MINNEAPOLIS - Fallon McElligott is one of the hottest advertising shops in the country. The agency has won hundreds of awards, and its work is widely admired - and imitated.

But so far, no one is rushing to copy the saucy ads Fallon has created fro Continental Bank. After all, not many banks want to be associated with such images as a man getting his face punched in.

Or an executive popping out of a filing cabinet.

Or an IRS examiner falling through a hole in the floor.

A Different Kind of |Medicine'

"There is a certain leap of faith that needs to be made," admits John Forney, a Fallon account executive. "Some banks may not want our form of medicine."

Fallon's "medicine" is that banks must redefine their image and adopt the marketing tactics long used by consume products companies.

Instead of peddling specific products and services, Fallon believes banks should promote an overall identity in the same manner that McDonald's sells hamburgers or Nike sells sneakers.

"Banks are a little naive" says Gordon Nelson, a senior account executive at Fallon McElligott and a former executive at Marine Midland Bank. "They don't pay enough attention to managing, building, and leveraging their brand perception."

Fallon's ads for Continental are designed to do just that. Under the theme "anticipating the needs of business," the ads position Continental as a business bank that can offer solutions to problems before its customers know they exist.

In one television spot, for example, an executive standing in a room is approached by a man carrying a life preserver. Moments later the room is flooded with water, but the executive is saved.

"The ads are very clever, and people don't expect bankers to be clever," says Cindy Wilson of the Bank Marketing Association in Chicago. "They prove that good ads are not just the domain of consumer product companies."

Officials at Continental say they are extremely pleased with Fallon's work. The bank says its research shows that virtually all of those who see the television ads remember them.

And Fallon's tracking studies of financial officers at more than 300 companies found a greater awareness of Continental since the bank launched its image campaign about five years ago.

No Hard Proof of Success

While Continental has no quantifiable proof that the heightened awareness is translating into increased business, the bank insists that is not the campaign's intent.

"The objective of the advertising is to raise awareness of the company, to help the customer think of us when contemplating a financial services transaction and lay the groundwork for our calling officers," says Continental spokesman Ted McDougal. "This is not supermarket point of sale."

Continental has limited its print campaign to six key business papers and magazines, and returned, after a five-year hiatus, to television.

The spots are aired during news programs like "MacNeil/Lehrer" and "60 Minutes," as well as sporting events, such as the Chicago Bulls basketball games.

"Contrary to a lot of misbelief, officers do use television - for information, not entertainment," says Mr. Forney.

To be sure, Fallon's Continental's advertisements are not universally admired.

"I frankly think the television advertising is pretty miserable," says a Chicago advertising executive who asked not to be identified. "It's trying very hard, and I don't think [the message] is very clear."

Fallon McElligott was founded in 1981 by Pat Fallon, Tom McElligott, and Nancy Rice, who were veterans of other Minneapolis advertising agencies. The fledgling agency received national recognition for its work for such high-profile clients as Federal Express, Lee Jeans, and Jim Beam Whiskey.

RollingStone Campaign

It also created Rolling Stone's critically acclaimed and much copied "Perception and Reality" campaign, which juxtaposed such contrasting images as a picture of George McGovern and Ronald Reagan.

The campaign helped debunk the magazine's image as a publication catering to hippies, and was credited for a big rise in Rolling Stone's ad linage.

But Fallon, which is 80% owned by Scali, McCabe & Sloves, has also had its share of trouble. The agency received a barrage of negative publicity for its handling of a compliant from the director of the Mankato State University Women's Center, who had been offended by the agency's ad for reruns of the television program "Dynasty."

The ads featured photos of the show's female lead characters with the caption "Bitch. Bitch. Bitch."

Reply Adds Fat to the Fire

Mr. McElligott, a copywriter, responded to the complaints by sending the center's female director a photograph of a Dinka tribesman kissing the behind of a cow.

The agency received a tremendous amount of flak. Shortly thereafter, it lost a number of prominent clients, including the Wall Street Journal, Federal Express, and US West, although none cited the Dinka incident as the reason for leaving.

Following the episode, Mr. McElligott resigned. About two years ago he started another Minneapolis advertising agency, but he was recently forced out by his partners, according to industry reports.

Ms. Rice, an art director, resigned in 1985 to start her own agency. Earlier this year she was named creative director at the Chicago office of DDB Needham.

Mr. Fallon is the only founder left, but he has managed to maintain the creative reputation of his agency, which does about $140 million in annual billings.

"They have demonstrated that they can not only survive without two of their original founders, but that they can thrive," says Richard Morgan, a columnist for Adweek, a trade publication.

Indeed, Fallon is one of the finalists for the $60 million account that MasterCard has put up for review.

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