Retail Banking US - Marketing Strategies
Ten trending marketing strategies used by U.S. retail banks were listed, which includes mobile banking, predictive analytics, and video advertising. In 2016, U.S. bank expenditure on advertising and marketing was $17.1 billion. Marketing expenditures are shifting towards digital and email marketing, with $1.3 billion spent on video ads in 2017. Millennials have been known to be a target audience for the financial industry, and now Gen Z is a target as well, with the oldest members now graduating from college and looking for jobs.
Here are ten of the trending marketing strategies listed by The Financial Brand:
2. Cross-Departmental Integration
3. Investing In New Skillsets
4. Content Writers
5. Data Integration
6. Predictive Analytics & Machine Learning
7. Data-Driven Personalization
9. Voice Search/Digital Assistants
10. Video Advertising
Over 55% of adults use mobile banking. 81% of customers using mobile deposits "say they are 'extremely' or 'very' satisfied with their bank, compared to 72% for non-mobile deposit users." 60% of clients under-age 34 rated mobile deposits as a 'must have' feature. However, adoption rates are slow, and incentives may need to be provided for consumers to start using the app in the first place.
Modern-day marketing requires increasing collaboration between teams and departments, instead of competing and focusing on separate goals. Integration is also needed for data analysis, especially with the valuable insights gained from algorithms and the data sets that fuel them.
TALENT GAP & HIRING TRENDS
In a research study by Capgemini, 54% of respondents claimed that "the digital talent gap is hampering their digital transformation programs" and that the shortage has caused a loss in competitive advantage. Content writers are also in high demand since marketing in social media requires strong content to work properly.
Machine Learning and predictive analytics offer advantages in predictive lead scoring. Identifying key prospects with a high customer conversion rate, as well as analyzing demographics and client interest levels, would have "the power to completely redefine marketing." Data is also being used to personalize individual customer experiences. 57% of companies using artificial intelligence say AI is "'absolutely' or 'very essential' in helping their company create 1-to-1 marketing across every touchpoint." In the study, two-thirds of the marketers expect a 6%-10% "increase in annual revenue from their personalization initiatives."
Chatbots are also trending in the marketing sphere. According to Gartner, "85% of consumers' interactions with brands will occur via chatbots" by 2020. 50% of mobile searches are expected to be done through voice search or digital assistants by 2020 as well.
90% of all shared content on social media is video advertising. Mobile video ad expenditures are expected to increase by 49% to $18 billion in 2018. 52% of marketers believe video ads offer the best ROI, while 43% of customers say they want to see more video content.
"According to EMI Strategic Marketing’s analysis of data from the Federal Financial Institutions Examination Council (FFIEC), U.S. banks spent $17.1 billion on advertising and marketing in 2016," which accounted for 2.4% of bank revenues. American Express, JPMorgan Chase, Capital One, Citigroup, and Bank of America each spent over $1 billion in marketing expenses, representing "more than half of the industry's total expenditure." The analysis lists 20 of the leading U.S. banks (as measured by their marketing-to-revenue ratio), and 15 of them had a ratio between 0.8% and 2.8%. JPMorgan Chase had the highest ratio of 19.6%, spending over $2.2 billion. In 2017, the financial services industry alone spent $1.3 billion in video ad expenditures, a 26% increase from 2016.
According to Diana Tummillo, who has "successfully deployed direct marketing strategies for 20 of the top 50 banks in the U.S." for 20 years, marketing expenditures are shifting significantly from TV, print, and radio to digital and email marketing. eMarketer predicts that by 2020, U.S. digital ad spending will reach $113.18 billion, while TV ad spending will stay at about $77.93 billion. This may be due to the increasing number of households foregoing traditional cable TV and choosing to watch their shows on the internet.
Millennials and Gen Z are the "most important generational segment(s) for financial marketers." Gen Z are now graduating from college and looking for jobs, meaning new potential clients for banks (i.e., checking accounts, credit cards). Gen Z uses mobile devices at a "higher rate than previous generations," as the first generation to grow up completely in the digital age. They are also "visual multi-taskers" with a 6-second attention span, which means marketing efforts would need to become easy, simplified, and visually-rich experiences. Personalized experiences using data analysis, voice recognition, mobile banking, and video ads all point towards catering to these target audiences.
Some marketing strategies used by U.S. retail banks include predictive analytics and mobile banking. U.S. banks spent $17 billion for marketing in 2016, and $1.3 billion was spent on video ads alone in 2017. There is a shift towards digital and email marketing tactics in general, partly due to the expanding, younger target audience. Gen Z has now joined millennials in being the most important generations for financial marketers.