Reworking The Ad Mix

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OCTOBER 23, 2006


Reworking The Ad Mix

The average chief marketing officer has a notoriously short tenure, so the lofty reputation of Wachovia CMO Jim

is perhaps best evidenced by how neatly the word "longstanding" fits in front of his title.

Garrity is a prototypically steady senior
level executive, tanned and low
key. He speaks softly, in sentences studded
with the jargon of both the marketing and te
ch worlds. (His first job was at IBM (

).) Garrity, who oversees a nine
figure marketing budget, sometimes sounds like a man who never met a data point he didn't like. This is because he
is trying t
o invent a system that quantifies return on investment to better justify and target Wachovia's ad spending.
Garrity and those like him are quietly reworking the advertising mix of the American corporation.

Garrity is a careful man in a job that requires a

tightrope walk through a windstorm. (Most of us can afford to miss
goals by a percentage point or two; if a CMO does, it can wreck a company's year.) As such, he does not go into
much detail about how Wachovia rigorously tests its marketing spending. He d
oes say his findings have led the
company to blend old and new approaches. He loves Web advertising for its "demonstrable" results but says
traditional plays, such as Wachovia's pro golf event and conferences, are also star performers. (Wachovia's
nt banking division has significantly cut ad spending in favor of events.) He has made no secret of his feeling
that broadcast TV is "becoming less valuable," saying as much at a recent panel I moderated. That he was seated
next to a top NBC (

)executive added a tinge of tension to the proceedings.


People don't buttonhole you at cocktail parties to wax poetic about their financial
institution. And, as Garrity points out, c
onsumers have a hard time differentiating one bank from another. (How many
distinctive bank branch offices have you seen?) But despite the low
valence bond between customers and banks,
Garrity notes, it's still hard to pry people away from established bank
ing relationships. And bank advertising does not
easily lend itself to crazed creative approaches of the sort that Burger King (

) has undertaken in order to lodge a
brand in consumers' craniums. Still, Wachovia has done well for itself via a years
long series of acquisitions, and its
stock price is up over 20% in the past year. But that strategy has been maxed out, says Garrity. T
he company will
now have to win new customers one at a time. This will put Garrity's marketing skills, and data, to the test. Luckily,
the banking business is both personal and data
intensive: Wachovia has direct relationships with its roughly 15
million h
ousehold and business customers; compare this with a beer company, which reaches customers only
through distributors.

Garrity isn't trashing the old playbook yet. Wachovia still spends plenty on broadcast TV
$53.8 million last year,
according to TNS Medi
a Intelligence, or just under 30% of its total spending. (Garrity's model suggests that sports
and news are the best ways to reach Wachovia's audience on television.) But it has cut back: in 2004, Wachovia
spent $66.8 million, or 37% of its budget, on broa
dcast. Garrity says that spending will drop again in 2006. His
company's research, like any that churns through reams of data from various inputs, is treated as a work in progress.
"If we had wholesale bet the ranch" on its findings this year, he says, "we

would have allocated 40% [of the budget]
significantly differently." Nevertheless, Wachovia's choices offer an early snapshot of the next
generation mass
marketing budget: less broadcast TV, with that spending tightly focused; more cable TV, which is bett
er at targeting
niche audiences; and much more online advertising. Even if a bunch of Jim Garritys were running things, changes in
how Big Business spends its ad dollars wouldn't come fast. But if just a few follow Garrity's lead, change will come

For Jon Fine's blog on media and advertising, go to

Jon Fine