Frenemies: The Epic Disruption of the Ad Business (and Everything Else) (11 page)

Imagine, he said, rapidly throwing out an idea that just came to him and was unrelated to the banks' credit card business but was related to the way he approached social media: “What if the retweet button on Twitter was brought to you by Xerox, because it's a copy!” On second thought, he added, “Twitter will never do that.” On third thought, “People don't aim high enough. They say no. I just said no.”

Members of his staff gently steer the discussion back to the subject of the meeting. One of the challenges with travel, a member of his team interjects, is that people don't want to cart heavy luggage. They can pack lighter by shipping their clothes ahead. We have to think of the customer and what they can afford, Vaynerchuk said. “Are you guys familiar with a start-up called Affirm? It's a financial company that makes consumer credit more accessible. It was started by Max Levchin, a cofounder of PayPal.” And, he adds, if you go online to the Casper mattress company to buy a mattress, “when you go to the shopping cart and put the credit card in you'll see the confirm button. You know what this is? It's making three equal payments. It's allowing you not to pay at once.”

What would be “amazing,” he says, is if Vayner could lock up customers for their credit card client by signing exclusive deals with retail companies to use a button on their Web site for the Sapphire Reserve credit card. “We could find out if the ability to create a Sapphire card button that triples the points can be integrated into their Web site.” Customers could pay in installments without being hit by steep interest charges. “If we quietly made deals with fifteen companies” we thought would be major businesses in the future, he said, we could “do what Walt Disney did with Orlando. Nobody knew he was buying all the property” that would turn into Disney World. “If you bet on companies
early enough,” Vaynerchuk later says, no doubt thinking of his early relationships with Twitter and Facebook, “you create a disproportionate emotional relationship.” With this front-row seat, Vayner would be serving their Chase client. They would also be serving Vayner by building relationships with, and collecting data on, these consumers. “We would lock in a new generation of shoppers,” he said.

If Gary Vaynerchuk is one day to own the New York Jets, which remains an obsession, he knows he needs to branch out and be more than a digital ad agency; in fact, more than just an agency.

One gets a sense
of the changed dynamics between client and agency by attending the marketing meetings of Bank of America, a Michael Kassan client. They are presided over by Anne Finucane. Her pedigree is not that of a typical banking executive. One of six children, she was raised in Boston by a mother who was a distant cousin of Democratic House Speaker Tip O'Neill, and a father who was a prominent lawyer whose clients included the New England Patriots, back when they were known as the Boston Patriots. Soon after college graduation, she joined the staff of Boston mayor Kevin White, where she would meet and later marry prominent
Boston Globe
columnist Mike Barnicle. They were close to the Kennedys and other Massachusetts Democrats. She became a senior executive at Hill Holliday, a Boston advertising agency, and in 1995 was appointed vice president of marketing and corporate affairs for Fleet Financial, a troubled bank that in 1993 paid $100 million to settle claims that it was guilty of predatory lending practices. Her main task over the next several years was to dig Fleet out of this mess by making acquisitions and assuaging elected officials and local regulators intent on protecting consumers and jobs. She became a confidante of two Fleet CEOs. By 2004, Fleet was itself an
attractive acquisition target, and Bank of America bought it. With her deft political and interpersonal skills, she became a confidante of CEO Kenneth D. Lewis, and then of his successor, Brian T. Moynihan.

The secret to her relationship with four different bank CEOs? “I think it's because I am not a banker. My expertise is in the world of marketing, communications, public policy, data analytics, research. If you have somebody who has neither the interest nor background to want your job, and you believe the individual is good at their job, then you're set up to be a trusted adviser.”

