Media companies face ‘250m loss’ as banks shift spend below the line

Media companies could lose up to 250m worth of revenue over the next five years as banks and building societies move their spend below the line.

The prediction is based on research conducted by strategic consultants The Coba Group among 35 of the UK’s leading banks, building societies and insurance companies.

Their findings reveal that 86 per cent of the financial services executives interviewed will drastically reduce the cost of media advertising campaigns in favour of telemarketing and direct mail.

Graham Gould, partner at The Coba Group, says: “Thirty to 40 per cent of all the money spent on media advertising will switch to below- the-line advertising over the next five years.

“There has been a significant strategic shift from recruiting customers to retaining them,” he says.

The total spend on media advertising for financial services last year was 650m.

Alliance & Leicester is one of the first building society’s to place more of an emphasis on below-the-line advertising.

The building society, which spent more than 18m above the line last year, has slashed its budget to 10m, according to sources.

“We are redirecting our marketing budget below the line to reflect the general trend in financial services, which is increasingly directly driven,” says Simon Knibbs, head of direct marketing for A&L.