Increased competition within the fund industry prompted Van Kampen Funds of Oakbrook Terrace, Ill., to launch its first ad campaign focused on firmly establishing its name in the market rather than promoting particular funds, according to Frank Wheeler, vice president and director of brand marketing.
"We see the market place getting more competitive and we understand the value of creating a brand name," he said.
The campaign will include print and television advertisements that are based on a year of research conducted by Van Kampen that revealed a majority of its mutual fund investors have modest financial goals and are interested in long-term asset growth instead of dramatic, short-term growth, Wheeler said. Financial advisors and their clients are the primary targets of the campaign. Wheeler declined to reveal the total cost of the campaign.
This is the first time Van Kampen has advertised on television. The advertisements' theme, "True Wealth," juxtaposes emotional and material wealth. One 30-second ad shows a man opening a door and looking in on his sleeping daughter. A voiceover tells the fable of King Midas and how he valued material wealth.
"You are everything to me,' he whispered as he beheld his riches," the voiceover says as the father is seen cuddling his daughter. The ad's tagline, "Van Kampen Funds - with more than four generations of money management experience so you can realize your true wealth," reinforces the ad's emphasis on investing for capital preservation and long-term goals.
"We are reminding people that there is more to life than just amassing material wealth," Wheeler said. "The most important thing is to preserve and protect the rich life you currently enjoy."
A second spot will convey the same message and will use the King Midas fable but will appeal to people near retirement, said Jennifer Telek, vice president and management representative for DDB of Chicago, the advertising agency that developed the campaign.
The advertisement will run 15 to 20 times a week for the next year on CNBC and CNN, Wheeler said.
Although the television spots will not mention specific Van Kampen funds or their performance, print advertisements will show the returns on some of Van Kampen's growth funds including the Van Kampen Aggressive Growth Fund and the Van Kampen Emerging Growth fund. Both funds reported over 100 percent returns last year and carry a five-star rating by Morningstar of Chicago, the fund tracking agency.
"We plan to continue highlighting the performance of our funds," he said.
Six variations of print ads using the King Midas fable will target a wide spectrum of investors, Telek said. All will include performance figures.
Ads will be placed in The Wall Street Journal, Barron's, Business Week, Forbes, Fortune, Investor's Business Daily and Money. They will also run in a number of trade publications.
The Van Kampen Aggressive Growth Fund's performance will be advertised even though the fund closed to new investors in December because the fund still generates strong flows from existing investors, Wheeler said.
Van Kampen is not the only fund company to advertise the performance of a closed fund. Strong Funds of Menomonee Falls, Wis., in late March, advertised in USA Today the performance of its Common Stock Fund that closed March 19, 1993. The ad is designed to highlight the fund's portfolio manager, Dick Weiss and is part of an effort to increase recognition of the company name, said Melissa Murphy, a company spokesperson.
But advertising a closed fund to increase brand recognition could create potential problems, said Geoff Bobroff, president of Bobroff Consulting of East Greenwich, R.I., a mutual fund consulting firm.
"The grander question is why are you advertising something that's closed and to the extent that you stimulate investor interest, what do you do with that interest?" he said.