Amp Brand Still Good Even As Company Ails
Sydney Morning Herald
Thursday September 11, 2003
AMP is facing another fight for survival for the future of its brand as it faces a potential takeover bid from National Australia Bank and engages in a marketing battle for the hearts and minds of its customers, shareholders and the influential financial planning community.
It has been estimated that AMP spent about $50 million last year on marketing and advertising including an expensive television campaign, although AMP is coy about disclosing the exact figure.
The group recently has been taking large full-page ads in metropolitan newspaper to assure customers and shareholders many of whom are the same people that it continues to be financially strong.
In an amusing juxtaposition in last week's Herald, both AMP and MLC, NAB's existing funds management brand, took out full-page ads barely a page apart, with the former imploring customers to ``look forward" and the latter describing itself as ``the insurance company of the year".
But, according to one close watcher of the marketing battle, AMP's image is holding up reasonably well in light of its woeful sharemarket performance. The share price has fallen from around $11.30 when managing director Andrew Mohl took the job in September 2002 to a low of $4.26 before last month's NAB market raid sent the price up to near $7 a share.
``My research is showing that [AMP's woes] are not having that much of an impact on people's decision to buy an AMP product because the primary customer relationship is with the planner not the brand," said Brand Management's principal Andrew Inwood, a marketing consultant to the financial services sector and former AMP marketing executive. ``The brand is not proving to be a barrier to purchase."
The biggest challenge for AMP's marketing team in the past year has been to revive the AMP brand after a battering in the press and placement of question marks over its solvency due to multi-billion losses in the UK.
While NAB is yet to lob a bid for AMP or detail its intentions, it is also considered a possibility that the AMP brand could disappear forever in the event of a successful takeover.
But based on a survey last month of 5000 consumers conducted by Brand Management, AMP rated in line with other financial services brands of similar size in terms of consumers' willingness to purchase their products and continued to outrate the four major banks.
The AMP brand remains strong with the over-50 consumers but is not as strong for younger age groups. ``But that's true for all major corporate brands," Mr Inwood said.
This sort of evidence means it may yet be worthwhile for NAB to retain the AMP brand, just like it did following the $4.6 billion purchase of MLC in 2000.
But the current marketing focus on ``bringing AMP back home" is a far cry from AMP's situation three years ago. In 2000, AMP spent an estimated four times its annual marketing budget in an effort to become an international brand and develop its now-ailing UK franchise, with much of the expense dedicated to sponsoring the Sydney Olympics torch relay.
An AMP spokesman said the group's current crop of print and TV ads were an extension of a campaign the insurer launched last September.
Clearly an important part of AMP's efforts have been to comfort its 1900 financial planners, most of whom are self-employed but operate under the AMP umbrella. AMP has been helping to fund individual marketing efforts by these planners.
AMP's doomsday scenario would be if these planners decided to leave the network.
``No-one who has an AMP product has gone broke but that is something people have experienced with companies like HIH or One.Tel," Mr Inwood said.
``There has not been that sort of suggestion with AMP but there was a fear that [investment] inflows would slow down."
While the AMP brand is showing some resilience, Mr Inwood questions why AMP and other financial services groups rely so heavily on generic advertising rather than advertising the specific products they offer.
``There is no significant point of differentiation with the AMP brand in the marketplace. It's as generic as the other major financial services brands in the marketplace," he said.
© 2003 Sydney Morning Herald