ThefinancialBrand: What are the top three areas of focus in digital marketing for banks and credit unions? Is there one digital channel that they should be emphasizing more? How are the current trends likely to change in the coming year? Read on for insights from the leaders of three marketing agencies with a lot of experience in the banking industry.

One area of marketing where banks and credit unions of all sizes can do a lot better is in their use of data.

“Reaching the most responsive audiences is the overlying goal,” which is best done through supplementing a financial institution’s own data with other data, says Achim Griesel, the president at Haberfeld, a marketing agency in Lincoln, Neb.

But much of the marketing he sees suggest that many banks and credit unions are skipping ahead instead of starting with the data. “Often, the channels and content seem to be selected prior to the targeting,” Griesel says.

Even the megabanks have room for improvement on this front, according to Martha Bartlett-Piland, the president of Banktastic. “They are not using data to better deliver offers with relevant messaging and imagery that resonate with customers,” she says, citing an offer one of her colleagues had just received to open a new checking account for the Topeka, Kan.-based marketing agency.

“She’s not the owner. She’s on their mailing list because she has one of our corporate credit cards,” which is something the bank should know from its data, Bartlett-Piland says. “That was completely off-base.”

Sam Ielapi, the managing vice president at FMCG Direct in New York, says data that would give bank and credit union marketers insight on their strongest prospects is also underused.

“Prospect-based signals focused on key life events allow banks to attract hand-raisers — listing one’s home, moving into a new home, expecting a new member to the household are all natural events that, if strategically addressed, may turn marketing leads into profitable new accounts,” Ielapi says.

We asked all three marketers — who have experience working with financial institutions — for their insights on the use of digital marketing, the mistakes they’ve seen and their advice on getting better results. One takeaway that should be no surprise: Deposit growth is a goal that is getting a lot of emphasis.

On the use of digital marketing and advertising:

Bartlett-Piland: Everyone is using digital marketing/advertising in some form. It varies somewhat based on geography and the customer/product focus the financial institution has. So 100% are using digital, but no one is 100% digital with their budgets.

On the top three areas of focus for digital marketing:

Bartlett-Piland: The top three areas of digital focus for our banking clients are online display, paid social and email.

But organic video and organic social follow very closely behind those top three. This is a very savvy group of marketers, so they’re making these choices based on their goals, audiences and geography.

On the content of the digital ads:

Bartlett-Piland: For the most part, it seems that people are balancing brand, product and services with nearly equal emphasis for their paid digital advertising. They’re looking for awareness, but also trackable campaigns that they can show contributed to ROI. (And yes, many are looking for deposits!)

Significantly lower on the list would be spending on employer branding and special events. Considering the pressure on attracting and retaining top talent, I’d expect more budget should be devoted to employer branding in 2024. Of course, that assumes that Marketing and HR departments are working together on talent initiatives (as they should be). Development of a successful consumer brand and employer brand go hand-in-hand.

On the area of digital marketing she believes banks and credit unions should be emphasizing more:

Bartlett-Piland: Video and podcasting are areas that our clients would like to do more of — they do perceive these as larger investments of both time and money to do them well. I’d agree that these are very strong avenues to help humanize their brand and deliver good quality content to their audiences in a way they want to consume it. It would be great if more financial marketers could use OTT, but it can be cost-prohibitive for smaller institutions. (OTT, short for “over the top,” is the use of streaming video services with precise targeting of audience segments.)

On what’s surprising to her about bank marketing:

Bartlett-Piland: My observation of some of the larger banks: They are not using data to better deliver offers with relevant messaging and imagery that resonate with customers. Just today, one of my team members received an offer from a super-regional bank to open a new checking account for her business. She’s not the owner. She’s on their mailing list because she has one of our corporate credit cards. That was completely off-base. They should be able to tell that from their data. That’s a waste of the advertiser’s money.

On the flip side, I recently received a direct mail piece from a credit union offering me a free lunch and seminar on hot HR issues. That’s well-targeted and beneficial. Smart!

It can feel overwhelming to anyone to dive into data and make a plan. It doesn’t have to be all or nothing. We advise people to start small and get some wins. Learn what works and doesn’t work, then do some more.

On digital marketing trends and the changes ahead:

Bartlett-Piland: Every time we turn around, there’s a new trend, a new digital channel and a new has-been. Effective marketers are nimble, but we also don’t allow ourselves to be distracted by the next shiny object. We keep analyzing, measuring, testing and tweaking while keeping our eyes on the goal. (Which also may change!)

Artificial intelligence is getting better, which means that marketers can work more efficiently. It remains to be seen what the long term impact will be on hyper-customized messaging and targeting.

On the use of digital marketing and advertising:

Griesel: Most of our clients use an omnichannel approach for their marketing related to core relationship growth, with over 80% including digital marketing in that mix. Budget allocation will vary based on markets as well as ROI. As it relates to core relationship growth, digital marketing will generally account for 20–40% of the overall mix.

On the top three areas of focus for digital marketing:

Griesel: For our clients, reaching the most responsive audiences is the overlying goal for their core relationship growth-focused marketing. They leverage internal financial institution data and outside resources such as market data and drive-pattern or convenience-based analytics to define the targets with the highest propensity to respond. Once the ideal targets are defined, they use an omnichannel approach to get in front of those households and businesses. The digital tactics used are those that allow them to best target those high-propensity households and business.

