Of the 'big five' high-street banks, Lloyds TSB, HSBC and Royal Bank of Scotland all slashed their adspend in the first quarter, according to figures compiled by Nielsen Media Research.
After spending £18.8m in the first quarter of 2006 and £16.2m over the same period in 2007, Lloyds TSB has reduced its spend by 51% to £7.9m in the first quarter of 2008. HSBC cut back by 7% to £6.6m in the same period, while RBS slashed its budget by 56% to £1.9m.
Barclays and Halifax were among the few boosting their spend, with budgets rising by 1.4% and 3% respectively.
'Finance brands really are at the forefront of the UK's economic problems,' said Martin Sambrook, managing partner of media consultancy Billetts. 'We should not be surprised that they are the first to make cuts in adspend.'
He added that the loans sector would be hit particularly hard by the lack of liquidity, as it relies on borrowing from other financial institutions.
Firstplus, the ads for which feature TV presenter Carol Vorderman, posted an 81% reduction in spend from £2.4m in the first quarter of 2007 to just £488,000 in the same period in 2008.
Other lenders, including Loans.co.uk and Norton Finance, which traditionally advertise in daytime TV slots, also recorded double-digit percentage falls.
Picture Financial, which owns the Picture the Loan brand and regularly ranks highly in Marketing's irritating ads survey, has scrapped all its advertising, spending just £306 so far this year, compared with £4.8m in the first quarter of 2007. The company said it has stopped trying to attract new business 'in response to the current economic climate'.
The pattern is in line with data from the latest Bellwether report for Q1 2008, which indicated that marketing budgets have been revised down for the second consecutive quarter. Initial budget setting for the rest of 2008 has also been downgraded. The report attributed the trend to weak sales, subdued consumer spending and ongoing concerns about the health of the UK economy.
Last September, banks, building societies and credit-card companies' advertising and direct marketing spend fell by £15m to £38m, according to Thomson Intermedia (Marketing, 5 December 2007).