After all the uncertainties of 2020 and much of 2021, it seems that consumers are ready to spend. This means the evolution of consumerism to fit new circumstances and the newfound potential for brands to connect with their target audiences.
CNN Business reported that even amidst the surge of Omicron and the concern over inflation, consumer spending appears to be going strong.
With this in mind, brands need to think about financial services, consumer spending, and what it means for media planning and buying strategies in 2022. Here’s what you need to know.
The State of Consumer Spending
It’s no secret that consumer spending plummeted during the beginning of the pandemic. Anxious about what the future would hold, U.S. consumers saved their money rather than spending it. But today, banks have a more optimistic view about the nation’s economic forecast, with the idea that Americans who now have cash in the bank (and just a bit more security regarding the future) are ready to spend and borrow money.
With fears about inflation and sluggish sales due to the Omicron variant of the COVID-19 pandemic, Reuters reported that many consumers had been focused on their financial health—which could pave the way for big spending. Bank of America reported that its customers spent 24 percent more in 2021 than they did before the pandemic in 2019—but that they were also making larger credit card payments to account for these purchases. In 2021, Bank of America’s customers’ fourth-quarter payments were up 28 percent compared to 2019. Plus, the overwhelming majority of customers’ account balances grew in the second half of the year.
What does this mean for those looking to predict how consumers will behave in 2022? As Bank of America Chief Executive Officer Brian Moynihan stated, “We believe there's lots of potential spending capacity left as average deposit balances continue to move up to the end of the year despite the heavy spending you see."
What’s more, in 2020 and 2021, American consumers received their stimulus checks, which will continue to affect the economy as a whole. While the general understanding was that these checks provided temporary relief, they seem to have impacted the economy in the long term. It seems that for many, this stimulus money was saved, not spent. A good deal of consumers paid down credit card bills (which modern economists consider a form of saving) using their stimulus checks, reducing their overall debt. Looking ahead, having less debt creates confidence in consumers to spending more.
Financial Services, Marketing, and Consumer Trends
Since the onset of the pandemic, consumers have been interacting with their financial services in new ways. The Financial Brand shared that more consumers are looking for financial services that are unique to them and their needs and that they are even more comfortable having more than one banking relationship.
What can be garnered from this knowledge? Marketing should be all about what consumers need at any given point in their financial journey, which is personal to every individual. This is true of marketing in any industry, but in this case, financial brands need to customize consumer banking relationships. This allows them to match the complexity and evolution of each individual’s changing financial journey; to allow consumers to connect with the brand on their own terms.
To keep up with this shift, those in the financial services sector have noted an evolution to more digital channels, including:
- Email marketing
- Programmatic digital advertising online
- Connected television (CTV), over-the-top television (OTT), and streaming platforms
- Advertising on video and music streaming services
Many in the finance industry also reported success with the increased use of traditional media channels like television and radio. One marketing executive shared with The Financial Brand that, “We went completely digital, utilizing email and web and took advantage of TV and radio, which we hadn’t done previously. Our marketing messages were more about branding, and TV and radio worked well for us in that space. I think this will be a permanent change.”
OTT media was one approach that interested financial services brands and consumers alike. For organizations looking to reach their target audience, OTT media eliminates excess spending and allows brands to zero in on a niche target audience. Providers can also offer tracking, which makes it easy for brands to know how much of a message is being watched—and many ads placed by financial brands were being watched in their entirety. It seems that more personalized, targeted media buying strategies that meet consumers where they are will be the way to go in 2022 and beyond.
One other financial services media buying success story surrounds previously ignored digital channels. A particular credit union placed strategic screen takeover ads on the Comcast login screen. They used a geographically targeted approach and as a result, saw an average of 50,000 daily impressions. Because their approach was hyperlocal, they were able to better connect with their target audience.
Anticipate Omnichannel Purchasing
In the most recent months of the pandemic, consumer spending in stores has remained strong, with McKinsey reporting a 10 percent year-on-year growth in September 2021 following several months of 5 to 6 percent growth.
