Financial Services Ad Spending Drops 10% in 2008
Nielsen just released its ad spending data comparing the first three quarters of 2008 to 2007. In the financial industry, advertisers have already made significant cuts, with presumably more to come in 2009.
| Company | Ad Spending (in millions) |
% | |
|---|---|---|---|
| 2007 | 2008 | ||
| Experian | $273 | $297 | 8.70% |
| Visa | $274 | $277 | 0.95% |
| Bank of America | $383 | $268 | -29.95% |
| American Express | $254 | $236 | -7.37% |
| JPMorgan Chase | $256 | $211 | -17.62% |
| Citigroup | $277 | $204 | -26.48% |
| Capital One | $221 | $175 | -20.78% |
| E-Trade | $133 | $165 | 24.50% |
| Mastercard | $173 | $162 | -5.82% |
| Scottrade | $90 | $153 | 69.17% |
A sharp decrease in advertising spending by mortgage and loan sectors led a 10% slide in spending across the entire financial services industry so far this year. Mortgage and loan companies have spent 62% less — or $778 million – on advertising during the first three quarters of 2008, compared with the same time period last year.
Overall, ad spending by financial services companies dropped from $5.9 billion in Q1-Q3 2007 to $5.3 billion through September of this year. (Note: Nielsen’s data excludes outdoor and B2B magazine ad spending.)
Traditional investment firms and mutual funds are increasing their budgets modestly — about 4-5%. Meanwhile, online investment firms are growing their budgets by almost 16% collectively, with some like E-Trade upping their budgets by 25%.
Lenders of all sorts — but especially mortgage companies — are slashing ad spending by nearly two-thirds.
Despite the struggling economy, some sectors of the financial services industry are boosting their ad budgets.
| Sector | Ad Spending (in millions) |
% | |
|---|---|---|---|
| 2007 | 2008 | ||
| Investment services | $1,192 | $1,239 | 3.86% |
| Credit cards | $1,244 | $1,235 | -0.72% |
| Banking | $971 | $946 | -2.65% |
| Online credit services | $368 | $422 | 14.87% |
| Online fnancial services | $305 | $353 | 15.72% |
| Credit services | $156 | $218 | 40.00% |
| Mutual funds | $174 | $181 | 4.17% |
| Mortgage services | $423 | $156 | -63.01% |
| General lending | $475 | $156 | -67.43% |
| Online lending | $267 | $94 | -64.97% |
Source: The Nielsen Company
This article © 2012 by The Financial Brand and may not be reproduced.
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I believe these budgetary struggles financial institutions are having (as manifested through the reduced spending) is good for the industry. It’s the tough situation they NEED in order to break free from their over-reliance on traditional media–the media that they know and are comfortable with. I think it’s high time they get outside those comfort zones and learn to harness and embrace more effective strategies such as word of mouth marketing.