George Hollister
About half of the country’s largest retail banks spent more on advertising in the first quarter of this year than they did last year. And about half spent less.
Reporting by Matthew Monk in this US Banker post outlines regulatory filings of the country’s largest retail-heavy banks ($50 billion+ in assets) that show that 11 of them have spent more year-over-year in Q1, and 11 have spent less.
Who’s right and what approach should my bank take?
With regulation-driven fee changes and other turmoil in the financial markets, many institutions are focusing on stealing business from rivals. And some are putting their advertising budgets behind the effort. Two banks in this group, Huntington and M&T Bank have made it clear that they’re focused on gaining market share and, not coincidentally, were in the group spending more year over year. Huntington led the group with a 51 percent increase in year-over-year spend.
Huntington, on the surface, had good results to show for their efforts, adding checking accounts for 67,000 more households and increasing consumer checking revenue by 9%.
But not all banks are in the position to increase spending. If you’re in that category, it’s all about doing more with less. After all, our management wants us to cut costs AND grow revenue, right?
You can do both.
Shifting budget to analytics and finely targeted communications using the most cost-effective channels can maximize impact from a constant or reduced budget. As Monk puts it “…targeted advertising approaches can be as effective as stadium-naming deals and television ads.”
Multichannel marketing campaigns, crafted wisely, can produce better results for the dollar spent either by driving immediate action, or as part of an orchestrated longer term drip nurturing process. Work with our clients has shown increased effectiveness of multi-channel, multi-wave campaigns over single channel campaigns on a consistent basis. And it’s trackable.
In today’s marketing environment, we can’t afford to be John Wanamaker. Wanamaker, founder of the store bearing his name, is remembered in the advertising business for the quote “Half my advertising is wasted, I just don’t know which half.” Well-targeted marketing with the right media mix can help reduce the unknown.
You probably still need some brand building media advertising…after all, strong brand advertising conveys the strength of the bank to both customers and prospects, essential in these turbulent financial times. But shifting some of that budget to more targeted approaches (and the analytics to support them) can yield impressive gains.
Once that’s done, focus the direct marketing budget on your best customers and prospects—cut your direct mailing volumes in half (or more), allocate the right portion of the budget to digital channels, and get greater results through better targeting for the same (or reduced) spend.
About the Author:
George Hollister is Practice Leader with SIGMA Marketing Group, with a special focus on Financial Services and B2B Companies. Connect with George on LinkedIn or follow him on Twitter.
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I agree with this article when it says that you can cut marketing expenditures and increase revenue. How? Utilizing digital analytic tools and digital channels will allow you to make an informed decision regarding future marketing opportunities. I would start with Paid Search. Are you doing it? Are you reaching your target CPA? Odds are is that your ad copy or landing pages can be changed to increase your CTR, Value Score, and PageRank. Paid Search is just one channel in an integrated marketing strategy but if you want a cost efficient, revenue maximizing marketing strategy start with digital technologies and work your way to the more traditional channels.
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