Toronto-Dominion Bank is shooting for the bank marketing big leagues, with a massive U.S. advertising budget that will make it one of the most prominent financial marketers in the United States.
Despite its aggressive expansion into the U.S. market, the TD brand is still far from a household name in that country.
"You may not know us yet," the bank admits in a new U.S. TV commercial, which shows Americans watching curiously while a crane raises a TD logo over the downtown of a generic city.
But the bank hopes a U$150-million advertising budget will make a big splash and boost its brand awareness.
That dwarfs the C$28-million TD spent on advertising in Canada in 2004, according to Nielsen Media Research.
"There aren't a lot of banks that spend that kind of money on advertising," said Walt Albro, senior associate editor of ABA Bank Marketing Magazine, which is published by the American Bankers Association.
"That would appear to be fairly significant spending -- especially if they keep it going over time, not just for a few months."
TD launched the first part of a three-tiered ad campaign yesterday, a U$25-million brand-building effort designed to introduce the brand in northeastern states where it is expanding.
Next week, TD Ameritrade will introduce its first major ad initiative since Ameritrade Holding Corp. shareholders approved a merger with TD Waterhouse in January, forming one of the world's largest discount brokers. The final piece is slated for May, when TD Banknorth, TD's Portland, Me.-based retail bank, will unveil a new branding campaign.
Collectively, TD's annual U.S. ad expenditures will be more than five times the amount it spends in Canada -- a testament, the bank claims, to how committed it is to its U.S. growth strategy.
"It certainly is bigger than you would normally see in Canada because of the cost of buying media in Canada and the number of people you reach," said Dom Mercuri, TD's chief marketing officer. "But those are the numbers we felt we needed to get a reasonable impression in the markets that we're going to serve."
Because the on-line brokerage business is national in scope, the TD Ameritrade campaign will account for most of the budget: likely in the $100-million range, Mr. Mercuri confirmed. TD will not bear the entire expense because it owns less than 40 per cent of Ameritrade.
Mr. Mercuri said the top three or four financial advertisers in the U.S. market earmark about U$150-million a year for ad expenses, and said TD "would be in that range."
The initial brand campaign launched yesterday with a TV commercial and print ads in 50 daily newspapers including The Wall Street Journal and The New York Times. Through references to the bank's 150-year history and images of the bank's logo atop a corporate tower, the commercial attempts to show that TD is a reliable, established bank, even if most U.S. consumers haven't heard of it.
"This is a fairly major salvo to introduce TD Bank Financial Group into the U.S. market," said John Boniface, president of Foote Cone & Belding Canada Ltd., which produced the brand campaign.
TD gained a foothold in the U.S. two summers ago, when it announced it was acquiring Banknorth for C$5-billion. Since then, it has purchased a pair of New Jersey banks: Hudson United Bancorp., for U$1.9-billion, and Interchange Financial Services Corp.
TD has arguably the most aggressive marketing culture of the Big Six Canadian banks, in large part because of its 1999 purchase of Canada Trust. Canada Trust lacked the scale of its banking peers, and used innovative marketing to acquire new customers. "We don't look at marketing as an expense," Mr. Mercuri said. "It's in our DNA.
TD's ad budget is believed to be among the largest ever for a Canadian company in the U.S. market.
At the height of the technology boom, Nortel Networks Corp. launched a major global campaign featuring celebrities such as hockey star Joe Nieuwendyk and former astronaut Buzz Aldrin. But reports at the time pegged Nortel's annual ad budget at less than $100-million.
Financial Post, Barbara Shecter, with files from Duncan Mavin, 18 April 2006
Toronto-Dominion Bank is backing a multi-billion-dollar U.S. expansion with a US$25-million advertising push to promote its banking, brokerage and investment businesses.
Ads will appear in more than 50 daily newspapers, including The Wall Street Journal, The New York Times and USA Today beginning on Thursday, as well as in regional editions of such magazines as Forbes, Fortune and Barron's.
There are also 30-second television spots that will air over the next three months in TD's northeastern U.S. retail stronghold, which includes New York, New Jersey, Pennsylvania, Connecticut, Massachusetts, Maine, New Hampshire and Vermont.
The promotion is intended to reach out to potential clients and investors in the United States by promoting TD's size and capabilities, said Dominic Mercuri, senior vice-president and chief marketing officer at TD.
"We have the physical assets," he said. "Now we need to continue to grow the brand and aggressively attract new customers to the bank and the discount brokerage operations."
TD was put on the U.S. map in March, 2005, with the US$4-billion purchase of a 51% stake in Maine-based retail bank Banknorth.
The U.S. presence of the Toronto-based bank was bolstered by last summer's merger of its discount brokerage TD Waterhouse with Ameritrade, and the purchase of retail bank Hudson United by TD Banknorth.
Last week, TD Banknorth agreed to pay a further US$480.6-million to acquire a New Jersey-based bank that pushed its presence in that state to 130 branches from 102. TD Banknorth is now New Jersey's ninth-largest bank.
TD is neck-and-neck with Canadian rival Bank of Nova Scotia for the final spot in the top 10 largest banks by market capitalization in North America.
In 2005, acquisitions boosted TD's U.S. market capitalization to US$6.7-billion. TD's market cap was $45.5-billion yesterday.
Ed Clark, TD's chief executive, is one year into a five-year plan to increase TD Banknorth's market capitalization to between US$10-billion and US$12-billion. One or two acquisitions are expected each year.
The advertising push is timed to coincide with the rebranding of recently acquired retail bank Hudson United bank branches as TD Banknorth branches, and the renaming of the combined discount brokerages as TD Ameritrade, Mr. Mercuri said.
The TV ad shows well-heeled people watching in awe as TD's signature green sign is hoisted by crane to the top of a skyscraper. The ads reference the key operations of TD Bank in the United States, including personal and commercial bank TD Banknorth, TD Securities, and TD Ameritrade.
The multi-million marketing spending is in addition to the budgets of each individual unit of the Toronto-based bank. When combined with those budgets, the spending exceeds that of top-tier U.S. banks, Mr. Mercuri said.
TD is not totally new to advertising in the U.S. -- albeit on a much smaller scale -- and its experience has not all been good.
Before the merger with Ameritrade, TD Waterhouse was sued by rival Charles Schwab Corp. over claims TD was unfairly portraying Schwab by lumping it in with more expensive brokers such as Merrill Lynch & Co.
The companies ultimately settled out of court, with TD required to apologize to Schwab and to cease airing the offending ads which featured actor Sam Waterston, the star of TV's Law and Order.
