Bank marketing budget and staffing considerations for 2025

By Ally Akins

In the latest ABA survey of bank marketers, it is clear they are focusing more on the channels that drive results, with a prioritization of digital marketing and media for 2025 budgets. This survey was fielded from September to October of 2024 and had 101 respondents from banks less than $200 million up to $10 billion.

Overall bank marketing spend

Marketing spend benchmarks provide industry standards to compare banks’ marketing budget. It is rarely an apples-to-apples comparison, but it allows banks to understand if they are in the ballpark of peers and estimate what an appropriate marketing budget might be.

Benchmarking marketing spend to peers is useful as a broad guideline. However, it does not consider unique aspects of a bank’s business model, market presence or business objectives.

As a result, benchmarks should be used as guidelines rather than firm targets.If a bank is spending substantially below or above the benchmark, management should have a good understanding of and justification why.

Banks tend to spend between 0.05-0.07 percent of assets on marketing. This has remained true for the past three years the survey has been conducted. This simple figure allows banks to estimate an appropriate potential range for their total marketing budgets, excluding overhead and salaries.

Through the 2022-2024 surveys, bank marketers have been asked to quantify the percentage of their budgets spent on new customer acquisition, customer retention and other budget line items. Budget expense allocated to overall advertising has remained relatively constant, while budgets have increased on new customer acquisition and retention.

Additionally, outside agency support as a percentage of marketing budget has decreased slightly, from 18 percent in 2022 to 13 percent in 2024. It would be interesting to understand whether productivity tools such as generative AI or Google Analytics have had something to do with this decrease.

Digital dominates

When asked to rank various marketing channels for their greatest return, bank marketers continued the trend of highlighting digital marketing, which has been the case for the past two years’ surveys. Digital marketing can be more cost efficient and easier to measure, which can be beneficial for banks of all sizes.
At the bottom of the list, bank marketers ranked magazines, statement communications, texts, and directories as the lowest return for their effort.

Accordingly, this also correlates to the areas that bank marketers plan to invest more in next year. The top line items for budget increases in 2025 are digital advertising, social media, SEM/SEO, website maintenance, and email marketing.

The lowest ranking channels for 2025 prioritization were newspapers, statement enclosures, and magazines, highlighting further shift away from traditional communication formats as digital channels become widely utilized.

SEM is increasingly becoming a focus for bank marketers because of its importance in digital lead generation. Now, with banks’ websites acting as a virtual branch, billboard and flyer for the bank, it is important that the website is as optimized as possible to acquire and retain traffic.

Only 30 percent of respondents selected direct mail as a category they planned to increase. While digital marketing has been encroaching on budgets that were formally dedicated to mail, direct mail –asf –particularly when combined with targeted digital media, can be an efficient and effective marketing channel.

In a recent study on the effectiveness of direct mail in 2024, Postalytics, a direct mail automation platform, found that direct mail has an 80-90 percent open rate, where email falls below 20 percent. Additionally, following Covid, more consumers are spending time at home than ever, and direct mail’s popularity is increasing in kind. These statistics suggest bank marketers may want to reconsider their direct mail budget allocation.

Additional insights from this year’s budgeting questions include:

• Only 38 percent of bank marketers budget for unplanned campaigns.
• Thirty-seven percent have a dedicated budget for digital growth and website enhancement.
• Only 16 percent received a budget for deposit growth initiatives in 2024, despite it being a top strategic priority, but 35.8 percent of overall advertising budgets were allocated to deposit growth this year, on average.

A topic on bank marketers’ minds is the use of AI. While it has been introduced as a potential significant disruptor for marketing, particularly in content creation and advertising optimization, only 15.2 percent of bank marketers surveyed planned to budget for it in 2025.

Department staffing and resources

The survey asked respondents of all bank sizes to provide the number of full-time equivalents in their marketing department. The responsibilities (and thus staffing) of departments vary widely by organization, and staffing varies by business model, but this provides insight into the size of departments by asset tier.

As marketing budgets and responsibilities shift from traditional communications to advertising and revenue generation, it also means that the design and structure of marketing departments must change. Bank marketers must look beyond just the number of FTEs to evaluate roles and job descriptions to equip their departments to be future proof. This includes imagining how product management, data analytics, digital marketing, and customer experience fit into the picture.

Wrapping it up

2025 promises to bring more of the same challenges and opportunities as 2024. But changing interest rates and strategic priorities will bring new challenges as well: bank marketers will be looking for ways to become more nimble, efficient, and drive greater return. This will include a prioritization of digital marketing and a focus on optimizing budget towards results. Additionally, analyzing marketing budget to benchmarks and aligning your staffing models towards optimizing performance will become critical in demonstrating that return.

Ally Akins is a consultant at Capital Performance Group, a strategic consulting firm that assists banks in making the most of their customer data. She can also be reached on LinkedIn.