Ad Spending Trends in the Financial Services Sector
By Alyssa Nejaime |
The proliferation of advertising buying methods and formats are giving today’s brands unprecedented opportunities for implementing powerful new means of generating awareness, engaging customers and driving sales. How are financial services companies managing the increasingly fragmented advertising universe and capitalizing on the myriad options available to them? We take a look at spending trends in the sector with a focus on research from eMarketer. Here’s what occurred in 2017 and what to expect through 2018 and beyond.
The financial services industry is a multi-faceted one. eMarketer’s definition of the sector includes commercial banks, credit agencies, personal credit institutions, consumer finance companies, loan companies, business credit institutions and credit card agencies. It also includes companies engaged in the underwriting, purchase, sale or brokerage of securities and other financial contracts.
A Significant Driver of Digital Advertising’s Growth
In 2017, financial services accounted for a little more than 12% of total digital ad spending, behind only automotive and retail. That translates into $10.11 billion in 2017, increasing year-over-year to a projected $15 billion spend in 2021.
Financial service companies have long been big spenders in search, finding the format strategically advantageous for customer acquisition. Recently though, the sector has been making big investments in display in keeping with the growing prominence of digital video and social media. In fact, in 2017, financial services brands were expected to increase spend on display ads by 32.3%, the highest percentage among all industries measured by eMarketer. And digital video makes up a significant portion of that—25.4%—as the industry becomes increasingly focused on harnessing the power of sight, sound and motion to grow brand awareness.
Mobile and Social Growing in Importance
Mobile is also a significant growth area for the sector as financial services companies work to keep pace with the increasing amount of time consumers—particularly millennials—are spending with their mobile devices. Nearly three-quarters of this year’s digital ad spend is allotted to mobile, representing a total spend of $7.17 billion, up 27.5% over previous year. This trend is expected to gain steam for banking in particular as banks continue to work to increase the mobile banking services available to consumers. At present, most banks offer mobile apps for basic banking functions such as balances and money transfers. But as millennials age and take on more financial responsibilities such as mortgages and investments, banks will want to be ready with more-sophisticated mobile offerings. That focus, according to eMarketer, will be a potent force driving additional mobile ad investments going forward.
TV Still a Big Focus
Data from Kantar shows that financial services and insurance brands continue to view TV as a good investment, increasing spending to $7.71 billion in 2016. Live sports are a big draw for these companies, as the audience for these tends to skew male and affluent—a prime demographic for the sector. Capital One, for example, ranked first among the top five advertisers during this year’s March Madness college basketball playoffs, running a total of 188 commercials over the three-week playoff period, spending a little more than $40 million.
Given these high investment levels in a broad array of formats and platforms, financial services companies are well positioned to be a leading force in the evolution of both TV and online advertising. Advertisers from all sectors would do well to keep an eye on the innovations and creative coming out of the sector in the year ahead.