Banker James Yeatman

US banks and credit institutions spent $13.4 billion in 2007 on direct marketing advertising.

These efforts generated $178.8 billion in sales, and total returns is forecast to hit $286.2 billion in 2012, according to the Direct Marketing Association (DMA), MarketingCharts reports.

Those findings are from a new DMA report, "Direct Marketing Facts and Figures in the Financial Services Industry."

"DMA found that the Financial, Banks and Credit Institutions sector in 2007 was the number-one American industry spending on direct marketing, and it ranked second in sales," said Anna Chernis, DMA's senior research manager and the report's author.

"In addition, the Financial, Security and Commodity Brokers, Holding Companies sector was the tenth-largest spender and sixth in direct marketing-driven sales."

Most financial services industry direct marketers (41.8 percent) use direct mail (other than catalog) as their primary channel, whereas the most common secondary channels are websites (57.8 percent said so) and inbound telephone (50.8 percent), according to the report.

Among other key findings of the report:

• Banks and credit card institutions had the best ROI in this sector in 2007, at $13.37 per dollar spent.
• Financial services direct marketers mainly use non-catalog direct mail (41.8 percent) as their primary direct marketing channel.
• Financial services companies' advertising expenditures for commercial email is expected to have the largest growth among all media types between 2007 and 2012, with a compound annual growth rate (CAGR) of 22.5 percent.
• Internet direct marketing advertising spending in this sector is projected to grow at the second-highest rate, at a CAGR of 17.8 percent, from 2007 to 2012.
• Telephone marketing advertising expenditures for the overall financial services sector are expected to reach $7.4 billion in 2008 and $8.4 billion in 2012.
• Broadcast advertising sales are expected to climb at a CAGR of 4.8 percent from 2007 to 2012.
• Insert media sales in the financial services arena will exceed $1.1 billion in 2008, with banks and credit institutions accounting for half of sales.
• Financial services companies are projecting to spend less on print advertising than they currently do. Banks and credit institutions' ad spending is expected to decrease 0.5 percent in 2012 from current levels.

About the study: This DMA research is intended to help financial services marketing professionals benchmark performance. The eight chapters of the study — Financial Services Overview, Direct Mail, Insert Media, Commercial Email, Internet Marketing, Print Media, Broadcast Media, and Telephone Marketing — illustrate ad expenditures, direct marketing-driven sales, and direct marketing-driven employment.