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