Wells Fargo banks on new
ad campaign to regain customer trust
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[March 22, 2017]
By Tina Bellon
NEW
YORK (Reuters) - Wells Fargo & Co will launch a new multi-channel ad
campaign, its chief executive said on Tuesday, in a further sign of the
bank's efforts to regain trust after a sales scandal last year caused a
sharp drop in account openings.
The advertising campaign, to begin in mid-April, will be published
across different media channels and focus on the changes the bank has
implemented since it was rocked by revelations over illegal sales
practices in September last year.
"For our team members and customers, we want to create a culture that's
better every day," Chief Executive Officer Timothy Sloan said in
explaining the new campaign to employees at a town hall meeting in
Orlando, Florida on Tuesday.
"Building Better Every Day," the slogan of the new campaign, will run
across broadcast and print ads, online and on the bank's mobile app, as
well as on its internal channels, Sloan said.
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A spokesman declined to comment on the budget for the new campaign. But
following the fallout, Wells Fargo last year said it would increase
marketing spending and in October 2016 launched its first nation-wide
campaign to address its sales practices.
Data by Kantar Media, a New York-based ad-tracking firm, showed that
Wells Fargo's advertisement expenditure rose by around 15 percent to
$183.8 million in the first 11 months of 2016 compared to the year
prior.
In October last year, the bank's advertisement expenditure across TV,
internet, radio, outdoor displays, magazines and newspapers increased by
32 percent on a yearly basis to $27.5 million.
A Wells Fargo spokeswoman could not immediately comment on whether the
increase was directly related to the company's 2016 campaign.
A spokeswoman for marketing group Omnicom, which owns media agency OMD
that runs the bank's advertisement campaigns, did not reply to requests
seeking comment.
Federal regulators last year had ordered the San Francisco-based bank to
pay $190 million in fines and restitution because they said its high
pressure sales environment pushed employees to open 2 million deposit
and credit card accounts without customers' permission.
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![](../images/032217pics/busine47.jpg)
The sign outside the Wells Fargo & Co. bank in downtown Denver April
13, 2016. REUTERS/Rick Wilking/File Photo
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The
bank has since unveiled a new compensation structure for its branch employees
that creates incentives based on customer service rather than sales goals.
Wells
Fargo, the third-largest U.S. bank, saw a sharp drop in account openings,
customer interactions at its branches and an increase in account closures since
the scandal.
It has since started to report on consumer activity on a monthly basis. Its
latest retail business figures on Monday showed the bank is still fighting an
uphill battle to regain customers.
Consumers opened 43 percent fewer checking and 55 percent fewer credit card
accounts on a yearly basis in February.
"A pick-up in marketing spend should benefit account openings the next few
months, but were that not to occur, then it could force us to reconsider the
long-term growth potential in Wells' retail bank," Brian Kleinhanzl, an analyst
with KBW said in a research note on Monday.
But other analysts said the bank hardly had a choice when it came to investing
in public outreach campaigns.
"If they do spend, they get accused of wasting money," Stephen Biggar, an
analyst with Argus Research, told Reuters. "But if they don't spend, they get
accused of not doing everything they can to regain customers."
(Reporting by Tina Bellon; Additional reporting by Tim Baysinger; Editing by
Bernard Orr)
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