Financial services ratcheted up its audio ad spending in the two most recent quarters as banks, insurance providers and credit card companies continue to make audio a key component in their media campaigns. First quarter 2021 investment shot up by 46% year-over-year after a 12% bump in fourth quarter 2020, according to actual spending figures compiled by Standard Media Index exclusively for Inside Radio.
“There has been growth in back-to-back quarters as they’ve been building on that audio momentum, out-pacing pharma which has been setting the pace with growth,” says SMI Director of Advertising Insights Nicole McCurnin.
How are Financial Services divvying up their audio dollars? In Q4 2020, it was a 60-to-40 broadcast-to-streaming split. By Q1 2021, buyers tilted a smidge more toward streaming, which attracted a 43% share while AM/FM cordoned off a majority 57% share. SMI defines streaming audio to include pureplay audio/music streamers, the digital streaming arms of broadcast radio, and select podcasters.
Spending on audio streaming is fairly evenly split among the three sectors that make up the Financial Services category: Banking & Investment, Credit Cards, and Insurance.
The lion’s share of the broadcast radio spend is for Banking & Investment and Insurance with only a narrow slice invested in Credit Cards.
“Credit Cards has been down overall since COVID, given that their messaging is typically aligned with earning points at restaurants, movie theaters and concerts and those sectors have obviously been impacted by COVID,” says McCurnin, who spent eight years with ad agency Havas Media Group before joining SMI last August. “So we haven’t seen those robust spending trends come back for them at linear radio in Q1.”
The cutbacks in Credit Card spending weren’t confined to broadcast radio. “They pulled back pretty sharply across channels,” McCurnin says. But it wasn’t only because of COVID restrictions. “People were trying to tighten purse strings instead of opening up credit cards,” she adds. “That was all at play.”
The Banking & Investments subsector upped its spending on both broadcast and streaming in back-to-back quarters. “Streaming outpaced linear growth in Q4 but they were pretty much on par with each other in Q1,” McCurnin notes. The subsector increased its broadcast radio spend by 29% year over year in Q4 2020 before nearly doubling it in first quarter 2021. Streaming, meanwhile, saw back-to-back quarters of two-fold growth in Banking & Investments.
Insurance, meanwhile, pulled back in both channels in fourth quarter 2020, before upping its broadcast radio investment by 9% and its streaming outlay by an outsized 69% in first quarter.
Banking Doubles Down On Network Radio
Banking, a major network radio user, more than doubled its network radio commitment in first quarter 2021, sustaining a strong investment threshold from fourth quarter. “They really ramped up in Q4 and essentially carried that support level into Q1,” explains McCurnin.
While Financial Services growth is being driven by Banking & Investments, Insurance also helped “with some slight lift in Q1 whereas credit cards pulled back versus last year,” says McCurnin. The data shows insurance companies increased their network spend by a modest 3% in Q1 after a more sizable uptick in Q4.
“As they rebound, Credits Cards are taking money from linear and moving it into streaming,” says SMI Senior VP of Marketing Jason Keown. “That seems to be the strategy they’re embracing whereas as Banking & Investment and Insurance are more even.”
While Banking & Investments outspend on network radio, Insurance punched above its weight on spot radio in Q1 2021 versus last year. The first quarter typically brings a drop-off in ad spend compared to Q4 across multiple categories and channels. But that wasn’t the case with the Insurance category, which upped its Q1 spot radio spend 13% year-over-year, keeping it consistent with Q4 levels. Banking & Investments was more typical in that it didn’t sustain at Q4 levels even as it upped Q1 spend by 62%, demonstrating an increased push in spot radio.
The percentage gains reflects network and national audio ad spend based on SMI’s core database, which accesses actual spend from the world’s largest media agency buying groups and independents and reflects $90 billion in ad spending across all media types.