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Bancography | Marketing Research

Bank Marketing Budgets: How Much is Enough?

The Financial Brand pulled the marketing budgets from the FDIC call reports of 256 U.S. banks spanning assets from $250 million up to $175 billion. What did we find? For starters, plenty of banks allocate more for their directors’ expenses than to marketing.

Total # of Banks in Study: 256
Average Asset Size: $2.9 billion
Median Asset Size: $593 million
Biggest by Assets: BB&T ($175.6 billion)
Smallest by Assets: Wedbush ($250.6 million)

Average Marketing Budget: $2.1 million
Median Marketing Budget: $437,000

Average % of Assets Allocated to Marketing: 0.073%
Median % of Assets Allocated to Marketing: 0.066%

Biggest Marketing Budget: BMO Harris ($118.7 million, 0.13% of assets)
Smallest Marketing Budget: Hometown Bank ($54,000, 0.018% of assets)


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Average Marketing Budget Allocated by Asset Tier

Looking at bank marketing budgets along each asset class doesn’t reveal any obvious trends. Banks of all asset sizes tend to allocate roughly the industry average — around 0.073% of assets.

Asset Tier # Median Bank
Marketing Budget
Average Asset %
Allocated to Marketing
Over $10 Billion 10 $13.6 million 0.075%
$1 Billion to $10 Billion 76 $1.28 million 0.072%
$500 Million to $1 Billion 64 $477,500 0.077%
$250 Million to $500 Million 106 $220,000 0.068%

We can draw a few inferences from the data. First, banks between $500 million and $1 billion might allocate proportionately more to marketing than other asset tiers because they are so heavily growth-focused. Once a bank hits $1 billion, there’s a little less pressure and it’s got a bit of a cushion — larger banks are more likely to be the acquirer than the acquired. But getting to that first billion takes hard work and extra marketing muscle. Once a bank reaches “critical mass” — assets north of $1 billion — there start to be some real, meaningful economies of scale. After all, a $1 million marketing budget gives you a lot more leverage and room to maneuver than smaller budgets. When you’ve only got $400,000, you’re going to have to make some pretty significant sacrifices (there may be multiple media channels you’ll have to overlook), and you’ve got to make every penny count. When you’re a small institution, it’s hard generating the ROA you need to devote big sums to marketing. Skyrocketing compliance and regulatory costs are enough to make a serious dent in any small bank’s marketing plans.

( Read More: 5 Things You Should Know About Credit Union Marketing Budgets )

Percentage of Assets Allocated to Marketing: Top 10 Big Spenders

Only one internet/direct bank showed up in our study, but you can quickly see the impact that a branchless model has on the marketing budget: First Internet Bank has to spend at least 2-3 times what everyone else does. When it comes to big spenders, there doesn’t appear to be much correlation between the size of the institution and the relative size of their marketing investment. However, you’ll notice that only one bank in the list below tops $1 billion in assets. Smaller banks have always cried that big banks have an edge. Maybe they feel like they need to dial up the marketing heat to keep up?

Rank Bank Assets Marketing
1 First Internet $737,240,000 $1,824,000 0.247%
2 Community Bank (MO) $289,136,000 $531,000 0.184%
3 Blue Hills $1,210,218,000 $2,141,000 0.177%
4 Rondout $273,025,000 $479,000 0.175%
5 Valley (NE) $339,549,000 $583,000 0.172%
6 Bank of Labor $518,087,000 $881,000 0.170%
7 Salin $780,345,000 $1,306,000 0.167%
8 The Bank Trust (TX) $416,548,000 $651,000 0.156%
9 Fidelity Deposit (PA) $639,886,000 $919,000 0.144%
10 Heartland (MO) $866,913,000 $1,234,000 0.142%

Percentage of Assets Allocated to Marketing: Top 10 Most Stingy

These banks invest between one-fourth and one-fifth what most banks do on marketing. In fact, if you look at the FDIC call reports for many of these stingy spenders, you’ll see that they spend more on their directors than they do on marketing. Granted, there could be some discrepancies with how the data is reported — not every accounts for advertising and marketing dollars the same way — and each market has its own dynamics (level of competition, media costs). But it’s hard to imagine how an institution with more than $2 billion in assets could survive on a paltry marketing budget floating barely above $400,000. Typically a bank that spends $400,000 to $500,000 on marketing has around $750 million in assets, not $2+ billion.

