U.S. banks’ digital ad spend reached over $13 billion in 2022, up more than 20 percent from 2021.
By Ally Akins
Marketers’ prioritization of digital media is based on a solid foundation of evidence. Statistica reports that the time consumers are spending on digital versus traditional forms of media has completely inverted. While formerly just a support to traditional, digital media consumption continues to outshine its traditional counterparts. In 2023, the average daily time spent with digital media is expected to reach more than eight hours per day.
Traditional media is still a major facet of a comprehensive marketing strategy, and consumers are still spending upwards of 40 percent of their daily media consumption on these channels. But using both in tandem has allowed bank marketers to see greater returns on marketing spend.
With banks’ key audiences spending an abundance of time on digital platforms, it has become imperative for banks to keep up and engage in digital spaces to maintain the attention and interest of their target audiences.
Bank marketers are increasingly seeing the value of digital marketing and its return on investment in real time. In the most recent ABA Bank Marketing survey of bank marketers across institutions ranging from $100 million to $50 billion+ in assets, banks across all asset tiers are seeing the highest return on their marketing spend on search engine marketing and digital advertising. Following those two tactics, email, content marketing, social media, influencer marketing and text were rated most highly. Direct mail was the highest rated “traditional” form of media according to the marketers surveyed. (See chart below).
In 2021, the ABA survey of bank marketers found similar responsiveness towards digital tactics. Digital advertising ranked highest, followed by search engine marketing, social media, email and content marketing, proving that digital’s effects on bank marketers are here to stay.
Search engine marketing—composed of search engine optimization and paid search (referred to as PPC)—can be a vital component of a bank’s digital strategy, as it includes both organic and paid tactics to support a website’s traffic and visibility online. Some definitions are important, via Media Place Partners. Search engine optimization: “Optimizing your website to get traffic from organic search results, the end goal being higher rankings on the search engine results pages. SEO deals only with non-paid results.” Paid search: “Buying ads to improve the visibility of your website on search engines.”
SEO is setting up your website for success, fostering online trust and content awareness, while PPC quickly pulls traffic towards your site. Without one or the other, a digital SEM strategy can fall flat.
Digital advertising, the other top-ranking category in marketing return on investment, is typically composed of paid social media and display advertising of all kinds. Banks are using these ads to draw audience attention towards a product/promotion, brand imagery or specific call-to-action.
Adjusting marketing plans in 2023
While the push toward a digitally focused strategy is not new to bank marketers, with tightened margins on the horizon and potential economic headwinds, it’s more important now than ever for marketers to prioritize and strategically dedicate resources towards these new(-ish!) tactics.
Only 47.7 percent of all participating banks in the ABA survey have a budget for continual digital growth and website enhancement, while 77 percent of banks lack a CRM, as 66.1 percent lacked an MCIF to analyze customer data to be able enable targeted digital marketing outreach. This suggests an area for focus and improvement.
When bank marketers were asked what categories will receive increased budgets for 2023, digital tactics dominates the conversation. Digital advertising, SEM, social media, content marketing and email are the top 5 tactics mentioned. Advertising agency budgets rank 7th in areas of planned increases for 2023. Unsurprisingly, the areas of increased budget strongly correlated to marketing departments perceived return on investment of these tactics.
Blending digital and traditional media to get the most bang for your buck
While digital media continues to ‘earn its keep’ for bank marketers, it’s important to remember how it fits into a larger marketing strategy. Digital is just one tool in a wide breadth of options for bank marketers to help communicate their brand, engage with audiences, and actually sell products.
Understanding which tactics work best for which business objectives and optimizing each towards those results will allow your marketing investments to prove invaluable, and showcase the value of marketing as a strategic partner within your institution. Either of mail, owned media, earned media or television/radio might be the best performing tactic for certain objectives, while digital advertising and social media might help bank marketers accomplish a different objective or allow access to reach a different audience.
Bank marketers are clearly shifting their priorities in the digital direction. However, there is a challenge that is hidden below the waterline. While attracting and retaining talent across all disciplines is difficult, digital marketing and data analytics positions rank right up there with IT and compliance as some of the most challenging positions to fill.
Supporting this thesis, participants were asked, “What expertise do you feel is missing from your marketing team?” More than 50 percent of the ABA survey respondents at banks between $1 billion and $9 billion in assets responded that their team lacked SEO, digital or data and analytics expertise.
That sentiment corresponds to how banks are dealing with the technical experience/expertise gap: outside support. From consultants and agency support, banks are reporting upwards of 15 percent of total marketing budgets spent on outside agency support. This is a critical acknowledgement that certain specialized aspects of digital marketing expertise are better ‘rented’ than ‘purchased.’
The results of ABA’s survey clearly show bank marketers’ preference for digital marketing tools and techniques. The results indicate also that marketing budgets are being thoughtfully crafted for demonstrable business results and that digital marketing provides a higher and more measurable return on investment. Using a balanced and well supported digital-first approach is enabling marketing to assume a greater role in revenue growth, demonstrating its value to the organization.
Ally Akins is consultant at Capital Performance Group, a strategic consulting firm that assists banks in making the most of their customer data. She can also be reached on LinkedIn.
Check out ABA resources, training, events, conferences, articles and insights for bank marketers here.