The report concludes that this supports the theory that companies that do not advertise are risking widespread public perception that they have failed or are on their way out, at a time when many financial companies are pulling back on their advertising and marketing efforts to cut costs and avoid the appearance of wasteful spending.
Nielsen also found that confidence was linked to age and affluence, as well as the amount of risk associated with the financial institution. Older adults ages 55+ and those with assets of more than $100K were more confident than the average. Overall, a minority of respondents said they had "complete confidence" in their financial institutions:
In response to what factors would increase confidence in the safety and soundness of their financial institution, respondents cited:
Year-over-year ad spending on financial services and insurance was down 13.4% in 2008 compared with 2007. The drop-off was even sharper for Q4 2008 vs. the same period in 2007.
Financial Ad Spending Comparison 2008 vs 2007 | |||
Institution Type | 2007 Ad Spend (millions) | 2008 Ad Spend (millions) | % Change |
Full Year | |||
Financial services | $6,107.9 | $5,070.5 | - 17.0% |
Insurance | 3,568.0 | 3,307.2 | - 7.7 |
Total | 9,676.0 | 8,377.7 | - 13.4 |
4th Quarter | |||
Financial services | $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 |
Source: Nielsen IAG, March 2009 |
Richard Khaleel, EVP of Nielsen IAG's Financial practice, concludes that "This research shows that ‘out of sight' can mean ‘out of business'... taking control of the message in advertising and press can make all the difference for a brand... "
Please visit Nielsen here for more information and access to the PDF file.
The headline is Duh!! but the article is great and rather sobering. Apparently FDIC assurance no longer means much to consumers?
In this story, the term PUBLIC RELATIONS is never used. So, how do you conclude that PR outranks advertising in building confidence in financial institutions
The research conclusions suffer from a lack of important context. An important study by AT&T 'back in the day' showed that ads that run in a climate of positive publicity actually receive lift from the PR. Conversely, ads run in an environment of negative publicity will likely not be successful and/or may be perceived negatively by consumers. Clearly our economic times have created a ton of negative publicity.
A couple of possible courses of action come to mind:
- PR and grassroots activities designed to build trust in the institution is a clear way to build consumer confidence. Trust is fundamental to confidence.
- Similarly, advertising designed to build trust could be effective, but great caution should be exercised before running marketing-oriented advertising in a climate of overwhelming negativity in the press.
Lastly, the body of existing research does not prove PR has higher inherent credibility than advertising. Actually both have a credibility issue in today's skeptical times.
Who wrote the headline for this piece? If you read past the headline, in fact, the advertising plays a tremendous role in consumer confidence. There is a direct correlation between seeing advertising and having confidence in an institution. Of course, when you ask consumers a direct question, they aren't going to say that advertising sways their opinion. That would make them look shallow.
Have you ever viewed a focus group and heard someone say, "oh, advertising never affects my opinion?" Then go outside and see they are driving a BMW.