Rank Bank Assets Marketing Budget Ratio
1 MainSource $2,810,094,000 $442,000 0.016%
2 Yakima Federal $1,771,413,000 $324,000 0.018%
3 North Dallas $1,202,084,000 $212,000 0.018%
4 Hometown (AL) $301,622,000 $54,000 0.018%
5 Progress Bank & Trust $523,621,000 $102,000 0.019%
6 Muncy $353,295,000 $71,000 0.020%
7 Independent (TX) $1,942,964,000 $413,000 0.021%
8 Highlands Union $597,106,000 $132,000 0.022%
9 Bank of New England $548,108,000 $123,000 0.022%
10 Lindell $491,354,000 $122,000 0.025%
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Just Right: How Big Should Your Marketing Budget Be?

Two out of every five banks allocate more marketing dollars relative to their assets than the industry average (0.073%). One out of every five allocated more than 0.10% of assets to marketing.


The Financial Brand has frequently recommended that banks looking for healthy growth should allocate roughly 0.10% of their assets to marketing. If you want to see modest growth rates — the kind of numbers any bank can generate — then allocate the same amount to marketing that they do. But if you want to grow at a faster pace, you need to invest more. Instead of investing 0.073% of your current asset size into marketing, think about investing 0.073% of the asset size you want to be.

Example: If your bank has $750 million in assets today but you want to hit $1 billion in the future, your marketing investment should be around 0.073% of the future number — $730,000 — not 0.073% of your asset size ($547,500). Notice that a marketing budget of $730,000 is close to 0.10% of current assets.

Bottom Line: If you want average performance, make an industry average investment in marketing. But if your bank’s strategic plan calls for aggressive growth, you better be prepared to support your plan with the additional marketing necessary to hit the goal. (Of course allowances and adjustments need to be made for a myriad of other factors geographic and competitive factors unique to each financial institution’s situation.)

( Read More: Bank & CU Marketing Budgets: Woes, Worries and The Sweet Spot )

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Top 10 Spenders: $1 to $10 Billion in Assets

Rank $1 Billion to $10 Billion Assets Marketing
1 Blue Hills $1,210,218,000 $2,141,000 0.177%
2 Enterprise $1,831,728,000 $2,578,000 0.141%
3 Landmark (MO) $1,845,901,000 $2,560,000 0.139%
4 Independence (KY) $1,341,643,000 $1,805,000 0.135%
5 Wilshire $2,826,877,000 $3,666,000 0.130%
6 Hills $2,134,336,000 $2,638,000 0.124%
7 Wilson $1,720,450,000 $2,104,000 0.122%
8 Beneficial $4,680,216,000 $5,324,000 0.114%
9 Canadaigua $1,923,286,000 $2,166,000 0.113%
10 Independent (MI) $2,172,438,000 $2,416,000 0.111%

Top 10 Spenders: $500 Million to $1 Billion in Assets

Rank $500 Million to $1 Billion Assets Marketing
1 First Internet $737,240,000 $1,824,000 0.247%
2 Bank of Labor $518,087,000 $881,000 0.170%
3 Salin $780,345,000 $1,306,000 0.167%
4 Fidelity Deposit (PA) $639,886,000 $919,000 0.144%
5 Heartland (MO) $866,913,000 $1,234,000 0.142%
6 Olympia Federal $549,268,000 $748,000 0.136%
7 Nebraskaland $507,988,000 $645,000 0.127%
9 Rosedale Federal $781,388,000 $961,000 0.123%
10 Ouachita $664,161,000 $817,000 0.123%

Top 10 Spenders: $250 to $500 Million in Assets

Rank $250 Million to $500 Million Assets Marketing
1 Community Bank (MO) $289,136,000 $531,000 0.184%
2 Rondout $273,025,000 $479,000 0.175%
3 Valley (NE) $339,549,000 $583,000 0.172%
4 The Bank & Trust (TX) $416,548,000 $651,000 0.156%
5 Richland State $266,702,000 $369,000 0.138%
6 Edgar County $362,534,000 $444,000 0.122%
7 Shamrock $257,167,000 $314,000 0.122%
8 1st Security (WA) $396,044,000 $474,000 0.120%
9 Port Washington $452,741,000 $502,000 0.111%
10 Gibsland $268,521,000 $295,000 0.110%

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  1. why as a % of assets, not of forecast (or at least trailing) revenues?

