Financial services advertising in the first quarter was $205 million, a 23% decrease from the first quarter of 2002, according to Competitrack, a New York advertising tracking company for the financial services industry. And from the fourth quarter of 2002, spending declined 7%.
"We are seeing many advertisers who have been historically strong spenders in the category, such as Fidelity Investments, Janus and TD Waterhouse, pull back their spending by as much as 90% compared to the first quarter of 2002," said Melanie Szlucha, senior account manager for Competitrack. "Those who have remained active are communicating they can provide consistent long-term performance, as well as emphasizing their stability as an investment firm."
It would appear that firms in the financial services sector are being much more selective as to where they place their advertising dollars, opting for the most bang for the buck, so to speak, and ridding themselves of peripheral sponsorships or types of advertising that are simply no longer cost-effective, Szlucha added.
Fidelity and T. Rowe Price both declined to comment specifically on their advertising strategies. However, Brian Sullam, a spokesman for T. Rowe Price, did state that the firm has "reduced some of the advertising given the market conditions." What few advertisements the firm is running are "refined to be clearer and have more impact," Sullam said.
According to Daryl Logullo of Strategic Impact, a Vero Beach, Fla., financial marketing consultancy, "The numbers are not surprising at all. There has been a distinct pullback of money that's available. Companies have become more selective, and we have seen a decline in some mediums such as FM radio as well as corporate-sponsored events such as the PGA tour, where many of the financial services firms had a distinct presence in the past."
Logullo further asserted that due to costs, advertisers using broadcast media are turning from national to spot advertisements. Houston-headquartered AIM, for example, has been targeting its television ads in the Southwest, rather than at the national market, Logullo said.
Some critics asserted that additional credibility must be brought to advertising during tough times. And in these times, consolidation of efforts into advertising that will have tangible cost/sales benefits is of the essence.
Dan Sondhelm, a partner with Sunstar, an Alexandria, Va.-based strategic financial marketing firm, suggested there should be increased emphasis on the actual fund managers in advertising, rather than overall marketing strategies. "They are the one who sold you on the fund, and they are the one that wants to keep you," Sondhelm said. He believes that this adds significant credibility at a time when companies are undergoing significant cost-cutting measures.
This is not the only perspective, however. Sheila McCormick, president and CEO of Click Communications, a financial services marketing company, questioned how much time the average investor has to follow an individual fund manager. She asserted that the utmost priority must be getting out a message of trust and integrity at a time when corporate scandals have sent investor confidence to some of its lowest points ever. "Recent scandals have been plaguing the market. Consumers are weary, and I think that investor confidence in the corporate world is a direct reflection of why the market hasn't rebounded," McCormick said.
However, despite market concerns and budget cutbacks, not all firms claim a specific shift in advertising strategies.
Bruce Dunbar, VP of brand and international communications at OppenheimerFunds, said, "The mix of what we do hasn't changed significantly in the past few years. We have continually been focused on building the brand since we started advertising in 1997, and we have stuck with a mix of media that we think has been effective in achieving that goal."
Dunbar said that Oppenheimer focuses primarily on national cable advertising, with some print media in addition, primarily in business-oriented consumer publications and specialty publications targeted to investment professionals.
While some firms may hold their specific advertising strategies as closely guarded secrets to the outside, the changes and adjustments in the sectors are plain to see. Gone are the days of peripheral, fluff advertising and unlimited budgets. To remain competitive, today's firms must streamline their advertising and opt for the most cost-beneficial options available.
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