Financial services companies, everyone is talking about you. You know that. But lately, the drumbeats are getting louder for you to starting talking for yourself.
We know that you’ve had any number of preoccupations—serious and steep revenue declines cascading into budget cutbacks, lay-offs and business reorganizations. But it’s been a year since Bear Stearns and six months since Lehman Brothers, plenty of time for surveyed investors and pundits to reach a consensus: Financial services companies need to be heard from.
Consider the commentary from the last few weeks alone.
"Out of sight can mean out of business," according to Nielsen IAG, which tracked a 13%-plus decline in year-over-year ad spending on financial services and insurance from 2008 to 2007. Spending dropped 23%-plus in the fourth quarter alone.
Citing the data shown in the chart below, a March 19 report from Nielsen links reduced spending to reduced confidence in an organization.
Eight percent of Americans today have full confidence in banks and financial services companies compared to the 31% confidence level expressed as recently as 2006. That’s according to a consumer poll sponsored by Waggener Edstrom Worldwide (WE)/RT Strategies and reported on March 20. Other findings:
- 44% said they had heard something from the industry but felt more negative after hearing it. The survey sponsors said this suggests “that media coverage or advertising is shaping public opinion more than direct communication from the industry.”
- 11% said they’d heard something from the industry and felt better about the industry after hearing it. The sponsors says this suggests “that when there is authentic and credible communication, it positively influences widely held opinions about the industry overall.”
- 38% said they’d heard nothing directly from the industry at all.
Then there's the March 25 commentary from Steve Cone, now with Epsilon but whose resume includes senior marketing roles at Citigroup, American Express and Fidelity.
“The financial services industry has listened to the constant media yapping about how TARP participants should not market themselves anymore or pay bonuses to anyone, and even non-TARP concerns have been scared into silence,” Cone writes in a DMNews post. Cone goes on to recommend a six-step plan of attack for thawing what he considers financial companies’ communications numbness.
To be sure, it’s the rare company right now that has the appetite and wherewithal to launch a multimillion dollar advertising campaign like what Cone has been associated with. (One notable exception is Fidelity with its launch of a Guide to Personal Savings investor education program and television, print, online and outdoor brand advertising campaign. For more information, see the March 10 Investment News article.)
And, given the environment, some apprehension is understandable. It is possible to mis-step, as illustrated by research announced this week regarding consumer attitudes toward corporate sponsorships. Of 13 categories tested, banks and investment firms were the most likely to inspire "Less" confidence as a corporate sponsor, according to a Performance Research study.
If you’re responsible for digital strategy at your company, you may think that agitating for an advertising spend is beyond the scope of your duties. But this is a prime opportunity to lead by opening some purseholders' eyes about what can be done—indeed, what others online are doing—and how efficiently.
The company that doesn’t have the funds for a traditional media-based ad blitz doesn’t have an excuse. Banner ads, pay-per-click, online sponsorships, social media, search engine-optimized press releases and whitepapers all have potential for mutual fund companies, ETF providers and other money managers to use to start speaking up for themselves. The marketplace is saying it’s time.