At a time when financial institutions are pulling back on their advertising, a new study from Nielsen IAG shows that consumer confidence in the long-term health of these companies is dramatically influenced by advertising and marketing efforts.
When asked about their own banks, insurance companies and investment firms, 55% of respondents who said they had seen more advertising for their financial institution reported having “complete confidence” in the financial health and soundness of their financial company and only 18% said they had “little or no confidence” in their company. However, among those who said they had seen less advertising, only 18% had “complete confidence” in their financial company and 45% said they had “little or no confidence” in their company. Overall, a minority of respondents said they had “Complete Confidence” in their financial institutions.
Watch Nielsen’s Alan Gould, Richard Khaleel and James Russo discuss the impact of financial advertising on consumer confidence.
“This research shows that ‘out of sight’ can mean ‘out of business,’” said Richard Khaleel, EVP of Nielsen IAG’s Financial practice. “The current economic climate makes it more important than ever for financial institutions to bolster confidence among their clients and this study clearly demonstrates the link between advertising and confidence levels. With constant scrutiny on the industry it’s clear that taking control of the message in advertising and press can make all the difference for a brand.”
Reduced Spending Meets Lack Of Confidence
The study comes as data show year to year reductions in advertising expenditures in the financial services and insurance categories. Year over year ad spending on financial services and insurance was down 13.4% in 2008 compared to 2007. The drop off was even sharper (-23.3%) for the 4th Quarter of 2008 vs. the same period in 2007.
When asked what factors would increase confidence in the safety and soundness of their financial institution, respondents cited:
- Seeing regular advertising for that institution (25%)
- Receiving regular mail or email offers from that institution (25%)
- Regularly seeing internet offers/advertising from that institution (21%)
- Reading positive stories in the press about that institution (44%)
For more detail, download the complete press release.
I suspect this also demonstrates the value of focus. There have been a lot of ads out there which address the “soundness” of the banks. I wonder too if these institutions are at the same time ramping up their PR which may also affect the results.
Nonetheless, I agree that out of sight = out of mind which ultimately can mean diminished business. This is especially true at times like this where there is more competition for the customer’s business.
[...] by Nielsen AIG found that consumer confidence in the long-term health of financial companies is dramatically [...]
[...] (read more) [...]
With the financial industry in a constant state of change, it is vital that we reach out to our clients and referral relationship partners almost daily. Whether it is direct mail, TV, social media, blogs, or phone – just letting people know that we are committed to staying in the game can be enough to gain that confidence we need.
Companies don’t necessarily have to spend more money on advertising to reach their clients. A simple blog with a few updated posts a week would bring that level of humanity and understanding that clients are looking to connect with.
[...] Details from the study, including charts and a video of Richard Khaleel, EVP of Nielsen IAG’s Financial practice, are available at Nielsen Wire: http://blog.nielsen.com/nielsenwire/nielsen-news/financial-company-ads-out-of-sight-out-of-business. [...]
[...] didn’t need a new Nielsen study to tell me that a financial institution can improve customer confidence through advertising. It [...]
[...] would increase the confidence of only 25 percent. ( For more info on the Nielsen study go to http://blog.nielsen.com/nielsenwire/nielsen-news/financial-company-ads-out-of-sight-out-of-business [...]
[...] would increase the confidence of only 25 percent. ( For more info on the Nielsen study go to http://blog.nielsen.com/nielsenwire/nielsen-news/financial-company-ads-out-of-sight-out-of-business [...]
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