Vertical Focus: Personal finance

30 April 2009 | By Sean Hargrave

quick facts

• Personal finance providers confirm the numbers game is over as they start using digital to recruit quality customers and deepen existing relationships.
• Their focus is being shifted to eCRM, examining affiliate traffic more closely for quality traffic and branding campaigns such as Barclaycard’s YouTubechannel, HSBC’s Talking Money and MasterCard’s Big Lunch sponsorship.
• Finance has slipped from the country’s leading digital advertising sector to fifth place between 2004 to 2008.
• In 2007 automotive overtook finance in the IAB league tables and now has nearly twice the market share of finance. Finance’s share of overall digital spend, according to the IAB, has almost halved between 2006 and 2008.

After so many shocks in the global financial system over the past year, personal finance companies are pursuing far more conservative marketing strategies than when new media age last looked at the sector in January 2008. Before record-breaking government bail-outs and quantitative easing, personal finance brands were aggressively marketing their latest offers online and offline in an attempt to increase market share. They aimed to poach customers from each other with a range of digital marketing techniques, including pay-per-click (PPC) search, display and far-flung affiliate networks.

Online is certainly a critical medium as far as customers are concerned. The Foolproof Online Shopping Survey last year found that the internet dominated as an information source, with 60% expecting to apply for a current account online and 200,000 consumers a month ready to change their accounts (nma 25 September 2008).

As the sector focuses on managing risk, however, there has been a shift away from ruthless customer acquisition to using digital marketing campaigns that appeal to financially stable customers, particularly those with whom brands already have a relationship. While search, affiliates and display ads are still important to financial services brands, many are increasingly using digital for sponsorship and branding, and relying on improving their eCRM efforts to deepen relationships with customers.

The shocks to the world’s banks have also had an effect on digital advertising budgets. Recently released IAB/PWC figures for 2008 show that finance has slipped down the league table of top online ad industries. From occupying the top spot in 2004, it’s now in fifth place with 7.6% of overall spend, below recruitment (23.8%), automotive (13.5%), technology (11.2%) and property (9.7%). While slipping from top spot to fifth in four years could be put down to the sector being an early adopter of digital, it’s telling that finance’s share of digital spend has nearly halved between 2006 and 2008 (from 13.4% to 7.6%).

Individual marketers from within financial services brands report a move away from aggressively pursuing new customers. When acquiring custom now, all are agreed the numbers game is over and quality leads are sought by working closer than ever with affiliates and aggregators, as well as behavioural targeting.

Changing priorities

When new media age last surveyed the sector it was a heavy user of search, display and in particular affiliate advertising. Aggregator and comparison sites were also important, although financial brands were worried about whether such sites were commoditising the market. Now, the days of trying to grab market share through largescale PPC search campaigns and trying to be the highest rewarder of affiliates are long gone.

According to Patrick Muir, chief marketing officer of Citi Consumer (which owns Egg), a more conservative approach to online marketing echoes what consumers themselves are looking for. “All the financial providers are talking about the flight to quality but it’s important to point out it’s a two-way process,” he says. “Consumers are looking for big brands they can trust and those brands are looking for stable customers who are worth acquiring. The one thing you can definitely say now is that the numbers game has been discarded.”

This is leading personal finance companies to pursue the same goal, although through subtly different means. While Muir reveals Citi is concentrating on deepening one-to-one wealth management relationships, the main activity at Egg is to refine its affiliate marketing, whether through networks or individual affiliates.

“We’re finding that we’re speaking to our affiliates a lot more than before so they can understand what we’re seeking to achieve,” he says. “We’re looking very closely at the quality of traffic we get from each network and the sites within those networks to see which are giving usquality customers. One area where we’ve asked networks to be cautious is sites which talk about financial hardship then link people to a financial services provider. The leads coming from such sites tend to be of a lower quality.”

This shared desire among personal finance brands to improve lead quality is driving Norwich Union Direct (which is in the process of rebranding to Aviva) to prioritise organic search over paid-for terms, as well as concentrate its efforts on analytics.

“We’re concentrating our search efforts more on optimisation [SEO] than before,” says head of sales and marketing online Steve Genders. “It’s more cost efficient because you’re not paying for every click once the work has been done. Our other major new emphasis is on analytics. We’re looking very hard at the SEO and PPC terms people come to the site through and looking at their journeys, as well as of those who come straight to us. It’s helping us realise where obstacles to conversion are and which search terms are working best.”

Maximising existing customers

This move away from aggressive customer acquisition towards carefully acquiring new business is being taken to the next degree at the high street banks, which are more cautious than ever about who they lend money to.

HSBC’s head of marketing Philip Mehl says the bank is now prioritising behavioural targeting on its site to encourage its existing 5m online customers to take additional products. “The flight to quality is definitely seeing us focus more on existing customers to build more in-depth relationships,” he says. “We still do some search marketing and some display, but our focus is on knowing who our customers are and making sure we put relevant offers in front of them when they come to our site. We obviously know what products our customers have from us, so we also know what they don’t have. For example, if we know you haven’t used your ISA allowance for the year, we’ll put those offers in front of you.”

