To 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.