During our April Market Pulse webinar, our panel of experts discussed macroeconomic trends as they relate to marketing and how institutions can maximize their marketing dollars in an uncertain environment. 

This month’s presenters included Andrew Davidson, SVP and Chief Insights Officer at Mintel; Amy Crews Cutts, President and Chief Economist at AC Cutts & Associates; and Maria Urtubey, Risk Advisor at Equifax. 

All our speakers answered the many critical questions below. 

Watch a replay of our webinar, “Market Pulse: Optimizing Marketing Strategies in an Uncertain Economy” or download a copy of the presentation.

What does the three month moving average (3MMA) look like for the core consumer price index (CPI)? You acknowledged that food & energy contributed to the sudden drop in the overall CPI 3MMA; does the drop still show up in any measurement of core CPI 3MMA?

Amy Crew Cutts: Yes, the same pattern holds, but the improvement is less relative to the year-on-year metric. This makes sense in that energy especially has seen price declines so that accelerated the CPI-all items 3MMA deceleration.

Are the two additional Federal rate increases expected before the third quarter 2023? Or, do we expect them to be more spread out?

Amy Crew Cutts: Most economists have them happening in the second quarter - and I agree with these economists. 

Can you help me understand how/why HELOC (Home Equity Line of Credit) originations are at the highest level since 2011 but HELOC credit limits/utilization both still sit below pre-pandemic levels? 

Maria Urtubey: My take on this is that people continue to close or pay off their HELOCs and the originations are not keeping up. Perhaps they will this year if the trend continues. The HELOC originated credit limited YTD has increased 37% from 2021 (and both credit limits and originations were higher than pre-pandemic). Utilization is at 37% as of February 2023 and shows a continued upward trend (it reached its lowest point in 2022), almost at pre-pandemic levels (just slightly lower). 2019 levels were above 38%. 

Do you think bank marketers are prepared for a shift in the narrative? Example: toward recovery

Andrew Davidson: Do I think they're prepared? No, I don't necessarily think they are prepared. And honestly, what's very interesting is when Jay Powell came out with his remarks and his full cost, the projected Federal Funds right for the end of this year, but Federal funds declining next year. We're seeing a rising rate environment. Of course, that means different products, different marketing messages. I did see one really interesting example from Fifth Third Bank. Recently they launched something called their Rate Drop Protector. We were first out of the gate with an innovative product which is protecting consumers in the event of the drop in the rates, so those are the types of products. But yes, it's about being prepared, thinking about what types of messages and having those ready for when the narrative shifts.

Analog vs Digital ad spend. What is the best way to optimize marketing dollars?

Andrew Davidson: You could see from what we were looking at, the data in terms of title spend. So you can see some of the more expensive channels. TV and direct mail are much more expensive than digital. It's about finding more efficient messaging and optimizing your message. Of course, it depends on what segment you're going for. I mentioned those premium segments earlier. They're still leveraging TV to get their message out there. So, it obviously depends on your audience. It's about looking and trying to get all of these channels to work together in the most optimal way.

 

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