School of Journalism
UNIVERSITY OF MISSOURI-COLUMBIA
UNICOM BANK *
Create Value for a Cost-Per-Point-Oriented Account
Unicom Bank is the oldest bank in the area, and one of the
few independent banks left in Megopolis, one of the top five
markets in the United States. Unicom invests a higher percentage
of its revenues in advertising than its competitors do. The bank
feels this is the only way it can stay competitive and independent
in a market that has seen a plethora of bank takeovers by
large, national bank holding companies that aggressively market
Unicom Bank prides itself on being a local, independent bank
and a responsible member of the community. In fact, in its
advertising, Unicom stresses community involvement, and "we're
your neighbor, not just your bank" is their tag line. The bank's
media mix includes newspaper (about 25% of its media budget),
television (about 40% of its media budget), outdoor (about 15% of
its media budget), and radio (about 10% of its media budget, or
$500,000), and a mix of magazines, promotional events, and
partnerships with local schools (about 10% of its media budget).
This latter 10% of the budget and outdoor Unicom places locally,
but the rest of the advertising budget is placed by a New York
Unicom's creative is handled by a small New York boutique
agency. The bank's television commercials are warm, fuzzy, and
have a deep emotional appeal, and they have won several national
and regional creative awards over the years. The board of
directors and top executives of the bank are in love with their
television commercials because all of their friends at their
country clubs continually compliment them on the soft-sell,
The radio creative consists of slightly modifying the
television sound track. The notion is to make an impact with
television and then hope that people play the TV commercial back
in their heads when they hear the radio.
Unicom's newspaper advertising is dull, common, and
informational: interest rates, checking account information, etc.
It makes little attempt to differentiate Unicom.
Unicom's buying service is a typical buying service. It
assumes television and radio station time is a commodity and buys
accordingly. Cost-per-point (CPP) is all it will hear about. The
buying service has grown substantially over the last several
years by bragging that it can buy cheaper (lower CPPs) than any
other agency and buying service, and seemingly has been able to
deliver on the promise--at least it has that perception, which it
will fight to the death to maintain.
The buyer for Unicom, Sally, is an especially mean-spirited,
nasty, highly competitive negotiator, even for this buying
service. Even though radio is only 10% of Unicom's budget, it is
still a substantial budget for Megopolis. Sally negotiates once a
year for the Unicom business and insists on, and usually gets,
big discounts, often because stations want the prestigious Unicom
business and don't want to be locked out for a year.
The Unicom marketing and advertising people are very
satisfied with their advertising arrangement--they love their
creative and believe their buying service gets them the best
deals possible. In fact, they firmly believe that the combination
of these two elements gives them a major competitive advantage.
However, Unicom's growth has flattened out in the last two
years, and in the get-well year of 2002, even though Unicom
showed growth, it lost market share to three hard-charging
national competitors. Unicom's new CEO is known to be worried
about the slow growth, although nothing has been hinted about
changing its advertising approach.
WPCB-AM is an all-news station, which is ranked eighth in
12+ 6:00 a.m.-12:00 midnight, Monday-Sunday, average-quarter-hour
ratings, sixth 25-54, third in 12+ cume, and second 25-54 in AM
Drive. WPCB-AM's demos are typical of an all-news station: older skew,
suburban, higher income, executives, high percentage of credit
card users and luxury car buyers, etc.
Sally consistently shuts out WPCB-AM from her buys for
several reasons: 1) WPCB-AM's CPPs in the demos are consistently
15-50% higher than competing stations; 2) Sally insists on AM
Drive only, which, according to the way WPCB-AM packages, raises
the CPP even higher; 3) Sally is notorious for being on the take,
and other stations will meet her demands for tickets, TV sets,
VCRs, and computer hardware, whereas WPCB-AM will not. WPCB-AM
and its national sales representative firm have resigned themselves
to not getting any Unicom Bank business because the station will not
meet her demands.
However, there is a sudden ray of hope in the Unicom Bank
cloudy, overcast outlook. WPCB-AM's attractive, single V.P.,
General Manager is having a romantic relationship with the new,
attractive, single CEO of Unicom Bank. During pillow talk, the
general manager has learned that the CEO is worried about the
soft-sell advertising approach, the slowed growth, and the
aggressive, community-oriented approach of a few competitors (the
previous year, one competitor made a highly visible commitment
with the leading television station in the market to sponsor "For
Kids Sake," and received excellent press). The general manager
has gotten a commitment from the CEO of Unicom to listen to a
presentation from the station--a one-hour-long meeting next week.
The general manager of the station believes that sponsorship of
one of several community affairs projects or the station's monthly
Business Breakfasts will appeal to the CEO. None of these are CPP
Sally has heard through the grapevine about the meeting and
is furious. She has told WPCB's national rep that if the station makes the
presentation and sells the bank anything she does not approve of,
she will never spend another dollar on any of the rep's list of
stations for all of her clients (Sally's buying service has a
large number of radio clients). The national rep has conferred with the
station and told WPCB-AM that it doesn't know if Sally is
bluffing or not, but they do know she has carried out such
threats in the past.
The general sales manager of WPCB-AM has called a meeting
with the station's general and local sales manager, three senior account
executives, the marketing director, the promotion director, the manager of
the national rep's local office (who has been in communication with the
President of the rep), and the rep salesperson from the New York office who
calls on Sally. The general sales manager opens the meeting by relating the
above facts and by saying, "We have one week to prepare a presentation to
the CEO of Unicom Bank. Here is what we have to decide in this meeting:
1. Are we going to present something that Sally wouldn't buy
and thus jeopardize our future business and the national rep's
business with other stations?
2. What is our strategy with the CEO going to be?
3. What information do we need?
4. How are we going to create value for the station?
5. What specifically are we going to offer?
6. How much money are we going to ask for?
7. And, most important, how are we going to get demonstrable
results for Unicom Bank?"
Answer the above questions according to what you think WPCB-AM ought to do.
* This case was prepared by Charles Warner