How Banks Can Beat Google & Facebook at Their Own Game

Posted by Mike O'Rourke on Mon, Jul 11, 2011 @ 01:10 PM

Banks Can Beat Google and FacebookTo most, the fast moving, pseudo-celebrity world of the tech industry may seem worlds apart from the conservative traditions of today’s struggling banking sector. Banks across the country are suffering from the one-two punch of the credit crunch and increased federal scrutiny and regulation that has dried up many of the industry’s traditional sources of revenue. The future looks gloomy to most working in financial services today, but thanks to the recent cross-over of advertising techniques rooted in the digital world, bankers may have reason for renewed hope.

It’s common knowledge today that digital powerhouses like Google and Facebook generate their sizable revenue by mining their users’ data and serving them paid advertisements based on their searches, likes and interests. The model has proven quite effective, allowing advertisers to display ads only to prospects that have shown interest via search queries or other submitted information. Google still earns over 95% of its revenue from such targeted advertisements, and growth of its AdWords and AdSense advertising platforms show no sign of slowing down.

The rosy news for financial institutions is that, thanks to outfits like Cardlytics and Billshrink, they can start earning revenue through similarly targeted advertising models that have proven even more successful at reaching motivated customers than Google’s. That’s because banks are sitting on some of the most valuable information a marketer could dream of – their customers’ spending data. 

Banks struggling to make ends meet, and afraid to alienate customers with new fees and hiked maintenance costs can now team up with an analysis company like the aforementioned to offer their customers Groupon-esque discounts from retailers like Wal-Mart, Lowes, Pottery Barn or Foot Locker, earning money each time a customer cashes in on one such coupon. According to Rod Witmond, head of product management at Cardlytics, roughly 20% of banking customers that received electronic coupons from their banks opened them,  and 30% of them cashed in on their coupon. Having worked for years on Google AdWords campaigns for clients in all sorts of industries, I'll attest that most advertisers can only dream of such conversion rates.

Thanks to statement-targeted advertisements, banks not only have a revenue source that benefits their customers in this time of increased regulation and tighter budgets.  Community banks also have a new service to offer local businesses that provides loyalty rewards and could win customers back from national chains, increasing their brand equity with their traditional most valuable customers. Participating financial institutions could package this service with other desirable business accounts and services at a discount to increase their market share among local businesses; just what the doctor ordered during such hard times for the industry.

Banks using statement-targeted advertising can rest easy knowing that while Google and Facebook are chugging along using proxy data to determine which offers are relevant to their users, their customers and partners, consumer and business alike, benefit from the most telling targeting data there is. Transaction data.

If your bank is searching for ways to boost revenues without risking customer backlash, our consultants stand ready to help you explore your options and tailor them to your bank's unique needs. Simply fill out the form to the right, and one of our digital marketing consultants will contact you to learn about your institution’s unique goals and challenges, and to work with you to develop a revenue-driven digital media strategy.

Tags: Banks, Banking, Advertising, Banking Crisis, Revenues

Financial Institutions Need Digital Marketing Strategy and Risk Management Policies

Posted by Tim O'Rourke on Thu, Apr 14, 2011 @ 06:55 PM

risk reward diceRegulators of financial institutions are concerned about digital media, and while a great deal of thought has gone into maintaining security of digital banking transactions, not much has been done with social media and other “inbound marketing” tools. In the uncontrollable world of social media, bank and credit union employees, as well as their customers and members, can engage in risky behaviors without thinking about the ramifications. Yet, the financial industry needs these tools in order to communicate with customers and the public at large in the new digital world.

The fact that social media has risks need not stop a bank or credit union from embracing an inbound marketing and customer/community engagement strategy. Banks are in the business of taking risks, but they need to get a better handle on the risks associated with digital marketing. Since no money transactions occur in most social media channels, the risks are more related to the security of private information and damage to your brand.

Every financial institution needs a Social Media Policy. Regulators will be looking for one the next time they do an IT examination (funny that they think of social media as IT). The policy should address the dos and don’ts of using social media for all employees and how to deal with situations in which customers make mistakes in your branded media. Common sense should be the rule, but in today’s litigious society you need to be clear about protecting customer information and protecting the company’s reputation. In helping banks and credit unions develop these policies, we have seen good policies and policies that backfired on the Company. An Australian bank set a policy that employees could be disciplined if their friends and family members posted negative things about the bank in any social media. Employees and their union took the bank to task and the bank finally admitted it was a mistake. They changed their policy.

orienteeringIf you don’t know where you are going, any road will get you there. Policy guides strategy and if you don’t have a digital marketing strategy, you are likely to make mistakes in your policy. So, before a bank or credit union sets out to develop a social media policy, an important first step is to think through the overall plan for digital media, inbound marketing and use of social media.  We’ll do more on bank and credit union inbound marketing strategy in future blogs. 

We would love to hear from banks and credit unions about what they are doing to plan their digital media strategies and mitigate the risks. Call us at 919-732-2835 or click here and complete the form on our home page and we will contact you.

Tags: Digital Marketing Strategy, Social Media, Strategy, Marketing Strategy, Banks, Financial Institutions, Risk Management, Banking, Integration, Credit Unions