What bang do financial marketers get for their bucks?
Spending more on marketing garnered more loans and deposits for institutions budgeting more for promotion in 2023 (with one exception). But the bigger spenders didn't see improvement in revenue, with the exception of those in the largest bank asset-size class.
In the face of profitability challenges, banks and credit unions face immense pressure to reduce operating costs and streamline operations. Marketing budgets are often among the first to be cut. In 2023, the largest and smallest banks increased their marketing budgets the most and saw superior growth as well. This trend was even more dramatic within a group of fintech bank holding companies, where much larger marketing budgets contributed to faster growth.
These findings underscore how critical marketing can be to the industry’s top performers.
Yet banks grew marketing more slowly in 2023 than in 2022, highlighting constrained budgets in 2023 as banks of all sizes faced economic headwinds due to increased interest rates and compressed margins. While banks with marketing spend reported managed to grow deposits and loans faster than their counterparts without marketing spend reported, revenue growth remained a challenge in 2023.
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