Survey: Marketers working closer with more bank business lines

Agility and flexibility will be keys as marketing teams allocate their resources to contribute to their institutions’ growth in meaningful ways.

By Mark Gibson

This article is part of a continuing series on ABA surveys of bank marketers. Previous articles include trends in bank marketing, how marketers use data, choosing and using the right customer data tools, bank marketers as bank leaders, analytics and strategy, and budget expectations.
The 2022 ABA Marketing Planning and Budgeting Survey reinforced the budget shift to digital marketing, and it provided insight into what bank marketers are planning in terms of staffing changes and budget allocation. The findings also suggest that the marketing function is working more closely with business lines than in past years:

Money is moving to digital. The 2022 survey reinforced the 2021 survey finding that bank marketers are shifting more of their budgets to digital tools, at the expense of traditional media. Digital advertising, search engine marketing and social media budgets are being increased by the majority of respondents, while fewer than 20 percent reported they are increasing TV, radio, outdoor or print. Thus, the shift in allocation of dollars continues to move from traditional to digital for the second consecutive year.

Source: ABA Q3 2022 Marketing Survey

The reason for this shift could be that marketers continue to believe their institutions are earning a higher return on digital marketing techniques than other more traditional tools. For the second year running, digital advertising and search engine marketing came out on top, with direct mail in the center and traditional media trailing toward the bottom.

Source: ABA Q3 2022 Marketing Survey.

Business lines influencing marketing budgets. Another factor that may be driving the shift from traditional marketing to digital is that lines of business are having a greater influence on how much is being spent on marketing, and how it’s being allocated. In 2022, 58 percent of respondents agreed that business lines have direct input on marketing expenditures, compared to only 40 percent in 2021.

Sources: ABA 2021 and 2022 Marketing Surveys.

This trend reinforces other data we have seen that more marketing teams are working closely with business lines to create programs that generate measurable sales revenue. This increased focus on measurable results often swings the pendulum in the direction of digital marketing which is typically more easily trackable than traditional techniques.

Insight into staffing levels. One of the more common questions that bank marketers have is: What is the right number of staff for an institution of my size? While there are no easy answers—a number of factors come into play—the 2022 survey added two questions to provide insight into this important topic.

The survey segmented responses by size of institution, so the table below provides directional insight. Not surprisingly, there are economies of scale to marketing, meaning that as an organization grows, the assets per one marketing full time equivalent also grows. For instance, for the smallest institutions under $500 million in assets, there was one marketing FTE per $192 million in assets. And for the $500 million to $999 million asset category, the figure was one FTE per $395 million in assets. Finally, for institutions in the $1 billion to $9 billion range, the figure was one FTE per $1.25 billion. An important caveat is that the standard deviation was relatively high for all these asset categories, meaning that the FTE figures varied considerably by institution.

Source: ABA Q3 2022 Marketing Survey.

Putting together the pieces of the pie. The survey also investigated how bank marketers are allocating their budgets. Not surprisingly, advertising took up the largest proportion of the budget at 38 percent, followed by events and sponsorships at 27 percent. Outside agency support averaged 18 percent of the marketing budget, while public relations accounted for 12 percent.

Source: ABA Q3 2022 Marketing Survey.

Finally, the survey asked how dollars are being allocated between customer acquisition and customer retention activities. Interestingly, respondents reported there was an almost even split between the two, with acquisition coming in only 3 percentage points higher than retention. Historically, acquisition would have rated higher than retention, so this may indicate a change of strategy toward deposit retention or existing customer engagement and cross-servicing.

Source: ABA Q3 2022 Marketing Survey.

Looking ahead. The crystal ball is clear—digital tools, marketing and sales partnerships and measurable results for an even balance of customer acquisition and retention are in the cards for the upcoming year. Budgets are increasing across channels and tactics, and marketing teams have allocated their resources to contribute to their institutions’ loan and deposit growth in meaningful ways. Darkening economic clouds could be on the horizon, but provided bank marketers have the internal capacity to do so, they will remain agile and flexible as their institutions’ goals pivot throughout the next 12 months.

Mark Gibson is senior consultant at Capital Performance Group, a strategic consulting firm that assists banks in making the most of their marketing efforts. He can also be reached on LinkedIn.