Some of the most arresting
ads in US financial services these days use children to poke fun at
the tactics of other banks. The fact that the ads promote Ally
Bank, the retail banking arm of deeply-troubled GMAC, has wound-up
competitors and raised the eyebrows of regulators, reports
Charles
Davies.
Go deeper with GlobalData
The blanket advertising campaign of
Ally Bank in the US has stirred up a controversy like few other
bank ad campaigns of recent years. In the current climate, poking
fun at rival banks by using children in the ad creative was always
going to be risky.
To some critics, the timing could not be
better, with the ads praised for being entertaining and funny. To
others, the ads are blasted for being in very poor taste. It is,
however, unarguable that Ally’s ad creative represents a bold step
in an entirely new direction for financial services advertising and
has earned the bank an invaluable amount of buzz.
The fact Ally Bank is the retail banking unit
of the deeply troubled GMAC, originally set up to finance General
Motors’ auto sales, and is arguably using taxpayer bailout dollars
to fund its extensive ad campaign blasting the tactics of its
non-bailed out rivals, has certainly drawn the ire of many of its
competitors.
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By GlobalDataAt the end of December, the US Treasury
injected a fresh $3.8 billion into GMAC, bringing the total
taxpayer investment to $16.3 billion. In the process the
government’s stake in the beleaguered firm rose to 56 percent from
35 percent (see box, opposite page).
GMAC established Ally Bank as a new brand in
May 2009 in an attempt to give the bank a fresh identity, the
result of GMAC’s very public struggles. And while the bank’s head
of branding and advertising Vinoo Vijay acknowledges the billions
in taxpayer support, he argues the crucial matter is what the bank
does to justify the US Treasury investment.
“We are trying to build a new way of banking
here, an entirely different way to bank, and so we have organised
around that business idea,” Vijay told RBI. “I don’t see how that
can be a bad thing.”
That rebranding effort began last year with a
new motto – ‘The world doesn’t need another bank; it needs a better
bank’ – prime time television spots, a major print campaign
(including a two-page spread in the first edition of a revamped
Newsweek), and prominent web placements on Yahoo!, among other
major sites.
Too effective?
Perhaps those ads are just a bit too
effective, goring banks as bait-and-switch artists in the
process.
In one of Ally’s TV ads, a banker gives a
little girl a bike, but only lets her ride it on a small cardboard
square. The ad is meant to criticise the teaser rates and fine
print that often accompany financial products. In another, a banker
offers one little girl a toy pony, then offers a second girl a live
pony.
The first girl expresses her disappointment by
saying, “You didn’t say you could get a real pony”, but the banker
says, “You didn’t ask”.
The reaction of the first girl is a priceless
commentary on customer treatment.
“We just jumped when she reacted with that cut
of the eyes,” Vijay said. “It was classic, and we knew right then
we had captured the essence of how many customers feel when they
aren’t treated fairly.”
In another spot, a boy is given a red truck
and immediately begins to ‘drive’ it around in make-believe
fashion. When the banker suddenly takes it away, offering a
cardboard cutout of a truck in its place, the kid isn’t buying it.
He looks up, outraged, and speaks for consumers everywhere when he
says, “It’s a piece of junk”.
The man then explains that the red truck was a
“limited-time offer only – it’s here in fine print”.
The television ad copy states simply: “Even
kids know it’s wrong to hide behind fine print – why don’t
banks?”
In print ads stating that Ally will send an
e-mail alert if money sitting idle in a customer’s account could be
working harder and earning more, the copy begins: “Is not saying
something a lie?”
It continues: “There’s profit and there’s
integrity. There shouldn’t be a choice between the two.”
The idea for the campaign sprung from
discussion of Ally’s business model, Vijay said.
“We started when we came up with the new name,
and the goal was to convey a business idea – to build a bank that
truly focused on the experiences consumers disliked about their
bank but felt they could do nothing about,” he said.
“So we focused on pain points – distrust,
conditions, rules, a basic lack of trust.”
The business idea led to the name – Ally – and
that grew into a value proposition: Talk Straight. Do Right. Be
Obviously Better.
So Ally held an open casting call for
experienced child actors and everyday youngsters to promote its
message of being a fair bank without hidden fees.
The reactions were culled from a batch of more
than 20 children, and their reactions were filmed in two different
phases. In the first, they are truly tricked, and the reactions are
genuine. But for a second round of shooting, the children were
briefed on what the trick would be and so were more prepared to
react. The final batch of ads combines both reactions.
“We were looking for something natural,” Vijay
said. “Kids express fairness and unfairness better than anyone, and
they do it in such a captivating way. We took kids because kids
call it like it is.”
There is genius in the execution. The
hidden-camera setup is a great way to metaphorically acknowledge
the anger and frustration people feel towards ‘banks’ – and deflect
it long enough to make a case for a bank without being booed off
the stage. The use of a grown-up, replete in suit and tie, only
adds to the juxtaposition.
At the moment the banker dupes the child, the
tension is palpable.
That Ally is actually the rebranded name for
failed and bailed-out GMAC escapes no one, and yet Ally gives the
bank a fresh, new feel.
“It gives us something to rally around,” Vijay
said. “It is reflected in greater traffic than ever before to the
web site, and stronger organic deposit growth.”
Underneath the humour and cuteness lies a
tough message. The ads are essentially highlighting practices that
exist in the industry and that customers are upset about. Ally went
looking for “pain points”, Vijay said, and found consumers are
routinely offended by fine print, rules and restrictions, and
constant change,.
“We wanted to clearly signal a new approach,”
he added.
Ally’s new approach is also apparent on its
minimalist website. Its phone number is atop each page, along with
the estimated wait time for callers and a 24/7 live chat button.
That hands-on approach, and the highest deposit rates in an era of
rock-bottom rates, are turning heads and inspiring critics.
After the name change in May, Ally offered a
2.8 percent interest rate on one-year certificates of deposit
(CDs). That was more than double the national average of 1.23
percent, according to banking comparison website Bankrate.com.
After rival banks expressed concerns about Ally’s ability to afford
to pay such rates for deposits, Ally dropped it a little, but its
rates still lead the market for CDs most days. Its online bank
offers a lower cost structure, a key reason it can offer
competitive rates.
Ally’s aggressive pricing strategy also raised
the ire of the American Bankers Association (ABA), which complained
in May last year to the Federal Deposit Insurance Corporation that
the bank’s rates could end up compounding its problems. The ABA
said it was “completely inappropriate, and indeed risky” for a bank
receiving bailout funds to be paying rates well above the industry
average.
Ally Bank officials dismissed the claim as
“irrelevant” because the bank was considered to be well
capitalised. The bank said it was paying up for deposits because,
with its debt rated well below investment grade, its
capital-raising options were limited.
But even Ally’s harshest critics could not
deny the rebranding and aggressive deposit raising campaign has
brought positive results.
For the third quarter of 2009, Ally said
retail deposits hit $15.9 billion. That compares favourably to
$14.5 billion, $11 billion and $7.2 billion in the previous
quarters.
