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Song Ma

Yale School of Management

Banks' Images: Evidence from Financial Advertising

Date: Friday, March 28, 2025
Time: 10:30-11:45 am
Location: Bronfman Bldg. (1001 Sherbrooke St. West), Room 245

All are cordially invited to attend.

Abstract:

This paper examines how banks strategically craft their images for customers using over a decade of TV commercial videos. Using an unsupervised video embedding method, we find that banks consistently build their images around one of three dimensions: pricing advantages, superior service quality, and a trustworthy, life-aspirational focus. Banks with strong local market shares emphasize service and life aspirations. Banks generally truthfully advertise pricing and service advantages but rely on emotional appeals when lacking these advantages. They also tailor their images to local demographics, increasing minority representation in targeted areas. Using a border discontinuity design, we show that advertising intensity and style significantly affect deposit quantities and spreads, a factor that becomes especially important during monetary policy transmission. These findings suggest that banks build images to strengthen their market positions and boost franchise value.