Financial Services Canada IAB Report January 2013
Outline Kantar Media Overview Who We Are Methodology State of the Industry Overall Industry Digital Ad Expenditure By Segment By Advertiser Ad Trends by Financial Services Category Consumer Banking Credit Cards Investment & Retirement Products Website Categories Where Digital Budgets Are Invested 2
Kantar Media Overview 3
Kantar Media A World Leader in Marketing, Media and Advertising Information #1 worldwide in advertising monitoring (adex and creatives) #1 worldwide in single source market research with TGI #1 in TV audience measurement systems (TAM) outside US #1 worldwide in news monitoring and media evaluation 4
Kantar Media s Provider of Marketing Intelligence Since 1926 Globally, we measure: 96% of all ad expenditures 50+ countries 2M consumers online behavior 1 million digital TV HH s 5
Methodology Online Display Advertising Continuous monitoring of 600 Canadian web sites Robust spidering technology Navigates through sites and collects all display advertising on a page Automatically matches images against database of previously identified ads New ads are classified, entered into the database and available for future matching Site page views are used to estimate ad impressions Rate card CPMs applied to ad impressions to estimate ad expenditures 6
Overall Industry Digital Ad Expenditure 7
Canadian Confidence Holds Steady Though pressure from the issues impacting the U.S. and the Eurozone are clouding the outlook, Canada enjoys highly efficient markets, well-functioning and transparent institutions, and excellent infrastructure. Canada s financial system has benefited from comparatively low exposure to investment banking risks, making it the world s most sound banking system* Despite the uncertainty, Canadians continue to feel confident that the economic situation is basically under control. The Present Situation Index, which measures how people feel about the economy right now, also remained virtually unchanged. - Norman Baillie-David, SVP of TNS in Canada and director of the research firm s monthly tracking study *World Economic Forum. 2012. <http://www3.weforum.org/docs/wef_globalcompetitivenessreport_2012-13.pdf> TNS. December 20, 2012. <http://www.tnscanada.ca/news/2012.12.20-cci-tracking-2012-12.pdf>. 8
Digital Spending By Financial Segment Digital Ad Spend Segment Full Year 2012 (000) Full Year 2011 (000) % Change % Share 2012 Consumer Banking $32,121.3 $30,391.6 5.7% 21.2% Credit Cards $41,506.9 $28,605.2 45.1% 27.4% Investing/Retirement $31,401.1 $24,684.8 27.2% 20.8% Insurance $12,946.6 $7,129.4 81.6% 8.6% Lending $11,396.6 $5,138.8 121.8% 7.5% Other $21,872.7 $31,561,6-30.7% 14.5% Grand Total $151,245.2 $127,511.4 18.6% 100.0% Competition for new customers and enhanced interest in digital has led to growth across all major segments. Source: Kantar Media, Jan-Dec 2011, Jan-Dec 2012 9
Top 10 Canadian Financial Service Advertisers Digital Ad Spend Rank Advertiser Full Year 2012 (000) Full Year 2011 (000) % Change 1 Toronto-Dominion Bank $19,168.1 $12,573.9 34.4% 2 Capital One Financial Corp. $18,909.0 $14,291.0 24.4% 3 American Express Co. $13,475.7 $16,341.5-21.3% 4 Bank of Montreal $11,674.3 $2,255.2 80.7% 5 RBC Financial Group $11,612.8 $7,364.9 36.6% Canadian Imperial Bank Of 6 $6,776.9 $5,063.1 25.3% Commerce 7 HSBC Holdings Plc $5,636.5 $7,046.5-25.0% 8 Bank Of Nova Scotia $5,547.0 $4,014.9 27.6% 9 Manulife Financial Corp. $3,487.3 $1,819.3 47.8% 10 Experian Group LTD $2,262.7 $29.1 98.7% Source: Kantar Media, Jan-Dec 2011, Jan-Dec 2012 10
Consumer Banking Advertisers 11 11
Consumer Banking Advertising Takes a Back Seat Consumer banking advertising is responsible for 21.2% of financial services digital ad spend totals $32.1 million (Full Year 2012) is up 5.7% in 2012 as compared to 2011 With the six largest banks controlling 85% of the market, the Canadian market is highly consolidated, leading to tough competition for customers. Stagnant revenues combined with higher costs driven by Bank Act regulations have encouraged cost cutting and reductions to marketing budgets. Ernst & Young. 2012. <http://www.ey.com/publication/vwluassets/making_the_right_moves_-_global_banking_outlook_2012-2013/$file/making-the-rightmoves_global-banking-outlook-2012-13.pdf>. Canadian Bankers Association. 2012. <http://www.cba.ca/en/media-room/50-backgrounders-on-banking-issues/123-credit-cards>. 12
