In what is perhaps a unique move, AIM Funds recently decided to hire the same advertising agency as its sister fund company, INVESCO, although both firms say that their ad campaigns will be distinct and tailored to their own needs.
AIM Management Group of Houston and INVESCO Funds Group of Denver merged to form AMVESCAP in February of 1997. AMVESCAP is based in London, and its primary U.S. office is in Atlanta.
AIM hired The Richards Group of Dallas in late July, and announced that it will develop an advertising plan in the fourth quarter, said Jim Roehm, an AIM spokesperson.
AIM's ad budget for 1999 is $10 million, according to Roehm. Its previous agency had been New York-based Deutsch, which worked with the firm since July of 1997.
"By joining INVESCO at The Richards Group, AIM gains combined media power and consolidated resources with which to leverage agency knowledge of the industry," said Marilyn Miller, AIM senior vice president of retail marketing. "With our plans to launch a new campaign in the fourth quarter of 1999, we believe that now is the best time for AIM to change."
Despite the move to a new agency, AIM is not changing its current advertising objectives or target audience, Roehm said. The two fund companies will work with separate account managers and creative teams at The Richards Group to make sure each has a unique brand.
"In the new campaign, there will be some small differences to what we have done before. One main emphasis will be in establishing our brand name," Roehm said. He added that since AIM is a load fund company, it will be targeting both financial advisors and the end consumer.
In general, it is uncommon for two affiliated fund companies to use the same ad agency, said Steve Moran, vice president and director of brand management at INVESCO.
"I don't know how many financial institutions would use the same firm for their subsidiaries. It probably happens but it's pretty rare," Moran said.
Boston-based United Asset Management has a large number of mutual fund companies as affiliates; John Hubbard, a spokesman there, agreed that it is rare for any of the affiliated fund companies to use the same ad agency.
INVESCO has been pleased with the work of The Richards Group since it first started working with the firm in October 1997, Moran said, particularly in its strategic brand development process. INVESCO launched its brand campaign in March 1998. It featured television ads with the line, "You should know what INVESCO knows" and a complementary print ad campaign.
Moran would not give firm figures on INVESCO's ad spending, but cited Competitrack figures that said the firm spent about $14 million on ads in 1998 and $7.5 million in the first half of 1999.
The importance of branding can not be overemphasized in the fund industry, Moran said. Thus, the efforts of ad agencies can play a large role in determining the success of a firm's distribution efforts.
"You've got over 10,000 mutual funds out there, and it's very difficult to differentiate one from the other," he said. "People are going to put their assets with a firm that has a very powerful brand. Supermarkets make this even more important."
The concept of branding for financial service companies is "coming around" Moran added. "But it's not a mature concept in this industry, not like it has been with the packaged good companies."