No bank came out of the financial crisis of 2008 in more parlous shape than BofA. That year they further burdened themselves with the acquisition of the collapsing Countrywide Financial for $4.1 billion, and troubled Merrill Lynch for $50 billion. Like most of the nation's largest banks, BofA was on federal life support. Unlike most banks, its stock price and profits took longer to rebound, not regaining profitability and stock price growth until 2015. When Finucane put up for review the varied agencies who serviced BofA in 2015, she turned to Michael Kassan. “He knows how other pitches go,” she explained. “He knows who's hot and who isn't. He knows who won business and who didn't. He knows who lost creative people or account people. He knows what's happening in the media and what the freshest pitches are.”

With 50 million banking and brokerage customers, 4,689 financial centers, 16,000 automated teller machines, 13 percent of all U.S. banking deposits, and a political climate in which big banks make for an inviting piñata, marketing BofA is not simple. Bank of America operates a retail bank, an investment and corporate bank and trading company, and an investment services wing. For their quarterly marketing meetings chaired by Finucane, two dozen or more agency and BofA executives congregate on the Fifty-first floor of the Bank of
America building that looms over Bryant Park on West Forty-second Street. For the June 2016 meeting, in addition to senior BofA communications, marketing, consumer, government, data, and enterprise executives, in attendance were two WPP executives, Donald Baer, chairman and CEO of Burson-Marsteller and former communications director for President Clinton, and Joel Benenson, CEO of the Benenson Strategy Group, who served as President Obama's and in 2016 as Hillary Clinton's principal pollster; Rishad Tobaccowala from the Publicis Group; several executives from the primary creative agency, Hill Holliday, an IPG agency; Stephanie Cutter, partner in Precision Strategies, who was Obama's deputy campaign manager in 2012; and John Marshall, senior partner and chief strategy and innovation officer of the corporate identity firm of Lippincott. Each had assigned seats around a vast table formed into a square and draped with a white cloth.

This June meeting demonstrated how dependent the bank was on forces it could not control, and how advertising often takes a backseat at a marketing meeting and why more money is spent on marketing—media strategy, public relations, polling, lobbying, consulting, research, design, direct mail—than on advertising. This meeting commenced with a report on BofA's finances. Bank profits rose from $4 billion in 2014 to $16 billion; the bank's liquidity was four times as large as in 2008. But this good news was drowned out by the background noise of an angry presidential campaign where expected Democratic nominee Hillary Clinton and her challenger, Bernie Sanders, and likely Republican nominee Donald Trump, vied to criticize big banks.

Surveys reveal that support for banks dropped five points, Finucane said. “My concern is Bank of America should not be a focus of the conversation when the talk is about Dodd-Frank.”

Pollster Joel Benenson said Sanders enjoyed broad support when he
declared, “We have a rigged economic system.” That issue won't disappear after the election, in part because “corporate profits are at record highs and yet wages are largely frozen.”

Repeating her caution, Finucane said, “We don't want to be the tip of the spear.” How does BofA mitigate the issue?

Despite the strides BofA has made by improving mobile banking and home mortgages, global corporate communications and public policy executive Jim Mahoney answered, “Candidates screaming makes it difficult to communicate effectively.”

They discussed the positive steps BofA has taken to demonstrate its good citizenship, including the support the bank provides for reducing carbon emissions and for what's known as “sustainable growth”—BofA is the number one underwriter for green bonds. “Right now we're better than the rest of the financial service industry, but what kind of a goal is that?” Finucane asked.

The conversation veered to how the bank could better engage with its customers by serving as a “curator,” or helper. Already, their user-friendly mobile banking app has more than 22 million customers. The bank is aided by the data it collects on its customers. A potential consumer who downloads their Zillow app offers “a clear indication” of whether they seek a new home loan. BofA doesn't have access to the names, nor do they share or sell customer data with anyone outside the bank. But in addition to the information gathered by their apps, the bank often knows of other online customer behavior and can tailor their messages accordingly. “We don't just need to run ads” at them, Lou Paskalis, who oversees their marketing investments, says. “We need to engage with them. We don't say, ‘Click here to get that loan.'” They take it slow, banking the consumers' cookies so they can track them on ad-supported sites. Maybe, the BofA document that was distributed before the meeting says, they “insert a Home Ownership thought leadership content piece” when the consumer is reading the
New York Times
online. Or serve them a “Best Rates” message when they're on their ESPN mobile app.

