Are we ready for the Re-Set World?

As the FTSE bounces back over 5,200, the savings ratio creeps up to the best it has been since late 1993, there is an audible sigh. The worst of the recession is over. By 2010 we will be ‘back to normal’.

I don’t think so. I agree with Professor Goffee, of the London Business School that “It could be that sections of the economy never recover in the way we understand them now. Financial services will not be the same. Consumers will think about value harder.”

The financial services world will never be (nor never should be) the same again. It truly has been Re-Set. And here’s why.

To quote Mervyn King :“The sheer scale of support to the banking sector is breathtaking. In the UK, in the form of direct or guaranteed loans and equity investment, it is not far short of a trillion (that is,one thousand billion) pounds, close to two-thirds of the annual output of the entire economy. To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.”

Not surprisingly, confidence in financial services companies has sunk to a new low as it emerged this month that British consumers even trust the media more than they do the finance industry. Just 7 per cent agreed with the statement “In the current economic climate, I trust the financial services industry to look out for me”, while 60 per cent disagreed. Only 18 per cent of those surveyed said they trusted the financial industry, compared with 34 per cent for the media and 19 per cent for the government – the two sectors traditionally occupying the'bottom rungs of the trust ladde'. Four in 10 added that they no longer had confidence in banks’ marketing messages. (source: DMA Oct 09)

So what is the new Re-Set paradigm for financial services? My personal view is that - there will be retailers who enter the market and put the service back into financial services - who really know how to look after consumers. See O2 money, watch out for Tesco, Boots and Metro Bank. They will all change our relationship with the sector. The new Re-Set world will be about service and experience, not profit and performance.

And consumers will also want reassurance and transparency that they are being treated fairly and the Government will step in and regulate and simplify products – which will mean a brand’s reputation and the social contract they offer with their customers will be critical as a key differentiator.

This Re-Set world should give us all in the sector the opportunity to Re-Start. To think about services and products from the consumers perspective, rather than continuing with the status-quo.

But how many financial services companies are planning for the Re-Set world now?

Joanne Parker
CEO

Is peanut butter and chocolate really the perfect combination?

On Monday Linked In and Twitter announced that they would be errrr... 'Linking In' with the introduction of Twitter updates into the Linked In status bar.

For some reason the two companies have decided to use a peanut butter and chocolate analogy that sounds slightly weird but hey that's silicon valley for you. Tubs of spreads are close to those guys hearts.

But what of the Twitter #In combination? At first it seemed to me a rather unholy alliance, but on reflection it's probably an excellent combo with real obvious value for both parties.



Recently Twitter has definitely been striving to be perceived as more of a business tool than it had been previously. The recently added list feature proved this. By integrating with Linked In this seems like the perfect way to connect and demonstrate Twitter's utility to a huge community of social mediaites on Linked In that have failed to see the point of Twitter up until now.

On the flip side Linked In has suffered the opposite problem. It's been stuck in an enterprise user rut and isn't seen as particularly cool. Activity on Linked In can seem like it moves at a snails pace in comparison to other social platforms, but by integrating Twitter suddenly the platform becomes a realtime bonanza.

Time will tell what the impact will be, but this week's most unlikely alliance could definitely prove a winner.

Crispin Heath
Head of Digital

The rebirth of Twitter as a social utility

At the end of last week Twitter launched lists. Lists allow registrants to create or follow lists of Twitter users that are useful or interesting to them in a more segmented way and without necessarily having to follow those individuals.

In one very carefully calculated move Twitter has managed to filter the noise incredibly successfully. The idea was jumped upon by the early adopters and by Monday morning there were over 6.5 million lists created.

The move by Twitter coincided with the first major newsworthy celebrity defection (or so everyone thought), followed by announcements by sports teams and the entertainment industry that they were asking their stars to either pull out of using the platform or limit their interaction to conversations outside their core job.It would appear that Twitter is moving away from being a media fuelled celeb filled vanity vehicle, towards being a more powerful social utility. It's a method of linking, connecting, researching and discovering, which has always been there, but had been run over by the media bandwagon driven by Ashton Kutcher, Britney Spears and the like.

The move hasn't been without its critics some have said that Twitter should have concentrated more on its core functionality before launching lists. Others (and very influential others) have argued that lists actually exclude those that are not yet power users and therefore hampers potential mass adoption. This is an argument that simply didn't wash with Robert Scoble who argued that social media isn't always about one big love in, but actually sometimes needs to be filtered so that users can find the conversations they are most interested in.

Despite these arguments lists have been siezed upon as a tool by organisations who wish to aggregate content more effectively, notably news organisations which have started to filter and segment vigorously. We're at the peak of the hype cycle with lists at present, but frankly the trough of disillusionment isn't going to be very deep. Twitter has definitely taken a giant leap forward in its battle with its competitors and by all accounts it's not finished yet.

If you're not following lists yet we have a few suggestions for you:

The Teamspirit team
Interesting Financial Services commentary
A list of IFAs that Tweet
Most popular Twitter lists

Crispin Heath
Head of Digital

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

Brands under fire, beware Google Sidewiki

Google quietly released a new social tool this week called Sidewiki Sidewiki is an addition to the Google toolbar, so far, so innocuous. However this could possibly enable the most visible feedback online brands have yet to face.

The Google Sidewiki toolbar allows any user with a Google account to comment, on any page, on any site. That effectively means users have the ability to graffiti corporate sites. Google say they are monitoring comments and have provided a reporting tool if posts are deemed malicious, however if the criticism is constructive, instructive and therefore destructive then the implications are massive.

