With the COVID-19 pandemic disrupting people’s financial plans and personal finances, the U.S. financial-services industry is planning to buck the trend of companies cutting U.S. ad spending by buying more digital ads — becoming the second-largest spender on digital (behind retail) in the process.
The financial-services industry is expected to increase its digital ad spending by 9.7% this year for a total of $19.62 billion, according to eMarketer.
The research firm also says mobile ad spending will grow 13% to $13.91 billion and comprise 70.9% of all digital ad spending in the financial services space.
Display advertising will grow 10.8% to $9.94 billion, and search will grow 9.1% to $9.01 billion. Financial services will account for 14.6% of total digital ad spending this year, falling slightly to 14.4% in 2021.
Financial services, along with related areas like tax preparation and business consulting, is already a sizable advertising category for radio, with several players in the space among last year’s top 100 advertisers, according to Media Monitors, which tracks ad spending in 85 markets.
They include Quicken Loans (No. 18 in 2019), with 840,422 aired spots; Capital One (No. 19), 832,442; Optima Tax Relief (No. 21), 791,547; Discover (No. 23), 739,684; Credit Karma (No. 54), 390,112; Navy Federal Credit Union (No. 68), 323,410; Community Tax (No. 70), 318,189; Home Advisor (No. 81), 266,574; and Upside Services (No. 98), 215, 732.
For individual stations, the growth within the digital advertising space could signal an opportunity to do outreach to financial services and related firms by emphasizing their digital assets, including streaming, apps, website video and banner ads.
Many consumer banks have closed a significant number of branches because of the pandemic. This led many consumers to move to online banking. About 73% of adults said they were more likely to use digital banking and digital payments during the pandemic, according to an April 2020 William Mills Agency survey conducted by The Harris Poll.
More than half of financial-services executives surveyed by Deloitte in April said they’re rethinking and digitizing client interactions and will make it a top strategic initiative post-pandemic.
Many of these digital ad dollars will be used to promote new digital products as consumers re-evaluate their personal finances from mortgage refinancing and credit loans, to tax filing and stock market investments.
Some of the personal finance scenarios the financial services firms are trying to capture include the huge rush of homeowners trying to refinance their mortgages in a climate of historically low interest rates.
Online stock brokers, like Robin Hood, have seen record numbers of new account sign-ups, as bored people stuck at home try to take advantage of the market’s volatility. Accounting companies such as H&R Block and TurboTax have spent more to target consumers because of the delay for the tax filing deadline.
With COVID-19 increasing people’s interest in personal finance, financial advertisers plan to take advantage of the fertile situation by marketing on digital platforms to grab a piece of this huge amount of online business. These firms have increased their ad spend especially on branding and awareness campaigns.