This, Paskalis said, is “one-to-one marketing”—what he identifies as “the deterministic model.” It occurs when Amazon offers recommendations to customers: people who purchased this book or music also purchased these. Increasingly, it is invading television advertising, especially OTT (Over The Top) or television streamed over the Internet. One to one marketing where advertisers can tailor different individual messages to each household in an anonymized way, sheltering their privacy, will be a game-changer, he believes.

As is often the case in these meetings, Finucane is eager to hear the thoughts of soft-spoken Rishad Tobaccowala, their principal outside strategist, who she privately describes as “the smartest guy in the room.” They appear to have very different personalities. She wears oversized eyeglasses and is capable of bulldozing a conversation. He wears round, frameless eyeglasses and his slight frame conveys an almost professorial air, which is enhanced because he sits, Buddha-like, and does not rush to speak. In a voice so soft people craned forward or sideways, as if it would help them hear, he cautioned: “We are at the beginning of this journey.” When the bank talks about its environmental deeds, for example, it is not “a targeted, one-on-one message. It is a narrative, and it relies on emotion. Lou is right: We will know, increasingly, what people want because of their behavior. But the struggle is what does the consumer want from Bank of America. Successful companies realize we outsource the work to the customer. We do the listening and the responding. The reason Amazon in its deterministic form—or Facebook—can tell you everything is because you are creating your own bundle of what you want.” But don't confuse a single product or purchase with what consumers want from a brand. “What Americans are asking for is, ‘Who is on my side?' Sanders and Trump built surprising support because the message sent is: ‘They are
on my side.' If you think about a bank's purposes, no one is as close to aligning with them as you are.”

In concluding, he tried to bring the discussion back to how the bank tried to rebrand itself in 2013 by adopting this slogan: “We know we're not the center of your life, but we'll do our best to help you connect to what is.” BofA can help them achieve a better financial life, Tobaccowala said, evoking the one word—empathy—he believed was essential. “If they know they can trust a company, then when they see a particular offer it is no longer a creepy offer. The big word, which I haven't heard, is empathy.”

Clients like Bank of America know they must fashion marketing messages in a very different way, a way often labeled branded content. These paid messages can arouse empathy, and don't beat the consumer over the head with a sales pitch; they often tell a story about something noble the brand is associated with, arouse emotion, and are most successful when the consumer doesn't realize the advertisement is an ad because it tells a compelling story or provides valuable information. This is why BofA partnered with the nonprofit online education Khan Academy in 2013, offering videos that explain complicated financial topics—like their series “Better Money Habits,” elucidating compound interest—on sites like Pinterest.

The ideal for a subtle ad pitch is the two-minute television narrative that BBDO's Indian agency created for Procter & Gamble's local detergent, Ariel. It opens with the young wife racing about to calm her children, make tea for her oblivious husband, who is watching television, answer the phone, cook dinner, lay out the dishes, and load the laundry in the washing machine. While she services everyone's needs, her father is in the apartment and viewers hear his voice describing what he is seeing, seemingly for the first time. In a sorrowful voice, he says, “Sorry for every dad who set a wrong example,” sorry that his daughter is just doing what he compelled her mother to do, that “your
husband must have learned this from his dad.” He leaves a note for his daughter, gets up, hugs her, and you hear him say as he leaves the apartment, “Sorry on behalf of every dad.” He then appears at home with his wife, whom he hugs and startles by stopping her from doing the laundry. He takes the laundry basket, stuffs the garments into the washing machine, and pours from a box of Ariel as these bold white letters fill the screen: “Why is laundry only a mother's job?”

Ariel launched a national “Share the Load” campaign, blanketing India with promotional messages and labels asking, “Is laundry only a woman's job?” Doing social good was good for Ariel's business; they claimed sales jumped by 60 percent.