About four years ago, the mutual fund industry began ratcheting up advertising expenditures. Certainly we see more commitments to longer duration ad campaigns, especially in TV and sponsorships. But even though significant money is being spent on advertising, fund companies are considered to be in the early adoptive stages of brand management. Most ad agency executives would contend that the answer is lack of commitment to long-term, sustained branding campaigns. To be fair to the fund industry, the traditional conservative mores of investment culture are somewhat antithetical to advertising.
Advertising is expensive and carries no assurance of success.
The business itself is hostage to the vagaries of fluctuating markets. All these factors are the underpinnings of a pervasive lack of differentiation across the fund industry. The inherent effect is natural skepticism among fund companies about the applicability of traditional packaged-goods marketing and branding theory to financial services. That's a question FRC posed to the CEOs of 20 nationally recognized advertising agencies, all of which had investment companies as clients. The executives were exuberant about their firms participating in such a discussion.