Agency: BSB Dorland Author: J.A. Ward

Halifax Building Society: Turning Big Into Beautiful

WHAT IS THE POINT OF THIS CASE STUDY?

This case study shows how, and why, BSB Dorland and the Halifax Building Society arrived at a clear definition of how advertising is most likely to be effective in influencing the financial services consumer.

Above all, it demonstrates that on the five criteria chosen for measurement of this effectiveness, the advertising has performed, and continues to perform, better than any other advertising in the sector.

What follows is basically an account of how detailed market understanding led to a very specific definition of the role for advertising; how, despite the measurement complexities involved, we have been able to demonstrate that this crucial role has been met and exceeded by the advertising; and how the funds applied to the task have been used more effectively than any other brand in the sector.

In 1993, financial advertisers spent £462 million supporting their brands. The appeal and power of the 'People' campaign is such that, on a spend slightly in excess of £3.89 million in that year (representing a 1.2% share of voice), Halifax continues to own the most memorable financial services campaign in Britain. More importantly, however, for a relatively small advertising investment the brand has defended its position in an increasingly difficult market.

WHY WAS THE CAMPAIGN DEVELOPED?

Financial services deregulation in 1987 had, not surprisingly, created a plethora of attempts to diversify into competitors' territory via new product development. In advertising terms this had led to heavily line (rather than brand) oriented campaign budgets.

Halifax had been as heavily involved in this activity as anyone, and by 1991 the result had been an erosion in the profile of the core brand.

This erosion had in turn occurred in the context of a collapsing housing market, banks making price-led incursions into the mortgage sector, recessionary fears leading to unwillingness to take out personal loans and falling interest rates creating an influential group of very price-sensitive investors.

In short, Halifax faced the 'double whammy' nightmare of a market where the importance of price was rising while the saliency of the brand was falling.

And clearly, brand saliency in this market was absolutely central. After careful consideration of an eclectic range of data sources (including tracking studies, panels, qualitative investigations, image monitors and customer satisfaction surveys) BSB Dorland and the Halifax Building Society in 1991 reached a number of important conclusions about advertising roles and objectives in relation to their brand.

First, it was clear that, in a context of product fear, apathy and confusion, the ability to trust a core brand was of paramount importance to the overwhelming majority of choices made by the consumer about individual products and services.

Second, it was quantifiably clear that most people were either too busy or too bored to spend any more than a minimal amount of time considering this choice. Therefore, the first credible brand that came to mind was very likely to be the source of eventual purchase, (given that 'eventual' might mean in the next millennium).

Third, however, correctly recalled and branded advertising awareness in the sector was high for only two brands (Lloyds and Prudential) both of whom had chosen to follow an involving customer-oriented creative route with commendable consistency. Too many others (the Halifax included) had been forced to spend behind product launches in the wake of deregulation, and had failed to commit funds to visible and consistent core brand support.

Fourth, given the average consumer's odd approach to purchase ('I don't really care, but I don't really understand either, so I'd like painless, friendly help') it was significant that building societies in general held an advantage over clearing banks in that they were still seen as friendly, philanthropic organisations.

And last, but by no means least, an exhaustive audit of the Halifax brand 'assets' demonstrated that in the client's own words their USP was that they were the biggest.

The overall conclusion reached was that there was a need to dramatically shift the emphasis of advertising support back behind the core brand, and define the roles for advertising as follows:

  1. To maximise front-of-mind Halifax awareness.
  2. To communicate a distinctive, credible and relevant 'size' proposition.
  3. To shift key image and favourability dimension scales in the brand's favour.
  4. To defend Halifax's premium in an increasingly price-driven context.

THE DIFFICULTY OF GIVING THE CAMPAIGN A CLEARER BUSINESS OBJECTIVE

Normally in such circumstances, either offensive or defensive market share targets would have been set.

