Financial services company Virgin Direct has built its reputation on being different to the financial old guard, or “the fog” as the rest of the industry is referred to internally.
But Virgin Direct is now established – it is three years old and sells not just Peps, but life insurance and pensions, it has launched the Virgin One bank and wants to be seen as a serious player. But if it becomes too serious it will become part of the “fog” it has always criticised so openly in the past.
Branding is a big issue for any Virgin company but recently it has been pushed to the top of the agenda at Virgin Direct and Virgin One. Rainey Kelly Campbell Roalfe, which already handles four Virgin companies, has been appointed to a branding strategy project (MW August 27). But the 15m advertising account is to stay with incumbent TBWA GGT Simons Palmer for the time being following a review sparked by its 50m NatWest win.
Brand strategy is so important to the youthful upstart that it has recently appointed its first brand custodian. Steve Taylor, former marketing director of private banking at Kleinwort Benson, is part of an influx of new blood. Andrew Inwood was recently poached from Australian insurance giant AMP to become marketing director of Virgin Direct. And Simon Clegg was brought in from investment company Hoare Govett to become managing director of Virgin Direct.
The new management team reflects the growth of the company but an overall brand custodian is required now that Virgin effectively has two financial brands – Virgin Direct and Virgin One, which was launched to existing Virgin Direct customers in October 1997. The latter is headed by managing director Jayne-Ann Gadhia and head of advertising Jo Barnett.
Virgin Direct needs to talk to different markets for each product, although it hopes for as much overlap as possible. Meanwhile, Virgin One aims to carve its own brand identity within the Virgin umbrella.
TBWA Carl Johnson chief executive says: “To think of Virgin Direct as one brand, needing one piece of advertising, would be shallow and misleading. A better analogy would be a car company with one marque but separate models, with separate business issues, competitors, target markets and selling propositions.”
Virgin Direct has had a field day with its outrageous publicity stunts.
Advertising has been similarly brash and deliberately controversial. Ads created by PR agency Consolidated Communications, often in less than 24 hours, relentlessly criticised the existing industry, with straplines such as “Why on earth do we call them ‘building’ societies, given the rates they pay?” and “Beware the charges of the light fingered brigade”.
One inside source says: “These ads were great for setting the Virgin Direct tone of voice but there was no strategy or product differentiation. It is a more sophisticated financial services company now and the advertising needs to reflect this.”
Despite its youthful image, Virgin Direct has succeeded in attracting a typical wealthy older market for its Peps. But product development manager Martin Campbell admits: “We need to reach the wider audience that is neglected by the other banks and building societies. These financial institutions have the worst product quality and shoddiest service standards.”
Virgin One is about to launch its first TV campaign. This time Richard Branson is dropped in favour of comedian Chris Langham. The Virgin Direct brand is not used on Virgin One account ads, which are in the same style with a red brand tag on a yellow background.
This is partly to carve out a separate identity to the existing Virgin Direct brand. But another insider says: “It is also distancing the brand because Branson may get into a balloon and never come back. He has been too much at the forefront and people expect him to manage their money personally and answer the phone when they call.”
Ads are already less controversial. The aim, according to Johnson, is to establish a point of difference by presenting an approachable human front, while retaining the sense of fun associated with all Virgin brands. Virgin Direct ads have been freshened up by swapping round the colours to use bold blue writing on a red background with a separate approach for each product.
Virgin Direct is no longer the newest entrant to the market and cannot use that as its main point of difference. Bold, brash advertising attracted media attention at launch but it will have to prove its track record on performance rather than promises. With estimated losses of 20m which have been attributed to start-up costs,Virgin Direct may find that growing up and finding the right advertising voice is not an easy thing to do.