NEWS: Study says financial adspend misdirected

Financial services companies may be wasting the money they spend on above-the-line advertising, according to startling new research results published this week.

Financial services companies may be wasting the money they spend on

above-the-line advertising, according to startling new research results

published this week.



In a conclusion that will shock agencies, the Chartered Institute of

Marketing claims that financial institutions could get a better return

by putting their support behind direct marketing and sales promotion.



The research, carried out among senior marketers across a broad range of

financial services companies, says that while a 10 per cent increase in

adspend can be expected to boost sales by about 1.4 per cent, the same

amount spent on direct marketing or sales promotion could double the

average sales increase.



The verdict is the result of interviews carried out by the London

Business School. It questioned 190 experienced marketing managers in the

major clearing banks, mortgage providers, unit trusts, life assurance

companies and other financial institutions.



The findings emphasise the growing pressures on financial marketers to

justify their ad budgets.



Derek Ralston, managing director of Barker and Ralston, which handles

most of Abbey National’s business, claimed that the most effective

financial campaign would always be a combination of above and below the

line. ‘If you get a direct mailing from a company you’ve never seen

advertised and know nothing about, you’re unlikely to respond to it,’ he

said.



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