  2. Jestyn,

    Pretty simple: forecast data isn’t available. Hard to crunch numbers you can’t get your hands on.

    The article does suggest that financial institution’s allocate their marketing budgets based on the asset size they want to be, and not just the level of assets they have today.

  3. Do the budgets include salary/wages or just marketing spend?

  4. Wonder,

    The data almost certainly does not include salaries, benefits, equipment, space and other costs associated with FTEs. Normally marketing budgets are set separate of these figures.

  5. Great overview of peer data. As a point of clarification: First Internet Bank is a direct bank as well as a premier nationwide residential mortgage loan originator. A portion of its marketing spend supports the latter. From a marketing standpoint, First Internet Bank spends more like a national mortgage company than a community bank of comparable asset size.

  6. This is not as useful to me when I do not see what makes up a marketing budget for these banks. As someone stated earlier, is this just spend? For us, marketing includes all of our business development activities (booths, sponsorships). Are these just advertising budgets that don’t include other marketing activities?

    Without knowing how “marketing budget” is defined, this study does not help me evaluate our spending compared to peer.

  7. Would you say these numbers also include sponsorships and contrbutions or mostly advertising, POS?

  8. Tammy, it really depends on how each bank categorizes its expenses. Would it make sense to bundle sponsorships and charitable activities under the “marketing” umbrella. Sure you could definitely argue it from that perspective — it’s outreach intended to influence people’s awareness and perceptions of the brand. But does every bank see it this way? Probably not. And there are probably some marketing VPs who don’t want charitable donations folded into their budgets.

  9. Helen,

    You should take your issue up with regulators. If they required financial institutions to categorize and report advertising/marketing budgets using a consistent set of standards (ala GAAP), it would make this type of analysis much easier. Short of that though, this kind of study is the best you’re going to get. It may not be ideal, but at least it’s (1) a starting point, and (2) a broad study, which should neutralize reporting inconsistencies.

  10. If anyone wants to see this kind of data again in the future, please speak up and leave a comment, because so far all the feedback has been negative. We were just trying to distill some public information that seemed interesting. But perhaps there are too many variables to make it valuable? If everyone agrees that the study isn’t useful, we won’t run it again.

  11. I like the report. Would like more detail to me compare my spending by medium and production.

  12. I definitely want to see more in the future. I have some of the same questions- what is “in” marketing- but I know it is all across the board from posing the “how much marketing” on other listservs. You have to start somewhere.

    For example, we don’t include sponsorships or donations unless there is a specific marketing related purpose to the sponsorship. If it is done as part of our charitable giving it isn’t marketing. It has taken us several years to separate it out.

    It would be nice if there was some level below $250 m as there are still a lot of us out there.

  13. This is great data. I think it would be difficult to get accurate breakdowns of marketing spend except for broad buckets.

  14. This is about 6 months late, but did want to let you know that it is super helpful to see this information. We were looking for benchmarks and it is nice to know what other banks are doing for their budgets! Thank you!

  15. I do find this helpful as well, particularly with the tip to use percentage of assets for the size company you want to be.

    I think it could be helpful, perhaps as a different study to see how banks view sponsorships and also what percentage those make up within the marketing or bank budget.

  16. This is useful information for benchmarking. It may not be a perfect exercise, but it’s good to be able to compare.
    Are we able to compare what other sectors use as benchmarks. I know usually a percentage of revenue as well.

    I agree with Carolyn it would be useful to study how banks view sponsorships and also what percentage those make up within the marketing or bank budget. It would be useful as well to compare this with other sectors and see how it works.

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