Fund firms have slashed their national press Isa advertising spend to less than 20 per cent of their 2000 level.
Ad agency MMS says national press advertising plummeted from £37.9m in 2000 to just £6.9m last year as groups slashed budgets after the collapse of direct Isa sales. Some firms, such as Jupiter, reallocated part of their spend to brand-focused advertising but others simply cut spending.
The biggest drop is from Scottish Widows which spent £6.7m in 2000 but just £113,000 last year.
M&G slashed its national press ad spend from £2.6m to £97,000.
Some observers believe the dramatic falls, coupled with tough new rules restricting the use of past performance in ads, sound the death knell for direct sales.
Jupiter joint managing director Gordon Davidson says: “The cost per response in ads has gone up by up to 10 times. It is difficult to see how the consumer market can return to 1990s' levels.”
New Star marketing director Rob Page says: “We are in a new paradigm but we will continue press advertising as a strong brand will be even more important as the retail market evolves.”
Chelsea Financial Services managing director Darius McDermott says: “We would only be worried if groups stopped advertising completely.”