Ad agency folks are famous for their metaphors. When we came up with a campaign idea, for instance, and were curious to know whether it would pass muster or not, we’d say, “lets run it up the flagpole and see who salutes it,” or “we’ll put it out on the stoop and see if the cat licks it up.” When we were working on a campaign and felt that, from a strategic point of view, our messaging was not being directed to the appropriate target audience, we’d call that “shooting at ducks that aren’t really there.”
I just recently saw some statistics around financial industry marketing budgets. Now, I guess I’m reminiscing a bit because any mention of “budget” brings me back to those ad agency days, when your survival hinged on a client’s budget. Every one of us assigned to the account was either working or worrying; working to grow the brand or worrying that the client might find a reason to cut their budget. We never lost a client to another agency, but I remember the host of downturns that sent shockwaves through the agencies where I worked. As soon as the client got a whiff of an economic slowdown, the marketing budget was always the first to go and with it, the agency personnel who worked on that account. (Often, unfortunately, it included agency personnel who WEREN'T working on that account, which was even more frightening.) When the economy turned around, we were always the last to see the benefit of the rebound. I suppose it was because clients tended to feel a bit “once bitten twice shy”. They wanted to be certain, before recommitting to the agency and spending more money, that the recovery was real and long lasting. We’re in one of those downturns right now, and we’re seeing the same response: Reduced spending on marketing.
The Gartner CMO Spend Survey 2021-2022 revealed that the cuts in the financial industry are pretty dramatic; “marketing budgets as a percent of overall company revenue dropped to their lowest levels in history — to 6% in 2021 from 11% in 2020. Despite facing in-year budget cuts in 2020 due to the pandemic,” says the survey, “most CMOs expected budgets to bounce back in 2021. This budgetary optimism was misplaced, as marketing budgets have fallen to their lowest level in the history of the survey.” Forbes says that “these findings reflect not only an ongoing downward pressure on marketing spend caused by the pandemic, but also a strategic shift in enterprise resource allocation decisions.” According to Gartner, the marketing budget dollars are shifting from marketing to martech solutions; that banks are redirecting the dollars they would ordinarily dedicate to building brand and promoting products/services toward their “digital transformation.”
In response, those in charge of marketing (the CMO if your bank is large enough and fortunate enough to have one) “are reimagining the capabilities that can be supported by their internal teams.” In other words, bringing the work in house. Nearly 30% of the work previously done by outside agencies, in fact, has been moved to in-house resources in the last 12 months.
So, in summation, what we now have are smaller marketing budgets managed in house, and more often than not, by staff members who have suddenly found themselves with added responsibilities. In other words, a stretched staff, that frankly has neither the funding or the time, to continue to do what banks must do: Sell themselves. Not just “even” during tough times but “because” of tough times.
What I mean is this: The ducks are out there. Simply because banks are compelled to race to the best digital experience doesn’t mean that they can take a vacation from building their brand, differentiating themselves, building trust and relationships…
ON24’s “2021 B2B Marketing Trends Report: How to Augment the Marketing Organization for a Digital-First Future” speaks to the damage that cuts in a marketing budget can do: “If companies stay flat, freeze, or dramatically reduce their spend in marketing and sales now, they are less likely to recover fast enough against their market competition when the time arises.”
Traditionally, brand awareness has been the ultimate goal of every marketing strategy. With digital transformation we’ve seen a massive shift toward performance marketing — metrics-driven, online marketing campaigns in search of clicks or conversions — and away from brand/relationship building. There’s a clear danger in this. ON24 has this to say about it: “The truth is, performance marketing may create a jump in short term sales, but it won’t keep your customers coming back again and again. You can sustain performance only with a concurrent brand campaign.”
Are banks running that “concurrent brand campaign”? I can tell you this: The successful ones, the ones that will come out of this downturn stronger, are. There’s no better time for your marketing messaging to stand out in your crowd of competitors than those times when your competitors are silent.
Like I said, those ducks are out there. Take the shot. Especially now, when you can be the only one in the blind.
About Bank Marketing Center
Here at BankMarketingCenter.com, our goal is to help you with that vital, topical, and compelling communication with customers; messaging that will help you build trust, relationships, and revenue. In short, build your brand. To view our campaigns, both print and digital, visit BankMarketingCenter.com. Or, you can contact me directly by phone at 678-528-6688 or email at nreynolds@bankmarketingcenter.com.
As always, I would love to hear your thoughts on this subject.