“Out of Sight” Businesses Risk Perception of “Out of Business”
NEW YORK – At a time when financial institutions are pulling back on their advertising, a new study from Nielsen IAG shows that consumer confidence in the long-term health of these companies is dramatically influenced by advertising and marketing efforts.
Details from the study, including charts and a video of Richard Khaleel, EVP of Nielsen IAG’s Financial practice, are available at Nielsen Wire: http://blog.nielsen.com/nielsenwire/nielsen-news/financial-company-ads-out-of-sight-out-of-business.
When asked about their own banks, insurance companies and investment firms, 55% 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 and only 18% said they had “little or no confidence” in their company. However, among those who said they had seen less advertising, only 18% had “complete confidence” in their financial company and 45% said they had “little or no confidence” in their company.
“This research shows that ‘out of sight’ can mean ‘out of business,’” said Richard Khaleel, EVP 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. With constant scrutiny on the industry it’s clear that taking control of the message in advertising and press can make all the difference for a brand.”
“This recession is now driven by consumer spending,” said James Russo, VP Marketing, The Nielsen Company. “In 2008, Nielsen data shows that consumer’s concerns were around food and fuel. Today consumers are driven by fear aligned to the weakening job and equity markets. Companies that will thrive in this climate of fear are those that manage consumer confidence through the turbulent times. Companies that deliver a message of value will be key to turning around the economy and determining who survives in the months ahead.”
The study comes as data show year to year 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% in 2008 compared to 2007. The drop off was even sharper (-23.3%) for the 4th Quarter of 2008 vs. the same period in 2007.
Total Ad Spending 2008 vs 2007
2007 Ad Spend 2008 Ad Spend % Change
Financial Svcs $6,107.9 $5,070.5 -17.0%
Insurance $3,568.0 $3,307.2 -7.3%
TOTAL $9,676.0 $8,377.7 -13.4%
Total Ad Spending Q4 2008 vs Q4 2007
4Q 2007 Ad Spend 4Q 2008 Ad Spend % Change
Financial Svcs $1,735.6 $1,229.6 -29.2%
Insurance $1,029.0 $889.9 -13.5%
TOTAL $2,764.6 $2,119.5 -23.3%
More Study Findings
The study also found that confidence was linked to age and affluence as well as the amount of risk associated with the financial institution. Older adults aged 55+ and those with assets over $100,000 were more confident than average. Banks fared much better than life insurance companies and investment firms.
Overall, a minority of respondents said they had “Complete Confidence” in their financial institutions:
* less than 38% had confidence in their checking and savings bank
* only 28% were confident of the company that manages their investment or retirement accounts
* only 28% had confidence in their life insurance company
When asked what factors would increase confidence in the safety and soundness of their financial institution, respondents cited:
* Seeing regular advertising for that institution (25%)
* Receiving regular mail or email offers from that institution (25%)
* Regularly seeing internet offers/advertising from that institution (21%)
* Reading positive stories in the press about that institution (44%)
About The Nielsen IAG Financial Brand Confidence Study
The Nielsen IAG Financial Brand Confidence Study was a national online survey of 5500 U.S. respondents. Respondents were asked questions about their confidence in
* the bank where they have their personal checking and savings accounts
* the company that handles their investments and retirement accounts
* their life insurance company
Respondents were also asked about the amount of advertising they had seen in the last 6 months for their financial companies. Finally, respondents were asked about factors that might positively or negatively affect their confidence in these financial companies.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in approximately 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com.