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