The average chief marketing officer has a notoriously short tenure, so the lofty reputation of Wachovia CMO Jim Garrity 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 tech worlds. (His first job was at IBM (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 to 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 does 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 investment 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 (GE)executive added a tinge of tension to the proceedings.
MONEY IS SEXY. BANKS AREN'T. People don't buttonhole you at cocktail parties to wax poetic about their financial institution. And, as Garrity points out, consumers 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 banking relationships. And bank advertising does not easily lend itself to crazed creative approaches of the sort that Burger King (BKC) 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. The 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 household 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 Media 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 broadcast. 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 better 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 nonetheless.
For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia
By Jon Fine