Employing a strategy that some say has fallen by the wayside for the fund industry, TIAA-CREF is trying out a unique ad campaign in Detroit and Boston. If it is pleased with the results, the firm plans to expand the campaign to broader markets.
"We've never done this level of media before," said Deanne Shallcross, the firm's executive VP of marketing. "We're measuring it to see what it does for us and we'll evaluate it to see if we'll extend it to other places."
Ann Becker, a principal at the Boston marketing and communications firm Thompson Becker International, said that fund complexes were often testing ad campaigns in distinct markets a decade ago. But, in recent years, as the fund business became swept up in a bull market and as the assets rolled in, "people just wanted to be out there," Becker said. So more firms began throwing campaigns onto the airwaves without testing them as thoroughly, she said.
TIAA-CREF launched a series of television ads in the Boston and Detroit markets last October. A radio campaign is expected to begin this month. The company is also advertising on outdoor media in the two markets, including billboards and bus stop shelters. A national print campaign is underway, which will include ads in business publications such as Personal Finance, and scientific and literary journals, such as Smithsonian.
The campaign is the most aggressive in the company's history and this round of testing is the first time the company has initiated a study on such a large scale, said Alice Borowsky, a VP of marketing at the New York-based firm.
The ads feature TIAA-CREF clients, some of whom are well-known in their fields, talking about their careers and the notion that TIAA-CREF has proved a reliable asset manager throughout their professional lives, Shallcross said.
"They are icons and everyday heroes, people who have very interesting lives and very interesting professions," she said. "We're there to support them throughout their careers."
The TV campaign include, architects, school teachers, and, perhaps the most notable, Kurt Vonnegut, the well-known author of Slaughterhouse Five.
TIAA-CREF chose to test the campaign in Detroit and Boston, two education-oriented cities, because the firm is known to cater to the financial needs of the academic community, Shallcross said. "They're very big for us," she said of the two cities. The regions include "like-minded individuals, people who think like people in education, where we've been very successful," she said.
Testing these campaigns usually involves saturating a relatively small geographic area with new advertising and then convening focus groups, conducting additional interviews to find out how people are responding to the campaign, Becker said. Firms will also quiz new clients about where they heard about a product or company, she said.
TIAA-CREF has set out to simulate a $50 million national campaign in the two cities, Borowsky said. The firm is evaluating the inquiries it is receiving from clients there. It has asked residents to name the financial services companies that most easily come to mind. And it is tracking sales in Detroit and Boston compared to other cities such as Seattle, Borowsky said.
Tracking by Institution
In addition, the firm is picking individual institutions in the region, such as hospitals and universities, and tracking the amount of new business that comes out of those organizations. Much of the research is repeated every quarter to monitor changes.
"The numbers are headed in the right direction," Borowsky said. "The awareness of our company in those two cities has gone up. I don't have specific numbers, but it has gone up."
TIAA-CREF's decision to test the campaign before taking it national was hailed by marketing consultants as a smart move that more fund complexes should follow.
"It's very difficult to develop an ad campaign in the first place until you know how you are understood," Becker said. "It takes very good, prudent marketing to run this kind of test and then measure it."
Such testing is expensive, said Jim Atkinson, a principal at Orbis Marketing Group, which is based near Los Angeles. "You should take a scientific approach to your advertising. If you can test, test," he said. "But you have to have the firepower - money. For a lot of companies they're going to spend more money on these tests than a national campaign will cost all year."
TIAA-CREF declined to disclose how much the campaign is costing the company.
Still, consultants agree that the nation's economic woes have driven the costs of air time on television and radio down, making it more feasible to test a campaign than in recent years. "A lesser cost for advertising encourages one to test," Becker said.