The Great Digital Migration
It’s no secret that consumers are flocking to the web, especially for banking and financial services. In a 2011 American Bankers Association report, 62% of U.S. adults said banking online was their preferred method, compared to only 36% the year before. Even more striking, 2011 marked the first time that a majority of people 55 and older preferred clicking to chatting with tellers.
More evidence: According to comScore, in January 2012 one in seven American Internet users visited an online tax service. And Fiserv reports that one in four U.S. households now banks with mobile devices. Sarah Lenart, comScore Vice President for Financial Services, notes that with customers being more comfortable and satisfied with online service, financial services businesses must ramp up their web marketing. She explains, “Financial institutions who want to ensure they are meeting their customers’ needs must continue to expand and refine their digital marketing strategies to increase customer penetration and engagement.”
A Question of Trust
The marketplace is extremely crowded, with lots of ad noise and competition for people’s attention. The market is also vast and highly fragmented: young and old, wealthy and poor, etc., making audience targeting a challenge. Last but not least, a mutual mistrust shapes the financial landscape. For at least four years now, consumers have shown historic levels of distrust in the industry, while the industry watches its back as phishing scams, insurance fraud and the like eat into profits. In fact, financial services and banking are among the least trusted industries in the world, according to the 2012 Edelman Trust Barometer. In the U.S., they rank dead last.
Banking on Display Ads
While banking and financial services marketers face stiff challenges, they also enjoy great opportunities. After all, millions of consumers will always need college loans, help with tax preparation, home equity loans, life insurance and basic banking. It stands to reason that financial marketers can reach the buyers who matter—with a little help from the right digital tools.
Increasingly, the tool of choice is display advertising. A study by Kantar Media shows that in first quarter of 2012, display advertising posted the highest rate of growth among the financial industry’s top 10 media categories: a 10.1% increase to $2,120.6 million. As reported in an earlier Kantar study, annual growth has been just as impressive. For example, the industry invested $2.7 billion in display in 2009. To put this into perspective, that was more than double the investment in network TV.
The study concludes, “Fierce competition among credit card issuers, revitalized marketing programs for retirement planning services and higher budgets from tax preparation firms were the growth drivers.” According to a survey by MediaMind, banks are spending the most, running campaigns for personal loans, debit cards and other popular services.
When you take banks out of the picture, companies like Scottrade lead the pack in total impressions served.
What results are display ads netting in banking and financial services? According to MediaMind, much depends on the surrounding content. While most content categories help deliver average conversion rates, some categories—maps, travel, auto and entertainment, to name a few—score well above par.
Performance varies also by display ad format. Not surprisingly, the larger and more visible formats yield higher conversion rates: floating ads, homepage takeovers, skins and overlays. Smaller formats such as peel-back banners tend to lag behind.
Types of Display Ads: More Choices Than Ever
Looking beyond mere format, if you’re a marketer and need to ensure results online, display gives you plenty of options.
When your display ads appear on sites that your prospects visit, your ads gain relevance, credibility and effectiveness. Just as important, your brand builds trust, leveraging site content and editorial reputation.
You reap similar benefits when displaying your ad alongside relevant content. For instance, someone is reading a banking article in the online New York Times and sees an ad from a bank promoting its mortgage loans. Contextual ads have an obvious benefit: You can send timely, relevant messages to interested consumers. Indeed, a study by the Advertising Research Foundation found that editorial content strongly influences on-site ads. Bonus: Because contextual ads are mostly sold on a pay-per-click basis, there are few wasted impressions.
By focusing more on the person than the web page, marketers can track online behavior to sharpen their targeting efforts. Once you identify a consumer as “in market,” you can reach that person online anytime, anywhere. In fact, consumers that respond well to behavioral targeting tend to have higher incomes, shop online more often and, best of all, spend more.
comScore reports that 90% of product searches result in offline purchases within 20 miles of where the shopper lives or works. No wonder more companies are localizing display, reaching buyers in targeted areas with specific offers and brand messaging. A new twist: you can serve an ad based on organizational type or industry, e.g., universities, medical offices, local and state government or the military. You can also target using technographic information, such as the speed of a shopper’s Internet connection and technology he/she uses. For instance, you may want to target people browsing from home versus from work or those using a tablet versus a desktop computer. This can help you determine which visuals and rich media to deploy.
All of this can be done through IP targeting. IP targeting is the method of determining the geolocation of a website visitor based on their IP address. This gives digital marketers the ability to deliver advertising to audiences based on their location, organization (i.e., colleges, government), industry (i.e., healthcare, retail, financial), ISP or other criteria.
5 Best Practices
By using the following tips, you can make display work harder in your financial marketing mix.
- Go local and be relevant. Localizing your display makes the conversation more relevant. It’s also a proven way to increase conversions. Example: Say you spend $40,000 on a display campaign and your conversion rate is 1% with a $40,000 return. In Neustar’s experience, localized messaging and visuals have been known to lift response by 70%, giving you in this case a 1.7% conversion rate. This translates to an incremental return of $28,000. Local online messaging can also drive offline traffic to your banks and offices. Again, over 90% of product searches ultimately end in local purchases.
- Build trust by building your brand. Beyond trying to allay mistrust, financial services marketers must also deal with uncertainty and fear, two common emotions in financial decision-making. Strong branding via display can help enormously. When you think of all the industry’s memorable brand campaigns, from the Geico gecko to MasterCard’s “priceless” and Discover’s bearded “Peggy,” you can’t help but be reminded of the value of great. You’ll also see how high your competitors have raised the bar. Display is an easy way to extend your next campaign. If branding funds are tight, display can make your brand look bigger without breaking the bank. Remember to repeat your message. According to Edelman, most consumers need to see it three to five times before they believe it.
- Drive response by combining display with search marketing. Together, display and search are ideal for promoting your brand. As display ads increase your brand awareness, more buyers will search for your products as they get closer to making a decision. A comScore study shows that display increases the likelihood of consumers searching with your branded terms—by a factor of 38%. Some companies have even seen a halo effect, with products featured in display advertising boosting sales of related offerings. While some halos are brighter than others—the iPod’s was downright heavenly in lifting Apple’s laptop sales—any such extra help is always a nice surprise.
- Put your brand where your prospects are and utilize retargeting. On the Internet, you don’t need a big budget to enjoy a big brand presence. You can be everywhere you need to be, including in the black, by using retargeting tactics. If you’re not already familiar with it, retargeting is the ability to show your prospects relevant display ads after they’ve left your website. Their visits tell you they’re interested; so even if they didn’t convert right away, you can stay top of mind with ads appearing elsewhere. Below is an example of how retargeting works, provided by Bizo.
- Test, tweak, retest. Repeat as necessary. In terms of basic production, display ads are easier to create than, say, TV or direct mail. This gives you greater flexibility to test and optimize creative in real time. For instance, you might test different messaging to promote a free trial: a 30-day trial, a 60-day trial and a customer success story. You might also try different visuals, especially if when localizing campaigns. And don’t forget to test ad unit formats.
While challenges abound in financial marketing, so do opportunities. As part of a broader online strategy, display advertising is a proven way to reach and convert prospects. By raising brand awareness and delivering your message in a repeated fashion, shoppers can be persuaded. At a time when other tactics are seeing diminishing returns, display ads, especially when localized, can build consumer trust and substantially increase conversions. No wonder financial services marketers have embraced display so warmly. As more consumers flock to the web, expect the trend to continue.