Topic: Banks’ Image: Evidence from Financial Advertising

Speaker: Allen Hu, Assistant Professor, Sauder School of Business, the University of British Columbia

Time: 10:00am-11:30am, February 19

Location: 4-101

Abstract:

How do banks strategically craft their image to highlight strengths and maximize value? This paper examines financial advertising using over a decade of TV commercial video data. We categorize persuasive elements into four types: pricing advantages, service quality, trust-building, and emotional appeal. Banks with strong local market shares emphasize service and inspiration, while productive banks focus on pricing. High-rate banks target rate-sensitive depositors, whereas low-rate banks highlight trust and emotion. Banks also tailor ads to local demographics, increasing minority representation in targeted areas. Using a border discontinuity design, we show that advertising intensity and style strongly impact deposit quantities, spreads, and loan origination. Higher advertising expenses correlate with higher deposit spreads, while different persuasive elements affect demand for various financial products. These findings reveal how advertising aligns with operational strengths, market positions, and demographics to boost franchise value and competitiveness.