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Financial Services Ad Spending Rebounds | Epic Research

Written by Jim Stewart | Mar 20, 2021, 4:00:00 AM

Four Things We’re Hearing

  • Financial services ad spending rebounds
  • Visa and Mastercard issuers shrink in 2020
  • Millennials bank just like us
  • Cash-back credit cards are in vogue

A two-minute read

Financial Services Ad Spending Rebounds

  • Financial services ad spending in all channels (digital, direct mail, paid search) has rebounded since the sharp drop in April 2020
  • Spending on credit card and checking has recovered to levels 70 – 80% of previous peaks, while personal loan spending has remained depressed
  • Keyword search costs have recovered for checking/savings faster than other products, with the exception of student loans, which was the least affected of any product in 2020
  • Direct mail remains the dominant channel of marketing spend for new customer acquisition for all products, despite dropping slightly in the fourth quarter

Visa and Mastercard Issuers Shrink in 2020

  • 2020 rankings of Visa and Mastercard issuers reflect the pandemic-related shrinkage of card portfolios, with all issuers except Navy FCU and Goldman Sachs showing lower receivables than in 2019
  • There has been little movement in the rankings in the past five years, though some issuers have posted significant gains:
  • Citi (+27.1%) was the fastest growing large issuer during the period, fueled in part by taking over the Costco and L.L.Bean cobrand programs
  • Credit One (+81.3%), Alliance Data (+79.5%), Navy Federal Credit Union (+75.9%), and Merrick Bank (+34.2%) were the other notable fast-growing portfolios
  • Goldman Sachs reached the top 20 following its 2015 Marcus debut

Millennials Bank Just Like Us

  • Millennials, those currently 26 – 40 years old, tell us that some of their banking preferences are not much different than those of older consumers
  • For example, 94% of millennials surveyed say they have accounts with banks that have branches in their local community, comparable to older and younger groups
  • Most of those surveyed said they chose banks with local branches so that they could make in-person deposits and cash checks, with no-fee ATMs and “security of having a branch if needed” coming next
  • Credit and debit cards were used equally for “daily purchases”, with credit cards being the most popular choice for “larger purchases” in the older demographics
  • PayPal was the most popular alternative payment method selected by all age groups, with Venmo and Apple Pay next most popular with younger consumers

Cash-Back Credit Cards are in Vogue

  • Online search volume for the term “credit card” has trended higher since 1Q 2020
  • While searches for “Travel Rewards Card” and “0% Credit Card” are down, “Cash Back Card” keyword search trends are up
  • These trends reflect the increasing preferences for cash-back cards and decreasing preferences for travel cards reflected in previous Epic surveys

Quick Takes

Thank you for reading.

The next Epic Report will publish on April 3rd. 

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Jim Stewart
www.epicresearch.net

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