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Back in 2021 – watching lots of pandemic-era TV like most folks – I saw this commercial launching Vanguard’s current ad campaign. If you prefer to read rather than watch, I’ll recite the very brief copy to you:
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VISUAL: Young girl and her dad find a flower growing in a sidewalk crack, and carefully transplant it in a bare patch in a nearby park. They return years later, with the daughter grown up and the transplant having flourished into a lush floral canopy surrounding the park bench where they sit.
SONG LYRICS: I see trees of green. Red roses too. I see them bloom. For me and you. And I think to myself, what a wonderful world.
VO: A rich life is about more than just money. That’s why at Vanguard, you’re more than just an investor, you’re an owner. So you can build a future for those you love. Vanguard. Become an owner.”
SUPERS: Vanguard (logo) The value of ownership
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Ok. Those of us who follow the industry know Vanguard is unique in being owned by their customers — similar to a mutual insurance company — but does the ad convey that to the general public?
Hell no!
In fact, more viewers probably think “become an owner” refers to owning investments – or, perhaps metaphorically, to owning one’s destiny through investing – rather than the firm’s ownership structure.
Furthermore, where’s the consumer benefit? So what if I buy a tiny share of the firm every time I make an investment? How does that help me?
As far as the campaign’s net takeaway: It’s good to invest. In other words, advertising the category, rather than the brand. I should add that the campaign is still running, with a variety of different investor stories, but no further clarification of the main message.
What went wrong? Let’s start at the beginning. Vanguard was founded in 1974 by the late John C. “Jack” Bogle, a larger-than-life hero to the self-directed investor. Famous for low-cost, broad market investing and for developing the first consumer index funds, the brand was built largely on Jack’s personality cult.
In fact, there was no TV advertising until 2019, the year Jack died. During his lifetime, Bogle’s frequent appearances on CNBC, PBS and in other media outlets more than made up for that.
Today, thanks to the success of index funds and ETFs, Vanguard has grown into America’s #2 asset manager with over $7 trillion assets under management. (Yes, trillion!)
So with all that success, why does Vanguard even need TV ads?
First, because Jack Bogle’s not around anymore to promote the brand. But there are more reasons:
Unlike the early days when investors bought directly by mailing a check to Vanguard, today’s clients more often invest through a brokerage account at another firm, or may have an independent advisor buying for them. Thus, no direct brand relationship with Vanguard.
Today, not only does Vanguard sell through brokers and advisors, they are brokers and advisors via their discount brokerage and registered investment advisor divisions, and need to build trust among prospective clients of these services.
Finally, in the conspiratorial fever swamps of extremist America, Vanguard is accused, along with BlackRock, of being a sinister force using their vast stock ownership to control the world. Advertising to simply explain what these companies do, and how they benefit tens of millions of small investors and savers, might help disarm some of this nonsense.
Hence, the wisdom of promoting the brand just as credibly as Jack Bogle did, but to a wider audience beyond all of us investing weenies who read Barron’s and watch CNBC.
So where did it go wrong? In my humble estimation, Vanguard is making two key mistakes:
Mistake #1 – Too many messages. Too little time. The ads are built around a storytelling concept: happily ending fables of investing, growing and succeeding that could work for any financial firm. The brand-differentiating message is tacked on to the end with no explanation. The website tells a more complete story, but guess what – Vanguard.com isn’t even mentioned in the copy nor does it flash onto the screen.
Mistake #2 – Failure to demonstrate an effective Unique Selling Proposition (U.S.P.) Even if consumers did come away with an understanding of the ownership message, what’s missing is how the consumer benefits from it.
So what’s the real U.S.P? Vanguard’s heritage is low-cost, broad market investing and the firm continues to build upon Jack Bogle’s vision. While all index funds and ETFs today might have very low fees, Vanguard delivers cost-efficiency across a full range of services.
For example, their Personal Advisor service gives the $500,000 investor the guidance of a Certified Financial Planner for a fee of just 0.3% of assets, while Fisher Investments charges 1.25% — over four times as much.
Where does the ownership structure fit in? It’s the safety mechanism that keeps the train on the rails. Without the public shareholders -- and stock-compensated execs -- demanding quarterly profit growth, the firm is not tempted to deviate from its original mission.
If I were invited into the Vanguard boardroom, what would I recommend?
First: Take a hard look at the research. It’s likely some testing was done for this campaign, but I’d guess in a flawed manner. Perhaps, for example, the creative folks sought validation that consumers liked the storytelling, but neglected to gauge whether they understood the ownership message.
Second: Take available evidence and put together a persuasive presentation to management: your advertising should promote Jack Bogle’s heritage and how the firm continues to build upon it. In other words: low-cost investing that goes beyond index funds and ETFs to an entire range of services
Third: Develop creative in a two-stage process that’s tested at each level. First stage is basic concepts: headline and key visual. Second stage is a rough execution including full copy and visuals. In TV that’s usually a storyboard animatic. (A moving and talking image created out of storyboard illustration.) Most important, that research needs to elicit not simply whether consumers like the ad, but if they take away an understanding of key benefits.
Things to consider:
A brand message that sounds perfectly clear to your execs, and even to your longtime customers, might fly way over the heads of your broader prospect audience
Ads, a 30 second TV spot in particular, can only tell a very short and simple story. For example: It’s good to invest. Or, Vanguard is the low-cost way to invest. Not both.
Storytelling rarely works n short-form media, like a 30 second TV spot, a website home page or digital display ad. Stick to the benefits and save the story for a venue where you have a lot more time to tell it