The financial industry has cut back on marketing spend due
to economic uncertainty, but experts say there are opportunities for
organizations that optimize their marketing strategy.
Andrew Davidson, Chief Insights Officer at Mintel
Compremedia, said marketing spend was down 29% in the first
quarter of this year across financial services. That includes
traditional and digital marketing channels.
“The bulk of marketing spend is on the sub industries of
credit cards and mortgages and loans. Both were down, but mortgages
and loans were effectively in free fall. They're down a staggering
46% from last year,” Davidson said, during our Market
Pulse podcast. He added that there was positive activity on the
Despite the shift in overall marketing of financial
products, Davidson maintains there are opportunities in a downturn.
As some companies and brands cut back, there are opportunities to
step forward into that gap if you have the right risk profile and target.
What insights do you have on credit card marketing when it
comes to driving new accounts?
Davidson: According to our data, 22% of consumers
say that inflation has caused them to use their credit cards more.
Outstanding credit card debt is on track to surpass a trillion
dollars. So, it's clear that usage and reliance on credit cards is
up. And that's at a time when we're seeing interest rates on credit
cards at a record high.
However, I do think there's still plenty of opportunity to
acquire new customers. Obviously, delinquencies are on the rise. And
there are signs of a more cautious approach. You know, I've
mentioned already the pullback in marketing. Another example is that
in Q1 of this year, while there was this broader pullback in
marketing, the biggest cutbacks were in the non-rewards segments. So
those credit card offers are trying to target revolvers.
And that's something that we saw back in the recession of
2008, 2009, that sort of flight to safety. So, things like teaser
rate offers start to evolve, for example. Teaser rates were very
much the marketing story for credit cards in 2022. They were coming
through very strongly, even though there was continued discussion
around recession. But we've seen something of a pullback there, even
though there are still plenty of offers on the market right now with
an intro APR of 21 months.
So, we’re seeing some shifts in the dynamics, really. And of
course, credit card interest rates are still at record highs. So,
there are opportunities for issuers and credit unions to compete on
rates in this current environment. You know, I think if you flip,
though, onto the reward side, I think it's about finding new ways to
find efficiencies, to add value. For example, in the co-brand space we
saw a slow start to the year in terms of new card launches, but since
then it's really kicked up a notch and we're seeing new types of
partnerships. You know, so the likes of AMC Theaters with the FinTech
Deserve or Simon Malls with the FinTech Cardless. These are all
examples of new types of partnerships that are emerging in the current
environment. So, as I say, it goes back to hunting these pockets of opportunities.
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For more on this interview, listen to the full episode,
Optimizing Your Marketing Strategy in an Uncertain Economy. The
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This episode was a continuation of our conversation of the March
Market Pulse webinar. Access
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