How has the coronavirus crisis has impacted the financial vertical? What has and will emerge is greater attention to savings thanks to financial strain and high unemployment. How should advertising efforts continue and what can we learn from the ’08 crisis?
Predictions for the financial industry
According to Business Insider Intelligence’s research director Dan VanDyke, coronavirus’s impact on the financial institutions will include: lending needs of (individuals and businesses) will heighten; more banks will temporarily suspend or amend loan repayment requirements and fees; falling interest rates will bring down savings rates, but will also fuel a boom in mortgage and auto financing (eMarketer).
As for other fintech sectors: funding totals will be down, stock market volatility will chill consumer investing and digitally-minded insurers will benefit from increased awareness and demand for their services (eMarketer).
Mobile, online, and remote banking options will succeed
The financial services sector is currently facing challenges on multiple fronts: shelter-in-place and social distancing requirements mean that few customers are able to be served in physical branches, putting additional strain on channels like telephone support, online and social media. (Econsultancy) Those well-equipped to handle remote/online banking will be well-prepared to weather the crisis, and fintech companies are well-placed to deal with digital demand and remote working requirements (Econsultancy).
Young adults are especially worried about the financial impact
With the unemployment rate now at a record 14.7% due to the crisis, consumers are rightfully worried about their personal financial situation, including keeping up with basic expenses. Studies show millennials are feeling more worried than their older cohorts. Several surveys support this notion:
- 25% of 18-to-29s reported being “financially affected by the coronavirus,” along with 24% of 30-to-44s, 28% of 45-to-64s, and 21%of those ages 65 and older (Economist/YouGov polling via eMarketer, April 2020)
- 80% of 25-to-44s said they were worried about their “personal financial situation,” vs. 78% of 18-to-24s, 74% of 45-to-64s, and 62%of those 65 and older. (Elon University survey via eMarketer, March 2020)
- 47% of 18 to 34-year-olds are concerned about paying for basic needs without going into debt (LeanIn.Org and SurveyMonkey via eMarketer, May 2020)
- 51% of 18 to 34-year-olds are concerned about paying rent/mortgage as compared to 38% and 14% (LeanIn.Org and SurveyMonkey via eMarketer, May 2020)
How to Advertise: Takeaways from ’08
Budget Shifted to Digital:
After ‘08, U.S. ad spending plummeted but accelerated the shift to digital advertising, particularly online video and mobile usage. In 2011, Geoff Ramsey, the chief executive of eMarketer, made a statement to the New York Times: “The bad economy has actually accelerated the shift to digital advertising. Online ads, especially search ads, are increasingly seen by many marketers as a more reliable bet than print ads, which are often difficult to tie to a measurable financial result.” (New York Times, 2011) In the same article, Brian Wieser, executive vice president and director of global forecasting at Magnaglobal reiterated, “The fastest-growing media will be online video and mobile” (New York Times in 2011). Similarly, we have already seen a massive increase in internet usage and online news consumption.
Post-’08 Examples: “Bank Solid. Bank U.S. Bank.” Readers understand the implicit call to action: “You should be banking at US Bank.” Similarly, the short message “Had Enough Excitement?” offers a cheeky take on the same ‘safe and sound’ message that communicates mutual understanding. “When turbulence and uncertainty surround us, we look to those who have proven themselves over time” offers a grownup, somber tone that shows prudence, reliability, and trustworthiness.
“Safe and Sound” Today, the brands that will make the greatest impact and weather the storm are those that can get positive, educational, and valuable content in front of people. Financial institutions and fintech, in particular, need to prioritize building trust, offering sound advice, and pushing longevity and experience; consumers are craving steady, stable, “safe and sound” figures that care deeply. Further, in times where our security is threatened, people are hardwired to seek clarity and calm, according to Econsultancy.
The importance of trust
Not only should trust, reliability, and compassion factor into brand messaging, but halting messaging completely will break trust with the consumer. Says eMarketer, institutions that were slow to respond will face a deficit of consumer trust in the coming months—and depending on their role, tough questions to answer.
- 29% of Americans have already begun using a brand due to the innovative or compassionate way they’ve responded to the COVID-19 crisis. (Edelman)
- 43% say they want messages that are reassuring from brands they know and trust (AAAA)
- Millennials are 44% more likely to trust experts, who happen to be strangers, than advertisements. (Hubspot, 2019)
- 75% saying brands should inform people of what they’re doing (Kantar Research)
- Key takeaways: Build trust, Offer sound advice; Steady, stable, “safe and sound;” Longevity, experience; Prudent Approach – Care deeply
- Trust Native Over Social Native ads garner greater levels of trust among consumers with a third (33%) more likely to trust native advertising than traditional advertising, and that clicking on a native ad driver on a premium content website has a greater impact than clicking via Facebook. (NAI study)
Bottom line: the coronavirus crisis’s impact on the financial vertical will likely be felt for a while. In this uncertain time, it’s important for financial services to build trust with the consumer, stay present, steady, and don’t go radio silent.
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Charlotte Otremba is Sr. Manager of Communications and Marketing at Bidtellect.