When the Olympic Games opening ceremony hits Australian TV screens tonight, all the major sponsors will be on the edge of their seats – was the outlay of around $5 million for a major corporate package really worth it?
But no one will be more attentive than Bendigo Bank chief Rob Hunt. There are just two banks among the 14 major sponsors. It was no surprise to see the Commonwealth Bank there, but the emergence of one of the smaller Australian banks to use the Olympics as a promotional opportunity is a real surprise. Bendigo has about 400 branches but only around 50 in our most heavily populated state, NSW, which will be a big slab of the TV audience.
Given the number of eyeballs that have been lured away from free-to-air TV screens over the last few years, the Olympics is one of the few occasions when you know you will have the best possible audience. You pay top dollar to advertise, but unlike regular advertising inventory you know it will deliver the maximum possible audience.
One only has to see the big screens that have been walking out of retailers over the last month to realise that Australians both rich and poor, young and old, are excited about sitting down to watch the Olympics.
Bendigo’s market share has been largely driven by the publicity that surrounded community banks. So the bank believed that now was the right time to outlay some real money and the Olympics was a unique opportunity, albeit an expensive one.
With the benefit of hindsight, Bendigo paid far too much for the Adelaide Bank. That acquisition changed Bendigo from a bank that obtained around 80% of its funding from local deposits to one where only about 55% came from local deposits.
Bendigo has recently been offering high interest rates to lift its local deposits. We will see how successful they have been when the group’s profit is announced next week. The number of deposits it attracts as a result of the Olympic campaign will be a good measure of its success.
But the Bendigo was also lucky. By chance the campaign comes at a time when customers are disturbed by the ANZ experience and to a lesser extent the problems at NAB because of recent write downs and bad publicity.
That makes it a good time to push for market share with an expensive Olympics campaign. But for a bank that only made $118 million last year, $5 million remains a big investment and future Bendigo Bank directors will be asked to account for the outlay.
This article first appeared on Business Spectator
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