Financial Services Advertising Spending Increasing
Financial services broke the top five in 2002, with a 2 percent increase in spending to reach a $5.9 billion total. USAToday reports that spending in this category topped $6.7 billion, with a 12 percent jump in spending in 2003 and jumped further in 2004, to 16 percent, to reach $7.8 billion in spending. It ranks behind domestic and foreign auto brands now.
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The jump in financial services ad spending is being attributed to the competition to sell investment services and retirement planning to aging baby boomers. Gary Soldow said in USAToday, “This spending increase is not at all surprising. The issue of retirement is looming in major proportions as the first of the baby boomers turn 60.” Soldow is a marketing professor at Baruch College’s Zicklin School of Business.
Consumers are seeing four times more advertising than 10 years ago, Thomas Cline, a merketing professor at St. Vincent College, told USAToday. Financial-services marketers “are saying we’re going to spend what everyone else spends because there is so much clutter out there. Advertisers almost feel like they are in an arms race to keep pace.”
Cline continued, “Money is money, whether its Charles Schwab or Merrill Lynch. There aren’t any distinctive attributes for these companies. What tips the balance is brand awareness.”
A new report by the Wall Street Journal shows larger, more popular web sites, such as AOL, MSN, and Yahoo, are seeing the advertisements shown on their front pages sold out, sometimes up to 18 months in advance. MSNBC reports that marketers are shifting dollars previously spent on television and print media to the Internet. With the backlog, Internet advertising space is being sold for 2006, using a process similar to the selling of network television spots.
The demand in Internet advertising spending is causing larger rate increases, according to the Wall Street Journal. Yahoo reported double-digit price increases last month for their third quarter bookings. AOL said some ad units have increased as much as 20 percent since the beginning of the year.
Non-profit organizations are also taking advantage of Internet advertising. Organizations, such as the American Red Cross and the United Way, are advertising on large sites, such as CNN.com, and smaller private blogs, personal pages, and resource web pages to generate revenue. These organizations are augmenting their direct donations with their Internet advertisement and sustaining the public interest for their humanitarian efforts. They are also increasing awareness for their on-going disaster relief efforts.
“There are [a] lot of competing messages in the market. It’s very important that we have a clear message, and we will continue to reinforce the key messages,” Carter Franke, chief marketing officer of Chase Card Services, said in USAToday.