ANALYSIS: Will NatWest lose the plot? - NatWest is about to unveil new ads which do not feature the Canning family. Amanda Richards asks whether abandoning its commitment to this long-term campaign signals a lack of confidence in the bank’s future

Building strong, sustainable campaigns is not something that comes easily to the high-street banks, so the news that another advertising strategy looks set to bite the dust is unlikely to come as too much of a shock.

Building strong, sustainable campaigns is not something that comes

easily to the high-street banks, so the news that another advertising

strategy looks set to bite the dust is unlikely to come as too much of a

shock.



The expected casualty this time is NatWest’s Canning family

campaign.



Axing these ads would signal not just the bank’s weak commitment to

marketing, but the growing threat to the future of the NatWest brand

itself.



Eighteen months ago, NatWest took the brave decision to strengthen its

brand using financially demanding, star-studded, soap-style

advertising.



Gary Olsen and Samantha Beckinsale were signed up for the lead roles and

the bank pledged that the strategy would take it into the 21st

century.



The aim of the campaign - created by Bartle Bogle Hegarty - was to bring

warmth, humour and reality to NatWest’s advertising, which in turn would

help to position the bank as a major provider of financial services.



Canning family values



But as the bank finalises its budgets for the 1998 calendar year, the

future of the Cannings campaign looks far from certain.



According to one source, TV budgets for the Cannings in 1998 have been

cancelled and a new brand-building campaign, through Ammirati Puris

Lintas, which breaks in the press and on posters in January, will not

feature any members of the Canning family.



Ian Schoolar, head of brand communications at NatWest, says the Cannings

campaign has researched well but refuses to comment on whether the axe

is now hanging over a family that was supposed to ape the success of the

characters in the Oxo and Nescafe ads.



’We are hopeful that it will appear again, but I cannot comment at this

stage,’ says Schoolar.



Sources say Schoolar is refusing to commit to the campaign’s future

because of the pressure being exerted on all NatWest business units to

cut costs.



That pressure has arisen in the wake of the bank’s disastrous and

expensive foray into investment banking - a market from which it

withdrew last week, with the sale of its UK and European equities

business to Bankers Trust and the acquisition of its US and Asian

derivatives business by Deutsche Morgan Grenfell.



The whole episode is expected to leave a substantial hole in the

accounts this year, and raises further questions over NatWest’s ability

to remain independent.



In the past 12 months, the bank has been plagued by constant speculation

about a merger with Barclays or a deal with Prudential or Abbey

National.



Pressure points



One source says: ’NatWest’s chief executive, Derek Wanless, will be

under pressure to show that the business is very profitable and to

deliver the best financial position to shareholders in the wake of any

deal.



’What is the point of investing millions in brand building when the

brand may not exist in six months’ time? The situation is very difficult

for the NatWest marketing team but there is no doubt that they are under

pressure to slash the marketing budget.’



NatWest marketers are understood to have debated whether the Cannings

campaign could survive on a smaller advertising budget. In 1997, NatWest

invested pounds 12m in the TV campaign. This compares with the pounds

7.5m put behind the launch of Midland’s new advertising strategy.



’The Cannings campaign needs a lot of money put behind it to develop the

characters,’ says a source, ’and NatWest doubts whether it would be

worth putting it back on TV on a smaller budget.’



Another source was more critical of the Cannings campaign. ’It has had

pounds 12m spent on it in the past year but it has still failed to

capture the nation’s interest. I think that reveals serious questions

about the bank’s strategy.’



Regardless of people’s personal views about the Cannings campaign, the

fact that it looks set to become the most high-profile victim of

NatWest’s renewed cost-cutting offensive again raises questions about

the bank’s approach to marketing.



Lost traditions



If ever there was a time for traditional banks to be marketing-led it is

now. Not only are they under pressure from new entrants, such as the

supermarket chains and the likes of Richard Branson, but former building

societies turned banks, such as Abbey National and Halifax, are also

posing more of a threat as they work to improve their customer

propositions.



While Schoolar argues that NatWest is taking great strides to improve

its service, many still believe that the bank, like its traditional

competitors, is still not as focused on the customer as it should be and

that advertising is just simply used as wallpaper to cover the

cracks.



Nigel Sherrington, group managing director of the Added Value Group,

says: ’Banks would do better to invest their entire marketing budgets in

information technology and internal communications.



’In the case of NatWest, what is more important: to present an image of

a twee middle-class family on TV, or to make sure all your supply chains

are effective and that your staff are all singing from the same song

sheet day in, day out?’



Price Waterhouse marketing partner Mike Sommers agrees that many banks

still don’t understand marketing. ’They should be targeting customers

with distinctive offers rather than trying to appeal to everyone with

bland statements in their advertising.



’Marketing is still a bolt-on department in these organisations.’



While the future for NatWest and for the Canning family is not clear,

shareholders and customers are unlikely to be impressed if the bank

decides to switch its advertising strategy again.



They may even be hoping that NatWest does merge and that the new

operation will focus on meeting customers’ needs, rather than

concentrating on the advertising strategy.



CAMPAIGN TRAIL



1990-1994: ’We’re here to make life easier’



1995-1996: ’NatWest. More than just a bank’



1996-present: The Canning family.



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