While most would like to believe that financial institutions as a whole are on the cutting edge of technology and marketing, sadly, that is not the case. Take, for example, a new report by Boston-based research firm Aite Group that shows that outside of the top-25 banks, FIs are not placing enough of a priority on online marketing.
Of banks surveyed, 75 percent of the top 25 advertised on search engines compared to only 36 percent of those in the group of the next 50 banks. Sixty-seven percent of top 25 place banner ads at other sites to only 36 percent of the next 50, and while half of the top 25 put banners in e-mail to communicate offers and half use targeted marketing technology to cross-sell/up-sell existing online customers, only 18 percent of the next 50 try these strategies.
Of the top 25, ad spending in 2006 was 7.6 percent of the total ad expenditure, compared to just 4.3 percent for those in the next 50. Online advertising proved to be profitable for big banks too.
“As the total number of accounts in force increased 14% from 2005 to 2006, [top 25 banks’] ad spend per account dropped slightly from US$10.6 to US$10,” the report states. “Next 50 banks also saw total account volume grow by 14% from 2005 to 2006. Their ad spending per account increased, however, from US$16.3 to US$18.2 — an indication that the larger banks were spending less to maintain and grow their account volume, and that the shift towards online ad spending was a successful strategy.”