• by Aaron Baar , September 16, 2008

The news on Wall Street may not be good this morning, or recently, but hopes are that the collapse of Lehman Brothers and the sale of Merrill Lynch--two of the financial service industry's better known brands--may not bleed into the general consumer confidence.

"A lot of these firms don't have a connection with the consumer," Tim Calkins, a professor of marketing at Northwestern University's Kellogg School of Management, tells Marketing Daily. "It's less a consumer issue than it is among corporations and investors."

And the financial services industry would be wise to have it stay that way. Although the broader economic picture will remain headline news for some time, banks and other financial institutions may look to shore up their relations with current customers. "At least right now, they're trying to make sure it remains isolated," Calkins says. "My hypothesis is the mainstream investor is not feeling any personal panic. The challenge [for companies] is will that continue to be the case."

Financial services companies will have to walk a fine line of assuring customers their deposits are safe, while not creating undue nervousness or fears. "There's not a lot you can do when it comes to safety. It's a tough marketing challenge because as soon as you do that, you create doubts," Calkins says. "It's very hard to begin marketing against safety when a lot of the fundamentals are unknown."

For the meantime, expect financial services companies to lie low as bad economic and corporate news occupies the headlines, says Jeff Cunningham, CEO of Directorship Boardroom Intelligence. While the economic picture could turn around by the middle of next year, marketers will wait for proof that things have improved before embarking on new programs, he says.

"Distractions due to business closures, third-party litigation and employment reductions will keep everyone busy for a while, and the media is going to have to spend a few more quarters out in the cold," he says. "I think we are looking at a turnaround in 2010 in ad spending."