UBS Financial Services Inc.

views updated

UBS Financial Services Inc.

1285 Avenue of the Americas
New York, New York 10019
USA
Telephone: (212) 713-2000
Fax: (212) 713-9818
Web site: financialservicesinc.ubs.com

THANK YOU, PAINE WEBBER CAMPAIGN

OVERVIEW

NOTE: Since the initial appearance of this essay in the 1999 edition of Major Marketing Campaigns Annual, Paine Webber became a part of the UBS Financial Services organization. The essay continues to refer to the company's former name, as that was the official name of the organization when the campaign was launched.

In November 1998 retail investment brokerage Paine Webber, a unit of Paine Webber Group Inc., launched an ambitious $20 million print and television campaign, the largest in the company's history. Overseeing the account was Saatchi & Saatchi, which had handled Paine Webber's advertising since 1981. The tag line, however, was much older than Paine Webber's relationship with its advertising agency: it had first used "Thank you, Paine Webber" in 1975 and had maintained the tag line until 1987. Now Paine Webber revived it in an effort to reinforce the company's identity.

Paine Webber was an old firm that had weathered a number of difficulties in recent years. In a business increasingly perceived as a commodity rather than a service, identity was an all-important factor if Paine Webber hoped to attract more business, and the firm's 1996 campaign—with the tag line "Invest with more intelligence"—had not proven particularly memorable. "Thank you, Paine Webber" was its first advertising effort since then, but this campaign retained at least one theme from the 1996 campaign: the idea that a customer who invested his or her money through Paine Webber could rest assured.

HISTORICAL CONTEXT

In 1879 Boston bank clerks William Payne and Wallace Webber formed their own brokerage house. They joined the New York Stock Exchange in 1890, and in 1899 they opened their first branch in Houghton, Michigan, where Paine Webber had a substantial interest in copper mines. Except for an understandable slump during the Great Depression, the company experienced many years of growth and in 1963 relocated from Boston to New York City. After incorporating in 1970 and going public two years later, Paine Webber created a holding company, the Paine Webber Group, which controlled all its properties. The 1970s saw expansion into Britain and Japan and the purchases of several U.S. companies involved in the investment industry.

Paine Webber hit on its first truly significant challenges in the 1980s. Soon after purchasing Blyth Eastman Dillon, an investment banking firm, in 1979, many of Blyth's executives left, and with them went some of the many lucrative accounts Paine Webber had hoped to acquire with the buyout. By the time Paine Webber had managed to get the bank fully operational, a number of other brokerages had outpaced it in taking advantage of the 1980s boom in mergers and acquisitions. The 1987 stock market crash proved another significant blow, and in the following year Paine Webber made a problematic loan to the faltering Federated Department Stores chain.

Just as Paine Webber was getting on its feet again in the early 1990s, again it hit upon a series of troubles. Once more it lost a number of important personnel, this time from its Mitchell Hutchins Institutional Investors in 1993. The next year saw a crash in the bond market that hit Paine Webber hard; significant layoffs ensued. This followed the acquisition of Kidder, Peabody, an investment banking firm that had fallen on hard times, from General Electric, and the expenditure further hurt Paine Webber's bottom line. By the end of 1994 the company had suffered a staggering 87 percent drop in earnings.

Nineteen ninety-six brought more challenges to Paine Webber. In 1989 it had run an advertising campaign to support its Provider line, a life-insurance policy. The campaign had included a direct-mail effort involving some 1 million pieces, along with the purchase of 800,000 consumer leads and a television spot featuring Paine Webber president Joseph J. Grano. Paine Webber discontinued the product in 1993 after selling 7,200 policies, but in 1996 buyers of the Provider policy initiated a class-action lawsuit, charging that Paine Webber's brokers had led clients to believe that Provider was not a life-insurance policy but a retirement investment. The company agreed to pay more than $332 million in fines as well as restitution. Also in 1996 it was ordered to pay $2.5 million for charges of illegal hiring practices stemming from an action in which it had lured a number of employees from a Prudential Insurance office.

