"The New Color of Money"
By Leon Lazaroff

On the morning of Sept. 12, Stephen Liguori, global retail marketing officer at Morgan Stanley, opened The Wall Street Journal to an advertisement trumpeting the brokerage giant as "The New Old Boys Club: Less Old, Less Boys."

It was hardly an affirming moment for Liguori, a former Kraft Foods and PepsiCo marketer who came to Morgan Stanley in early 2001 to create its retail division's first consumer marketing department. He had spent the summer working on a multimillion dollar rebranding campaign to address the company's April decision to shorten its name from Morgan Stanley Dean Witter, recasting itself as a popular institution along the lines of Merrill Lynch.

Building on its earlier "Well connected" theme, Morgan Stanley launched a campaign, via Leo Burnett, around Labor Day. Print ads showed closeup portraits of women with the "New Old Boys Club" headline and such copy as: "Once upon a time, making money was the domain of country clubs and smoky back rooms. But not anymore." In a related TV spot, a stylish and confident-looking businesswoman strides through an airport terminal to the futuristic sounds of Madonna's "Ray of Light," while the narrator intones: "Welcome to the new old boys club: Less old, less boys."

Tim O'Day, senior account director at Leo Burnett, explained that the ads were a way of saying to those who might not be intimately familiar with Morgan Stanley: "Hey we're not a bunch of stodgy old bankers."

But given the tragedies that had just transpired in New York and Washington, D.C., Liguori feared the worst. "This was totally inappropriate; I was floored," he said. "We had to change everything. Everything we had done to market this firm up to Sept. 11 was now totally worthless and irrelevant."

Liguori was not alone. In the wake of the attacks, the nation's leading financial services giants-many also in the midst of major rebranding campaigns, including Merrill Lynch, UBSWarburg and J.P Morgan Chase- faced an even more daunting environment and complicated repositioning task.

Now, financial services firms acknowledge a shared sense of insecurity surrounding the volatile stock market, massive layoffs, an official recession, domestic terrorism (threats) and images of US troops in overseas combat. All of which places greater urgency on the marketing part of the equation.

"There's been a massive change the likes we've not seen in a generation and a half," said Liz Nickles, director of marketing and advertising at Credit Suisse First Boston, N.Y "No one is just lobbing something out there. When you're attached to anything that has to do with economic issues, the financial landscape, it's something people are very concerned about. For all marketers, this is an extremely difficult environment."

Long before Sept. 11, the comedic brand of advertising that put financial institutions like E*Trade on the map in the late '90s had given way to more restrained, economically sensitive pitches about the benefits of sound advice and stable management. In the aftermath of the attacks, investors' concerns about their financial futures were compounded by fears for their personal safety. The consensus among marketers was that they needed to speak to those apprehensions, or at least avoid anything that would seem insensitive.

Yet the result has been a lot of safe advertising that does little to differentiate a brand, argued Charles Wendel, president of Financial Institutions Consulting, N.Y. "It's been difficult to distinguish between the various investment banks since Sept. 11," Wendel said. "There's been a lot of flag waving, but giving a reason why a client should call up an investment banker at this time is proving much more difficult." Major challenges for financial services companies began to take shape in the last few years, as top-tier investment banks endured a steep decline in corporate mergers and acquisitions, the big-dollar transactions that generated billions for the industry in the '90s. At the same time, the dot-com bubble that made mega-millionaires out of investors and media stars out of brokers, suddenly burst. As result, firms that added hundreds of bankers and support staff when the economy was booming have had little choice but to lay off thousands as fees and revenue streams dried up.

Profits at U.S. securities firms are expected to drop 47% in 2001, according to the Securities Industry Association. Since reaching a historic peak earlier this year, the brokerage industry has eliminated more than 25,000 jobs, with more cuts likely.

The bar has been raised for financial marketers, as a decade's worth of activity produced an industry whose connection to and relationship with investors has badly deteriorated. Even as the economy blossomed, customers often came to see investment bankers as being more concerned with the churn of a stock sale than their clients' financial stability.

So in today's less-trusting investor climate, what can companies do to win back customer loyalty? Ted Flinn, a former Wall Street banker now at the Greenwich, Conn.-based consultancy Berni Marketing & Design, said that while any top investment bank can claim to have a financial specialty, marketing teams are eager to demonstrate an ability to offer more than just knowledge and skill.

"Banks want to offer an emotive feeling," Flinn said. "They are saying, "If you're one of our clients, we won't just make you money: We'll make you feel a certain way."

For years, the idea of branding a bank was like suggesting that cheerleaders be used at baseball games. In the mid-'90s, though, that view began to change. Investment banks came to resemble ice cream flavors: each had particular characteristics and everyone had a favorite. While the Internet fostered a booming economy, the popularity of mutual funds and widespread use of 401K plans connected average folks to Wall Street. Investment banks that had little or no retail business were suddenly opening storefronts and launching online trading operations.

Now that the economy is in recession, companies have had to summon pro-active marketing messages so retail customers and corporations will turn to them for financial advice and profitable products.

Part of the challenge is helping customers navigate a vastly changed landscape. For example, when German giant UBS Warburg merged with Paine Webber last fall, executives needed to market a European bank to a U.S. audience while helping investors make the connection between the holding company (UBS) and its components UBS Warburg, UBS Paine Webber and UBS Asset Management.

The firm is building awareness through a series of red-and-white print ads running in financial publications including The Economist and Barron's. The ads are written in the format of questions and answers, such as: "What's the benefit of having 28,000 employees in the U.S. and 71,000 worldwide? Depth. Depth is having expert coverage in every sector and market you care about..." Another ad asks: "What does $1.5 trillion of client assets mean?" The answer: "Trust."

Berni Marketing & Design
800-BERNI-58 * www.bernidesign.com

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