What a load of Bankers

As I’m such a cool guy, I wrote my dissertation about how the recession affected the advertising of banks…like I said, cool.

But believe it or not, it turned out to be pretty interesting so I’ve [tried to] distilled it down for your reading pleasures (don’t worry, deep down I know nobody is really going to read this but if you do, get comfy).

There seems to have been noticeable shifts in the approach the banks and their respective agencies have taken in representing themselves to the masses. The financial services sector is a typical low-interest category; people would rather think about which car they’re going to buy or where they’re going to go on holiday, not which ISA or savings account they should choose. Another point to note is that the differentiation between the services banks offer is very hard to pin point, services on offer are incredibly similar.

Essentially the products and services banks provide are more or less the same. Therefore the advertising and marketing of these brands is of massive importance hence the reason for so much change in their communications recently. Brands such as Halifax, Nationwide and Barclays have made massive changes to their advertising due to the recession. Big strategic and creative changes can be seen as an advantage but there is much to be said for brands that have stuck to their core message and brand values.

HSBC is famous for being a global brand. Their market positioning has been “The Worlds Local Bank” way before the recent recession and has continued to be after it. The recession has affected the whole world not jus the financial capitals of London and New York. HSBC have recognised this and have targeted everybody, rather than narrowing their target audience. By being consistent they portray an image of security and being an intelligent organization that doesn’t change its message every time something goes wrong economically. Although many firms have been communicating in the area of trust, HSBC has taken a different approach. While the notion of trust may relieve some internal pressures, and provide a short-term solution it won’t stand up as a long-term brand position. In addition, what’s more trustworthy than a bank that is consistently saying the same thing? Chopping and changing a core message suggests uncertainty. While others are floundering, if not failing, in this economic gloom, HSBC have stayed strong and by being consistent have not had to waste money on additional marketing and advertising. A very clever approach indeed.

Have you ever wondered why banks tend to have really traditional and expensive buildings? The reason is that the buildings are adverts in themselves. It states to the consumer “We’re here to stay. We’re not going to run off with your money”. It’s a mark of performance. The consumer can have confidence in the bank because they’ve obviously spent a lot of money and time on building a reputation. The banks have a lot to lose if they don’t follow through with their promises to consumers. As well as being the basis of a good brand, this idea of communicating to the consumer in a more subconscious way is called behavioural economics. Behavioural economics has a role in analysing the thought process of consumers in a recession, especially when their own money is at stake. In this current economic climate, consumers may be tempted to find short-term solutions to their money problems. Banks that have changed their advertising due to the recession can lure in consumers who are in search of a short-term solution. Consumers feel better if they react now rather than taking the better long-term solution. And this pursue of short-term gratification could be why some banks have decided to sell themselves as responding to the credit crunch.

Another notion is that of Loss Aversion. People tend to naturally display greater sensitivity to losses than to equivalent gains when making decisions i.e. people are more annoyed about losing £5 than they are happy about finding £10. This theory ties in with the advertising of banks. If the theory of loss aversion is applied then people will be anxious to prevent losing money and will therefore be more responsive to advertising that places an emphasis on safety and security.

Another argument raised in this study was; is it better for banks and consumers to search for a short-term or long-term solution? There are arguments for both cases but banks can tackle the recession with a long-term solution, which can also benefit them in the future. So to some extent, the banks shouldn’t let the recession affect their advertising at all.

Humor featured highly in the financial services advertising sector before the recession and nearly all brands have decided to produce more serious advertising. This begs the question, when the recession has passed, will banks revert back to a more humorous tone of voice? Halifax has produced a brand new TV advert (first appeared 17.01.10), which is dramatically more upbeat and light-hearted. Whether or not this is the correct decision and if others will follow, only time will tell. If banks do revert back to a more humorous approach, when is it appropriate to do so? Have Halifax been slightly premature? The fact that Halifax had comical adverts then more mature and are slowly heading back towards comical adverts is proof that the recession did have an affect on their advertising at least.

I feel, however, that the biggest impact of the credit crunch on the advertising of banks comes back to the consumer. It’s unlikely that you will change your bank account very often, it’s one of only few products or services whereby your first choice is normally your last. Although now, because of the recession, people are starting to look into the different brands and offers more closely and consequently the advertising has had to address this issue. So, in conclusion, the recession has had an affect on the advertising of banks but over time we’ll then be able to see to what extent.