ANALYSIS: BRAND SPEND ANALYSIS - HSBC will need to spend more to boost its relatively low brand profile in the UK

Background HSBC is one of the world’s largest banking groups. It has 5,000 offices in 82 countries and is included in Forbes’ list of the world’s 100 ’super companies’.

Background HSBC is one of the world’s largest banking groups. It

has 5,000 offices in 82 countries and is included in Forbes’ list of the

world’s 100 ’super companies’.



In the UK, it has more than 20 operating divisions, including First

Direct, and is committed to launching a global internet banking service.

HSBC will spend pounds 1.25 billion this year on online services.



However, despite its size, HSBC has a lower brand profile and level of

advertising spend than other UK banks, perhaps indicating a strategy of

buying market share through acquisitions rather than fighting it out

with competitors through advertising. This view is perhaps endorsed by

its decision to rebrand Midland Bank under the HSBC umbrella.



Agencies HSBC uses St Luke’s for its creative work, New PHD for media

buying, and MindShare Media UK and New PHD for planning. HSBC’s head of

strategic planning is Paul Seward.



Media spend HSBC was the UK’s 68th biggest above-the-line advertiser in

1999 and its spend for the year to January 2000 was pounds 17.31

million.



However, in sharp contrast to other banks - and even First Direct - HSBC

spends very little on direct mail. A sharp drop in above-the-line spend

in December and January resulted in its total advertising spend being

relatively small. However, HSBC has announced it is to increase its

advertising budget as part of a multi-national rebranding programme.



Media mix More than half HSBC’s spend goes on TV. More than a quarter is

spent on the national and regional press and the remainder is split

between outdoor, direct mail and radio.



1999’s key campaigns centred around TV sponsorship and corporate

awareness drives in February, June and November and the ’take remote

control of your money’ posters.



HSBC’s advertising spend fluctuated over the year. More than a third of

spend occurred in June and July, while there was hardly any spent in

March, August, December and January. Regional press was used evenly over

the year but TV, radio and outdoor advertising ceased in December.



Trends HSBC’s current focus is very much on global internet banking and

interactive opportunities such as in-store TV banking. However, these

innovations will require strong advertising and brand building, so the

corporation is likely to up its UK marketing spend significantly in

2000.



Comment Richard Marshall, Director of direct marketing agency Tullo

Marshall Warren, says: ’Competition in the UK banking sector is fierce,

and many banks are receiving bad press at the moment as a result of

overcharging and ’disloyalty fees’. This will encourage customers to

shop around, which makes customer relationship marketing crucial. It is

surprising that HSBC is such a low spender on direct mail - I would

expect proportionate growth in order to focus on acquisition and

retention strategies.’





Research by AC Nielsen MMS tel: 01344-627553 www.mediamonitoring.com



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