Wonga to overhaul advertising
Wonga has today (14 July) appointed the former RSA chief executive Andy Haste as its new chairman, who intends to conduct a complete advertising and marketing review as he looks to “repair” the controversial payday loan brand.
As part of that review Wonga will drop the long-running grandparent puppet brand ambassadors it has used in marketing since 2011.
Haste says in a video on the Wonga website: “I’m very aware of the criticism of the advertising approach, and the puppets will be going, I’m going to be reviewing all our advertising and marketing to make sure we don’t leave any impression that we’re trying to influence or target the very young or the vulnerable.”
Wonga will also review advertising during children’s programmes, according to a BBC report, although a spokesman tells Marketing Week that the company already has a policy not to advertise against children’s programming. Research from regulator Ofcom last year found children saw an average of 70 payday loan adverts on TV in 2012. However, in March, the government rejected an outright payday loan advert ban during children’s TV.
Wonga currently has no plans to review its relationship with lead advertising agency Albion, according to the loan company’s spokesman. The brand also says it remains a “proud sponsor” of Newcastle United Football Club.
The advertising review forms one of six key priorities Haste has set out in taking up his role, as he believes “significant change” is necessary to secure the company’s sustainable future.
Haste’s six priorities are:
- To conduct a review of Wonga’s customer base and products to ensure that it is lending only to customers who can reasonably afford to repay their loans.
- To ensure all lending is conducted in a responsible and transparent manner and delivers the best outcomes for customers. Wonga said this will lead to a tightening of its lending criteria.
- To address the total cost of credit and ensure even greater transparency in Wonga’s products
- To re-represent Wonga to the public, especially through its advertising, in a way that accesses the right type of customer and reduces the risk of inadvertently attracting the very young or vulnerable.
- To build a sustainable business model with superior technology and operating processes that deliver effectively and put customers and good governance at the heart of everything Wonga does.
- To engage positively with Wonga’s regulators and other key stakeholders in all of its markets to ensure that the business is operated transparently, with the right system and controls to protect those individuals for whom Wonga recognises its products are not appropriate.
Haste adds in a statement: “Our goal is to deliver the original vision for Wonga – to provide short-term lending to the right customers in a responsible and transparent way. We will become a more customer focused, and inevitably in the near term, a smaller and less profitable business.
“However, we are determined to make the necessary changes and serve our customers in the right way, to repair our reputation and become a business with a long-term future and an accepted place in the financial services industry.”
Wonga has a battle to repair its reputation and Haste says it has “understandably” faced a lot of criticism. Most recently Wonga drew controversy when it emerged the lender had sent out fake legal letters to customers that had missed their repayments.
Wonga sits at the bottom of the 36 companies in the cards, loans and building society sector on YouGov’s BrandIndex, which provides consumer perception data on brands among a range of measures including reputation, impression, value, reputation, recommendation and satisfaction. Its Index score is -47.7, far below the next brand up on the table – Ocean Finance – with a score of -8.3.