While in-person spending remains robust, so too make eCommerce sales which saw strong growth, up approximately 35 percent in 2021 from 2020 levels, up 30 percent from pre-pandemic levels, and 60 to 70 percent of consumers making the most of omnichannel sales, researching in-store and online purchases. To that end, social media is heavily influencing purchases among consumers of all ages.
What this tells us is that consumers are buying more across multiple channels. With omnichannel sales on the rise, brands must keep in mind that a media buying strategy shouldn’t rely too heavily on just one or two channels.
Take Media Planning to the Streets
Out-of-home marketing strategies are proving to be an important media planning component for those looking to meet increased consumerism in 2022. McKinsey reports that nearly half of U.S. consumers are currently engaging in out-of-home (OOH) experiences, up from around one-third of consumers in February of last year. This includes OOH activities like work, shopping, socializing, and even a return to indoor dining.
While OOH media strategies took a downward turn during the height of the pandemic, this particular media channel is returning with gusto. As reported in Martech Series:
“The out-of-home (OOH) advertising recovery has been faster and much more substantial than the industry predicted at the onset of the year. The growing adoption of digital screens along with new innovations in data and automated trading have elevated OOH’s in-market position to match other dominant media channels.”
Some of this return can be attributed to device fatigue. After more than two full years of digital meetings, remote work, and social distancing, it’s harder for digital marketers to get the undivided attention of their intended audience via a single-screen format. Instead, media planning in 2022 will involve real, palpable, out-of-home experiences to connect with consumers who are emerging from their quarantine “bubbles” and out into the real world.
What’s more, 39 percent of consumers are trying to spend less time in front of a screen, and 62 percent report that they skip ads on their devices as a result of device burnout or device fatigue. On the other end of the spectrum, OOH media strategies include a wide variety of formats that are captivating, unobtrusive, and an important component of consumers’ daily lives. Americans are spending more time outdoors and outside of their homes, which means brands should recognize the current, real potential in OOH media to connect with consumers who are ready to spend.
Employ a Multi-Screen Strategy
One thing to keep in mind about reaching the modern consumer? Their abundance of screen time—and not just on a single screen. The U.S. Chamber of Commerce recently reported that the average household in the U.S. contains somewhere around 25 connected devices. With all these screens, brands need to be aware of how they plan to connect with their target audience—and how to avoid missing a chance to engage with them completely.
With over two dozen devices per household, choosing only one device or platform for a marketing strategy may make it challenging to know which channels to pursue. It could mean a missed opportunity to connect if consumers aren’t using that device.
One major way to counteract this potential missed chance is with a multi-screen advertising approach, which enables brands to reach the right consumers using a variety of media platforms and devices. How should they go about this? First, it requires pinpointing a brand’s ideal customer as well as the geographic location most important to a business. Then, brands can use multiple digital media channels as well as geographic targeting tactics (and hyperlocal marketing strategies) to reach this audience no matter how they choose to consume content.
For example, while linear television is still consumers’ primary source of programmatic viewing, adding in a streaming advertising campaign can boost brand awareness and dispel an advertisement’s message with a whole new audience. In fact, adding a linear television marketing campaign to a streaming-only media plan strategy can improve a brand’s reach by as much as 363 percent.
Making Sense of Media Planning in 2022
What does this emerging resurgence of consumerism mean for upcoming ad campaigns? Now is the ideal time to connect with industry-leading media strategists to find the right balance of channels.
At MBI, we are keeping a close watch on these new consumer trends and spending patterns, the implications for those in the financial services sector, and what it means for media buying on the whole. Leveraging industry connections and maintaining an in-depth knolwedge of current trends are some of the ways we maximize the impact to our clients by better understanding your target audience.
Any media planning strategy requires careful attention to what’s happening in the world around us, but at MBI, we take that mission a step further. We’ll help you develop a media buying strategy to set you up for success, put your message in front of your target audience, and reach your goals. Connect with our team today to learn more about how we can help you.