45 Fremont Street
San Francisco, California 94105
Telephone: (415) 777-8389
Fax: (415) 597-2171
Web site: www.barclaysglobal.com
Barclays Global Investors (BGI), a subsidiary of the United Kingdom's Barclays PLC, was a little-known mutual-fund provider in the United States when in 1999 it developed a new investment product called iShares. It was essentially an index mutual fund that could be bought and sold like shares of stock. Such funds held shares of stock in every company listed on a particular index in order to enjoy the growth of the entire group, the winners more than offsetting the losers. It was not imaginative investing, but over time it proved to be a worthwhile strategy. Making the index funds tradable was an innovation, but given the abundance of mutual funds competing for investment dollars and BGI's limited marketing budget, it was difficult to bring iShares to the attention of investors. In 2004 BGI released the "New School" campaign, which targeted the top ranks of investment advisers rather than the general investing public.
The "New School" campaign consisted mostly of television spots and print ads. Airtime was limited to the high-profile financial cable channels CNBC and Bloomberg. Print ads were run in prestigious publications such as the Wall Street Journal and Barron's. The less-than-$5 million campaign ran from January 2004 through August 2004. The target of the advertising was younger financial advisers who were willing to entertain new ideas in investment. Many of the television spots depicted a financial adviser who, having decided he was ready to embrace a "new school" of thought and action, debated his mirror image, who was stuck in the past.
The "New School" campaign significantly improved awareness of iShares among financial advisers and greatly increased investments in iShares. During the course of the campaign, Barclays became the third-best-selling fund family. The campaign also won a pair of prestigious awards: a Midas and an EFFIE.
BGI's U.S. predecessor, a Wells Fargo Bank unit, was a pioneer of the index fund—a mutual fund that mirrored a market index such as the S&P 500 (a list of the top 500 U.S. corporations ranked by their stock value). By holding shares in all companies of an index in proportion to their worth, an index fund achieved the same growth as the entire index. It was a passive form of investing but produced steady results and became a popular investment vehicle. In 1999 BGI unveiled a new index-investment product, iShares, but instead of taking the form of a mutual fund iShares were exchange-traded funds, which could be bought or sold just like shares of stock, even though they represented a large bundle of stocks. In addition to containing stocks, iShares funds would also
be developed to collect baskets of bonds, currencies, and commodities.
BGI began marketing iShares in 2000 with a $10 million campaign developed by the ad agency Saatachi & Saatchi, San Francisco; it focused on wealthier, more sophisticated investors, taking what Adweek magazine's Justin M. Norton called a "buttoned-down approach." As BGI struggled to establish iShares in the marketplace, Saatchi closed its San Francisco office, and BGI's advertising account was...