Quick! Name a favorite mutual fund or investment management commercial or advertisement you've seen this year. We'll wait.

Still waiting . . .

Hard pressed to recall even one?

Unless you are intimately involved in the production of a fund group's print or TV advertising, chances are that few, if any, will immediately spring to mind.

As one fund industry executive so aptly described this year's dearth of clever or memorable ads: "Madison Avenue is not sitting on the fund industry's doorstep."

That is part and parcel of both reduced ad spending by financial services companies over the past year as compared to previous years, and the more serious attitude conveyed through those few ads that have run.

27% Drop in Spending

Ad spending among financial services companies is down 27% through Sep. 30, over the same time period in 2002, according to Competitrack, the advertising research and tracking firm in Long Island City, N.Y. This year, firms have spent a collective $500 million promoting themselves, their products and services.

That compares to the $683 million spent on ads over same period last year, and the heftier $918 million spent on advertising during just the first nine months of high-flying 1999. For all of 1999, financial services companies spent a cool $1.7 billion, versus $900.1 million spent during all of 2002.

After dipping to a lower level during the usually quiet summer months of July and August, 2003 advertising spiked back up to $56 million for the month of September, according to Melanie Szlucha, senior financial services analyst with Competitrack.

Kinder, Gentler Ads

The three-year bear market has transformed ads from hyping double- and triple-digit returns and those that humorously poked fun at retirement planning at a time when everyone was making money, into a kinder, gentler and more somber variety.

But humor has not completely vanished with investors' nest eggs. "I think humor is still in the mix," Szlucha said. Some companies, including A.G. Edwards, Merrill Lynch and Evergreen Investments, are still running humorous ads this year, even as overall advertisements are softening and broadening.

This past June, Evergreen debuted two 30-second corporate-branding TV ads within a campaign called "More Demanding" that stresses Evergreen's attention to high-quality investment management. One ad features a gentleman tossing a food wrapper into an office trash can, only to realize it will miss its target. He takes a flying leap across the room, and catches the wrapper before it hits the floor. The other ad shows a man, who is lunching with several peers, pulling a just-soiled tablecloth off the table, keeping all place settings intact.

The Evergreen ads have been running periodically on four cable financial networks as well as sports network ESPN..

Love Our Products,Love Our Company

Ads this year have focused on overall advisory services, wealth management and asset allocation as opposed to just touting mutual funds. Some have generally promoted a product aimed at proactively solving investors' needs and dreams -- such as a 529 college education savings plan, or an inflation-protected bond fund -- without getting too specific. Companies are choosing branding and reassuring messages over sizzle.

Where once beefy, individual fund performance was the big draw of ads, those select few that still focus their message on an individual fund's performance have taken a more reserved, third-party approach, opting to show not specific numbers, but how many overall stars a particular fund has been awarded under Morningstar's star-studded rating system. Both American Century Investments and Dreyfus have taken this route.

Adding to the economic turmoil are the new, stricter rules for advertising that the Securities and Exchange Commission handed down this past September, and the waning number of publications in which to place print ads, evidenced by the abrupt closing of Time Inc.'s Mutual Funds Magazine one year ago, Bloomberg Personal Finance this past February, and Worth magazine a few months later. (Worth recently announced that it will relaunch in December 2003 as Robb Report Worth, published by CurtCo Media Group).

So which advertisements are standouts so far in 2003?

Crazy for Crackerjacks

For American Century, 2003 as a year for advertising will end the same way it started, with a timeless, classic message encapsulating the firm's culture and conveying who the firm is, what it stands for and how it manages money, said Catherine Bernard, vice president of corporate advertising and sponsorship.

The overriding goal this year was to position American Century as a premier investment manager who has the wherewithal to manage a variety of products for three channels: direct investors, third-party intermediaries and institutions. The emphasis was taken off just managing mutual funds and replaced with the overall ability to manage broader assets.

The firm was also careful to get its message across that investment management is its one and only business. "We are not into banking or offering other services," Bernard said. And the firm's medium of choice has been print publications.

While the firm's peanut butter sandwich ad made dubious headlines when an investor questioned the sandwich's authenticity (see MME 5/5/03) the firm's crackerjacks ad most typifies the core message of the firm, Bernard said. The ad shows the contents of a crackerjack box spilling out onto a surface. The headline reads "American Traditions" and the caption starts with: "Some things are best when they have a surprise inside. Not your investments."

As the debate continues whether this year's bump up in the equities market is for real or is just another short-lived bubble, optimism has fueled the firm's desire to return to touting specific funds' performance. New ads will be complementary to the current branding ads, but will have a different look and feel, and will show performance, Bernard said.


This year, Dreyfus has continued to capitalize on its longstanding mascot, the majestic Dreyfus lion, in both print and some limited TV ads that have run on cable financial networks, said Noreen Ross, executive vice president, marketing and advertising. "We are committed to the lion and are sticking with our very strong lion images," Ross said (see MME 9/30/03).

Print ads have run throughout the year in Barron's, The Wall Street Journal, Registered Rep and Investment Advisor, as well as Money Management Executive sister publication Financial Planning. This past summer, ads also ran in Golf Digest.

This year, Dreyfus' ads have featured one of three themes, Ross said. Some were broad education ads focusing on asset allocation and aimed at investors. Others were general brand ads highlighting the firm's diversity of products. And the third fell into the pure product group, which featured specific funds and their Morningstar risk-adjusted ratings.

But while the lion imagery has been a constant, the ad headlines have changed to one-line zingers such as "Strength," "Majesty," "Saavy" and "Muscle" as a way to simply convey a single message, Ross noted.

Not Exactly Limbaugh

"Smarter ways to be conservative" has been the underlying theme in the 12 print ads Nuveen Investments has run so far in 2003. Eight ads ran this past spring, and four new ads ran in the fall after a summer break, said Alan Brown, chief marketing officer. The core message is that it's not such a bad thing to be known as conservative, Brown said. In bad markets, a lot of investors freeze. But, he added, Nuveen's ads said: Manage risk, don't avoid it. "The main goal is to communicate the essence of our brand," he summed up.

The early ads ran in a variety of trade publications as well as in The Wall Street Journal and Barron's. But Fortune, Forbes and the special issue of Money magazine that goes out to advisers was added to the fall media blitz, Brown noted.

A recent two-page spread shows a man on the beach combing the sand with a metal detector. The core message says, "Experience has a way of making the beach smaller and the metal detector bigger," as the ad goes on to tell of Nuveen's 105-year-old history and its managed accounts capabilities.

The ad struck a note with advisers, some of whom called to ask for specific ads to be reproduced in poster-size for their use, Brown commented. "We try to reach advisers on an emotional level, then get across our attributes. It's a more human approach than others," he added.

TV and some print ads have been the right mix for Federated Investors. The firm only ran ads during the first half of the year, to "set the tone of the year," said Meghan McAndrew, a Federated spokeswoman. Federated's TV ads have appeared on three financial networks, as well as MSNBC and Fox News.

One 30-second TV ad, pure branding, follows a series of eight everyday people walking around as they live their lives. A narrator announces, "There are many different walks of life with many different reasons to invest. At Federated, we have a wide range of funds and managed accounts so investors can find the right mix of products that work the best for who they are, and how they live."

The firm's only other TV ad features the Federated Kaufmann Fund, honing its message that the fund combines the strengths of two experienced players.

Complementary print ads focus on Federated's long-term investment approach, and the idea that even as the economic climate changes, the firm sticks with that theme, McAndrew added.

Copyright 2003 Thomson Media Inc. All Rights Reserved.

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