The focus is on persuading existing customers to take new products or upgrade their accounts, says Mehl. “We’re also using behavioural targeting to push people towards our investment products and discover who we should be talking to about a wealth management relationship. We’re constantly seeking to push the value of our customers.”

Virgin Money has also used behavioural targeting, to target new customers via AOL and Yahoo. It tightened its targeted demographic at the start of the year through a campaign with MSN and wanted to go to the next stage. Paul Hanson, marketing manager at Virgin Money, says, “We haven’t done any TV advertising for a year because we wanted to concentrate on the targeting and accountability that digital provides. We have marketleading offers but we want to know they’re in front of people who are likely to convert and will be good quality customers. So we’ve worked with Yahoo and AOL to target people who have shown an interest in a credit card but who are also most likely to be a good credit risk. It’s a waste of resources to have to turn applicants down.”

Similarly to Egg, Hanson reveals Virgin Money has been talking frequently to affiliates when it identifies a site that’s sending lower-quality traffic than others.

Learning to talk

Despite its positioning as a challenger brand that’s younger and fresher than most traditional personal finance brands, Virgin Money is typical of businesses in the sector when it comes to social networking and other marketing opportunities opened up by Web 2.0. Hanson says social networking is “something we’re looking at later in the year” and that it’s a difficult area for the company to have a conversation with young people about because “we’re still a personal finance brand”.

It was such sentiment that a personal finance brand has to be relevant when it markets itself that prompted Axa to launch My Budget Day last year (nma 20 November 2008). The site aims to get people taking responsibility for their personal finances by budgeting online, through the site, for 15 minutes a week.

“We looked at how we could join in the financial discussions and decisions people have online and found where we could really help was overcoming inertia,” says Sonia Carter, Axa’s online communications manager. “We find that people need encouragement to take control of their finances, so we set up the site to let them see what they were doing now and what they could consider doing. We’ve looked into social networking and it’s still up for discussion, but we felt we had to do something relevant to a financial services brand. We didn’t want to score an own goal by going on social networks and being seen to be getting in the way of discussions.”

“I’m not sure how social networking is relevant to personal finance brands”

Philip Mehl, HSBC

HSBC seems to have been the brand most affected by social networking and only then, admits Mehl, by backing down after last year’s vociferous Facebook campaign which called for the reversal of a decision to scrap advantageous graduate overdraft rates. “We learned a lot from that,” he says. “It led to us to launching the Talking Money section on our site where students can get advice from other students about managing their money.”

Sister brand First Direct has created its Little Black Book user-generated content site where customers talk about their experience of the bank and share recommendations (nma 19 November 2008). For Mehl, having your own brand presence is a more natural fit. “Having something on our site works best for us because, although setting up Facebook pages and widgets might seem like a lot of fun, I don’t see the meaningful value in it. It’s like Twitter — it has its place but I’m not sure how it’s relevant to personal finance brands because I don’t think it lies at the heart of people’s financial worlds.”

Deeper relationships

Such caution could also affect mobile marketing. Last summer Lloyds TSB staged a home-page takeover of MSN Mobile, while Barclaycard ran its first mobile ad campaign using video pre-roll ads, which debuted to O2 customers before being aired on TV (nma 12 June 2008). Whether this momentum will be maintained remains to be seen, but most of the well-known high street financial services brands are still evolving their digital marketing strategies after turmoil in the market. The new landscape is likely to foster a conservative relationship with digital.

Nevertheless, there’s a recognition that brands need to embrace deepening relationships through eCRM and rebuilding reputations through sponsorship-led brand empathy activity. Just as HSBC and First Direct have moved towards user-generated content, so too have Barclaycard and MasterCard. The credit card and payments companies believe they’ve each found the direction personal finance companies should be marketing themselves at a time when brand image has overtaken the numbers game of customer acquisition.

While Barclaycard has its user channel on YouTube (see box), Ben Rhodes, VP of marketing at rival MasterCard, reveals it’s planning to build brand empathy this July through the Big Lunch movement, which is encouraging communities to come together on 19 July to throw street parties across the country. He says plans are currently underway for the brand to highlight its sponsorship of the movement and use the user-generated content that will arise from it as part of a branding push.

“We’ve done a lot of research and people are generally worried about redundancy, the recession and the potential for civil unrest,” he says. “So we think this is a great way of getting involved, with communities engaging with each other. Consumers want to talk to brands but brands have to learn how to listen, they have to build brand empathy. So we’re focusing on what really matters and that’s connecting with the people in your neighbourhood. Financial services brands really have to move beyond being functional and build some deep brand engagement so that they’re more than just someone people call when they’ve lost a card.”

This is why financial services providers are approaching the latter half of 2009 in a very different frame of mind than they left the second half of 2007. Conjuring up market-leading offers with 0% finance and cashback offers has taken a back seat to demonstrating to a concerned population that their brand is one people can have confidence in. At the same time, the keyword is quality rather than overall traffic levels and new customer acquisition targets.

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