Financial services firms spend a lot of money trying to attract new clients; in fact, they account for 14% of all digital advertising spending.
However, they don't put forth as much effort to turn prospects into paying clients. Just $1 is spent on turning a lead into a client for every $92 that is invested in obtaining one. This startling figure highlights a serious weakness in financial services advertising firms' marketing tactics: they're not making as much money as they might.
The large discrepancy between the amount spent on obtaining leads and the amount spent on converting them might initially seem to be the result of a straightforward error or misallocation of resources.
However, the truth is more complicated. Financial service firms who want to successfully sell their goods have to use antiquated conventional marketing strategies to get around a challenging regulatory and compliance environment.
Financial services companies need to reevaluate their marketing strategy in order to close the revenue gap between marketing expenditures and revenue. While negotiating the challenging environment of finance marketing, they need to figure out how to turn prospective clients into devoted supporters. We'll walk you through the process based on what we've done for clients in the financial services industry.
Are you trying to find a group of seasoned marketers that can handle the task for you? Find out more about our marketing package for financial services and about our agency here.
What is Financial Services Advertising?
The promotion and sales of financial industry products and services to potential clients is the focus of financial service marketing.
It also differs from other forms of marketing. Financial marketing strategies are more credible and trustworthy than those for other businesses because of the distinctive nature of financial goods and services. Moreover, the techniques you employ to construct these two have to conform to stringent regulatory guidelines.
There are two main methods to promote financial services:
- Digital marketing includes both outgoing and inbound channels, such as pay-per-click (PPC) and blogs.
- Conventional marketing techniques: print, radio, television, and signage
The majority of financial service firms will combine conventional and digital marketing strategies. However, most rely more on conventional marketing methods because of historical habits (such as the substantial reliance on print ads in newspapers).
The landscape is swiftly evolving, driven by the potential of digital marketing initiatives within the finance sector, particularly for client engagement and expanding reach. Among the digital platforms, online searches play a pivotal role as customers actively explore financial services. For instance, 93% of accounting clients initiate a phone call following an internet search. It emphasizes the critical importance of being visible in online searches, underscoring the necessity for a robust online advertising business presence.
Why Does the Financial Services Industry Need Financial Services Advertising?
Financial institutions don't have the luxury of waiting for clients to approach them. The “lay-back approach” used by the industry in the past is insufficient now that the environment has altered as a result of factors including greater competition and changing client expectations.
In order to generate interest, financial service companies must now interact with their target market. This change from casual to confrontational marketing has been caused by a number of factors:
- Commoditization: It's becoming more difficult to stand apart from the competition as financial goods become more standardized.
- Disruptive FinTechs: FinTechs (financial technologies) that are aggressively disruptive attack the status quo and overthrow the existing order.
- Lack of trust: Customers' faith in the banking industry has been lost; it must be slowly regained.
- Regulatory barriers: Aggressive marketing is becoming more difficult due to stricter rules.
- Digital transformation: Traditional marketing strategies are becoming unsuccessful due to innovations like marketing automation.
- Digitization: Customers that shop online initially anticipate improved and customized digital experiences.
Financial service companies need to develop and implement creative financial service marketing strategies that generate new business in order to overcome these obstacles to success.
What Differentiates Financial Services Advertising?
As we've previously stated, the financial ads sector is subject to stricter regulatory and marketing rules than other industries. These regulations serve as a major obstacle to the marketing of financial services even while they are in place to safeguard the interests of customers:
Affiliations: All marketing materials must disclose the proper affiliations, such as “Member FDIC.”
Truth in Advertising Act: Provides that “no advertisement may be misleading or deceptive, should be based on scientific evidence whenever possible and cannot be unfair.”
Truth in Savings Act: Prohibits financial organizations from hiding information about checking, savings, and investment accounts from consumers or company owners.
Fair Lending Laws: Prohibits giving credit based on a person's demographics or any other characteristic.
The vast array of organizations that make up the financial services sector, including brokerages, retail, investment, and commercial banks as well as credit unions and insurance providers, are subject to these regulations.
Marketing initiatives must take into account the relevant regulations based on the kind of company. Penalties, legal action, license suspension or revocation, heightened regulatory scrutiny, and reputational harm may result from breaking these rules.
Digital-First Financial Services Advertising Strategy
A digital-first financial services marketing approach is necessary to reach consumers that prioritize digital platforms. With this strategy, you may improve customer engagement, interact with consumers more proactively, and outperform competitors that haven't fully adopted digital media.
