DIRECT: ISSUE - April’s ISAs could bring adland a pounds 100m windfall/Agencies that can get across the difference between a PEP and an ISA will clean up, Ken Gofton says

Mad March, as the investment houses call it, is all but over. It’s the month in which those people comfortably above the bread line decide how much to put into tax-free investment, before the start of the new tax year.

Mad March, as the investment houses call it, is all but over. It’s

the month in which those people comfortably above the bread line decide

how much to put into tax-free investment, before the start of the new

tax year.

This time round, it’s been crazier than ever. There’s been a last-minute

rush for familiar savings vehicles - personal equity plans (PEPs) and

tax-exempt savings accounts (TESSAs) - before they’re replaced by

individual savings accounts (ISAs). The changeover has sparked a massive

increase in financial advertising, especially through direct


Much of it may be working in terms of raking in the funds, but it’s so

much wallpaper and dross. Ironically, financial services companies want

agency personnel who know the business, while agency staff jump shop to

escape from the sheer boredom of many of the financial accounts.

April’s launch of the ISA is a significant move, however. The

Government’s aim is to make tax-free savings attractive to a much wider

spread of people, through features such as ready access to cash

deposits, and life insurance.

That gives the edge to high street building societies and banks, or

companies such as Virgin Direct, which boast a special rapport with


It’s no coincidence that some of the most thoughtful work around springs

from a realisation that the public is still very confused about the


An Abbey National poll found that 20 per cent of the population thought

than an ISA was an energy drink, and 7 per cent assumed it was a new


’It’s clear there’s a lot of confusion, but that’s not surprising with a

product that’s still to be launched,’ Sara Weller, Abbey National’s

retail marketing director, says. ’Of more concern is the fact that, when

training staff, it becomes clear that what is meant to be an easy

concept for the public to understand is really quite complicated.

’The amounts you can put in during the first year and second year are

different, there are mini accounts and maxi accounts, and there’s the

option to go with one provider or several. But this is an opportunity

for us. Our whole brand is about making financial services less


The opportunity is being grasped with a pounds 5 million integrated

campaign. Euro RSCG Wnek Gosper is doing the above-the-line ads,

featuring the astronomer, Patrick Moore, and the comedian, Alan Davies.

The line is that rocket scientists don’t understand it, ’but I do

because I’ve got a leaflet from Abbey National’.

WWAV Rapp Collins will pick up the theme on the direct marketing


Underlining the idea that Abbey National is out to make ISAs

understandable is the fact that all of the supporting literature, and a

nine-minute humorous video, have received ’Crystal Mark’ approval from

the Campaign for Plain English.

Instead of material just about ISAs, Virgin Direct opted for a free book

explaining the lot - PEPs and TESSAs too. But the principle is the


A campaign to promote the offer, developed by Rainey Kelly Campbell

Roalfe, has been running on TV, radio, posters and in the press since


It has generated over 200,000 responses so far.

’Fundamentally, the reason for the book was that we recognised the

change to ISAs threw up a unique set of circumstances,’ Gordon Maw,

Virgin Direct’s marketing manager, says. ’The choice was either to

attempt to squeeze the last drop out of PEPs, or take a longer term

view, and tackle the confusion. We decided that what people need most is


Jim Kelly, managing partner at Rainey Kelly Campbell Roalfe, confirms

the campaign’s pulling power. One recent off-peak screening of the

latest ad - ’old dears’, which uses the theme ’I haven’t got much time

left’ - was expected to draw about 130 responses and achieved almost


Providing a plain-speaking guide, and thus acting as a beacon for the

industry, was absolutely true to the brand, Kelly says.

The risk was that people would take the free information, but invest

elsewhere. In fact, PEP money has been pouring in. ’The fact that we

know that more than half the requests for guides were from people

wanting to know about ISAs suggests we have a head start there, too,’

Kelly adds.

Plain speaking is needed even when the target audience is financially

literate. The Charles Schwab Corporation is an ’execution only’

stockbroker - it doesn’t run investment funds, but simply buys and sells

on its clients’ instructions. As far as PEPs are concerned, that means

it has ’been providing them with a tax-free bucket’. ’But we give them

no advice as to what they should put in it,’ John Cole, Schwab’s head of

advertising and communication, says.

As this requires a little more sophistication on the investor’s part,

there has been no cold mailing to the general public. Instead, Schwab’s

agency, Craik Jones Watson Mitchell Voelkel, has been seeking responses

through ads in the investment press, and a prominent ’share square’

counting down the days to the end of PEPs, in the Financial Times’ share

price listings. But even with this sophisticated audience, research

showed that the fulfilment pack needed to be kept simple and jargon


Yet another advocate for putting effort into explaining things is Mark

Sheard, joint managing director of Stretch The Horizon. The agency has

been running an integrated campaign - outdoor, point-of-sale and mail -

for NatWest, with a theme of tax-free havens, and money growing on


’Our research shows that consumers remain massively confused, and are

waiting for someone to offer genuine information as well as advice,’ he

says. ’As ever, consumers want providers to stop selling long enough to

provide real information.

’So what’s the industry doing? It’s falling over itself to flog PEPs.

Few providers are interested in doing the education job. The Government

didn’t give them much time and they don’t know what competitors are

doing. In short, they have a thousand and one reasons for doing the bare



It will be some time before the total spend for direct marketing and ads

for PEPs, TESSAs and ISAs in this changeover period can be


On the PEPs front, Thomson Intermedia calculates that 152 companies put

pounds 115 million (at ratecard) into press ads and advertorials between

January 1998 and early March 1999. The big spenders in its survey are

headed by Legal & General, followed by Scottish Widows.This takes no

account, however, of loose inserts, which are notoriously difficult to


ISAs don’t get going until April, and the press spend identified so far

by Thomson totals just pounds 2.33 million . However, Carat has forecast

that as many as 300 financial services companies will be splurging

pounds 100 million in April alone to launch the new ISA products. The

agency is expecting pounds 25 million-pounds 30 million to go on TV,

with the rest going on press and direct mail.

Thomson has also been tracking direct mail campaigns, using GfK’s

6,000-strong, nationally representative panel of consumers. The top four

for PEP mailings in the 12 months to the end of January this year were

Save & Prosper (4.46 million), Marks & Spencer (1.84 million), M&G (1.51

million) and b2 (1.09 million). Significant ISA activity only began in


Posters have also been widely used in the current financial services

blitz. Virgin Direct’s Gordon Maw says: ’Posters are coming into their

own as a direct response medium. People phone in on their mobiles while

stuck in traffic or waiting for a bus.’


Company                    pounds m

Legal & General              11.744

Scottish Widows               7.495

Royal & Sun Alliance          5.909

Fidelity Investments          5.731

M&G                           5.426

Mercury Asset Management      4.561

Jupiter                       4.470

Virgin Direct                 4.365

Perpetual                     4.158

Gartmore                      3.935

Source: Thomson Intermedia (January ’98-early March ’99)

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