Year-on-year marketing spend at the UK’s largest high street banks and building societies grew in 2022, as businesses responded to the economic downturn.
An analysis of reports and accounts by Financial Promoter found that marketing spend increased at Barclays, Cooperative Bank, Coventry Building Society, Lloyds Banking Group and Yorkshire Building Society. HSBC UK and Santander UK did not publish a specific breakdown of operating costs.
According to financial statements published for the year ending 31 December 2022, Barclays’ total marketing spend increased 25% year on year, totalling £500m on marketing and advertising in 2022, up from £399m the previous year.
Lloyds Banking Group’s accounts, meanwhile, show spending on “advertising and promotion” grew from £161m to £170m over the same period, a rise of around six percentage points.
Coventry Building Society, the UK’s second largest mutual, increased spend by 45.7%, from £4.6m in 2021 to £6.7m in 2022. Yorkshire Building Society, meanwhile, followed suit, increasing spend from £9.8m in 2021 to £14.8m last year. Nationwide had not published its figures at the time of writing.
The Co-operative Bank did not breakdown its increase in marketing investment, only to say that higher operating costs were partly attributed to “higher marketing spend in 2022”.
Karen Quinn, director of Untamed Marketing, said while some businesses may be tempted to tighten their belts in a downturn, previous economic cycles show that those who maintain their presence see market share increase over the long-term.
“Spending more on your brand presence now will pay dividends,” she said. “And, in a world where costs are rising, and the focus on mental health is increasing, we’re seeing a post-Covid step change in how banks are communicating.
“Propensity to trust any financial organisation is low, so there is a positioning challenge that banks will try to overcome. It’s why straplines like ‘by your side’ are becoming prevalent as they position themselves as long-term partners that understand their customers.”
Quinn said that the growth of challenger banks has added pressure on high street banks to demonstrate their value, particularly when it comes to digital.
Mike Evans, founding partner of Marketing Alpha, agrees, noting that the battle for new customers is no longer focussed purely on acquiring people from younger demographics.
“The market is becoming more competitive, with disrupters entering who are appealing to a broader demographic (not just younger people), so maintaining market share in this environment is challenging and marketing helps do that.
“Banks are reinforcing their emphasis on service to be seen as more client facing, which is where a lot of advertising is positioned. This is against a backdrop of branch closures and a reliance on digital. The human side of banking has waned a bit and I think that is where banks are trying to change things.”
UK Finance declined to comment.