The departure earlier this month of David Henderson, director of advertising at state-owned bank Northern Rock, is the clearest indication yet that the government is turning back on its promise to resurrect the beleaguered financial-services brand.
Unforgettable images of customers lined up outside Northern Rock branches - the first run on a British bank since the 19th century - confirmed it as the unwitting visual indicator of oncoming recession. However, the subsequent crises at banking titans such as Lloyds TSB, HBOS and Royal Bank of Scotland have since dwarfed its troubles.
At the time of nationalisation in February 2008, Chancellor Alistair Darling claimed that temporary government ownership would grow the value of the business and the Northern Rock brand for eventual sale to a commercial bidder. One of the major pillars of a report by the bank's chairman, Ron Sandler, who was parachuted in by the Treasury, was a vow to reinvigorate consumer perceptions of it.
The report, written for the government and the European Commission, promised to ‘re-establish the Northern Rock brand and revitalise marketing', and stated that the new management would prioritise the ‘development of appropriate marketing activity' to support the recovery.
Lack of activity
Yet a source close to Northern Rock says that all forms of marketing activity have dried up over the past nine months, no plans are in place for future ad campaigns, and the bank's management has no intention to replace Henderson.
This anecdotal evidence is borne out by spend figures. According to Nielsen, Northern Rock spent a relatively small £54,000 on advertising during the fourth quarter of 2008, compared with £1.1m in the previous quarter and £1.6m in the corresponding period in 2007.
Adspend has not picked up this year either, with £54,000 spent in January and February.
Alan Gilmour, a former marketing director at Lloyds TSB and nationalised Icelandic savings brand Icesave, says Northern Rock's management is deliberately slimming down the business. ‘It looks like [Northern Rock] is trying to downsize the balance sheet to a stable position,' he adds. ‘The obvious option is to sell off the savings book to an Abbey or ING, and slowly run down the lending book. There
may well be no long-term plans for the brand.'
The theory that Sandler and his management team are whittling down Northern Rock to proportions more in keeping with its building-society heritage is certainly plausible. Indeed, it may follow the lead of many regional operations in this sphere, such as Chelsea Building Society, by focusing its sporadic marketing efforts on industry best-buy tables.
Former First Direct and smile.co.uk marketer Mike Phillipson, now at direct marketing agency Propaganda, agrees that any return to marketing will show Northern Rock in a much humbler and more modest guise.
‘Northern Rock needs to reinvent itself internally and externally, it has so much negative baggage attached,' he says. ‘It will rely on PR and online communications much more in the near future. Northern Rock should be behaving more like Skipton Building Society and less like big banks such as Barclays.'
The question is whether Northern Rock can truly reinvent itself with tightly controlled PR, or whether the bank's management is defying its impressive rhetoric about revitalisation by, in fact, quietly attempting to scale down the business.
Without a senior marketer and long-term marketing strategy in place, it is difficult to see how a brand can undergo a miraculous transformation. Then again, a casual drift into relative obscurity may be precisely what Northern Rock is looking for.