Tuesday, December 9, 2008

Banks Put Value On Marketing Component

Bankers Put Value On Marketing Component
by Aaron Baar, Yesterday, 6:18 PM

Banks continue to see marketing as an important part of doing business, even as they face tough economic conditions.

According to the American Bankers Association's 22nd annual bank marketing survey, non-salary marketing expenditures exceeded $10 billion for 2007, down only 1.6% from 2006. Marketing was a key part of a bank's business picture in 2008 and will continue to be one in 2009, Maggie Kelly, the ABA's vice president of marketing, tells Marketing Daily.

"The marketing survey results confirm what we suspected: that in today's challenging and even more competitive banking environment, marketing remains one of the most valuable contributors to a bank's bottom line," Kelly says.

However, they may take a slightly different approach in their messaging. "What we're hearing is that it's back to basics: retaining your customers, customer acquisition and increasing deposits," Kelly says. "They're [also] doing more with less. The bank marketers going forward are not going to have growing budgets."

Advertising (which includes direct marketing) was the preferred bank marketing method during 2007, accounting for slightly more than half (58%) of overall marketing expenses. However, with tighter budgets and more ways to reach customers, they are employing more techniques such as social media and mobile banking, Kelly says.

Indeed, the survey showed that nearly every bank (99%) had a Web presence, with more than two-thirds of them conducting some form of online marketing. Rich media (audio and video) and business-related blogs were favored as Internet marketing methods, and will continue to be important moving forward.

Public relations were the second-largest marketing expenditure after advertising, according to the survey. Community relations, such as donations and contributions to local group, accounted for more than half of those expenditures. "All the banks are reaching out to their communities," Kelly says. "Small banks have always been doing it. The larger banks are focusing on their local neighborhoods."

One in three banks said deposit growth will be their biggest marketing challenge over the next year. Less than a quarter (23%) cited competition as a challenge, and only 22% cited the economy. As a result, banks will be gearing their messages to address those challenges, Kelly says.

"Banks will continue to put out a message of safety and soundness of their investments," Kelly says. "Recognizing there's going to be a decline for loans, banks are going to be providing more of a service to customers on saving strategies and financial education."

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