Top 5 Consumer Banking Advertisers Digital Ad Spend Advertiser Full Year 2012 (000) Full Year 2011 (000) % Change Capital One Financial $9,472.9 $9,369.6-1.1% Toronto-Dominion Bank $5,421.8 $3,392.7-37.4% RBC Financial Group $4,117.4 $3,566.2-13.4% HSBC Holdings $2,666.1 $3,433.5 28.8% Canadian Imperial Bank Of Commerce $2,356.9 $2,599.9 10.3% Source: Kantar Media, Jan-Dec 2011, Jan-Dec 2012 13
Consumer Banking Messaging Strategies New Answers to a Market Challenge Challenges A saturated market has made it difficult for banks to grow their consumer base, creating a very competitive environment in which leading banks are fighting an aggressive battle to win and keep customers Creative Solutions To prevail in this competitive industry, banks are trying a variety of approaches to stand out, including: Providing direct incentives for customers to switch, like cash and gift certificates Emphasizing product differences Focusing on service quality However, as banks quickly copy strategies used by rivals, the ultimate result has been a significant amount of competitive imitation 14
Reason To Switch Campaign TD Canada Trust Cash incentives are used to capture new customers Service is used as a differentiator, including the convenience of extended branch hours and testimonials about quality customer service English French Source: Kantar Media, 2012 15
Demonstrating Depth and Breadth Royal Bank of Canada Student Loans 1. Student Loans 2. Interest Rates 3. VIP Banking Canada s largest bank showcases its diverse offerings with consistent message branding VIP Banking Source: Kantar Media, 2012 16
Emphasizing Community Involvement and Outreach Scotiabank Takes A Different Approach English French Scotiabank puts itself outside the competitive fray by promoting its charitable outreach in the Richness Project campaign Source: Kantar Media, 2012 17
Online and Mobile Banking De-emphasized in 2012 Digital Efforts As online banking has become mature (according to a 2012 study by the CBA, 67% of adults reported using it), digital spending for online/mobile banking has fallen Online and mobile banking accounted for 3% share of all digital spend on Banking Services in 2012 vs. 5% share in prior year a 37% decline in ad spend volume Most of the spending was by TD Bank; National Bank of Canada; Bank of Montreal Source: Kantar Media, 2012 Canadian Bankers Association. November 9, 2012. <http://www.cba.ca/en/media-room/50-backgrounders-on-banking-issues/125-technology-and-banking>. 18
Credit Card Advertisers 19
Credit Card Advertising Bounces Back Credit Card advertising is responsible for 27.4% of financial services digital ad spend totals $41.5 million (Full Year 2012) up 45.1% as compared to 2011 The category is characterized by: Slow growth rates for cards in circulation and sales volume Competition among card issuers for high-value customers A wide variety of card products that creates a need to differentiate through marketing Canadian Bankers Association. 2012. <http://www.cba.ca/en/media-room/50-backgrounders-on-banking-issues/123-credit-cards>. 20
Top 10 Credit Card Advertisers Digital Ad Spend Advertiser Full Year 2012 (000) Full Year 2011 (000) % Change American Express $13,057.5 $16,249.7-19.6% Capital One Financial $9,295.8 $3,240.6 186.9% TD Bank $6,838.1 $813.0 741.1% RBC Financial Group $2,107.9 $943.4 123.4% Bank Of Montreal $2,078.1 $121.2 1615.2% Visa Inc. $1,880.9 $2,176.3-13.6% Bank Of Nova Scotia $1,732.7 $356.8 385.6% Canadian Imperial Bank Of Commerce $1,383.6 $1,393.1-0.7% Bank Of America Corp $1,210.2 $336.7 259.4% Exxon Mobil Corp $766.6 $0.0 --- Source: Kantar Media, Jan-Dec 2011, Jan-Dec 2012 Bank of Montreal increased its digital spend by 1,615% from 2011 to 2012. While AmEx and Visa decreased their spend during the same time period. 21
Credit Card Advertising Strategies Credit card marketers are sticking to what works and have not changed their basic marketing strategies Primary messaging focus Rewards programs Cash back Interest rates Rebuilding credit 22
Reward Cards American Express RBC Avion RBC Avion Infinite Card Travel Rewards ch American Express offers incentives to new customers: Bonus points in its rewards program No card fee for first year RBC focused on a longer-term reward incentive RBC encouraged its card usage to earn travel rewards Source: Kantar Media, 2012 23