Nonetheless, earnings in 1996 were higher than they had ever been, and in 1997 Paine Webber launched a new investment product, the Paine Webber EDGE. In 1998 German financial institution Dresdner Bank AG expressed an interest in buying Paine Webber, but as of fall 1999, no further move had been made.

TARGET MARKET

In 1999 Paine Webber purchased an interest in an Internet software company and launched on-line trading services targeted to clients at relatively lower income levels. "Lower income levels" was a relative term, since persons who required the services of an investment brokerage had to have something to invest in the first place. (An equally appropriate term would be "younger investors," since Paine Webber, like all marketers, tried to keep one eye on the future.)

In the main, however, Paine Webber's target market could be described as mature, both in terms of years and of assets. Thus a November 1998 news release accompanying the launch of the "Thank you, Paine Webber" campaign included this statement from Mark B. Sutton, president of the Paine Webber Private Client Group: "Paine Webber has enormous opportunities for growth, particularly as millions of affluent baby boomers seek guidance in managing their assets and transferring wealth to the next generation. This campaign emphasizes that in the age of the Internet, financial information has become a commodity, causing information overload and further complicating investment decisions. Now more than ever, excellent investment advice tailored to investors' needs is highly valued."

Placement of campaign spots and print ads was broad, with inclusion in more than 40 news, consumer, and trade publications and media placement on network and cable television programs including National Football League and college bowl games, as well as the popular 60 Minutes news magazine program on CBS. Again, the latter tended to attract older viewers than many offerings on television.

Paine Webber's news release went on to note that quarterly research conducted in cooperation with the Gallup Organization had shown that "while many investors have ambitious plans for their futures, most underestimate the resources required to accomplish their goals, and few have considered wealth preservation planning." Simply put, this meant that many investors in their late 30s, 40s, and even 50s had not begun making adequate preparations for retirement, and Paine Webber sought to present itself as the solution to their problems.

COMPETITION

In 1998 Paine Webber ranked fifth among investment brokerages, with Merrill Lynch & Company in first place. It struggled to develop a position for itself as a brokerage offering strong individual service along with an aggressive institutional strategy. Meanwhile, as it launched "Thank you, Paine Webber," Stuart Elliott of the New York Times reported that both Merrill Lynch and John Nuveen & Company, another competitor, were in the process of changing advertising agencies.

Thanks in part to advertising that prominently featured its bull logo, thus carrying the image of an investor-friendly "bull market," Merrill Lynch had established strong name recognition with consumers. So had Fidelity Investments, a unit of the FMR Corporation whose highly personalized television advertising had also made its offerings a standout. Elliott reported that Fidelity and other brokerages were in the process of increasing their advertising presence in late 1998.

Paine Webber also had to contend with the somewhat troubled reputation it had acquired as the result of hardships during the 1980s and 1990s. Indeed, its choice of "Thank you, Paine Webber," a campaign first run in 1975, harkened back to a simpler time—or at least to what many perceived as a simpler time in hindsight. Meanwhile, Paine Webber kept a close watch on the competition. When Saatchi & Saatchi was invited to take part in a $50 million review for Chase Manhattan Bank in March 1998, it initially accepted, then pulled out, according to Adweek, for fear that a relationship with Chase Manhattan might be perceived as a conflict of interest.

MARKETING STRATEGY

The pullout from the Chase Manhattan bid may have been the event that sparked a rumor in Adweek that Paine Webber itself was on the hunt for a new agency. According to the April 13, 1998, report, the company had requested proposals from more than a dozen agencies. "Sources said Paine Webber needs a shop to take on creative and media chores for its corporate identity account," Adweek reported, "and would narrow the field to 12 this week. Two more cuts will be made before the company picks an agency in late June." Tony Dalton of Saatchi & Saatchi told Adweek, "I would be surprised if it [the Paine Webber account] were in play, and I would wait to see what the client had to say before deciding whether to defend."

It is no wonder that Dalton professed to be surprised by the rumor, which turned out to be just that—a rumor. Saatchi & Saatchi had maintained the account since 1981 and would continue to do so into 1999. It had launched its last campaign for Paine Webber in 1996, using the tag line "Invest with more intelligence." In one spot a 50-ish man was shown on a sailboat while a voice-over speculated as to how he had managed to achieve the sort of lifestyle that would allow him to go sailing while others his age were still working—and worrying about retirement. "How's he doing it?" the voice-over asked. The answer: "More research, insight, understanding."

