By Vanessa Stoykov, CEO and Paul Wodrow, Creative Director evolution media
As appeared in AdNews 11 November 2005
1. A more crowded advertising market
There is a much greater spend on above-the-line advertising by financial services brands than ever
before, and this is only going to increase. The recent spending spree of
super funds ($10m in two months!) has added a lot of noise to the
advertising environment of late, in an increasingly crowded communications
market. More and more financial services companies outside the big banks
are going mainstream. This makes it more important than ever that
organizations get their communications right, especially since the banks’ advantage
is that their brand equity already exists.
2. The target audience has shifted - and is still shifting
When choosing financial services or other professional services,
people are now more influenced by mainstream presence, and their peers. So
relatively technical and non - mass market organizations are starting to
think about creating broader brand relationships - this is evident in
campaigns such as the recent ‘numbers count’ campaign from the CPA.
Financial services communications should start from a position of
understanding the target audience - they need to ask themselves, is it an
audience of intermediaries such as funds managers, or are they end-users
who don’ t have a high level understanding of the product?
Thanks to technology, audiences are continuing to shift and to gain
greater control over their purchasing of financial services products. This
makes it imperative for financial services organizations to get their
brand penetration right now. As the back office moves into the living room
with the uptake of broadband, those brands who get it right now will have
a distinct advantage.
3. How to deliver a brand promise for a technical subject
Most financial services organizations aim to project a safe,
sleep-at-night image - that is why many of them use the colour blue in
their communications! To create an image that is different, creative yet
still trustworthy is a challenge. Of course, you can talk shop, but you’ve
got to be liked before people will listen. Perhaps an even bigger
challenge is for agencies and marketing departments to convince the CEOs
and boards that it is OK to be different. And financial services
organizations need to remember that high production values and an adequate
spend on media will make all the difference in successfully positioning
their brand.
4. Marketing strategy must flow from business strategy
Too often marketing departments and agencies are far removed from the heads of
business. If the two strategies are not closely aligned spend is wasted.
Agencies and marketers need to get closer to their CEOs and directors to
understand what it is that needs to be achieved.
5. ROI
Return on Investment is the holy grail in expenditure
examination in financial services. Exactly what ROI means to financial
services organizations when assessing marketing/communications can vary
greatly. Building a brand can be intangible and this is a difficult
concept to get around when you work with numbers all day - as do most
decision makers in financial services. ROI goals needs to be decided from
the outset.
6. Localised brands need mainstream acceptance
How does a brand such as BankWest, or Suncorp, achieve recognition and acceptance in
the mainstream? There are some serious players outside of Sydney and
Melbourne that need to make their mark. To gain distribution without a
shopfront is a real challenge.
7. Online strategy is only going to get more important
Generation X is increasingly shopping for financial services online,
and over the next 10 years as Xers become more important and the baby
boomers less important, the right online strategy is going to be
essential. Generation Y will pose other problems - such as no brand
loyalty. How future-proof are financial services marketing strategies?
8. International brands entering Australian market
Many big international brands are entering the Australian market with an
expectation of success, but Australia is very different, especially from
the US - for example, we have almost an anti-sales culture. A lot of
financial services purchasing is still based on relationships, in the
intermediary market it’s very much a case of who you know (to get your
products out there), not how much you advertise. There are two streams of
thought emerging - those financial services companies who think they don’t
need to use mass marketing to be successful (relationships) and those who
have the money to use mass marketing to gain traction.
GE Finance is a great example of a brand able to spend to get traction
- it needed recognition for financial services in a market where it was
known for fridges light bulbs! GE decided an outdoor campaign was
the best way to get brand relationships.
Some players will not use, or have the resources to undertake mass
market campaigns. However, all international brands have to remember that
we are geographically isolated in Australia - you need to present a brand
promise that is relevant to Australians in order to compete.
9. Spending your budget is a science
There are few players willing to spend the necessary amount for a successful mass presence.
There is a great big no-man’s land of small-medium sized organizations -
up against much bigger organizations such as Fidelity or the CPAs - who
can’t spend their way into brand recognition. These players need to
understand their target audience a whole lot better if they are going to
spend their dollars wisely. One way to do that is to hire more people on
the inside (people who have worked in advertising) - and/or a specialist
professional services agency who understands finance.
Unfortunately most financial services companies’ profits relate to
money markets - meaning budgets are often determined by the market
performance. Any change in the market produces a change in marketing
spend. In financial services, when you are making money, you spend money;
the reverse is also true. This is when creating the right budget decisions
really count.
10. A misunderstanding of terms
When the advertising industry thinks “financial services”, it usually pictures the banks, while
the financial services sector thinks “advertising” is TV and magazines!
There is a right brain/left brain disconnect, which can also go against an
organization internally, when the value of right brain creativity cannot
be quantified. CEOs in financial services are not working in collaboration
with their marketing department, the marketing department usually works in
isolation from the CEO and board. In fact, in financial services the
marketing department is the first to go when markets turn. Combined with
the fact marketing spend is determined by outside forces - namely, the
performance in the market - rather than by internal business strategy, and
you have a struggle on your hands to achieve creative, effective
communications.
And one more thing - Regulation
The financial services sector, perhaps more than any other, is bound by regulation. There are
countless constraints on what you can and cannot say, and what brand
promises you can make. When combined with highly technical, complex
products, you have a major challenge - how does the engaging,
relationship-building part of your communications rise above the product
description and the fine print?
Many financial services companies are more interested in covering their
bases than in delivering the right message to the right target audience,
and they struggle to deliver a simple message. ING Direct is very good at
simplifying what they do. While regulation is an essential reality, it
should not sound the death knell for great communications.