of their online ad campaigns, part of an overall shift in the Web advertising market, which in the early years of recovery following the dot-com bust was carried by direct-response ads, particularly search listings. While banks, credit card issuers and brokerages already view the Net as a highly effective direct-response channel, they are starting to complement that with brand strategies formerly reserved for TV and print, according to clients, agencies and publishers.

“The role the Web plays now in entertainment, communication and information has elevated it to the point where it absolutely is a traditional media,” said Ben Stuart, vp of brand advertising for Schwab.

Schwab has been an enthusiastic adopter of Web branding, particularly with its “Talk to Chuck” campaign. The push, which has run since October, looks to separate Schwab from Internet rivals by emphasizing the company’s array of services not available at discount brokerages. The $60 million campaign has relied heavily on TV spots and print ads, but Schwab has made the Web a key driver of branding, Stuart said.

In 2005, Schwab spent 25 percent of its budget online, up from 17 percent in 2004 and 8 percent in 2003. According to Nielsen Monitor-Plus, Schwab spent $70 million on traditional advertising in 2005.

Others in the category are following suit. Chase, for instance, ran its first Web branding campaign in December, promoting its line of rewards cards. Manning Field, svp of brand management at Chase, said the bank is doubling its online spend annually, taking money from traditional media. “That [the Internet] is a testing medium for branding is not true for us anymore,” he said. “It’s an integral part of how we make connections with people for the Chase brand.”

Visa launched a wide-ranging push to introduce its new Signature credit card in 2005. For Visa’s security push running through the football season, independent shop AKQA created Web ads and JibJab-like animation at

“We’re definitely at this point focusing more on brand-building online than direct response,” said Jon Raj, vp of interactive and emerging advertising at Visa. “We’ve found direct response works best if it has some kind of brand component that precedes it.”

The moves to add branding to direct response online could be a boon for the industry. Financial services is the third-largest category for Web ad spending, trailing only auto and computer makers, according to the most recent industry-wide spending figures from the Interactive Advertising Bureau. Financial-services display ad spending was $388 million in the second quarter of 2005, representing 13 percent of the Web ad market, per the IAB.

Richard Kosinski, the business and finance category development officer at Yahoo!, said Schwab and others are adopting brand campaigns online, in part because new ad technologies have turned the Web into a storytelling medium that can extend awareness campaigns in other media.

Schwab has relied on ad units to allow potential customers to sample the brokerage’s products. With its lead agency, Havas’ Euro RSCG, Schwab developed ads that allow users to hear audio reports from its lead investment strategist; others let prospects search for Schwab equity ratings.

Brokerages and banks are also using new interactive techniques to extend their TV campaigns. Last fall, WPP’s OgilvyInteractive shot footage during Ameritrade’s TV commercial shoot and created rich media banners with interactive options for users to take the spot in different directions for further information. “Combining broadband with video, you really have interactive TV,” said Jan Leth, co-chief creative officer at Ogilvy & Mather New York.

Despite signs of this shift to view the Web as a branding medium, some agency executives said many financial services firms continue to view the Web through the prism of pure direct response. Jo-Ann Abbate, svp of strategy at Digitas’ Modem Media, said financial services clients often think brand-building means 30-second commercials rather than looking to the Web to differentiate their service beyond low rates or other product attributes.

“They don’t understand that building a brand is supplying content to people that actually helps them,” she said. “You have to redefine how you think about your brand.”

Adam Turinas, svp and managing director at Omnicom’s Organic New York office, which counts Bank of America as a client, said the Internet’s greatest strength—its measurability—is in some ways a hindrance, because it is pegged as a below-the-line effort. “When clients are dividing the pie, customer acquisition tends to win out,” he said. “There doesn’t tend to be a lot left on the table for brand-building.”

Stuart said Schwab wants to strike a balance between branding and response, measuring the success of its ads using both brand and acquisition metrics. Sarah Kim, vp of media at aQuantive’s Avenue A/Razorfish, Chase’s interactive shop, said the influx of branding dollars coming online, both from the financial industry and elsewhere, would pose a challenge to agencies to remain focused on the efficient returns that made the Web attractive in the first place. “We need to be very cautious that we don’t write off the fact that it’s a brand campaign so we don’t have to be accountable,” she said.