In 1996 Paine Webber had devoted $19 million to its advertising, but in the following year the budget dropped to $8 million. By August 1998 the company had spent only $3.5 million; that would change with the launch of the new $20 million "Thank you, Paine Webber" campaign in November. The latter slogan had first appeared in 1975, created by Marshall Karp and Andrew Langer. It had run until 1987, when it was dropped in favor of successive campaigns, including "Invest with more intelligence." Elliott wrote in the New York Times that with the re-launch of the near-classic tag line, "Fans of advertising slogans that develop into catch phrases and enter the vernacular can gratefully start saying 'Thank you, Paine Webber' again" as Paine Webber "reviv[ed] the gratitude attitude."

Included in the initial launch were six print ads and two television spots that, in the words of the Paine Webber news release, "support[ed] its strategy to differentiate the firm by offering customized advice to high net-worth investors through highly trained investment professionals. The multi-million dollar print and television campaign capitalizes on Paine Webber's strong name recognition and its most memorable tag line, 'Thank you, Paine Webber.'" Launched just prior to Thanksgiving 1998, the campaign would continue well into 1999.

PAINE WEBBER'S MEDIA CONFERENCE

From December 7 to 11, 1998, Paine Webber held its 26th annual media conference at the McGraw-Hill Building in New York City. The five-day conference, as a company news release stated, was "designed to inform investors about the changes that have occurred within the [media] industry during the last year." It brought together representatives from a number of large media concerns, including Viacom, Time Warner, CBS, the Washington Post, the New York Times, Times Mirror, Knight-Ridder newspapers, Saatchi & Saatchi advertising, and many more.

Media Industry Newsletter commented on the absence of a major, if troubled, participant: Reader's Digest, still one of the nation's most widely circulated magazines. Tom Ryder of the Reader's Digest Association (RDA) had originally been scheduled to present "Phase ′' of the company's planned restructuring, but as it turned out, RDA was not ready for the presentation. Nonetheless, as Media Industry Newsletter conceded, Paine Webber media/entertainment managing director Chris Dixon and others managed to produce an impressive lineup. The conference, Dixon promised, would present a refreshing approach: instead of yet another discussion on the Internet and other new media, this one would place its greatest emphasis on the role of traditional media in the twenty-first century.

The print ads, with a heavy concentration on upscale publications, marked Paine Webber's first venture into print advertising in five years. As for the television spots, these juxtaposed images of worried investors—who presumably had not invested with Paine Webber—against those of satisfied-looking Paine Webber clients. One commercial showed parents and grandparents watching a children's soccer game as the thoughts of various spectators were projected in voice-overs. One mother said to herself, "It'd be great if money would grow as fast as these kids," while a father thought, "College in four years, costs up … someone do the math here." By contrast, the thoughts of a happy Paine Webber investor were much simpler: "Thank you, Paine Webber." As the campaign progressed other spots depicted similar scenes on a commuter train and in an airport terminal.

OUTCOME

In January 1999 Denise Gellene of the Los Angeles Times gave a less than glowing appraisal of Paine Webber's television advertising. "The gratitude of these customers seems excessive," she wrote. "There's no evidence in these commercials that Paine Webber has performed remarkably; none of its customers are boarding Lear jets. And let's not forget that Paine Webber's customers are paying full-service commissions for investment advice. Maybe Paine Webber should be thanking them."

Also in January Wall Street Letter noted that "Though the firm dug up its old 'Thank you, Paine Webber,' slogan … institutional salespeople reportedly had different feelings upon receiving their 1997 bonus checks" in February 1998. Investment earnings had been down, and Wall Street Letter attributed the cause to changes in key personnel, in particular sales director John Kelleher. According to the publication, "The jury apparently is still out" on whether the company would make the changes necessary to better compensate its sales force.

Likewise the jury was still out on the continuing "Thank you, Paine Webber" campaign. Certainly Paine Webber had weathered greater difficulties and come out on top. Like an investment, the campaign needed time to mature as it proceeded throughout 1999.