HSBC’s £400m global review that never was

March 9, 2013

Chris Clark HSBCSo, what was all that about? HSBC’s group marketing director Chris Clark calls a review of the “£400m” (actually rather less these days) global account late last year. Well, not exactly a review. More a series of private meetings that happen to take in the incumbent agency’s rivals at Omnicom, IPG and Publicis – just in case they have any bright ideas. No fundamental discussions take place on either strategy or creativity, because none are called for, even from the incumbent JWT.

Sniffing a rat, McCann (IPG) and BBDO (Omnicom) pull out. Late yesterday (a good time to bury news) it trickles out that WPP has, er, retained the account. But there have been a few twists of the kaleidoscope. Most salient is that outsider Saatchi & Saatchi (Publicis) will now handle the small-spending (relatively speaking) retail banking and wealth business across Europe and in Latin America. JWT is still at the epicentre, with the global brand business, but will now share the rest of the account with its WPP sister agency, Grey London.

Is this a classic piece of agency punishment meted out by the client? We still like you, WPP: but you’ve gone a bit flabby. So, just to make sure you’re on your toes, we’ll keep you on tenterhooks for a few months and then award a chunk of business to one of your rivals – to see how hungry they are.

Was it simply an exercise in cheese-paring the fees, as JWT officially likes to see it, on the part of one of the world’s wealthiest institutions?

Or is this Chris Clark desperately trying to justify his job as CMO (in all but name)? A marking time exercise, while he and his boss, HSBC chief executive Stuart Gulliver, dream up a successor to the faded strap line, The World’s Local Bank?

Because, of course, it isn’t anymore. If you rolled the market capitalisation of Barclays, Lloyds Bank and RBS together, they wouldn’t add up to that of HSBC – which remains by far Britain’s largest bank. But internationally, Gulliver has been busy rolling back the borders, with the divestment of businesses from as far afield as Argentina, Russia and Singapore. The proceeds of which were one contributory reason for the humungous profits the bank was able to declare only last week.

In the recent past, Clark has talked up the need to spend more marketing pounds on the product side (i.e., the separate bank businesses) and less on the corporate brand. One reasonable interpretation of this stance is that banks, in these bonus-bashing times, would do well to get their heads down to providing some basic customer service, as opposed to extravagantly boasting about their global expanse.

Another (they are not mutually exclusive) is that Clark and his colleagues haven’t got a clue what they should do. “In the future” doesn’t quite do it, does it? And in any case, as Clark himself once quipped, it’s more of a start than an end line.



Big is beastly, especially if we’re talking big banks like Barclays

August 28, 2012

Which brands make us most angry? Yes, you guessed correctly. The big ones that rip us off, starve us of mortgage funds, pilfer our savings and behave with amoral disregard for everyone’s interest but their own. Anything, in short, that ends with the word “Bank”.

But come, let’s be a bit more specific. How about some brand differentiation – which is the worst, and which the runner-up? Well, coming in at number 2 – just behind the winning “All banks” category – is Barclays. And next, in 7th position, is Royal Bank of Scotland.

I know all of this thanks to some research, just out, conducted by YouGov and commissioned by creative agency Johnny Fearless (of which more below).

Why don’t Lloyds, Santander and HSBC make it into the top 10? Surely not on account of the odour of sanctity. We can only speculate, but could it be that Barclays and RBS have the two biggest Swinging Dicks attached to their brand heritage, namely Bob Diamond and Fred the Shred? I doubt that most people know who Antonio Horta-Osario is, and would struggle to recall his name in sufficient detail if they did. Which is probably just as well for Horta-Osario and Lloyds Bank.

More interesting, if perplexing in some ways, is the identity of the other 7 members of this exclusive Top 10 club. Tenth equal with Coca-Cola is Nestlé – still regarded as a corporate pariah on account of its anti-social baby-milk marketing practices in developing countries. I’m sure that doesn’t depress sales of Kit-Kats and Yorkie bars one bit, though.

And what’s Coke doing in there? Sorry boys and girls, for all your tender investment in clean athleticism, those grubby practices in Third World countries have not gone unnoticed.

Next up, “All utilities companies” at number 8, on account of their high prices and perceived profiteering. But two deserving special mentions here are British Gas – with its conspicuously bad customer service; and BT – with its ineffectual overseas call centres.

Virgin Media is in there at number 8 as well, although I have yet to discover whether this is because we’re all being beastly to Beardie or on account of some graver underlying cause – such as woefully inadequate service.

That leaves us with McDonald’s at number 4 – poor quality food and an inappropriate Olympics sponsorship, apparently.

…And, weighing in at number 3, the nation’s unfavourite retailer – Tesco. Memo to Tesco CEO Phil Clarke: it’s because you’re too big for your boots, despoil our high streets and blackmail your suppliers. No other retailer can do this so successfully, it seems.

