Most Banks Waste Marketing Dollars on Channels That Deliver the Weakest ROI
By Jessica Kendall, Contributor at The Financial Brand
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A new report from Cornerstone Advisors reveals a fundamental disconnect in how banks and credit unions invest in marketing. The channels receiving the most budget are not the ones delivering the strongest results.
Paid search and display ads dominate spend. Yet, financial institutions rate email marketing, organic search, and affiliate/partner programs as the most effective. Even more telling, those same high-performing channels are the ones that survey respondents believe are among their most underutilized channels.
This mismatch reflects how marketing decisions are made — driven more by familiarity, scalability, and legacy budgeting practices than by performance data. Combined with weak attribution and measurement limitations, many institutions are effectively optimizing spend without a clear view of outcomes.
Bottom line: The result is a persistent gap between marketing investment and marketing impact. To close this gap, marketing leaders need to rethink how budgets are set, measured, and aligned to growth.
Need to Know:
- Most institutions still base marketing budgets on prior-year spending, not expected performance outcomes. Fifty-six percent of institutions set budgets by adjusting last year’s spending, rather than building from expected returns.
- Banks and credit unions spend ~0.10% of assets on marketing, a figure that has remained stable for a decade.
- Nearly half (46%) of institutions allocate the largest share of budget to paid search, yet email ranks highest for ROI.
- Attribution remains unreliable, with many institutions miscrediting sources or lacking visibility altogether. Thirty-one percent believe they misattribute marketing results more than 25% of the time, and none can fully attribute all outcomes.
- Nearly 6 in 10 executives say core or CRM systems limit ROI measurement.
- Only about one-third of institutions use affiliate/partner marketing, despite high effectiveness ratings.
How Channel Choices Drift Away from Performance
Marketing channel decisions across banking tend to follow a familiar pattern. Investment flows toward channels that are widely used, easy to activate, and capable of absorbing budget at scale. Paid search and display advertising fit that description, which helps explain their dominant share of spend.
But, performance ratings tell a different story. When asked which two marketing channels deliver the most ROI, 48% of respondents put email marketing at the top of the list. In addition, the report asks CMOs to rate each channel on four attributes: cost efficiency, volume potential, customer/lead quality, and scalability. Email marketing garnered the highest overall scores across three of the four attributes, followed by affiliate/partner marketing and organic search.
This aligns with how executives think about marketing effectiveness more broadly. Brand awareness ranks as the most important driver of marketing effectiveness, just ahead of competitive offers. At the same time, volume remains the most commonly cited measure of success.
That combination creates a complicated operating environment. Channels that generate immediate, visible activity tend to attract more budget, while channels that build brand strength or deliver higher-quality customers over time require more deliberate investment.
Key takeaway: Despite strong performance, adoption and investment levels for these channels remain comparatively low. Affiliate marketing is a clear example: a smaller share of institutions use it, yet a meaningful portion of executives identify it as one of their most underleveraged opportunities.
Why Better Marketing Channels Go Underfunded
The underinvestment in higher-performing channels reflects real operational constraints for banks and credit unions. These are not plug-and-play channels. They require different capabilities.
Example: Email marketing depends on data quality, segmentation, and ongoing optimization. Organic search requires long-term content strategy and technical expertise. Affiliate marketing programs involve identifying partners, structuring agreements, and maintaining performance oversight.
By contrast, paid media channels offer immediate deployment. Campaigns can be launched quickly, adjusted frequently, and expanded with additional budget. Activity is visible almost instantly, which makes it easier to justify continued investment — even if performance is inconsistent because there is consistent visibility.
These differences influence where teams focus their energy. Channels that are easier to operationalize tend to receive more consistent funding, while those requiring new capabilities progress more slowly.
Measurement Gaps Shape Investment Decisions
Attribution remains one of the biggest constraints on marketing effectiveness in banking — and is why budgets keep going to channels like paid search.
Nearly 6 in 10 institutions say their core or CRM systems limit their ability to measure marketing ROI. Identity resolution challenges, long conversion cycles, and gaps between online and offline tracking add further friction. The result is an incomplete view of how customers move from initial engagement to funded accounts and long-term relationships.
Even when attribution models are in place, confidence is low. More than 1 in 4 institutions say they do not have reliable attribution at all, while others rely on basic web analytics or channel-reported metrics.
The downstream effects show up quickly. Not a single institution surveyed said it could reliably attribute all key outcomes — including applications, funded accounts, balances, and profitability — back to marketing sources. At the same time, 31% of executives believe they are crediting the wrong source more than a quarter of the time, and another 26% aren’t sure.
That level of uncertainty shapes how budgets are built and adjusted. Channels that appear to perform well continue to receive funding, even when attribution may be overstating their impact. Others that influence earlier stages of the journey often receive less credit and less investment.
Without a reliable way to tie marketing activity to outcomes, marketing teams fall back on precedent and intuition. Budget decisions lean on historical allocations, visible activity, and executive preference because those signals feel more concrete than incomplete data.
Improving attribution changes that dynamic. With clearer visibility into what drives results, institutions can align spend more closely to performance.
From Execution to Growth Leadership
Closing the gap between marketing investment and impact requires changes in how marketing operates within the organization.
Today, marketing is often positioned as an execution function. Campaigns are launched after decisions about products, pricing, and target segments have already been made. In that role, success is measured by activity rather than impact.
The report outlines three shifts that can change that dynamic.
- Take ownership of growth strategy. Instead of managing separate initiatives for acquisition, retention, and cross-sell, leading organizations define a unified approach to growth — one that connects products, audiences, and channels.
- Build stronger data capabilities. Measurement and attribution cannot remain afterthoughts. Institutions that treat marketing data as part of their broader enterprise data strategy are better positioned to track performance and optimize investment.
- Define a core competency. Whether it is analytics, brand development, or customer experience, a clear strength gives marketing a foundation for decision-making and a stronger voice in strategic discussions.
These shifts change how marketing contributes to the business. With clearer ownership of growth strategy, stronger data foundations, and a defined capability, marketing moves from supporting role to strategic driver — one that helps determine where the institution invests and how it grows.
