2011 was undeniably the worst year for BofA in the bank’s 108-year history. In the past twelve months, they’ve suffered through the worst quarterly loss in the bank’s history… Dropping from their rank as America’s #1 biggest bank… A plummeting share price, from $19 back in Spring 2010 almost straight down to under $5 (the stock once traded as high as $55)… Expensive and unseemly lawsuits, including the robo-foreclosure scandal that cost the bank $11.8 billion… Catastrophic week-long website outage… Congressmen using their time on the floor to organize a boycott of the company… A massive revolt against a proposed $5 debit card fee… And then there’s still the mess leftover from the bank’s acquisitions of Countrywide and Merrill Lynch that BofA must contend with. Perhaps the only good news for BofA is that there is nowhere to go from here but up.
BofA Fires Back
In October 2011, as the BofA debit fee debacle was reaching its crescendo, the strain on BofA’s leaders became torturous. Under pressure, CEO Brian Moynihan couldn’t help but fire back.
“We have a right to make a profit,” he snapped.
Later that month, speaking to staff at the bank’s Charlotte headquarters, Moynihan indignantly said he gets “a little incensed when you think about how much good all of you [BofA employees] do, whether it’s volunteer hours, charitable giving we do, serving clients and customers well.”
Wagging his finger at critics, Moynihan added, “You ought to think a little about that before you start yelling at us.”
While BofA’s leaders were griping over the public’s reaction to $5 debit card fees, the bank was simultaneously rolling out a coordinated campaign focused on the bank’s charitable contributions, small business loans and mortgage modification efforts. BofA ran the campaign in TV, print and online ads from October through the end of last year.
One ad that ran in Charlotte, the bank’s backyard, carried the tagline, “We’re working to help keep the North Carolina economy moving forward.” The ad touted the bank’s economic significance in the state — $159 million in loans to small businesses in the first half of the year, more than 22,000 loan modifications since 2008, and $10.8 million in charitable commitments in 2011. The message was clear: “See we’re not greedy bankers. We’re nice people.”
“The campaign aimed to deliver the facts about Bank of America’s local impact,” said BofA spokesperson T.J. Crawford. “Sharing the significant work we do at the local level and critical role we play is more important than ever.”
Advertising Is Not What BofA Needs
“If the banking industry is to survive, it needs to change its culture.”
— Reputation Communications
“All those charitable, volunteering employees have nothing to do with what people are yelling about,” observed Bill Varble at the Mail Tribune. “Yes, BofA has employees who are really nice. But the [people] ‘yelling’ at the bank aren’t yelling at its employees, they’re yelling about the bank’s behavior.”
What Varble is saying is that BofA’s ad strategy doesn’t align with its actions. It’s like the bank is saying “we love you soooo much” while punching consumers right in the gut.
Writer David Allen Isben says consumers have become far too wise to be swayed by white-wash campaigns. He believes it is a big mistake for BofA to be “touting their supposed good deeds” when they should be “addressing the behaviors that consumers see as demonstrating corporate greed.”
Key Question: What can an ad agency do if BofA isn’t willing to change its core culture?
BofA seems to think ads can solve its image problem — as if consumers will somehow feel better about the bank with the right message. Not a chance. Ads aren’t the problem. The problem is BofA’s underlying brand — what the bank is doing, not what it’s saying.
This point does not seem entirely lost on BofA’s CEO. “We can’t be the biggest bank in America and have people thinking we’re taking advantage of them,” Moynihan said.
True. But what’s the best way to get people to stop thinking you’re taking advantage of them? It’s not with ads or slight-of-hand. It’s by actually not taking advantage of people.
An expert on crisis communications said that BofA’s image woes will not improve until there is “demonstrable progress on fixing the business issues that are at the root. Until those issues are resolved, advertising and other marketing techniques won’t accomplish much.”
To get a good sense for how screwy things can get at BofA — how badly the company’s ethics can be warped — just look at the litany of litigation they’ve faced in the last decade. The Financial Brand assembled a list of some super expensive settlements BofA has inked in recent years, and what you’ll notice is a habitual pattern of abuses, deceptions and dirty tricks. Talk about profits over people… it’s shameful.
No one, it seems, is immune. BofA has — with alarming consistency — exhibited a willingness to exploit their own customers, their own shareholders, third-party investors, various government bodies and worst of all, their own employees.
At the end of the day, a cynical CFO might wonder which is the cheaper strategy: Giving away millions to charities so you can have a defensive backstop every time the public accuses you of misdeeds… misdeeds that will then also end up costing you a fortune in nasty court cases? Or simply doing everything right and everything possible to avoid such situations in the first place?
