Banks have sharply cut back spending on advertising investment products as they employ other ways to promote their brokerage units, a research firm has found.

The industry spent $10.3 million on advertising investment products in the first 10 months of this year, 53% less than a year earlier, according to Competitrak, New York.

The reduction of advertising dollars for mutual funds, annuities, and other investment products came as banks began selling more certificates of deposit in the first quarter, several bank officials said.

But bank brokerages are also promoting investment products through direct mail campaigns, which they find more cost effective than television, print, or radio advertising, Competitrak says.

"In the advertising world, banks are by far overshadowed by companies with huge budgets," such as Fidelity Investments and Merrill Lynch & Co., said Robert Moss, Competitrak's president.

One full-page advertisement in a newspaper can cost as much as $100,000, Mr. Moss said.

Competitrak tabulates its data by tracking advertisements on network, cable, and local television stations, 150 national and local newspapers, and 200 consumer magazines. The results show:

*Mutual fund company advertising in the first 10 months dropped 11% from the year-earlier period, but the industry still spent $159 million.

*Brokerage firms increased their spending by 4%, to $75 million.

Keycorp, a $63.4 billion-asset bank in Cleveland, has spent more than $1.5 million so far this year on direct mail campaigns and promotions inside branches, said Jack Kopnisky, president of Key Investments.

The company has a sophisticated data base that divides customers into various market segments based on demographics, including age and an estimated income level.

"We anticipate their needs and go after them repetitively with different direct mail campaigns," said Mr. Kopnisky.

For example, the company has identified its older customers and sent them brochures detailing Keycorp's individual retirement account services.

Keycorp has also targeted a promotion for financial planning services to the customers it calls "emerging affluent."

The aversion to advertising does not come without research. "In an analysis with media consultants, we haven't found large radio and television spots to be effective," said Susan Rau, executive vice president at National Westminster Bancorp's private clients and insurance group.

But some bank brokerages expect to increase their presence in consumer magazines and newspapers. Mr. Kopnisky expects to add print and radio advertising to next year's marketing budget, which he expects to increase to between $5 million and $15 million.

Some bank brokerages already promote the mutual funds they manage in consumer finance magazines such as Money and Smart Money.

Of the $8 million First Union spent this year to promote its Evergreen Funds, the bank spent $6 million on print advertising.

"We are going to be as aggressive as Fidelity and Merrill Lynch," said Carol Deckbar, director of marketing and communications for the Evergreen Funds. "That's who we want to look like when we grow up."

She said the bank's surveys show that customer awareness for its brokerage services is gaining significant ground against competitors.

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