  1. Which companies or brands make you feel angry? 
  2. What is it they do to make you feel angry?
Rank Company or brand
1 All banks’, ‘Banks’
2 Barclays
3 Tesco
4 McDonald’s
5 BT
6 British Gas
7 Royal Bank of Scotland’, ‘RBS’
8= Virgin Media
8= Utilities’, ‘Energy companies’
10= Nestlé
10= Coca-Cola

The research was commissioned by Johnny Fearless and carried out by YouGov. Total sample size was 2077 adults. Fieldwork was undertaken between August 3-6th 2012. The figures have been weighted and are representative of all UK adults (aged 18+).

Johnny Fearless is a Soho start-up agency founded by Paul Domenet and Neil Hughston, whose stock in trade is creating “social crackle” around brand messages. Or so it says in their publicity blurb.


Poor old Diamond Bob – a martyr to Barclays’ brand values

June 28, 2012

BarclaysA lot of people are accusing Barclays Bank and its chief executive Bob Diamond of racketeering. Acting like white-collar gangsters, in other words. They say the bank and its principal directors colluded in serial distortion of the interbank rate, Libor. What this means in plain English is that they beggared us – the saps who are their customers – with artificially inflated interest rates on loans and mortgages  – in order to enrich first themselves, through bigger bonuses, and then their shareholders, through bigger dividends. Barclays has been fined a total of £290m by the regulatory authorities on both sides of the Atlantic. But it’s the thin edge of a very thick financial wedge. Once the lawyers get weaving on behalf of aggrieved customers, who knows where the liability will end up?

Martin Taylor, a former Barclays CEO himself, summed it up best on this morning’s Today Programme. He said that Barclays had engaged in “systematic dishonesty” between the years 2005 and 2009. While he didn’t explicitly link Diamond – who then happened to be head of BarCap, the division most closely tied to the scandal – with the gigantic swindle, he did say that chief executives set the cultural tone of the businesses they run. Implication: Diamond should retire to the discreetest room in his penthouse suite and make good use of a service revolver. Diamond – Taylor implied – may, or may not, have colluded in such corrupt dealing practices; but because they happened on his watch, he was at very least grossly negligent.

Now I know what I’m about to say isn’t going to be popular, but I’ll say it all the same. Was Bob so very wrong in what he did – or rather, for the sake of any legal eagles looking in – er, what he didn’t do? I mean, at least Barclays Bank co-operated with the investigative authorities, whereas other banks did not. Barclays is paying the price of being first to fess up: a media Exocet amidships.

Then again, the bank took not a penny of public money in the wake of the Lehman Bros collapse. All right, it was pretty stupid to allow such an unredacted and inculpatory email trail to get into the hands of the regulators. But at least you won’t hear any trading floor intercepts along the following lines: “Dude, thanks a billion in Treasury credits. I owe you big time. But not as much as I owe the taxpayer. Come over after work and let’s break open the Bollie.”

I’m not sure the same will be said of RBS and Lloyds. Both were big recipients of taxpayers’ bail-outs, and both – along with HSBC, Citigroup, JP Morgan, UBS, Deutsche Bank and others I probably don’t even know of yet – are, so it seems, up to their gills in interest-rate-rigging mire too. Poor old RBS. Talk about reputational damage: it’s not only guilty of systemic incompetence with customers’ direct debits, but of “systematic dishonesty” in charging them higher interest rates as well. Will this publicly-owned company owned by the public ever recover?

But I digress. Bob’s is the head that everyone wants to stick on a pike over Tower Gate. That’s because everything about Bob is Big and Boastful. Biggest salary, biggest bonus, biggest ego. He is, in short, the archetypal arrogant, swaggering, fat cat.

And as such, he has been entirely consistent with Barclays brand values over the years. Do you not remember Barclays brand ambassador Anthony Hopkins telling us how, if you weren’t big, you were nothing in banking circles? You don’t, do you? So, here as an aide-memoire is a superbly-crafted ad by Leagas Delaney, dating from 2000:

Sometimes, you see, advertising really can convey complex, uncomfortable, inner truths – without the client even noticing. Bob did, of course. He’s been a part of Barclays’ cultural furniture since 1996. He took the message very seriously indeed and acted out the part. What a brand martyr the man is!


Why HSBC £40m fine over mis-selling scandal gives marketing a bad name

December 6, 2011

Chris Barraclough is right. While the marketing community obsesses about Marks & Spencer lingerie ads, Size Zero models, Twitter trending and the monetisation of Facebook, it is almost entirely oblivious to some criminality of Dickensian proportions tarnishing its name.

Criminality? We’re talking big banks here, and yet another “mis-selling” scandal, although in truth the scandal involves everything from new product development through to sales, marketing and marcoms. Not to mention some truly appalling internal supervision, with a hint  of News International about it.

Villain of the piece is HSBC, Britain’s biggest bank, which has just been fined £10.5m by financial services regulator the FSA and ordered to pay back £29.5m to old age pensioners it had systematically swindled out of their savings over a period of 5 years.