Wanted Urgently: One ‘Silver Bullet’ or ‘North Star’
BofA is currently shopping its ad account around, looking for a new agency. The bank invests about $2 billion into marketing annually, with an estimated $300 million slated specifically for advertising production (the current review does not include BofA’s media buy, which is handled separately). As the 17th largest marketer in the U.S., the bank’s agency search has caught the full attention of advertising’s most heavy hitters.
According to Ad Age, a briefing document circulated to BofA’s potential new agencies said the bank was seeking a strategic position that can serve as a “North Star” for all business and marketing decisions, and convey that the bank is in the midst of a transformation.
BofA wants “a campaign that creates buzz,” Ad Age continues. “The bank also desires a deeper sense of purpose, one that can withstand any potential dings to brand reputation.”
Actually, Ad Age admits it isn’t entirely clear about what the bank might be after. “BofA doesn’t seem sure of exactly what it wants. But it’s eager to find a new marketing direction fast.”
Reality Check: What BofA really needs is a brand strategy, not an ad agency.
“It will probably take years and multiple behavioral changes for BoA to prove themselves.”
— Edward Boches, Mullen
All indications at this point suggest BofA intends to stick with its feel-good ad strategy. If that is indeed the case and BofA asks their next agency to slap a halo over the brand by showcasing the bank’s goodness, both parties are going to have a tough road ahead.
“Unless its new agency comes up with a silver-bullet strategy — one that feels humble, honest and wholly unique for the financial-services industry — the exercise could prove fruitless,” noted Ad Age.
Edward Boches, Chief Innovation Officer with Mullen, is skeptical, and expects more of the same. “No doubt we’ll see executions that pat the bank on its back for funding inner city growth, helping send kids to college, providing entrepreneurs with money to launch new businesses and practicing corporate philanthropy with efforts that include free admission to hundreds of museums,” he wrote on his blog.
But it’s going to take more than that.
None of these challenges will stop the world’s largest ad agencies from flagellating themselves as they pursue BofA’s account with naked abandon. After all, it’s much easier to “shut up and do what you’re told” than to point out the cultural flaws that will undoubtedly undermine whatever ad campaign a client winds up running. The winning agency will be thrilled to pocket a billion dollars in billings while throwing some more awards on the shelf before getting the inevitable boot for (now get this…) “failing to reshape consumers’ perception of the brand.” No mea culpa from BofA at all. “Goodbye. Next agency, please.”
But here’s something for BofA’s next agency to think about. Based on past performance, the bank is almost certainly doing something right now — something ugly and potentially illegal — for which they will end up forking over millions if not billions in fines and restitution. How’s that going to look while their ad campaign plays out?
Will BofA ever change its behavior at a fundamental level? Maybe. Or maybe not. Maybe they don’t care. Maybe coughing up huge settlements is just an acceptable cost of doing business at BofA, and their ad agency’s assignment is to counterbalance consumer negativity with as much shiny spin as possible?
What BofA Should Do
“The suits in Charlotte need more than a new ad agency and a $300 million ad campaign. They need a new mindset for how to solve their marketing and image problems.”
— Edward Boches, Mullen
If BofA doesn’t get its act together, there’s nothing that ads are going to do for them.
At least BofA’s CMO Anne Finucane is on the right track when she admits it will take more than a new slogan to turn the bank’s image around. “In order to repair reputation,” she said in the NY Times, “you have to repair the issues that underlie that.”
Reality Check: Ad agencies don’t repair internal and cultural issues.
BofA needs to find out who it really is, determine who it wants to be, define how it wants to be perceived, and build the culture to get there. Then, after that work is complete, BofA can go hire an agency to run ads reflecting that brand — not the other way around.
What else should BofA do?
- Focus on contrition and humility instead of defensiveness. When someone feels you’ve wronged them (as most Americans do in BofA’s case), you don’t try reminding them of all the other wonderful things you did for them in the past. Consumers can’t stomach self-congratulatory hubris when they were expecting an apology. “Oh honey, I know you’re mad I slept with your sister, but you know what a wonderful father and provider I am.” <— That is not an apology.
- Focus on internal culture and ethics. What an organization does is much more important than what it says.
- Focus on branding over advertising. Ads don’t fix image problems, they really only help build awareness. If your brand sucks, ads only remind more people more often about how much the brand sucks, no matter what kind of happy face you try to put on it.
- Focus on PR over advertising. BofA has a long, complicated story to tell and zero credibility. They need the media’s help.
- Focus on real substance over superficial style. An attractive appearance will only conceal character flaws for so long.
- Bury Countrywide in the deepest hole possible. BofA needs to get rid of everything associated with Countrywide and put it as far behind them as fast as they can.
- Retain the Merrill Lynch brand. It still has significant value.
Will BofA be the “Bank of Opportunity” and embrace this chance to reinvent itself with “Higher Standards?” Or will they just run another stylish and clever campaign that glosses over the bigger issues?
If you were in charge of BofA’s brand what would you do?