Over the course of this year there has been a greater and greater demand for brands to listen from consumers, technology companies, agencies, in fact too many voices to list. In a way it's been convenient for companies to ignore it. If it's all going off on Twitter, or Facebook or “some blog” then it's out of sight and therefore out of mind (of course this an absurdity). What Sidewiki does though is bring it to the doorstep and now anyone can graffiti all over your front door. Now it's already been declared dangerous and doomed to fail and simply a way of Google monetising the whole web, but this is a Google beta product and it'll inevitably change and over time integrate Google's other features. And in the meantime the comments are going to start cluttering up the doormat and they're going to be difficult to ignore.

This kind of interwoven peer to peer feedback is the future of the web. It's going to force companies to change the way they operate so once again with gusto. Start listening and start taking heed.

Crispin Heath
Head of Digital

Tooth fairy index anyone?

When I was a kid and my first tooth fell out (actually it was punched out in a bit of a fracas over some space dust but that’s another story) the tooth fairy magically passed by overnight, took the incisor and left a shiny 10 pence.

Fast forward a few years (actually more like 4 decades) and the going rate for that first tooth for my daughter is a mighty £2.00. That’s a massive 2,000% increase or 52% year on year.

Compare that to house prices over the same period: 1,477% (source Nationwide); FTSE All Share: 1,396%. Less a sterling performance more an enamelled one!

But a more important point is that my daughter at 7 struggles to comprehend what that £2.00 will buy. The maths lessons at her primary school still have calculations involving buying cakes for 3p. 3p!!!! When did you last see a cake for 3p? Or 8 Mojos for a penny for that matter. Parents and schools need to get kids to understand how money works and the real prices of things as early as possible or we’ll be stuck with bad financial habits for another generation.

As for me, anyone know how I can access the Tooth Fairy index?

Jim Poulter
Client Services Director

Have you looked at consumer finance advertising recently?

I have and it isn’t very inspiring.

A lot of it is still rate led (even though advertising a rate of 2.80% would have seen as madness not that long ago).

Much of it is just boring.

Take the NatWest ads. The tv ads are about helpful banking and then in press ads they tell us “This year, we’re making £12.2bn available to help the property market.” It’s not wrong. It’s just all rather worthy and hard work.

HSBC ask us to “Realise the retirement you want with the help of our global expertise” with a photo of a lady having a golfing lesson. I’m not sure where the benefit is.

Halifax are more inspiring, encouraging us to save for the special things in life and for life’s lumps and bumps. But it all seems rather everyday.

So what’s missing?

Brands outside of financial services are much more optimistic. They make you smile, they thank-you for their attention. Budweiser are sure “Good times, they’re out there.” Even the rather marvellous Child Poverty work doesn’t lecture us, it gives us inspiring facts to get us involved in their campaign.

In financial services, the ‘meerkat factor’ has wowed and the results are astonishing for comparethemarket who work in a highly commoditised marketplace. I miss the ‘I want to be a slug’ ads from the Pru, or Allied Dunbar’s ‘We won’t make a drama out of a crisis’.

Consumer finance advertising just needs to get more engaging, more entertaining, more emotive, less left brain.

Given the news last week that the debt owed by British consumers has fallen for the first time since records began, it feels like now is the right time to be motivating, not confusing or mundane.

Oh and by the way, I do know that advertising is only a small part of the picture here. It’s about how a brand behaves. But actually I do think advertising is a window into brands and their businesses and what is missing is the desire to inspire.

Jo Parker
CEO

There's no queue at the bank

Having spent a few hours in the bank this month trying to sort out my mortgage something occurred to me. Although a lot of people (including myself) partake in online banking, and telephone banking, the big queue at the bank suggests that you do still need to go into a branch for some financial transactions.

With the power of tweet and other instant microblogging services, we could get updates from them telling us of the progress of the queues. It would certainly be handy for most of us Londoners who can nip out of work knowing we won't be faced with a huge queue at Barclays.

Emma Partridge
Art Director

Do you use LinkedIn and/or Facebook?

It's a question I asked on LinkedIn itself the other day and unsurprisingly unanimously the answer was Linked In for business, Facebook for personal. I expanded and asked if others were using Twitter or Friendfeed or any other social network and again the majority response was I don't have time.

The reason I asked in the first place was I just can't get along with Linked In. I'm a big fan of social networking and in terms of it's educative qualities it's been an enormous addition to my professional development. Twitter has almost completely surplanted my RSS feedreader as a research tool. Friendfeed helps me to understand who influences those that I choose to follow. Facebook keeps me in touch with friends who due to family pressure I don't get to see much and cousins I don't see regularly, you know the score. Delicious and Digg help me to share my bookmarks and content I like.

All of these platforms help me be social and hopefully helpful. They allow me to be myself but also keep on top of business and that's where I part the way with LinkedIn. It's not a social networking site, nothing about it is social. It's about networking, but not the ecademy way, it's more the bad glass of sweet white wine and guard up kind of way. It's not intuitive, it doesn't aid in the sharing of information, in essence it's far too closed.

I concede that it is great at finding professionals and if you are looking for a job, but Twitter and Friendfeed do that as well as everything else and as an added bonus you're likely to understand whether you'll get on with them on personal level as well which for me is just as important.

In my opinion it really needs to step up it's game if it's going to continue to grow, there are rumblings that there is a major overhaul in the planning stage, I just hope it's a significant improvement.

Crispin Heath
Head of Digital

p.s. I did have an amazing response to my question when it was posed on LinkedIn but it still isn't enough. I know, I'm too dogmatic.