National Savings is ditching the Larson advertising campaign developed by McCann-Erickson in a radical 8m relaunch of the Government department.
The new campaign through HHCL & Partners will focus almost entirely on direct response ads in national newspapers and TV. Ad sites will be promoted as “virtual shops”.
The work forms part of a 20m marketing budget and represents a significant shift in strategy to target what is essentially the same audience.
“We are trying to target savers who rarely go into Post Offices and are unaware of our products,” says assistant controller for press and advertising Charles Dodsworth. These are basically the same upmarket 35 to 55-year-olds that the McCann-Erickson campaign was aimed at.
The Post Office is central to understanding National Savings’ traditional problem of distribution. Public use of Post Offices is in decline and National Savings has failed to organise other forms of distribution.
“It has a reputation as the place for poor people to save – kids with pocket money and grannies with small amounts of money,” says one former employee. “It [National Savings] needs to disassociate itself from the Post Office and attract more sophisticated investors.”
The direct response campaign involves the use of permanent sites on Teletext and in five national newspapers: The Financial Times, Daily Mail, The Daily Telegraph, The Times and The Sunday Times. There will be two sites in each paper.
The sites are grandly called “virtual shops”. The TV campaign supports the newspaper ads and invites consumers to use these virtual shops.
The campaign planned by media buyers Michaelides & Bednash includes a 52-week booking in the national press. Ads will appear on Wednesdays, Saturdays and Sundays.
“Media is a fully fledged arena of distribution. They are not ad sites but virtual shops, in the same place every week and with a facia,” says HHCL partner Chris Satterthwaite.
The campaign will be backed by a direct-mail campaign through GGT Direct, which will supply a “virtual guide”.
The new ads offer “Unique investment opportunities from HM Treasury”. They emphasise the trust, authority and security of the Government department, in contrast to the less specific “Security has never been so secure” strapline of the McCann campaign.
But there are more pressing problems for National Savings. It is struggling to meet its targets in funding the Public Sector Borrowing Requirement. The Chancellor Kenneth Clarke needs it to contribute 2.5bn this year, and there are fears that it will miss this target.
In August National Savings was 5m in the red because of investors cashing in bonds and certificates and switching to building societies.
Three years ago, one of National Savings’ innovative new bonds, First Option Bond, generated a cashflow of 200m in two weeks. This prompted building societies to retaliate with threats to increase mortgage rates. In response, the Government reduced the interest rates.
National Savings – whose turnover on savings is bigger than Abbey National’s – has since kept interest rates low.
Its marketing strategy has also changed. More emphasis has been placed on advertising to encourage business. Building societies are able to offer more flexible products and rates. National Savings has to rely more on the image conveyed by its ads to encourage savers.
The Larson campaign was National Savings’ first creative answer to this fundamental problem. It raised almost 1bn through the direct response channel in four years.
Anne Nash, controller of marketing and information, says: “Larson was a change of image, but not a fundamental change. We did not want to attract a younger target market because of our attractive ads, we wanted to attract them to the organisation.”