It’s a complex story with many, unflattering, angles. Here are a few of them, to give the flavour. The mis-selling involved an investment bond with a capital protection element. The snag was, you had to put the money away for about 5 years or incur a huge financial penalty. Many of the 2,485 victims were very old; one was 94 – the average age was 83. Obviously, a large number had a life-expectancy shorter than the term of the bond. Yet, they were easy prey, not necessarily on account of mental infirmity but because they were 1) capital rich (compared to most of the rest of the population) and 2) very fearful of the eventual cost of living in a halfway decent care home. Quite a few sold their houses to fund what they were told was the answer to their financial prayers; on average, they handed over £115,000 each. The average loss was £11,790 per customer, spookily adjacent to the £11,500 commission over 5 years received by advisors who had helped to sell the product. The FSA judged that 87% of sales were “inappropriate”.

HSBC is not solely culpable. It bought the rogue organisation responsible, Nursing Home Fees Agency, long after it had been set up in 1991 – presumably on the basis that NHFA was a nice little earner (as indeed it was). Then, too, NHFA came highly recommended. Help the Aged, the charity, was being paid commission for passing on names to the NHFA, while the Royal British Legion listed the company as a place to seek advice on how to pay for care fees. NHFA salesmen were also aided by a listing in the government’s financial advice website at Direct.gov.uk.

For all I know, malpractice may date back two decades. But that hardly exonerates HSBC, which took 4 years to wake up to something being rotten and then to report it. NHFA was only closed down in July of this year.

Horrendous though this mugging of pensioners may be, it would be nice to think of it as an isolated incident. No such luck.  In January 2011 Barclays was fined £7.7m and ordered to pay £60m compensation to thousands of elderly victims of a similar mis-selling scandal. In April, the banks finally lost a case in the high court, after years of procrastination over the payment protection insurance scandal – making them liable for billions of pounds of compensation. In May, the Bank of Scotland, a subsidiary of Lloyds Banking Group, was fined £3.5m and forced to pay £17m compensation to elderly customers after – guess what? – selling them risky investments.

How do they get away with it? Well, because they can. These fines may seem astronomical by my standards or yours, but they are a spit in the ocean compared with the Big Fours’ bottom lines. HSBC, for example, made interim profits of about £7bn this year. Banks also benefit from a culture of impunity. This is usually taken to mean stratospheric and wholly unjustified annual bonuses, or irresponsible, arcane, casino investments that eventually bring the house down. It is equally apparent they have a licence to plunder the needy and vulnerable with little fear of meaningful retribution.

For that state of affairs we too, as Barraclough implies in his blog post, are partly responsible. And marketers, obsessed with youth and cutting-edge technology, especially so. Finance, particularly retail finance such as pensions, investment bonds and mutual funds, is nit-pickingly complex and unsexy. It’s also, as often as not, about an unsexy sector – the over 50s – who happen to own most of the nation’s wealth. So we defer to the so-called experts. These experts don’t mind being boring, in fact they positively revel in it. And you can well see why.


Diverted Boulton makes safe landing at Nationwide

July 9, 2009

James BoultonJames Boulton, the ex-HSBC marketing director and brother of Sky TV presenter, Adam, has finally landed at Nationwide after a bizarre mini-Odyssey involving British Airways.

In circumstances still not entirely clear, Boulton seems to have quit HSBC at the beginning of the year in the belief that he had a job in the bag – a good one too – at BA as global marketing director, following in the footsteps of Tiffany Hall.

Only to discover that he did not. Having led him up the garden path, BA either withdrew the offer or halted the process. Boulton had been applying for a job that would no longer exist, due to a management “rationalisation”…

It’s another example of just how ruthless companies have become in slashing key personnel once they are deemed too expensive. Equally unsettling was Cadbury’s recent decision to get rid of its European president, Tamara Minick-Scokalo, only six months after elevating her from group commercial director.

Boulton may not have got the CMO role he was evidently looking for after HSBC declined to expand his duties (I note his successor, Brendan Cook, has been given additional responsibilities – product development and research). But he could have done a lot worse than end up at Nationwide.

In effect, he takes over the high-profile position occupied for many years by Peter Gandolfi, although the title, like much else, is different. Plenty has changed at Nationwide under the leadership of Graham Beale, including most of the key personnel. That’s only to be expected. The sleepy mega-mutual is well positioned (unlike almost any other financial services organisation) to benefit from the Credit Crunch. Big mutuals – friendly, conservative and, above all, reliable (it says in the script) – are back in fashion. And since Nationwide is by far and away the best branded and biggest – at over half the sector’s capitalisation –  it should be able to exploit this new mood much better than anyone else.

Beale has, perhaps justifiably, been whingeing about the ridiculous capital ratios (money kept back as security) being imposed on his organisation (given it is not particularly reliant on the wholesale money market, exposure to which has been a major cause of vulnerability). I notice this has not prevented Nationwide from launching an eye-catching 125% mortgage aimed at attracting people in negative equity who want to move.

Boulton, with his packaged goods skills acquired at Unilever and PepsiCo, has a promising canvas to work on.


%d bloggers like this: