At a time when financial institutions are pulling back on their advertising, a new Nielsen study shows that consumer confidence in the long-term health of these companies is dramatically influenced by advertising and marketing efforts.
When asked about their own banks, insurance companies and investment firms, 55 percent of respondents who said they had seen more advertising for their financial institution reported having “complete confidence” in the financial health and soundness of their financial company.
Only 18 percent said they had “little or no confidence” in their company. However, among those who said they had seen less advertising, only 18 percent had “complete confidence” in their financial company and 45 percent said they had “little or no confidence” in their company.
Increased marketing exposure is one reason Travelers Cos. and Hartford Financial Services Group Inc. have boosted their sponsorships of sports events, such as golf and auto racing.
“This research shows that ‘out of sight’ can mean ‘out of business,'” said Richard Khaleel, executive vice president of Nielsen IAG’s Financial practice. “The current economic climate makes it more important than ever for financial institutions to bolster confidence among their clients and this study clearly demonstrates the link between advertising and confidence levels.”
The study comes as data show reductions in advertising expenditures in the financial services and insurance categories. Year over year ad spending on financial services and insurance was down 13.4 percent in 2008 from 2007, Nielsen said. The drop off was even sharper, down 23 percent, for the fourth quarter of 2008 vs. the same period in 2007.
