Explain the different steps in advertising for bank or financial services institutions
Posted by Ripon Abu Hasnat on Monday, June 9, 2014 | 0 comments
Several steps
are essential for successful execution of advertising campaigns in financial
services. These steps are-
Determining the Objectives of Advertising:
The first
step is to determine the objectives of the advertising campaign, reflecting the
overall marketing strategy of the company.
For example,
the objective of an advertising campaign might be to generate new policies for
an insurance product or to increase the level of consumer awareness of the
brand or the company. Recognizing and identifying the exact objective of an ad
campaign is critical to accurate assessment of its merits and potential.
Examples of popular advertising objectives in financial services are target
levels for customer inquiries, new policies signed, and advertising recall.
(2) Determining the available Budget
The next step
in the advertising process is to determine the budget required to carry out the
ad campaign. Often, the required budget is significantly different from what is
available, and may be dictated by organizational budgetary constraints. For
example, the budget available for advertising a particular financial service
might be determined based on a percentage of the total premium revenues
generated in the prior year. Clearly, an increase in the intensity of an
advertising campaign would require higher budget allocations and may call for
the abandoning of traditional budget-setting approaches for advertising. The
total budget that is required to execute an advertising campaign is a function
of the reach and frequency (and hence the gross rating points) necessary to
create consumer response and the cost of media used to secure this level of
exposure. The associated dollar figure, therefore, needs to have been estimated
prior to negotiations with higher levels of management, in order to ensure the
availability of sufficient funds for executing an effective advertising
campaign.
(3) Estimating the Return on Investment (ROI):
The next step
in the advertising process is to determine the return on investments associated
with the advertising campaign. Four items of information are needed in order to
conduct this estimation, one of which is an estimate of the lifetime value of
an acquired customer. The lifetime value of the customer is the total profit
that an acquired customer represents to the company. It is quantified as the
sum of the profits associated with the stream of transactions that the customer
will undertake with the company over the years. In addition, an estimate of the
total number of consumers who will be exposed to the advertising campaign is
required. An estimate of the percentage of reached consumers who will
eventually purchase the advertised financial product or service is also
required. Clearly, negative return on
investment estimates would make the advertising campaign and unlikely prospect
for further action.
(4) Developing the Contents of the Ad:
Once the
return on investment computation has shown favorable results, the next step in
the advertising process is to develop the contents of the ad, as reflected in
its execution style and informational content. In this step, the services of
advertising agencies that specialize in producing financial services ads are
required. These specialized agencies often also engage the support of legal
experts who can determine the compliance of advertising content with existing
regulations. Often, testing of ad content using small-scale samples, focus
groups, or test markets may be needed.
(5) Media Selection:
The next step
in the advertising process is to determine the media that will be used. In
general, financial services that are more complex and require the communication
of detailed information tend to rely on print forms of advertising.
Television
advertising, which capitalizes on multiple sensory inputs, tends to be the most
effective although often the most expensive. Once the media to be used for an
ad campaign has been determined by the ad agency, a media schedule needs to be
developed in order to achieve the original objectives of the ad campaign which
had been identified. There are specific media scheduling and campaign execution
strategies that are most effective in certain forms of financial services. For
example, an effective ad-scheduling tactic is to advertise in pulses with heavy
advertising in one month, reduced advertising the following month, and a return
to high advertising levels in the third month.
(6) Scheduling and Campaign Execution:
There are
specific media scheduling and campaign execution strategies that are most
effective in certain forms of financial services. For example, an effective
ad-scheduling tactic is to advertise in pulses with heavy advertising in one
month, reduced advertising the following month, and a return to high advertising
levels in the third month.
This tactic
tends to result in more sales and higher levels of consumer response than a
constant and steady level of ad spending.
(7) Measurement:
The final
step in the advertising process is to assess the impact of the ad campaign
through formal market research or examination of company records. It is
critical to measure and record sales levels and other advertising responses
following an ad campaign in order to determine the financial effects of the
invested advertising dollars.
Such measures
may help fine-tune the advertising strategy of the company and provide
estimates for optimizing future advertising campaigns. For direct advertising
campaigns, such measures are obtained through the tracking of consumer
inquiries following the ad campaign and the use of tracking numbers, which can
pinpoint the exact promotional material to which the consumers are reacting.
For ads delivered through mass media such as television, radio, and newspapers,
the tracking of consumer responses may be considerably more difficult and might
require examining aggregate changes in sales for the months following the ad
campaign, or the purchase of market research data from specialized research
firms.
You can subscribe by e-mail to receive news updates and breaking stories.
0 comments for "Explain the different steps in advertising for bank or financial services institutions"
Leave a reply