According to a new report from Nielsen UK, total UK ad spending for banks declined about 10 percent in 2008 to £1.4 billion from 2007.  But brand-building campaigns accounted for more than £138 million – a 6.2 percent increase from the year before – and that spending is expected increase this year as banks recognize the importance of investing in their brand during a downturn.

To help them do that, some banks have turned to NeuroFocus, the global leader in neuromarketing in which Nielsen is a strategic investor, to help test messaging and other concepts to ensure that their advertising is on the mark.

Key findings of the NeuroFocus study:

• Empathy is most important: Consumers want to hear that banks understand their pain. Claims of “sacrifices” and applying “hard work” did not resonate as well.
• Age trumps beauty: Marketing materials featuring older people resonated better than young people.
• Use images that evoke stability: Photos and other images that showcase families, solid structures, “clarity in chaos,” and light in darkness scored best in consumers’ subconscious.
• Blogs work: Blog postings – even those written by parties with a vested interest in the subject – were deemed to be the most effective form of written advocacy among consumers.

“The strongest message consumers want to hear from banks is how much their bank empathizes with their pain.  These are neurological insights that banks cannot afford to ignore right now,” said A.K. Pradeep, CEO of NeuroFocus.

The full study is available from NeuroFocus here.

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.