The client's market planning department worked with BSB Dorland in order to try and arrive at some form of commercial evidence of success, but after numerous meetings it became clear that the obstacles to achieving this were insurmountable. In brief, the key factors were:

  • The length of the mortgage purchase cycle: one might buy a house in 1999 and choose funding on the basis of branded influence in 1994.
  • The variability in each mortgage transaction between application, offer and completion: which was the 'purchase'?
  • The difficulty of monitoring the price formulations of over 50 main competitors.
  • The peculiar problem of even tracing 'purchasers' in the investment sector.
  • The unpredictable roles played by 'confidence' and government National Savings Certificates issues in the fluctuations of savings fund inflow.
  • The often wild monthly variations in mortgage market share caused by short-term needs in the intermediary sector and the unpredictable price activities of clearing banks.
  • The unique lack of fit between current market conditions and profit derived from exceptionally long-term lending practices not related to those conditions.

In short, the complexity of internal and external variables made anything other than the most cursory, circumstantial correlation between advertising and sales/share/margins impossible. Clearly, however, there had to be some criteria for judging advertising effectiveness; that is, that at the very least it was helping to maintain the brand's position in the light of increased competition and reduced margin opportunities.

On this basis, the following questions were to be asked of the campaign:

  1. Is it more efficient than previous advertising at raising our brand profile?
  2. Is it more efficient in this sense than our competitors' advertising?
  3. Is it communicating the right things to the target audience?
  4. Is it shifting image and favourability scales in our favour?
  5. Is it allowing our product campaigns to engender sales success at acceptable margins?

This latter point is of particular interest in that, while the new brand campaign was to represent a major shift in advertising spend emphasis, there would still be the necessity to undertake product event marketing in order to demonstrate to that important 19% of the market who do shop around that Halifax remained an aggressive trader keen to have their business.

The biggest single block of spend would, however, be behind the new campaign: how could we make a USP based on size more relevant to the consumer?

DEVELOPING THE PROPOSITION

There was general agreement by client, agency and consumer that the big philanthropist (or 'gentle giant') brand positioning was unique in the sector. In propositional terms, however, this had to be more clearly related to consumer needs: size had to imply a consumer benefit. The expression to the creative department was thus:

Halifax got to be the most successful building society in the world by earning the trust of millions of individuals and satisfying their needs. No other brand comes close to matching this track record.

In image terms, the values of mutuality were to be expressed clearly: Halifax was to be positioned as a friendly financial institution that cares about its customers.

Once the creative work had been agreed, animatics researched and the budget signed off, there was not surprisingly concern on the part of the client about the size of the investment. The three original 'People' scripts ('House', 'Cake' and 'Cheque') represented large production costs alongside greatly increased television spend. Considerable effort was therefore given to 'modelling' and tracking the advertising's progress towards meeting its objectives over time.

MEASURING CAMPAIGN EFFECTIVENESS

The campaign made its debut on television in October 1991. In the years 1992 and 1993, posters were also used intermittently as a means of educating the public to the central idea of people building symbolic objects together. Within a relatively short space of time, however, it became clear that this thought had been clearly communicated, and in fact for most of the campaign period television has represented the overwhelming majority of media exposure.

TABLE 1: ADVERTISING SPEND (£000)

Medium1991199219931994
Posters-829647-
TV3,0726,9133,2502,973

Throughout this two and a half year period, the campaign's progress has been tracked by Millward Brown. In a general sense, it is worth noting that executives of this company have consistently stated their belief that the transformation in results after the campaign broke exceeds anything they have seen for other campaigns, either in this or other markets.

IS THE CAMPAIGN MORE EFFICIENT THAN PREVIOUS CAMPAIGNS AT RAISING THE HALIFAX PROFILE?

As Figure 1 clearly demonstrates, from the campaign break-point in October 1991, claimed television advertising awareness increases substantially from a benchmark at around 19% to a peak two years later in excess of 40%. Over the opening nine months of the campaign, the degree to which this was attributable to a creative change was modelled by Millward Brown, and as Figure 2 equally clearly shows, the empirical campaign considerably outperformed the model. Figure 3 confirms that this upward trend in profile continues to the present day and is extremely closely correlated to advertising spend.

IS IT MORE EFFICIENT IN THIS SENSE THAN OUR COMPETITORS' ADVERTISING?

