Scotiabank Is Everywhere

Has years of aggressive marketing paid off for Scotiabank?

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By Cameron Conway

Last Saturday, I was at home watching the Winnipeg Jets play the Chicago Blackhawks. As I happened to pause the game, the camera was focused on the Jets bench. I looked at the coach, and noticed the wall of Scotiabank logos right behind him. Then I realized everyone in the arena had Jets towels with Scotiabank S’s embroidered on them. And I thought to myself, Wow, Scotiabank (TSX: BNS, NYSE:BNS) is really going all out with its marketing. Is it actually paying off?

While it’s expected for major companies to advertise in one way or another, something feels different with Scotiabank. It is the official bank of the NHL, and it has also secured sponsorship/partnership agreements with all Canadian NHL teams except Edmonton. It’s also recently launched the new “Scotiahockey NHL Visa Card” rewards program.

Off ice, CBC’s “Hockey Night in Canada” and “Scotiabank Hockey Tonight,” along with TSN, have the Scotiabank name front and center. And the investment in hockey doesn’t end with the NHL — it also reaches into 4,500 minor hockey teams and leagues through its “Community Hockey Sponsorship Program”. You could say it’s a power play to the cultural heart of the country.

Scotiabank isn’t the first time a company has capitalized on Canadians’ love for hockey as a marketing tool. We’ve seen similar actions with Kraft Hockeyville, Tim Hortons Timbits Hockey and, most recently, Hyundai Hockey Helpers.

Beyond the rink

But Scotiabank has also gone beyond the rink to find ways to entice people. It has also made its name known through the CFL, Canadian Cricket Team, the Giller Prize, the Toronto Symphony, and even CBC’s Dragons’ Den.

Now, it didn’t start with hockey. I believe the launching point of the marketing marathon we see in action today can be traced back to a 2007 partnership with Cineplex (TSX:CGX), a partnership that unleashed the SCENE loyalty program (and Visa Card) and brought about the re-branding of several theaters as “Scotiabank Theaters”. It also added Scotiabank commercials as a pre-show to the movie trailers (commercials before we can watch the commercials!) — an opportunity to showcase its services to people who couldn’t fast-forward or change the channel.

What’s the payoff?

As illustrated below, between Cineplex, the CFL, and now the NHL, Scotiabank has taken a huge leap with its advertising dollars over the past 10 years.

Scotiabank

2013 (Jan-July)

2012

2007

2002

Advertising and promotion (millions)

$247

$303

$193

$105

It would seem that that money has been well spent, whether you measure growth through profits or brick-and-mortar share or employee head count. Here’s a picture of the company’s 10-year growth:

 

2012

2002

Net income (million)

$6,466

$1,862

Earnings per share

$5.31

$1.68

Employees

81,497

44,633

Branches/offices

3,123

1,847

Of course, not all of that growth has come from marketing alone — acquisitions and expansion outside Canada have played big parts — it has played a pivotal role in the numbers.

Taking a conclusion to the bank

In an age of DVR-fuelled commercial skipping and unending Internet advertising, Scotiabank has made smart investments to make sure Canadians know who it is and what it offers.

Personally, before this marketing blitz I only knew it as “that bank in the rundown strip next to 7-Eleven”. Today, I see a company that is committed to grow (and reward its investors), a company not content to sit on the bottom half of the “Big 5”.

We’re talking about banking, after, all, so this is a long-term investment that’s without the fireworks you’ll find in, say, the gold sector or BlackBerry-style roller-coaster rides. But this is a company showing a real willingness to stay relevant in the wandering eyes of the consumer.

Though Scotia and the rest of the Canadian banks are solid businesses, they weren’t good enough to make the cut for our special FREE report “Buy These 5 Canadian Companies Instead of Following a Flawed Piece of Advice”.  Click here now to find out more about all 5, one of which was recently taken out at a big premium.

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Fool contributor Cameron Conway does not own shares of any companies mentioned.  The Motley Fool has no positions in the stocks mentioned above at this time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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