Financial Services Firms Lag in Digital Marketing

October 30, 2008

This article is included in these additional categories:

Analytics, Automated & MarTech | B2B | Financial Services | Paid Search | Retail & E-Commerce | Social Media | Technology

Nearly half of marketers at financial services firms say digital initiatives will be integral to their marketing within two years, but their lack of experimentation, low digital budgets and difficulty with measurement are preventing them from realizing digital’s full potential now, according to a survey from MarketBridge and SourceMedia.

The survey, “Digital Marketing in Financial Services,” finds that though financial services marketers have a reasonable grasp of digital marketing, they have been slow to adopt to new Web 2.0 techniques. They are currently using “tried and true” digital tools and implementing them mainly on a campaign-by-campaign basis with little experimentation into more “emerging” digital vehicles, the survey said.

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Key findings:

  • Respondents said search-engine marketing and organic search are the most effective digital vehicles, while blogs and virtual networks are deemed least effective. Social networks are considered relatively ineffective.

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  • While they do use digital marketing channels, only half of respondents say they spend 0-10% of their budget on digital. The majority (65%) spend most on what they are familiar with, such as their own websites. Relatively few (15%) are spending toward “Web 2.0” vehicles such as blogs, social networks, video and similar initiatives.

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  • More than 90% say marketing is the key influence driving digital strategy. Nearly two-thirds say that a centralized marketing organization owns the strategy and almost that many say marketing owns execution.
  • Top concerns are lack of experience with new digital marketing platforms, and the inability to prove ROI. More than two-thirds (35%) cited regulatory issues as a top concern.

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  • Nearly half expect digital marketing to be an integral part of the marketing mix within the next two years.
  • More than 60% say they have a “reasonable” to “very good” understanding of digital marketing. When asked how organized their companies were to plan and implement digital marketing strategies, more than half report being “adequately” to “well organized.

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“Given the challenges now faced within financial services, it’s crucial that companies rethink and adjust the way they acquire new customers and retain current ones,” said Tim Furey, CEO of MarketBridge. “Digital marketing can help financial institutions develop stronger relationships with customers. Web 2.0 is about consumers selling to consumers, banks and insurance companies need to be thinking about how they are creating brand advocates within the customer base.”

“These findings show that the foundation is in place for marketers, but they are not shifting budgets fast enough to fully understand the value and impact of these new tools and platforms,” said Scott Gillum, MarketBridge SVP and financial services practice leader. “The next step is moving beyond one-off digital campaigns, increasing experimentation with other digital tools such as social networks, viral video, and blogs, and moving toward relationship-marketing activities that build and maintain long customer relationships-and this requires investment.”

About the survey: The survey was designed to gauge the depth and breadth of digital marketing deployment within the financial industry. Fielded in Q3 2008 it drew 237 respondents across a variety of titles and functions within financial services. Nearly 40% had executive-level titles and close to 20% had total marketing budgets of $100 million or more.

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