It’s a funny old world, isn’t it? Last week the Pru’s virtual bank,
Egg, was widely perceived by the national press to have made a bit of
balls-up when it announced it had pulled in pounds 5 billion in deposits
in just six months since launch - a target it said it had expected to
hit in three years.
This follows on from the balls-up at launch when Egg was unable to keep
up with demand and had to turn savers away. Loans, meanwhile, are not
running quite so fast.
Since, in banking, a deposit is a liability while a loan is an asset -
and banks therefore only make money when they lend it out - the press
has a point. But only just.
The really interesting point about the current state of Egg - and the
reason why deposits have grown so fast - is that the appeal to older
customers (ie the ones with the dosh to put away) has been greater than
Mike Harris, chief executive of Egg, even admitted he was ’shocked’ by
this. Egg won’t offer a precise age breakdown of its depositor base, but
it did say that it had more customers in the 45-65 age range than in the
Now let’s just pause here to let this register. Egg, you will recall,
launched in October with an edgy, vox-poppy campaign through HHCL. Apart
from Zoe Ball and Linford Christie, the ads featured real-life customers
who were, without exception, in their 20s and 30s. Thus everything about
the launch, from the trendy name (not forgetting the E as in e-commerce,
internet banking etc) told us this was a product aimed at the youth
market - and therefore, it seemed, an eminently sensible thing for a
venerable but fuddy-duddy institution like the Pru to do.
And what do we have now? In short, the Pru has, in Egg, a genuinely
mass-market brand on its hands - somewhat, one suspects, to its
To my mind, Egg offers three interesting lessons for both clients and
agencies. The first concerns the fact that, in this age of segmentation
and media fragmentation, it’s hugely expensive and time-consuming, if
not impossible, to build cross-demographic brands with mass appeal. As
Egg shows, that is palpable nonsense.
The second is the obsession - and clients are just as guilty as agencies
- with targeting youth. This has its basis in two prejudices: one, that
you can only be cool and trendy if you have a youthful customer base
(hence the predeliction for producing ’yoof’ ads); and two, that once
consumers get past a certain age, their brand preferences are impossible
to shift, tied down as they are by habit and inertia. Again, Egg proves
both those sacred cows wrong.
Last, the success of Egg will, I hope, force marketers to reassess their
view that new-tech products like virtual banking, e-commerce or anything
internet-related are the preserve of the young.
In fact, research by Ziff-Davis and Yahoo! demonstrates that the ’silver
surfers’ (the 20 per cent of web users who are over 45) are a
And as Egg shows, they’re not only open to ideas, but they’re also savvy