Cash Back Offers MBNA Smart Cash RBC Cash Back Card RBC offered a less generous reward but supplemented this with no annual fee MBNA s cash back reward emphasized two common household expenses (gas and groceries) MBNA also promoted a higher cash back reward than RBC Source: Kantar Media, 2012 24
Building Credit Capital One RBC Royal Bank Capital One encouraged people who have bad credit to rebuild it with their guaranteed approval incentive RBC targeted people who have not built their credit history RBC emphasized its low requirements to obtain credit Source: Kantar Media, 2012 25
Investment & Retirement Product Advertisers 26
Investment and Retirement Product Advertising Investment & Retirement Product advertising is responsible for 20.8% of financial services digital ad spend totaling $31.4 million (Full Year 2012) up 27.2% in 2012 as compared to 2011 While Canadian investment companies fared comparatively well in the face of a global recession, less optimistic consumer sentiment has led to campaigns focused on securing the future. 27
Digital Spend By Sub-Segments Full Year 2012 29% 22% 31% 17% Advertisers in the investment and retirement category spent most of their digital ad dollars in online brokerage ads in 2012. They also invested in online ads for General Promotion, Investment Products, and Planning and Advisory Services. Online Brokerages Planning & Advisory Services Investment Products General Promotion Planning and advisory services was the least advertised sub-segment during the same time period. Source: Kantar Media, 2012 28
Top10 Investment & Retirement Advertisers Digital Ad Spend Advertiser Full Year 2012 (000) Full Year 2011 (000) % Change Bank Of Montreal $5,629.0 $984.2 471.9% Toronto-Dominion Bank $3,428.0 $6,376.5-46.2% Manulife Financial Corp $3,186.5 $1,698.2 87.6% RBC Financial Group $2,976.9 $1,256.4 136.9% Fidelity Canada $1,146.4 $134.0 755.4% Bank Of Nova Scotia $1,066.0 $2,053.6-48.1% BlackRock Inc $1,030.8 $449.8 129.2% HSBC Holdings Plc $875.7 $1,024.5-14.5% Dynamic Fund Of Canada Ltd $205.8 $1,443.6-85.7% Jones Financial Cos Llp $35.3 $1,216.3-97.1% Source: Kantar Media, Jan-Dec 2011, Jan-Dec 2012 Fidelity Canada increased its digital ad spend by 755% from 2011 to 2012. Meanwhile, TD Bank and Bank of Nova Scotia decreased their spending during the same time period. 29
Investment and Retirement Product Advertising Messages Taking Care of Today and the Future, Not Striking It Rich Online brokerages provide Value through monetary incentives for opening new accounts Powerful tools to help investors trust for investors Investment Products/Services provide Long-term financial planning (retirement or nonretirement) Financial expertise and knowledgeable staff Growing emphasis on putting customer s needs first 30
Online Brokerages Bank of Montreal Royal Bank of Canada Bank of Montreal adds value by offering money incentives It emphasizes its trusted status with other Canadian investors Source: Kantar Media, 2012 Royal Bank of Canada highlights its client service award with the goal of gaining trust and approval Easy-to-use factor comes into play with comparison to online shopping 31
Planning and Advisory Services Scotiabank RBC TD TD Canada Trust used the fear factor in their messaging, encouraging prospects to choose TD for advice on retirement Bank of Nova Scotia messaging focused on showing reliability and knowledge of a long-term support staff RBC depicted the importance of the prospect s plan and how it might shift throughout the years Source: Kantar Media, 2012 32
Where Digital Budgets Are Invested 33
Segment Spend Allocation By Site Type Full Year 2012 Site Category Credit Cards Consumer Banking Investing/ Retirement Insurance Total (000) $41,506.9 $32,121.3 $31,401.1 $12,946.6 Total - % Share 100.0% 100.0% 100.0% 100.0% Business, Finance, Investing General Interest/ Entertainment 12.4% 21.3% 53.3% 16.9% 24.0% 24.5% 13.0% 12.0% Local News & Guides 19.7% 7.2% 6.5% 14.2% News & Current Events 12.8% 11.2% 6.7% 8.8% All Other 31.1% 35.8% 20.5% 48.1% Source: Kantar Media, Jan-Dec 2012 Investing/retirement segment was highly targeted to prospects on sites relating to business, finance, and investing a natural fit for this type of product Credit cards, consumer banking, and insurance segments were marketed to a broader mass audience on general interest/news sites 34
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