PR OUTRANKS ADVERTISING IN IMPROVING CONSUMER CONFIDENCE
I recently pulled the following from a Center for Media Research Brief. The brief discusses how public relations considerably outranks advertising in improving consumer confidence in banks.
When asked about their banks, insurance companies and investment firms, the study found that 55% of consumers who say they had seen more advertising for their financial institution reported having "complete confidence" in the financial health and soundness of their financial company. Among those who said they had seen less advertising, only 18% had "complete confidence" in their financial company and a significant 45% said they had "little or no confidence" in their company.
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:
Less than 38% had confidence in their checking and savings bank
28% were confident of the company that manages their investment or retirement accounts
28% had confidence in their life insurance company
In response to what factors would increase confidence in the safety and soundness of their financial institution, respondents cited:
Reading positive stories in the press about that institution (44%)
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%)
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.
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... "