At this nine months point in the campaign's history, Table 2 illustrates a very high level of accurate (ie correctly branded) recall or 'cut through' for Halifax advertising. Not only is the branding correct in 94.7% of cases, but the level achieved is three times that of the nearest advertised brand. The cost per point of recall achieved represents, at £160,000, a 93% efficiency lead over the nearest rival and a fifteen-fold improvement on the poorest brand's performance.

TABLE 2: SPONTANEOUS ADVERTISING ASSOCIATIONS BROUGHT TO MIND WITH THE ORGANISATION

AdvertisingWith Correct£ per point
MemoriesOrganisationrecall
%%
Halifax1918160,000
NatWest75309,000
Lloyds87*
Nationwide96525,000
TSB43*
Leeds44792,000
Midland331,560,000
Prudential321,698,000
Abbey National222,394,000
Alliance & Leicester22*
National & Provincial221,035,000
Base: February/July 1992 (1557)
* Did not advertise
Source: Millward Brown/Adwatch

IS IT COMMUNICATING THE RIGHT THINGS TO THE TARGET AUDIENCE?

Once all three films had been aired, in autumn 1992 data was collected to ascertain the main messages taken out by the consumer. Given the positioning of 'customer oriented gentle giant', it was therefore gratifying to note the top four dimensions communicated:

TABLE 3: PERCEPTION OF HALIFAX BUILDING SOCIETY

%
Friendly32
Cares for customers26
Is the biggest24
Meets customer needs23
Moving with the times22
Wide range of services17
Source: Millward Brown, August 1992

At the same time, at the rational spontaneous level, the campaign films were also establishing the financial subject matter behind the symbols - traditionally, a difficulty in this sector:

TABLE 4: PERCEPTION OF FINANCIAL SUBJECT OF EACH FILM

'House''Cake''Cheque'
%%%
Loan/Mortgage/Buying house533714
Plan/Save/Invest103016
Banking services1328
Source: Millward Brown, August 1992

The above emphasis reflected the subjects closely, in that 'House' was primarily about mortgage finance, 'Cake' about a lifestage event which might require both investment and borrowing, and 'Cheque' a simple rendition of the fact (before this film, poorly communicated) that Halifax offers a current account.

IS IT SHIFTING IMAGE AND FAVOURABILITY SCALES IN OUR FAVOUR?

Perhaps the starting point for any answer to the question of brand favourability should be to establish whether people actually enjoy the brand's advertising substantially more than was previously the case. As Figure 4 demonstrates, over the last two and a half years enjoyment of Halifax brand advertising has risen from a benchmark of around 12% to nearly 48%: a remarkably high figure for the financial sector.

Over that same period, at each stage of the tracking exercise Millward Brown have monitored the degree to which the advertising was creating a better opinion of the Halifax. Opinions of financial institutions are generally low, and of course this measure related solely to those whose impression has improved rather than to the total level of approval. However, as Figure 5 illustrates, over the campaign period the numbers expressing an opinion of improvement have risen by approximately 40%.

Halifax also use MORI to track overall impressions of the core brand over time. This data gives total approval levels and, for the most recent period studied (November 1992 to October 1993) shows an increase from 33% to 46% in those feeling very or mainly favourable to the Society.

Both client and agency also asked Millward Brown to track key image dimensions, particularly in the two areas of customer care and friendliness. Figure 6 shows how, from the start of the campaign, both dimensions rose sharply and have continued on a rising trend that correlates closely with the advertising bursts.

Finally, MORI's graph (Figure 7) of October last year concludes that Halifax is now more favourably viewed than any other financial institution.

IS IT ALLOWING OUR PRODUCT CAMPAIGNS TO ENGENDER SALES SUCCESS AT ACCEPTABLE MARGINS?

As well as deploying a strategic brand budget to reiterate stature, improve awareness and increase favourability in a market where over 65% of consumers rarely if ever shop around, the Halifax Building Society also undertakes communication events and bursts of tactical advertising aimed at recruiting those students, 35+ mortgage customers and 50+ investors who consistently demonstrate a greater willingness to compare the products available from various institutions.

