Banks have sharply cut back spending on advertising investment products as they employ other ways to promote their brokerage units, a research firm has found.
The industry spent $10.3 million on advertising investment products in the first 10 months of this year, 53% less than a year earlier, according to Competitrak, New York.
The reduction of advertising dollars for mutual funds, annuities, and other investment products came as banks began selling more certificates of deposit in the first quarter, several bank officials said.
But bank brokerages are also promoting investment products through direct mail campaigns, which they find more cost effective than television, print, or radio advertising, Competitrak says.
"In the advertising world, banks are by far overshadowed by companies with huge budgets," such as Fidelity Investments and Merrill Lynch & Co., said Robert Moss, Competitrak's president.
One full-page advertisement in a newspaper can cost as much as $100,000, Mr. Moss said.
Competitrak tabulates its data by tracking advertisements on network, cable, and local television stations, 150 national and local newspapers, and 200 consumer magazines. The results show:
* Mutual fund company advertising in the first 10 months dropped 11% from the year-earlier period, but the industry still spent $159 million.
* Brokerage firms increased their spending by 4%, to $75 million.
Keycorp, a $63.4 billion-asset bank in Cleveland, has spent more than $1.5 million so far this year on direct mail campaigns and promotions inside branches, said Jack Kopnisky, president of Key Investments.
The company has a …