No data but not dated: Why pre-digital bank marketing methods still work
Faster than you can say “analytics,” bank marketers have gone gaga for data: Data this, data that, data as the new (choose one) oil, electricity, rocket fuel. Data as the new data.
And next to all that data, marketers have … TV. Radio. Outdoor billboards. Newspaper ads? And—gasp!—direct mail, which isn’t even email. Shunt them all aside? Sounds tempting, doesn’t it?
At least that’s what one financial institution thinks. The digital-only Radius Bank no longer uses traditional billboards or print, which once meant “waiting months to learn we’d only had a few calls to the phone number we used within the ad,” says Luther Richardson, the company’s user experience analyst. With digital, data-driven advertising, the bank can “capture a campaign’s success faster or pivot quickly when the results are less than adequate.”
And yet, are data-centric tactics right for everyone? Not really.
“We see trends publicized in the media about digital marketing and personalization and while they’re important, I feel that they’re overblown,” says Mark Gibson, former chief marketing officer of Rockland Trust and a senior consultant for Capital Performance Group. “What’s lost is that a lot of traditional media still has tremendous value.”
And Gibson’s not saying that because he saw it on TV.
Swept up in the fervor over digital, data-oriented marketing, “a lot of our bank clients stop doing things that are working in traditional media,” Gibson says. “They move their marketing money into digital and then see a reduction in effectiveness.”
Lost in a cacophony of messages, digital media often fails to generate brand awareness, consideration or emotional bonds—or differentiate companies, Gibson argues. “TV, radio, billboards and magazines are generally better able to disrupt brainwaves” and build brands by connecting with consumers emotionally.
So while data can identify needs and make suggestions it can’t convey the sounds and images of, say, a child’s laughter, happy family or shiny new car with quite the same heft.
Maureen Farrell Burns, a digital marketing expert and partner at Bain & Co., believes data-driven, digital marketing complements more time-honored methods. “I don’t see traditional forms going away anytime soon,” says Burns co-author of its annual report on customer loyalty in retail banking. As for the shift toward digital marketing, “I think we’re at the beginning.”
That’s right: the beginning. Which means that for old media, it’s certainly not the end.
Newspaper ads and billboards still have value because, “There’s still a need for banks to create that perceptual awareness,” Burns says. “Banking is unique in this way, in that people like to drive by their money. They like to see branches and advertising [for them]. It’s going to be a while before that goes away.”
Ella Chinitz, executive director at EY, agrees that traditional ad formats remain “viable marketing channels and part of the overall marketing toolset to reach audiences.” Yet “marketing should meet the target customer where they spend their time. So depending on the audience or segment for a given banking product, marketing channels should align to audience preferences.”
Change, challenge and balance in traditional marketing
Despite the enduring utility of established marketing methods, their slice of overall budgets has dropped in recent years while digital’s has increased, Chinitz says. She cites the Gartner CMO Spend Survey 2018-19, which finds that despite concerns about digital advertising’s efficacy, chief marketing officers in North America and the U.K. invest two-thirds of their budgets in paid digital channels, including search advertising.
Burns predicts that “unless marketing budgets massively increase, money will shift toward channels that bring higher returns on investment—which tend to be more targeted, digital-type channels.”
To build brand awareness, attract new households and cross sell to existing ones, Arvest Bank will continue to balance traditional advertising with efforts to reach audiences “in the digital, search and social media realms,” says Jason Kincy, the bank’s senior vice president and marketing director.
Arvest also uses data to inform direct marketing initiatives for digital and snail-mail channels. “We believe you have to be aggressive in all of these avenues to reach various audiences for different purposes,” Kincy says.
This raises an important point: Any supposed bifurcation between data-driven versus conventional marketing is like pitting fintechs versus brick-and-mortar banks. Used correctly, data can maximize old-school marketing.
Shauna Graham, vice president and marketing director of Professional Bank, believes “data will drive the usage of traditional marketing, allowing marketers to make smarter, more targeted choices within traditional mediums, while incorporating new and emerging marketing channels.”
In fact, data can only go so far. Companies such as Intel have launched exciting research into digital billboards armed with artificial intelligence and facial recognition technology. Stroll past and you won’t see an ad directed at just any Joe Passerby, but you.
But how this might work in a high-traffic setting remains to be seen—as does whether consumers will reject such marketing as intrusive and annoying: the virtual equivalent of a salesman’s dinner time door knock.
The matter boils down to this question: How can banks make customers’ lives easier? That may sound novel with flashy tech phrases such as “pain points” and “frictionless.” But however you communicate the answer, old method or new, it’s whether it resonates that counts.
As Gibson sums up: “More sophisticated marketers know that it’s really a mosaic of different media that will pull people through the buyer’s journey.”
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Greg Beaubien is a Chicago-based writer and editor who has written for the Chicago Tribune and Los Angeles Times.
Lou Carlozo is the managing editor of BAI.