29th July 2015
Marketing madness and at what a cost
The marketing of financial services products via television, online and radio must be one of the very best examples of regulation gone mad that one could find.
In 2014, financial services accounted for 20% of all advertising spend at £158m, with price comparison site moneysupermarket.com the leading individual spender.
Research by eMarketer forecasts that in 2015, mobile will overtake all of print, including both newspaper and magazines; in 2016 it will overtake television; and in 2017 mobile will become the single biggest ad channel in the UK market.
And yet the biggest failing of all these ads is that no matter how much money is put into the position of the ad or making it appealing, the small print significantly dampens the impact.
The FCA has guidance on the subject of financial services advertising and there is a lot of good sense in it.
The FCA state that “Warnings should be right for the product, the medium, the audience and the content of the promotion. Irrelevant or inappropriate warnings may only discourage or confuse consumers for no useful reason and will result in the advert being unclear”.
However, it still seems that striking a balance between providing relevant information in a compliant way is proving confusing.
The next time you actually listen to or view advert please do so carefully.
That garbled message running at the end of so many does the very thing that the FCA advise against. Or, try and read the small print on the final frame of a banner ad and see just how useful it proves to be?
Is financial services advertising regulation simply there to tick a compliance box? What do you think are good examples of financial services ads out there, let us know?
Comments (7)
To my mind it is often the case that the best products don't need advertising as their benefit or quality is well known. You may see plenty of ads for Asda, but when did you last see an ad for Fortnum & Mason? I see Toyota ads frequently, but never any for Ferrari.
It would seem that in the main only the ignorant or uniformed are the target as the informed and advised have invariably already made their decisions. It is a fairly well established fact that it is almost impossible to accurately measure the effectiveness of advertising. Much is placed out of a sense of hubris or If the competition do it, then we must.
As far as regulatory oversight on this activity is concerned in view of the above I think it is not only reasonable, but essential that regulators rein in adverts, otherwise how long will it be before we get Invest in this and we promise you will be rich in a week.
Harry Katz 31/07/2015 09:03
For eveything they buy, is anyone so bloody thick that they don't realise "terms and conditions apply" and that all products are "subject to availability?" Or is all this nonsense there so that anyone can later blame someone else for their own stupidity or lack of attention AND make it stick?
If we really MUST have all these silly garbled warnings, can't they be put at the beginning of every commercial break, or once in a a prominent place in a newspaper?
Richard Brown 31/07/2015 09:34
But my comment here is driven by Harry, hello Harry. I see you think luxury goods don't advertise.
I'm afraid, yes they do, just not on TV. Its too mainstream for them, too much wastage and, unlike Iceland, the association with Coronation Street is not one they aspire to.
However, sport, sailing in particular, they love - if you saw the Americas Cup race last weekend, they were all on TV. Watch for the start of the Fastnet in a couple of weeks, they will be there too.
And Ferrari spend an absolute fortune advertising - putting their name to a team and backing it with lots of track advertising in Formula One.
Fortnum and Mason also I'm afraid - I get mailings from them quite a lot. Sadly, the result of buying a hamper for a previous company's Christmas promotion, not because I bought one for myself! But next time I need a hamper...
Lesley Hankin 31/07/2015 09:46
I completely agree with Richard, realistically I don't believe anyone is going to sign-up for a FS product based on one advert alone and as all T&Cs are going to be provided during the sales process, they are ludicrously over the top.
I think if a consumer is going to buy a product based on one advert and not read T&Cs or do their homework then at some stage they also have to be accountable for their own actions.
Sarah Paul 31/07/2015 11:05
I didn't say that luxury brands don't advertise, just that they probably don't need to. I am a very devout follower of F1 and I don't think I can even name an advertiser on the Ferrari. Anyway Ferrari carry the ad for payment. They don't care if anyone reads it or not. But when was the last time you saw an advert for Ferrari? They just don't need to advertise. I know nothing about sailing so can't comment. But I would reiterate - when did you last see an advert for Fortnum's or a Savile Row suit?
Harry Katz 06/08/2015 18:53
I think you miss the point Harry, Ferrari, in fact any F1 team could not operate without sponsors, either for the car or driver. They may not care as you suggest but the sponsor does and there is no room for 'warnings', not even for tobacco.
The Scuderia's current deal with the New York-based company Philip Morris is estimated to be worth $160 million annually.
While its branding is no longer visible, although the red-and-white square which adorns the Italian machines is close enough, Philip Morris obviously benefits from the relationship, leveraging its partnership through synergies and by inviting clients and business partners to races and to Maranello.
Savile Row tailors regularly advertise, but not always in traditional media http://www.gievesandhawkes.com
Try the link for Gieves & Hawkes Summer sale.
Derek Bradley 07/08/2015 08:05
Thats all true Derek, yes, thank you.
Harry - my point was also that the Ferrari F1 team IS their advert. Along with the logo emblazoned trackside and on the bridges at each grand prix. Its all 'advertising' - flipping expensive advertising but advertising nonetheless. And effective, to which your comments and Red Bull's involvement are both testament.
Sorry, this was a small point which has perhaps hijacked the original thread somewhat.
Lesley Hankin 07/08/2015 09:50
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