During the period under study, Halifax have mounted four such campaigns.

The first was a £1.5 million burst behind fixed rate mortgages between October 1992 and April 1993, designed to regain the initiative in a sector where the banks had gained price-led share in preceding months. Over this campaign period, Halifax processed 40,654 such mortgages and saw its market share rise from 23% to 30%, despite having a share of voice under half that of Abbey National.

The second was a push to recruit new Maxim (current account) users during the autumn of 1993. Here again, on a spend of about £1.2 million, despite a historically low consideration level versus clearing banks (and inferior incentives), the campaign generated 40,083 account openings in just under seven weeks, exceeding the campaign's business target by some 32.5%.

The third was a tactical campaign, again designed to regain the mortgage initiative, mounted from August to October in 1993. During this period Halifax did not have any mortgage product in the top five on price competitiveness, yet the Society saw its share rise from 24% to 34% for a total outlay of £2.2 million.

Finally, between February and March 1994, the Halifax supported its Guaranteed Equity Bond (GEB) investment product with £286,000 of 0800/couponed press advertising. From the campaign's launch on 24 February until the final insertion on 11 March, 12,511 responses were generated, exceeding the corporate financial target by 28.2%. Once again, comparable products demonstrate that Halifax had little in the way of keen 'price' to attract such fund levels.

CONCLUSIONS: THE CAMPAIGN ACHIEVEMENT

The personal financial services market is one where there is an unparalleled length of purchase cycle, degree of apathy, misunderstanding and lack of contact with any physical product. Not only that, but almost everything sold is a means rather than an end in itself: practically everything from credit to pensions has another goal in mind, be it the purchase of a suit or provision for a comfortable retirement.

To say that this represents a peculiar situation is something of an understatement. Here we have an industry with hundreds of influential institutional brands investing unusually large sums of marketing support behind a plethora of services, almost all of which are enabling devices of very low interest, high complexity and almost total invisibility. So it was, therefore, unlikely that a standard set of roles for advertising could be applicable. And equally, we would contend, the criteria set for advertising success were likely to be atypical, particularly in a sector where the role of indirect or intermediary business remains so influential.

It remains the view of BSB Dorland and its client Halifax Building Society, however, that the primary role for advertising in this market should be to optimise immediate brand saliency by achieving appreciably higher levels of awareness and favourability than those enjoyed by its myriad competitors. Such a policy, the evidence suggests, will be most likely to maximise 'pre-decided' footfall into the branch network and purchase 'non-rejection' at the point of intermediary recommendation.

The tracking of this campaign from October 1991 to April 1994 shows, to our total satisfaction, that the 'People' campaign has dramatically improved its performance versus previous Halifax advertising; beaten all comers in terms of efficiency; effectively communicated the strategy; moved favourability scales to the point where Halifax now stands out as the pre-eminent financial institution in the UK; and allowed Halifax to effectively market its products, without loss of margin, in a market increasingly driven by price.

NOTES & EXHIBITS


Halifax Building Society: Turning Big Into Beautiful

FIGURE 1: CLAIMED TV AD AWARENESS (%)


Halifax Building Society: Turning Big Into Beautiful

FIGURE 2: CLAIMED TV AD AWARENESS (%)


Halifax Building Society: Turning Big Into Beautiful

FIGURE 3: CLAIMED TV AD AWARENESS (%)


Halifax Building Society: Turning Big Into Beautiful

FIGURE 4: DETAILED RECALL OF HALIFAX USING PHRASE CHECK LIST � ENJOYMENT (%)


Halifax Building Society: Turning Big Into Beautiful

FIGURE 5: DETAILED RECALL OF HALIFAX USING PHRASE CHECK LIST � BETTER OPINION (%)


Halifax Building Society: Turning Big Into Beautiful

FIGURE 6: DETAILED RECALL OF HALIFAX IMPRESSIONS OF BEING CARING AND FRIENDLY (%)


Halifax Building Society: Turning Big Into Beautiful

FIGURE 7: DETAILED RECALL OF HALIFAX � IMPRESSION