These tactics may change over time, but currently it’s search, IP targeting, and retargeting that result in the best digital metrics and ROI. Whenever there is an option to become more targeted, clients will do that. Examples include adjusting display/IP deployment based on weather conditions or leveraging location data to become more targeted and drive higher engagement.

On the content of the digital ads:

Griesel: Digital ad content varies by client. For 71% of core relationships, the starting point is the checking account. Therefore, product-oriented ads are always part of the mix. Because customer churn is often driven by life-changing events and consumers or businesses may not switch financial relationships until they have one of these events, brand-based content is part of the digital mix as well.

Lastly, most clients will have some truly unique selling proposition that they leverage in their digital advertising whenever possible.

On the area of digital marketing he believes banks and credit unions should be emphasizing more:

Griesel: Financial institutions often overlook the importance of targeting in their digital marketing. Unrelated to the strategy an financial institution has, finding the best prospects and then using the right channels to be in front of them and subsequently engage them is the key to success. Often, the channels and content seem to be selected prior to the targeting. We approach it from the opposite direction: identify the best targets and then determine the appropriate content and channels.

On what’s surprising to him about bank marketing:

Griesel: In 2023, the competitive pressure in the community banking space has dramatically increased. Emerging from a few years during which deposit growth and low-cost funding were given, 2023 is a year in which national banks have dramatically increased their offers. But more importantly for community-based financial institutions, the national banks have also accelerated their marketing spend for core relationships. Large banks seem to have the ability to increase and shift their budgets throughout the year. At community-based financial institutions, such abrupt budget changes pose challenges.

On digital marketing trends and the changes ahead:

Griesel: One of the key advantages of digital marketing is its ability to adapt to market conditions and changes. That flexibility is something traditional marketing lacks. In the ideal marketing mix, it should be used to adjust messaging and budgets in a timely manner. Any digital tactic leveraging data to target audiences or deploy content will increase its relevance in a digital mix. For example, utilizing data to digitally identify and provide the nearest branch locations or adjusting digital marketing based on weather conditions are all options.

Given the rate environment — a relatively high-rate level for the intermediate future — it is likely that the increased spending from national institutions is here to stay. This means that for community-based financial institutions to succeed in any of their marketing channels, they must evaluate their budgets as well as increase or shift budgets as needed.

Banks Must Prioritize the User Experience on Their Websites

On the use of digital marketing and advertising:

Ielapi: Almost all of our clients have digital advertising as part of their mix — as they should! From a direct marketing perspective, the actual allocation to digital varies materially, depending on how comfortable clients are using and measuring those channels.

On the top three areas of focus for digital marketing:

Ielapi: For financial-based direct marketers, the top areas of digital focus are: email, paid search and social. Strategically, our clients have found these channels create a more robust reach and marketing experience when deployed as companion tactics in a multichannel activation strategy. We often help clients create an optimal cadence of social product/offer awareness, in combination with direct mail and email, while ensuring paid search is funded as an “always on” tactic.

On the content of the digital ads:

Ielapi: Our focus in serving clients is in direct-response, performance marketing, thus ads tend to be almost exclusively product-oriented. Additionally, cash and rates are still kings!

Direct marketing is most impactful with incentive-based content as priority one. Banks are currently in great need of low-cost deposits, so the increased focus we’ve observed is on checking, savings, money market and CD accounts.

The other focus areas tend to be products where the full customer experience can be completed digitally — predominately credit cards and other digitally originated products.

On the area of digital marketing he believes banks and credit unions should be emphasizing more:

Ielapi: We believe there is a continued gap in deploying list-based (or addressable) digital tactics at scale and see this is a prime opportunity for banks, specifically for product marketing teams trying to acquire new quality customers. List-based digital techniques can also be precisely measured, an area in which there has traditionally been a gap for many types of digital media. One emphasis we would love to see more banks adopt is list-driven, signal-based trigger tactics.

We envision signal or behavior-based tactics set up for existing customers but see a lack of focus on prospect-based signals as well as new-product cross-selling. For example, banks do a great job connecting with checking customers on account-based alerts and services; however, they tend to ignore the large opportunities of prospects that can be reached in the same fashion. Prospect-based signals focused on key life events allow banks to attract hand-raisers — listing one’s home, moving into a new home, expecting a new member to the household are all natural events that if strategically addressed, may turn marketing leads into profitable new accounts.

On what’s surprising to him about bank marketing:

Ielapi: A continued surprise for us is with respect to website user experiences, or UX. Overly complicated or non-existent online origination paths clearly compromise the effectiveness of digital advertising. Candidly, we’re surprised more dedicated attention isn’t being placed here. We continue to advise clients to build media buy plans (digital and offline) with a key understanding of realistic customer journeys. Separately, we are excited to see the advancements in CTV and looking forward, with our clients, to the evolution of that channel.

On digital marketing trends and the changes ahead:

Ielapi: We are anticipating the mix will continue to shift for the foreseeable future as new advertising platforms become available and the digital advertising world sees more disruption in privacy, measurement and attribution. We anticipate the “optimal mix” of placement and budget allocation will continue to be fluid and a high test-and-learn space for the foreseeable future.