This means that, for financial service providers, your entire plan should include the following techniques.
Embrace Digital Marketing
It is not a winning approach to rely exclusively on traditional channels. Customers are using digital platforms more and more to conduct research, make decisions, and communicate with financial advertising network providers. For instance, before making an investment choice, more than eight out of ten potential investors spend more than an hour studying online. These are individuals you may convince to use your financial services or who may know someone who could.
Pay-per-click (PPC) advertising is one digital marketing tactic that may assist you in segmenting your prospects according to their preferences, behaviors, interests, and demographics. In this manner, you can customize your marketing messages and content for each prospect, offering them unique experiences that speak to their particular requirements.
On the other hand, traditional marketing techniques such as TV advertisements or print ads are also available. They have advantages and have been around for a very long time. However, they lack the sophisticated targeting capabilities of digital marketing. Rather, they depend on more generalized, less focused strategies that get less attention. For this reason, the majority of financial service companies use digital marketing strategies such as:
- Search engine optimization (SEO)
- Search engine marketing (SEM)
- Content marketing
- Pay-per-click (PPC) advertising
- Email marketing
- Social media marketing
If you don't use one or more of these strategies, you'll lose out on opportunities to engage customers and generate leads, miss out on reaching a sizable section of the target audience, and lag behind rivals that successfully use digital channels to communicate with customers.
Use Content Marketing to Educate and Empower Customers
According to a study by Facebook research agency Facebook IQ, only 8% of millennials trust financial institutions with their advice. The data indicates that financial service providers have a challenging task ahead of them.
Overcoming this obstacle can be aided by employing an engaging content strategy to educate customers. For instance, those looking for advice and information on handling their own finances may be drawn to a blog article about personal finance.
This blog article draws readers in, builds your reputation, and encourages them to get in touch with you for help if they need a personal financial adviser or anything similar. According to a research article, financial consumers you educate with content tend to be more loyal in addition to bringing you closer to a sale.
However, learning is not as simple as creating blog entries. All advertising services would be lucrative if that were the case. We will provide some guidance on creating this material, rather than a comprehensive manual, as you are probably creating your marketing plan for the first time. For further in-depth questions, feel free to reach us.
1. Identify Customer Needs
Consumers react best to information that addresses their issues. You have to first determine their pain areas in order to produce material like that. What queries do they have? What kinds of searches are they conducting online?
In the end, this tailored approach results in a more successful and impactful content strategy by increasing interaction, fostering trust, and positioning your company as a trustworthy information source.
2. Provide Valuable Information
Provide pertinent and educational information that meets the demands of your customers. Provide instructional resources that break down difficult financial concepts, give helpful advice, and address issues that clients frequently encounter.
3. Tell Stories and Use Real-Life Examples
Using anecdotes and real-world examples will help your material come to life. Customers will be able to relate to the material better as a result, increasing its recall and engagement.
4. Simplify Complex Concepts
For many individuals, finance may be scary. Divide complicated ideas into easily understood chunks of knowledge. To make the material easier to comprehend and more approachable, use clear language, illustrations, and analogies.
5. Leverage Visuals and Multimedia
Include eye-catching components in your material, such as photographs, videos, and infographics. Visual aids improve informational effectiveness and audience engagement.
6. Use Data and Research
To give your writing more authority and credibility, back it up with facts, figures, and research results. This improves your content's credibility and supports users in making wise selections.
One financial services company that uses a unique content strategy is JPMorgan Chase. They undertake unique research and provide excellent thought leadership material through their Research page, which increases their reputation in particular sectors.
In conclusion, our commitment to delivering only high-quality traffic sets us apart in the realm of financial services advertising. By prioritizing excellence, we aim to not only drive meaningful engagement but also establish trust with our audience. As we navigate the dynamic landscape of financial services, our dedication to providing top-tier traffic remains unwavering, ensuring optimal results and sustained success for our clients.
Q1: What is financial services advertising?
A1: Financial services advertising refers to the promotion and marketing activities specifically designed for businesses operating in the financial sector. This includes advertising campaigns for banks, insurance companies, investment firms, and other financial institutions, aiming to attract customers, build brand awareness, and communicate financial products and services.
Q2: What are the benefits of financial advertising?
A2: The benefits of financial advertising are multifaceted. It helps in building brand recognition, establishing credibility, and attracting a targeted audience interested in financial products or services. Effective financial advertising can also enhance customer trust, drive engagement, and ultimately contribute to the growth and success of financial institutions.