As banks try to raise revenue and improve their reputations, they are shaking up their relationships with the "mad men" of Wall Street, testing out new advertising to help refurbish their brands.
Several large banks, including Bank of America (BAC), Fifth Third (FITB) and KeyCorp (KEY), have switched ad agencies over the past year for some or all of their business. Now past the worst of the financial crisis, bankers are taking the time — and spending the money — to try to improve how their customers see them and their besmirched industry.
"Obviously there's a lot of change going on in banking, and we had engaged in a lot of introspection ourselves coming out of the financial crisis — what we stood for, how we believed we were going to compete successfully," Larry Magnesen, chief marketing officer at Fifth Third, said in an interview this month.
"The landscape changed, and some competitors disappeared entirely." At Fifth Third "we decided to evaluate our strategic communications partner," he added.
Fifth Third announced in August 2011 that the prominent Leo Burnett would became its main agency, taking over for Olson, an independent shop in Minneapolis. Magnesen says Fifth Third, of Cincinnati, was looking for an agency that was more accomplished in "newer disciplines," including social media, and one that emphasizes the customer experience.
Leo Burnett doesn't "diminish the importance of advertising, but what they emphasize is that the acts you engage in, the behaviors of people, particularly in a services business, are in many cases more powerful in driving home a brand message than just communications alone," Magnesen says.
Other large financial institutions, including Citigroup (NYSE: C) and American Express (AXP), are reported to have conducted agency reviews in recent months, while Bank of America, Ally Financial and BNY Mellon (BK) have all switched partners.
While some advertiser shuffling is par for the course, marketing experts say the pace of bank-agency breakups has increased in recent months.
"There's always a fair amount of turnover, but to have four or five of them in play at the same time is pretty unusual," says Campbell Edlund, president of EMI Strategic Marketing.
Kevin Tracey, founder of the financial services marketing firm Tracey Communications, estimates that the "average life span of an advertiser relationship" has diminished rapidly over the last couple of decades, down to less than three years. In the 1980s such relationships lasted roughly seven years on average, he says.
"The opportunity to see something that's fresh and exciting causes companies to change often," he says.
Edlund predicts that a few more banks will switch agency partners by the end of the year.
Former B of A agency "BBDO I'm sure is hunting," she says. "They just lost a big account from a brand perspective, and I'm sure they're out looking for a big bank. And the same will happen at Citi if they move from their incumbent."
Some brand experts are skeptical that such frequent changes pay off, especially when banks are facing deeper, prolonged reputation problems. For example, B of A launched a new advertising campaign in the fall, but failed to dispel customer outrage over the bank's plans to start charging debit card fees.
"The blame game that results in agency changes is epidemic here," says Tom Dougherty, chief executive of the brand consultancy Stealing Share. "Banks on average change agencies every two years, and they end up with the exact same solution — a new ad campaign that talks about the same things in slightly different ways."
"If I want to give examples of markets that get it completely wrong, I point to banking and airlines," he adds. "They need to find out what we believe is most important in our lives and they need to represent that. Banks have never given us that sense of self."
Yet banks continue to seek out new marketing partnerships at high rates, in part because they now have the luxury of paying more attention to their advertising strategy. Many banks put marketing on the back burner in recent years, while dealing with more pressing fallout from the financial crisis and the ensuing wave of industry regulations, observers say.
"There was a hunker-down mentality the last few years, more distinctly waiting for regulations to shake out," says Mark Zmarzly, a vice president of financial services at ACTON Marketing in Lincoln, Neb.
"Now there's somewhat of a consensus," Zmarzly says. "There isn't going to be a ton more changes on the retail side. They've gone through product changes, seen what competitors have gone through, and then it makes sense to hire new agency, to go out to the market with more money and a new brand."
Financial companies are also more likely to approach advertising with a keen eye toward regulators to ensure that advertising is transparent and straightforward.
Last week the Consumer Financial Protection Bureau signaled its interest in how banks sell their products when it issued its first ever enforcement action, over Capital One's (COF) credit card marketing practices.
"From a regulatory standpoint, all financial institutions now apply a regulator's lens to looking at their marketing at every level," Edlund says.
"Increasingly, banks and payments companies endeavor to look at what they stand for in the market and think about how that would be looked at not only by the consumer but also the regulators," she says.
The rise of social media like Twitter and Facebook, another seismic shift for the industry, may also increasingly influence banks' decision to switch firms.
"The traditional agency really knows how to do classical TV advertising and have the various forms of print and a little bit of web support," Edlund says, adding that social media is now causing some banks to question whether their current marketing team is the best fit.
"It's social, and that's many, many different forms of social, where the formulas for maximizing the investment in those channels are not yet understood at all," she says. "It's like working on another planet where gravity doesn't work the same way."
Here are some of the banks that have switched agencies or are reported to be considering a change:
In May, Citigroup launched a direct marketing review for its retail bank and North American credit cards unit, currently handled by WPP Group's Wunderman, according to press reports. A Citigroup spokesman declined to comment.
That same month, American Express reportedly began soliciting ideas for its "Open" small business unit, previously handled by MDC Partners' CP&B. (WPP's Ogilvy is Amex's main agency.)
"American Express evaluates its agency assignments to ensure we have the best partners for our marketing needs, and to get new ideas and fresh perspectives," spokesman Scott Krugman said in an email. He would not confirm or deny reports that the company is agency shopping for Open.
B of A announced in May that WPP will serve as its worldwide agency of record, taking over brand advertising from Omnicom Group agency BBDO Worldwide. Hill Holiday will take on additional creative work.
A B of A spokesman declined to comment beyond a press release announcing the shake-up.
Last year, Ally Financial signed on with Grey New York, part of WPP's Grey Group, leaving Bartle Bogle Hegarty.
"Ally regularly evaluates its marketing efforts and after completing an agency review last year, decided to select Grey Group as its marketing agency of record," spokeswoman Beth Coggins said in an email.
BNY Mellon partnered with Doremus as its lead creative agency, after previously working with Concept Farm.
"We were most impressed with their [Doremus'] excellent track record in helping organizations execute worldwide campaigns that result in business growth," spokesman Ron Gruendl said in an email.
KeyCorp hired Campbell Mithun to handle creative, media and brand planning, consolidating accounts previously held with several firms. A spokesman did not respond to requests for comment.