Banks raise pitch, adspend up 60%

Banks are pumping in serious money into brand building and advertising.

Nearly 38 public and private sector banks increased their advertising and publicity budgets by a whooping 60 per cent from Rs 247 crore in 2002-03 to Rs 393 crore in 2003-04. In 2000-01 and 2001-02, the banks spent Rs 139 crore in each fiscal on publicity budgets.

It a tussle to grab a larger share of the lucrative retail segment, comprising home, car and durables loans through 0 per cent interest schemes, banks are booking hoarding sites at vantage points and buying ad space in print and TV to create a distinct brand recall.

"In the early days, foreign and new private banks had an air of exclusivity around them. But two developments have wiped out their initial advantage. One, an across-the-industry rise in service standards. And, secondly, lowering of entry levels by exclusive banks to grab business," said an industry source.

Market observers note that with widespread computerisation and inter-connectivity of branches, bank services have become even more standardised across the board.

With uniform levels of service and almost the same bouquet of products, the stage is set for an all-out war to grab the customer mindspace.

Private sector giant, ICICI Bank, spent Rs 68.68 crore on advertisements and publicity in 2003-04, according to figures published in its latest annual report. It had spent Rs 58.18 crore in 2002-03 and a modest Rs 7.98 crore in 2001-02. State Bank of India (SBI) has increased its publicity budget by 95.6 per cent in 2003-04 to Rs 67.36 crore.

As many as nine banks increased their publicity budget by over a 100 per cent each. Ad spends by the State Bank of Hyderabad and Vijaya Bank increased by over 330 per cent each in 2003-04.

Bank of Baroda invested Rs 24.10 crore (Rs 9.46 crore) and HDFC Bank invested Rs 37.06 crore (Rs 17.51 crore) in publicity and advertisements.