Financial Brands Come Out Of Hibernation

Selling a financial brand during a global recession ranks easily as the single most challenging marketing role of the past 12 months.With marketing budgets being seriously pulled in, plus a large dose of cynicism from consumers, financial brands have had it hard,to say the least.

The most obvious impact of the downturn has been on spend. For those global brands with a strong presence in Asia, all but essential marketing activities were curtailed, especially at those institutions that were bailed out by public money and where high profile ad campaigns and lavish sponsorship deals would only add to the negative PR. Asia-based financial brands, although in most markets spared the worst of the downturn, have been under similar pressures, with many finding it a struggle to secure marketing budgets from costconscious CEOs.

“Banks have decreased their spend, but oddly this did not happen straight away,” notes Guillaume Conteville, regional director for global solutions at MEC.“What we saw was a peak in adspend right after Lehman’s collapse. Essentially a lot of banks felt compelled to run confidence and reassurance campaigns, intending to bolster perceptions of financial stability.The most spectacular drop in spend happened later, during the first months of 2009.”

Figures from Nielsen show that 2009 adspend in the financial service sector in the key markets of Hong Kong and Singapore — where it is traditionally the largest category spend across all media — has so far been way down on 2008.In Hong Kong,companies working in the banking and investment services sector spent HK$1.02 bilion (US$131.6 million) on advertising in the first half of this year, compared with HK$1.3 billion for the same period in 2008. In Singapore, the decrease has been even more dramatic, with first-half spend totalling just S$47.9 million (US$34.2 million), compared to S$78.1 million for the first six months of 2008.

Justin Garrett,director of consumer research,financial services,at Nielsen Hong Kong, points out this decrease in spend, while understandable, could well have an adverse effect over time.

“The height of the crisis was not the time to advertise products aggressively, but it was still the time to support the brand through advertising.Financial brands, once trusted pillars of strength, were damaged significantly in consumer’s minds and we have seen a decline in trust generally as consumers rethink the tried and true rules through which they evaluate bank brands.”

The importance Garrett places on branding is crucial. Budgets will undoubtedly return as the economy picks up but, looking beyond the current economic situation, more significant is the need for financial companies move beyond an emphasis on product, features and convenience and instead start to rebuild their tarnished brand image.

Branding shift 
“Previous to the slowdown,the role of the brand in financial advertising was underplayed,” says Arvind Sharma, chairman of Leo Burnett South Asia. “Given that Asia was on the fringe of the world economic crisis rather than caught in the middle, players had the luxury of not having a critical corporate agenda to communicate.”

Instead,Sharma argues,brands have been able to concentrate more on delivering what the customer wants to hear.“The entire focus of communication has shifted from product-focused communication to investor-focused communication that deals with investor anxieties, or simply celebrates the investor.”

This certainly appears to be in line with consumer trends.A US-focused study from Interbrand released earlier this year suggested there had been a noticeable change in consumer attitudes to financial companies, in particular the role of the brand in customer decision making process. The study found that the economic downturn had heightened the importance of branding in the financial services category, with consumer trust and confidence in the brand overtaking service and fees as a key purchasing criteria.

Terence Oliver,president and CEO, Asia-Pacific at Interbrand, believes Asian financial brands are facing a similar situation. “Selecting financial services brands is becoming more of an emotional choice — do I trust these people with my money? — rather than the feeling that they are all the same so I’ll use the people with a branchn down the street,”he says.

For Asian institutions, however, may actually be as much an opportunity as it is a challenge. “There is an excellent opportunity for Asian financial services brands to position themselves as reliable and worthy of consumers’ trust before Western brands have a chance to reestablish their positions and the turmoil of the past year is forgotten.

Asian financial brands need to move quickly to build trust with customers and the emotional connection that, once established, is in Asian societies particularly difficult to break.”

This move toward a more empathyled brand message in Asia is now under way, with a number of brands using the first half of 2009 to communicate their new positioning. Philip Brett, president,South and Southeast Asia,TBWA notes that there has already been a huge amount of activity which is attempting to place the customer much more at the centre of communications.“A more contrite industry is no longer ignoring the customer,” he says.

In India, recent campaigns from ICICI Bank, the State Bank of India and others highlight this trend. A recent mutual funds promotion for Sify Securities, for example, runs the tagline ‘Saluting the courage and optimism of the Indian investor’.

Elsewhere, messages centred on building trust with the consumer have been seen from the likes of AIA,DBS and HSBC, the latter of which has launched campaigns reinforcing ethics and integrity across several Asian markets .

And financial brands are not only becoming more circumspect about the kind of messages they are communicating; there has also been a less obvious change in relation to the use of media.“We do see an increase in the use of online marketing as financial brands begin to realise the effectiveness of this medium and not project themselves as ostentatious with their marketing spend — the online medium tends to be less conspicuous in this regard,” says Rajesh Mahtani, executive director, strategy and analytics,at Starcom MediaVest Group Southeast Asia.

MEC’s Conteville agrees, but notes that the underlying trend of budgets shifting towards online is similar to that seen in other categories.

“Financial brands do spend more and more on display and SEM but it is difficult to know how much has been driven by the crisis and the increased focus on lead generation and how much is attributable to improved channel strategy to reflect the change in consumers’ media consumption patterns,”he says.

Indeed,the move online could be reflective of wider trends in the marketing industry — albeit equally influenced by the recession— than issues unique to the financial sector: a natural increase in digital marketing dollars, budgets being shifted away from mass media and a desire for more measurable ROI.

Beyond recession
One thing is certain,though.Financial marketing will emerge from the recession in a markedly different guise to how it entered the crisis.But how long will such changes last and will they ultimately be beneficial for the sector? Much will depend on the availability of budgets and how they are spent.

Conteville says that, in most markets, pre-crisis investment levels have yet to rematerialise and expects a substantial time lag before advertising spend truly reflects the health of the economy. As such, financial brands may need to bear the scars of recession for a little longer yet.

“I believe that as we slowly creep out of recession, we will see an increase in advertising dollars, which is typically seen in a good economy,” adds Mathani.“ However,we will continue to see more accountable use of media budgets, and agencies will be asked to inject greater measurability in their communication plans. Wetherefore see less of the ostentation and marketing wastage that characterised much of 2007 and the first part of 2008.” Most importantly, brands should not forget the deep impressions the financial downturn has had on their most important asset — the customer.

“Going into the future, it is likely that investors will continue to want their money to be with players who are seen as trustworthy and having expertise even if it is at cost of a few growth points,”says Sharma.” For Brett,it is important that lessons have been learned. “It is inevitable that the industry will regain its confidence,” he says.“I hope,however,that the customer centric model, and a more grounded approach will carry through for a long time. It is what the customer deserves.”