Citi Adds Manilla.com to Social Media Strategy

Citigroup Inc. plans to use the promotional space it has purchased on online bill-viewing platform Manilla.com to build relationships with its customers rather than try to sell to them.

That strategy speaks to Citi's emphasis on social media and its willingness to maintain conversations with consumers as they wander the Web, rather than try to push them onto its own site at all costs.

Manilla is a startup backed by the magazine titan Hearst Corp. that plans on Tuesday to begin offering a one-stop online destination for consumers to view statements from 500 banks, utility companies and others with whom they do business. Its revenue model calls for its advertisers to pass along a portion of the savings they reap from turning off paper billing.

Experts question Manilla's usefulness as an advertising platform and say it may live or die based on its worth as part of a social media play.

"Citibank has been very aggressive … [using] blogs and Facebook to reach customers rather than using ads when they pay bills or manage their finances," Ron Shevlin, a senior analyst at Aite Group LLC of Boston.

"We like to think of this as a conversation, not a billboard," Vanessa Colella, Citi's head of marketing for North America, said of her company's work with Manilla.

Manilla allows billers to put dynamic Web ads on the bills it displays to users. Rather than cross-sell products, Citi plans to use Manilla to inform consumers about ways to reach out to customer service and to direct them to Citi's blogs and websites, including its Women & Co. financial advice site, Colella said.

"We think these messages, in addition to marketing messages, are important ideas and information for customers," she said.

Hearst, based in New York, publishes such magazines as Redbook, Good Housekeeping and Marie Claire, reaching about 50 million women a month. Manilla could be another channel through which Citi could seek to direct portions of this audience to Women & Co. and other initiatives.

Citi has a history of supporting third parties, rather than seeking to drive all of its customers to its own website. Citi backs Bundle Corp., which uses its credit and debit card data to let consumers track spending patterns, share content on Facebook and discuss personal finance topics.

Shevlin suggested Manilla could be another investment opportunity for Citi with its statement presentation and rewards tracking capabilities. As a tip of the hat to Hearst, it also aggregates magazine subscription information and sends renewal reminders.

Other than Citi, Manilla's only large billing partner to date is Comcast Corp. The bill-presentation site says several thousand consumers have signed up to test the product since it opened for testing in March.

"If we are able to get more people to move to Manilla and paperless [bills] there are savings for the banks," Jessica Insalaco, chief marketing officer for Manilla, said. "It's an additional tool for their customers, and its an engagement opportunity."

Insalaco said banks and other partners will be drawn to the "nonjunk" nature of Manilla. Other third-party financial service providers cross-market products from competing banks, but Manilla does not.

"It is a clean way to stay connected to my bank and what they want to say to me," Insalaco said.

Experts say Manilla must quickly recruit a large number of consumers and assure banks that it does not encroach on their franchises. Shevlin said that it is important for Manilla to convey to potential clients that it has more to offer than just ad space.

"If the value proposition for Manilla is offering another channel to market to your customers, that is a prescription for failure because there are already [many other] emerging channels to reach customers," Shevlin said.

"The challenge they will have is that they need to go out and build their relationship strategy," said Matt Swain, associate director for InfoTrends, a research firm in Boston. "Long-term partnerships will generate the revenues through paper suppression." Nearly 80% of U.S. consumers prefer to receive paper bills in the mail, though nearly three quarters have expressed interest in alternative channels, according to Swain's research. The biggest roadblocks for turning off paper, he said, are concerns about security and the ability to archive bills. About 61% of consumers said they were also concerned about their ability to remember login credentials.

Manilla has several disadvantages, including its reliance on screen scraping and its relationship with Hearst, said Steve Shivers, chief executive of Doxo Inc., a bill presentment and document storage provider in Seattle.

Shivers said many billers prefer consumers to visit their websites and may be unwilling to work with a company they perceive as doing the bidding of a large magazine conglomerate.

"In general businesses are never going to pay a company that is taking my users somewhere else and using that as a way to sell other products and magazine subscriptions," Shivers said.

In contrast to Manilla, Doxo works directly with all of its billers and requires that consumers enroll using only a part of the their account information, such as a billing address, Shivers said. Unlike Manilla, where consumers are given a choice of whether to turn off paper, Doxo requires them to do so.

"If I'm a utility company or a credit card company, Doxo lets them reach the customer they have not yet reached," Shivers said.

Mark Schwanhausser, a senior analyst for Javelin Strategy and Research, said both companies suffer from a big flaw — namely that consumers can't pay bills directly from either site.

"The principal shortcoming of the direct-to-consumer approach is that you make it easier to see things, but you can't do anything," Schwanhausser said. "Financial institutions have an advantage here. You can view and you can do."