Consumer goods are not really passé. But financial sector firms are the new kids on the ad block. And they are splurging like never before.
Insurance companies, banks, initial public offerings and even stock broking houses are spending significant amounts on advertising as brand recall assumes strategic importance in a competitive market for selling financial products.
In 2009-10, there has been a 17 per cent jump in ad spends by such firms as compared to last year, TAM Media Research data said.
In value terms, it is just 5 per cent (Rs 1,000 crore) of the total Rs 20,000-crore ad industry pie, but the rising spends reflect growing importance of brand building in a fast maturing financial services industry where people don’t shy from investing in high risk products such as equities.
“There has been a growing emphasis among financial sector firms to woo investors that they feel could be on the fringe,” said independent marketing analyst Santosh Sood.
The data shows that the January to March quarter of the last fiscal witnessed maximum advertising from insurers and banks.
“We have decided to increase our advertising spends by 25 per cent over the previous year, we would focus on brand building,” said T.M. Bhasin, chairman and managing director, Indian Bank.
Experts said the rise in ad spend by these firms also mirrors the economy’s growth pace. “Advertising spend growth always precedes the larger economy’s growth and vice versa,” said Sam Balsara, chairman of Madison Communications.
The recent regulatory move to ban all “entry load” or the initial cost for buying a mutual fund product has also helped push ad spends.