Wonga looks to rebuild battered brand as it pledges new ‘responsible’ marketing drive

Having endured a torrid few years, gaining enemies ranging from MPs to clergymen, Wonga has today (May 19) revealed a new approach to its marketing, with a TV campaign ditching the ‘Wongie’ puppets and instead pushing responsibility among those who take up its controversial pay-day loans.

The ‘Credit for the real world’ campaign will show ‘typical’ Wonga customers, including mothers and lorry drivers, and focus on how Wonga is lending to them responsibly and improving their day-to-day lives.

In a reshape of its marketing strategy, Wonga commissioned Fold7 to create the new campaign, having parted ways with Albion London, who were responsible for Wonga’s long-running elderly puppet characters. Critics have claimed the use of the puppets trivialised pay-day loans to children.

Moving forward, Wonga claims it will now work with media outlets to self-impose ad restrictions to mitigate the risk of appealing to the young or vulnerable, and will screen TV stations to ensure it doesn’t target under 18s. It will also provide clearer risk warnings and representative APRs in its commercials.

“Our new product features and today’s marketing relaunch are further proof of the action we’ve taken, and continue to take, to ensure Wonga is lending responsibly and putting customer’ outcomes first”

Tara Kneafsey, UK CEO of Wonga

The switch in strategy, which follows the suspension of all Wonga advertising by chairman Andy Haste last July, will also include a number of ‘sustainable’ improvements to be introduced to the service this summer.

These ‘improvements’ include a three day grace period for customers who are late on repayments, clearer online information of the ‘worst case scenario’ applicants could find themselves in if unable to pay back loans, and a 24-hour period for unsure customers to cancel their loan.

Controversy

The Wonga brand has been involved in a number of high-profile controversies over recent years.

Last summer, Wonga was forced to pay £2.6million in compensation after chasing struggling customers with fake legal letters in order to pressurise them into paying up.

The brand has generated public criticism ranging from MPs, bemused at Wonga’s persistent advertising during daytime children’s programmes, and the Archbishop of Canterbury, who said Wonga’s interest rates were “morally wrong.”

Last summer, one of its ads was banned by the ASA after it failed to state any interest rate. Another banned ad, meanwhile, was deemed to have “trivialised” the decision to take out a short-term loan after suggesting 5853% APR was ‘irrelevant’ to consumers.

wonga

Wonga’s annualised interest rate is currently capped at 1,500% – which means customers pay £24 interest for £100 borrowed.

In 2014, following the string of scandals, the number of Wonga’s customers in the UK fell by nearly half to 575,000, with the company making 2.5million loans in compared to 3.7million the year before.

The lender, which made a pre-tax profit of £39.7m in 2013, succumbed to a pre-tax loss of £37.3m in 2014 – with it predicting similar losses in 2015.

However, Kneafsey insists that Wonga is addressing criticism and is on the right path in changing brand perception.

She added: “We’re representing our short-term loans to the public to reduce the risk of inadvertently attracting the very young or vulnerable. Our focus is on serving hard-working people throughout the UK who need access to Wonga’s transparent short-term credit products.”

Battered brand

But Wonga might have its work cut out if figures from brand health monitor YouGov BrandIndex are anything to go by.

According to the monitor, Wonga’s overall score for consumer reputation is currently -61.3 – making it bottom of the UK’s 40 biggest cards, loans and building society brands. In comparison, 39th placed Ocean Finance has a score of just -13.3.

Over the last 90 days, its brand index score, which encompasses consumer perception of quality, value, satisfaction, recommendations and reputation, has fallen 4.9 percentage points, generating a woeful total score of -47.7.

Chairman Andrew Haste is understood to be considering a rebrand for Wonga should the new marketing changes not create positive results.

He said last month: “We know it will take time to repair our reputation and gain an accepted place in the financial services industry, but we’re determined to deliver on our plans and serve our customers in the right way.”

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