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Bank’s online marketing is critical

After writing a blog entry yesterday that claimed bank’s online marketing is a waste of time, I was surprised that only Ron and Joey pulled me up on this.

Reason: the headline is one that, for those who know me, is obviously rubbish.

And the headline had little to do with the report that only 12 of 154 retail bank marketers surveyed in the USA feel confident about their online marketing capabilities, but the news that TV advertising is still far more effective than online, with 52% of consumers stating that they remember TV ads whilst only 1% remember an online campaign.

That may be comfort for some old media marketers, but the key question should have been:

1) Who are the 1% who remember an online campaign?

2) What is a waste of time?

First, the 1% are not the customers you currently deal with, but the customers you want.

The survey was performed by Deloitte and YouGov (get a copy here) amongst 4,199 UK adults aged 18 years plus during July 2010.

In the release of the survey, Howard Davies of Deloitte says: “Among UK viewers it is still the exception rather than the rule to comment on a programme currently being watched on the web. However among 18-24 year olds the practice is more widespread and it is now becoming standard for programmes targeted at this age group to incorporate a social media and social network element … membership of online fan groups is similarly niche, even though over 40 percent of the UK has now signed up to Facebook. Only 7 percent of those polled have become fans of their favourite programmes but among 18-24 year olds penetration is an impressive 46 percent.”

In other words, those of you who took comfort from the fact that you can still do marketing in the same old way, using the same old media to the same old audience, are just living in Dinoville.

Tomorrow’s consumers are the ones you need to focus upon (as shown in the other blog entry today) as they are the ones you can gain, rather than lose.

What do we mean by this?

Most bank customers are over the age of 35 and, according to most banks, once you reach 35 years of age you are highly unlikely to change banks.

You’re old in other words, set in your ways and cynical about changing banks as you’ve found the one you want and it’s too much hassle to change.

If this is the case – which I don’t think it is, as I’m over 35 and changing my bank account right now – then the customers you can get are all under the age of 35 and, consequently, more likely to be natural targets for online marketing.

This brings me to the second point: what is a waste of time?


The title of yesterday’s blog should have been: “bank’s online marketing budget is a waste of time”.

Y’see, it’s not budget that’s needed online.

It’s resources.

It’s effort.

It’s conversation.

It’s participation.

It’s networking.

It's being social.

Things I’ve blogged about so often before that I’m not going to belabour the point again here.

However, I will make it clear what I mean by budget.

A TV ad spot can cost anything from a few thousand dollars for a niche station to over $3 million for a moment during the Superbowl.

Let’s take that $3 million moment.

For the big branded, fast moving consumer goods of Budweiser and Doritos’s that may make sense, but for a bank it does not.

A bank is a SERVICE organisation, based upon HUMANS providing that service.

Now then, if you buy into that statement then your brand is your people.

Your people in branch or, more commonly today, the people we deal with on the telephone and online.

So here’s the real sucker punch.

Banks have to get great at being social online and use their social people online to be their online marketing.

That doesn’t’ require budget. It requires resources and effort.

Then you find a $3 million moment can work for almost free.

For example, HSBC launched a campaign this week on Facebook offering a £15,000 prize for the best 90 second video made by a student answering the question: “How £15,000 at university would help you make your mark on the world.”

The responses I’m sure will be gold dust, both in terms of content and reach, but also in terms of learning about this key demographic. And the customers create the marketing. The cost is just the effort of running the campaign – being social – and the £15,000 prize itself.

Similarly, Barclays gained a lot of kudos with the online game 56 Sage Street, where younger bank customers can learn about money through an interactive online game.

This is all detailed in the blog entry below about Gen Y and the point is really this:

  • the audience you want for the future is the 1%, not the 99%;
  • that’s why online marketing is as key as TV advertising, as the two media are symbiotic in the eyes of this audience; and
  • online marketing is not about big, flash viral campaigns – although they are worthwhile – but it's more about living like a digital native and getting under and into the skin of the online customer.

That’s why online marketing is a waste of time, because too many banks see it as being about spending with agencies rather than living the online brand.

Get with it.

About Chris M Skinner

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here…

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  • Great post. On the other hand if you want to be cynical, the billions spent by big banks like Barclays, Citigroup, Visa (ok not a bank but still) etc. on television, billboards, sports sponsorship, might be a necessary – and if you are really really cynical – and deliberate ‘cost of doing business’ – ie if you carpet bomb the masses with “we are big, safe, trustworth, part of the fabric of the economy and your economic life” messaging, does that permit them to extract fabulous rents with often appalling customer service without losing those same customers? Spend a billion, make ten? Of course I’m being a bit cheeky, but less provocatively, looked at from the executive suites of these mega-institutions, spending these sums on brand marketing is probably rational and definitely a lot easier/less disruptive than trying to fundamentally restructure your business model and value proposition…

  • British Bankers’ Association here. Another thought-provoking post. Worth adding perhaps that the old media are becoming adept at using social media to generate plenty of stories about banks.
    Two examples from this week. Within minutes of Angela Knight’s comment piece appearing on the BBC website on Monday (http://www.bbc.co.uk/news/business-11052793), the Beeb was tweeting for people who disagreed with her view. Then a Telegraph article printed on Wednesday on small business complaints about bank lending (http://www.telegraph.co.uk/finance/businessclub/7948353/Banks-to-blame-for-lack-of-small-business-lending-not-weak-demand.html) featured some compelling case studies which came from the Telegraph Business Club’s LinkedIn group. The Telegraph set up the group and sat back while the case studies walked in. Quite brilliant strategy – 21st century newsgathering!
    And let’s not forget that the Consumer Focus supercomplaint about the ISA market earlier this year earned them enormous coverage, given their report was actually based on an online survey of only 400 or so readers of the Money Saving Expert website.
    So even if the banks are still getting to grips with web 2.0 (and certainly we at the BBA are in that category too) the old media are all over it, and the results are everywhere.

  • Joe

    Online marketing isn’t the only option for banks looking to attract and retain Gen Y customers. Mobile marketing (such apps and SMS alerts) can be an effective way to enhance brand loyalty for this target market.
    UK banks could make much better use of this communication channel.

  • Chris

    Sorry Joe
    Should have clarified that ‘online marketing’ included all mobile Internet marketing , e.g. apps etc.