As the campaign advertising and mudslinging season drew to a conclusion last Tuesday, Fidelity Investments of Boston began its own media blitz designed to win the allegiance, and dollars, of investors.

Fidelity launched a major advertising campaign, spending nearly $100 million on television and print advertisements highlighting its personalized service and the performance of its funds, said Anne Crowley, a company spokesperson.

The campaign's cost is more than double the $39.9 million Fidelity spent on advertisements last year, according to Competitive Media Reporting of New York. (MFMN 4/17/2000)

The year-long campaign will include at least 15 different print and television advertisements appearing on major television networks and in major publications, said Crowley. The ads will promote the firm's brokerage business, retirement services and some of its mutual funds, she said.

The ads are a departure from the familiar Fidelity advertisements with Peter Lynch, former portfolio manager of the Fidelity Magellan Fund and now a vice-chairman of Fidelity Management & Research. Most of the new advertisements emphasize Fidelity's customer service by depicting situations in which a customer service representative helps a client figure out a solution to an investment dilemma or learn about a new product.

The campaign could provide a much needed boost to Fidelity's fund sales and, more importantly, change a growing perception that Fidelity is not the company it once was, said Burton Greenwald, president of B.J. Greenwald Associates of Philadelphia, a financial services consulting firm.

"I think they want to regain a leadership position they had for many years in the mutual fund industry," he said. "Unless they make a big splash, the perception will continue to be that they are no longer king of the mountain."

The advertisements are designed to convey to customers that even if they invest directly with Fidelity, they can still get substantial guidance and support, Greenwald said.

"There is no question the trend is moving toward some sort of advice and counsel and the role of the intermediary has been emphasized," he said.

Fidelity is probably focusing its ads on personalized customer service in order to bolster one of its weaker offerings, Greenwald said.

"Schwab has both clicks and mortar as opposed to Fidelity which doesn't have anywhere near as far flung branch office set up," he said. "And Schwab has always said, If you want to come by and talk to us, we're there for you.' And I think everything that I've seen in the industry the last two or three years indicates that investors want more and more handholding and advice and counseling."

In recent years, Fidelity has dedicated a large percentage of its advertising budget to increasing consumers' awareness of the firm's brokerage capabilities. Some of the individual ads in the current campaign promote more than one Fidelity product, said Crowley.

One advertisement, for example, seems to promote both Fidelity's brokerage services and mutual funds. In the advertisement, a picture of a smiling baby sitting in someone's lap is beside a script of a dialogue between a customer service representative and the baby's grandfather. The grandfather informs the customer service representative that he is thinking of a long-term investment for his new grandson.

"Today, I'd like to buy some shares of General Electric for him and some Oracle ... or maybe a Fidelity fund," he tells the Fidelity representative.

The advertisements achieve a high level of personalization by using the names and photos or images of actual Fidelity customer service representatives. The situations portrayed in the advertisements are based on actual calls and encounters service representatives have had with customers, she said.

In one two-page advertisement touting Powerstreet, the firm's online brokerage service, a picture of a client working at his computer with a satisfied smile is beside a script of his conversation with Mary Rowan, a Fidelity brokerage representative, who beams at him from across the page. The customer wants to take his money out of his account so he can begin trading stocks.

"Great. We can do that," says Rowan. The customer is amazed.

"Wait a minute," he says. "Fidelity? Trading stocks? But Fidelity? That's managing mutual funds. I had no idea I could trade." To the contrary, says Rowan. Fidelity can help investors trade, manage and research their investments, she says. The campaign's tagline, "See yourself succeeding," is superimposed over the picture of the investor.

Several of the advertisements address retirement and 401(k) issues in a similar manner, using the customer service representative to highlight the level of personalized service Fidelity provides its clients.

One such television ad depicts an elderly couple discussing how they have been Fidelity customers for over 30 years. Both husband and wife explain how Roger Hobbs, a Fidelity service representative, helped them roll a pension plan over into an IRA.

"Fidelity was always there for us," the elderly gentleman says in a reverent tone.

Several of the ads focus on individual funds and their performance, including one television and one print advertisement that highlight the Fidelity Mid-Cap Stock Fund.

In the television ad, a young professional woman is seen walking down a busy city sidewalk while talking on a cell phone with a Fidelity customer service representative about the Fidelity Mid-Cap Stock Fund. In the middle of the screen, the fund's three, five and lifetime performance figures appear. The commercial again ends with the tag line, "See yourself succeeding."

The print version of the advertisement has a small picture of the same woman at the top of the ad and the fund's performance figures displayed prominently in bold in the middle. The fund's five-star Morningstar rating is also displayed.

"Could the Mid-Cap Stock Fund be our best kept secret?" is written at the top of the ad in bold typeface.

The new ads are a welcome change from Fidelity's old ads which relied heavily on Peter Lynch and addressed how Fidelity's funds were managed, said Eric Kobren, executive editor of Fidelity Insight, a newsletter based in Boston.

"They made use of Peter Lynch's familiarity and now it's time to move on," he said. "[Fidelity] is a direct marketing firm and when you have a product that you want people to buy ... you have to tell them about it."

Fidelity's decision to focus on specific funds was needed in order to bolster lagging sales of the firm's direct-sold funds, Kobren said. In recent years, Fidelity has not heavily marketed that business and it has faltered, he said.

Performance advertisements should provide a boost to lagging sales, but that boost could come at a price, Greenwald said.

"There is no question that if you want cause and effect advertising that produces immediate results, you scream from the roof tops that you've got a good set of numbers," he said. "And that's exactly what Fidelity is doing, recognizing that they are going to attract some hot money that they will lose just as quickly if it doesn't pan out."


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