What the FSA should (and shouldn’t) do next…

Recent reports told us that the savings ratio jumped in the second quarter of this year to 5.9%, the highest it’s been since late 1993. The figures are a sharp turnaround from the first quarter of 2008 when the savings ratio went negative for the first time. We’re even apparently saving more than the Japanese, for the first time in 30 years, and they are famously cautious as a nation.

And let’s be honest this isn’t being driven by attractive savings rates is it? According to Bank of England figures, the average cash ISA paid interest of just 0.41% in August, a tenth of the level a year ago. Consumers have also been reducing their unsecured debt at the fastest rate since records were first kept in 1993, repaying £300m a month.

Predictions are that the savings ratio could go even higher, into double digits (in the last recession it was 12%) and the UK is still below its’ long-run average of 8%.

All good news, on the face of it anyway.

But what I was mulling over as I was waiting for my flight back from Edinburgh yesterday, was this.

Surely we should be thinking about how we move the nations’ relationship with money away from boom and bust? Are we happy that we only save as a country when our financial system goes into meltdown and we are worried we are going to lose our jobs? Just as the Labour party looked to move the economy away from boom and bust, shouldn’t we be doing the same with saving and lending behaviours as well?

So this is what I think the FSA should do next.
They should do a consumer campaign now about how much people are saving to reinforce the behaviour and appeal to our herd mentality (read Nudge for more!). Make people feel like they are missing out if they’re not. And they should keep reinforcing it over time.

So what they shouldn’t do, is a one-off big bang campaign. And it should certainly not be advertising led. It should employ the best in brand engagement communications from social media to getting key influencers talking on their behalf. They should make saving the next cool. (Oh and by the way, if the FSA read this, I know a great agency that would do a great job on this, just call 020 7360 7878 or tweet me @joteam)

Jo Parker
CEO

What is the future of paid for content?

It was reported this week that the economic downturn has dramatically hastened people to switch their media purchasing behaviour. In place of paid for paper and magazine purchases people are turning to online news for their fix begging the question, what is the future of paid for content?

The print media is going through a rather protracted period of angst around the subject of their long term survival and how best to extract value from the original content they produce. As Nick Crocker pointed out last week in Mashable there is a lot the print media has to learn from the music industry. The printed media industry is increasingly sticking to their guns, becoming more litigious over the years and without (up until recently) really shaping or engaging with the future production and distribution models of paid for content, in much the same way as the music industry has for the past decade or so. Their failure has been in identifying what is of greatest value to readers. It is conveniently forgotten that shortly after Radiohead released 'In Rainbows' as part of a 'pay as much as you want' model, that they followed up with a retail release of the album through XL Recordings and have gone on to sell over a million copies worldwide. This was a brilliant piece of marketing and PR, backed up with sound commercial sense, an innovative model that should be a bench mark for the thinking around the packaging of content.

If the traditional media are to have similar successes they need to be similarly innovative. The media moguls - led by Rupert Murdoch of course - have been increasingly looking at ‘paid for’ as the new way. However some of the echoes of the music industry have been heard in recent days with Murdoch decrying search engines and in particular Google for stealing News Corps' content. This sounds more like a man fiddling while Rome burns than one that’s engaging with the new world. The reality is that over the past few years the news industry has got rid of highly qualified, quality journalists and replaced them with syndicated content and bulked out lifestyle pieces. That has resulted in original content being commoditised and in the process hugely devalued.

The industry does appear to be embracing Murdoch's idea of pay walls based along segmented lines. It seems like a good experiment and should tell the industry a lot about their customers' habits. The trick will be not to introduce it on a blanket basis and thereby alienate the whole market in one fell swoop. If that happens people will switch off and find an alternative. It's never been easier to switch allegiance, so the industry needs to tread carefully.

Crispin Heath
Head of Digital

A statement about my pension .... or my provider?

This week I got my pension statement, detailing my family's projected quality of life post-work. The standard low, medium and high projections were there as always, alerting me as to whether I can look forward to a cup, bowl or full plate (ooo!) of flavoursome gruel in my dotage.

Given the past year and the stock-market's nose-dive, expectations were not high. My level of interests were high, however, as my pension is the primary mainstay of my standard of living from retirement to pearly gates.

So what information does the provider I have entrusted with this important task give me? A standard letter telling me this is my bi-annual statement (I knew that) and a lovely statement with standard projections, confirming the decline in my pension (I guessed that). Nothing else. Nada. Zip. Same letter (apart from the date) as I got during boom time in fact.

I had a hundred questions. How much of the drop in my pension was down to poor provider performance (say, in relation to benchmarks) and how much down to markets? Were there elements of the underlying funds that were performing fourth quartile and I should ditch?

Frankly, a little added value from my learned provider would have been appreciated. What was my learned provider's view on the next six months? Their view on fund classes? Of changes in legislation and taxation that could benefit me. What about an outbound phone call asking me if I have any questions. I just feel they are taking the money sometimes. They are charging me after all. I've had to change providers over the years and, unfortunately, I can report that the same experience is meted out by all the household name providers I've been with.

Research (and common sense) shows that the receipt of statements has a direct impact on perceptions of the provider's brand (and from there my likelihood to recommend them or buy other products from them). Unhappy experiences we also relate to friends and relatives, passing on our perceptions. Wouldn't even cost much, if that's the barrier that's put up.

Pension statements are often the only direct communication brands have with their pension customers, so isn't it an opportunity to give a little thought to?

Oh yes, I'm changing providers in the next two months, did I tell you?.

Mark Hollander
Client Services Director

Do you see, Grasshopper?

I was saddened to hear earlier this year of the death of one of my childhood heroes - David Caradine. To my sons he will be remembered for playing Bill in Tarantino’s Kill Bill, but to me Caradine will forever be Kwai Chang Caine from the classic TV series Kung Fu.

Like thousands of teenage boys in the mid 70’s watching Kung Fu was the TV highlight of the week. I used to daydream of being able to floor Philip Hughes or Gareth Penman (the school bullies) with the same ease that Cain despatched the unscrupulous gold prospector or corrupt sheriff.

Although the short-lived fight scenes in Kung Fu were always good value, my favourite bits of the show were Caine’s flashbacks to his time in the Shaolin monastery, where Master Po would dispense liberal amounts of Confusion wisdom to ‘Grasshopper’, Po’s nickname for Caine.

For old time’s sake I watched an episode on a re-mastered DVD. A couple of things surprised me; firstly how slow the fight scenes were compared to today’s martial arts films, and secondly how interesting and authentic the ‘wisdom’ actually was. In one particular episode ‘Dark Angel’, Master Po tells Cain “The present is rooted in the past. It is through these roots we draw nourishment and strength.”

What’s all this got to do with advertising? Recently a freelance digital designer was trying to convince me that a blue square was an idea. I said it wasn’t. He disagreed and tried to convince me otherwise explaining how the colour and shape could dominate takeovers and expandables and ‘carry the message’. What message? I asked.

Professionally my ‘roots’ in advertising were from a time when there were no Macs, photo libraries or You Tube. An idea had to be robust enough to stand up to interrogation without all the extra ‘loving-up’ modern technology can add. A good idea has always drawn nourishment and strength from within itself, its own depth, ingenuity or novelty. I’m not one of those creatives who bemoan technology; I love it. But let’s get honest about what is an idea and what isn’t. And when it ‘isn’t’ let’s not dress it up in digital king’s clothes.

Later on in the episode Dark Angel Master Po asks Caine “What is a tree without roots?” I’d say it’s a bit like a concept masquerading as an idea only to be blown over by the slightest intellectual interrogation.

Geoff Turner
Creative Director