If You Want To Win A Marketing Award, Use A Calculator

An article in Chief Marketer called How to Win (More) Marketing Awards: Practical Help from a Real-Life Judge offers some advice on how to win an award, even if you’re not the “best marketer on the planet.” Here’s reason #1:

Most entries are riddled with mistakes and slapdash efforts. [S]ponsoring organizations…get 1% of entries in the first weeks. On the actual day of the deadline, roughly 65% of entries will arrive. Then the day after the deadline, the final 44% of entries come.”

That’s 110% of the entries, according to my calculator. And you wonder why CFOs question marketing’s ROI calculations. 🙂

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Nationwide’s Super Bowl K-Fed Ads: How Consumers Will React

Nationwide is previewing their Super Bowl ads with Kevin Federline on its site. When millions of viewers see it during the Super Bowl, here’s how they’ll react:

“That was cool, but what the hell is an annuity? Hey, any more beer in the fridge?”

Financial professionals are fond of saying that insurance products are sold, not bought. No where is that more true than with annuities, where studies (the ones I’ve found are UK-based) show low consumer awareness of these products.

Not only is Nationwide missing out on an opportunity to drive consumers to its Web site to view the other versions of the ad, more importantly, it’s failing to drive consumers online to: 1) find out what an annuity product is and if it’s right for them,; 2) capture leads to pass on to their agents; and 3) develop some measure of the effectiveness of the ad.

The ad does instruct viewers to contact their investment professional. Just two problems with that: 1) many consumers don’t have an investment professional, and 2) how many consumers consider their insurance agent their investment professional?

It’s not too late to change the ads, is it?

Other Uses For Personalized Billboards

News of the personalized billboards that Mini Cooper is testing got me thinking of some other firms that might use this new medium:

  • Ron Shevlin, your current bank balance is $1.17.
    Get a payday loan at Sonic Cash.
  • Ron Shevlin, your STD tests are in, contact us immediately.
    Lahey Clinic
  • Thank you for your continued business, Ron Shevlin.
    From your friends at Frenchy’s Adult Book Store.
  • The air in your front left tire looks low, Ron Shevlin.
    Lou’s Mobil station (one block ahead).
  • Ron Shevlin: Your alimony payment is three months late.
    Massachusetts Association of Divorce Lawyers.
  • Ron Shevlin: Your alimony payment isn’t the only thing that’s late.
    American College of Obstetricians and Gynecologists.
  • Only wimps drive a Mini Cooper, Ron Shevlin.
    Land Rover of Peabody.

On second thought, maybe personalized billboards aren’t such a good idea.

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Affluent Baby Boomers Don’t Want Financial Education

Interesting study from Cogent Research on affluent baby boomers was featured in today’s Investment News. Key data points:

  • More than one-third of the 4,000 investors who were born between 1956 and 1964 with investible assets of more than $100,000 surveyed in the study said they don’t work with an investment adviser.
  • 57% of the respondents’ total investible assets were managed without the assistance of a financial adviser.

The article quoted Peggy Cabaniss, president of Lafayette, Calif.-based HC Financial Advisors Inc, as saying that the survey underscores the need for more education about financial planning.

My take: Affluent boomers don’t need — or want — to be educated about financial planning. They need to be convinced of the value of working with an advisor. These cranky investors don’t trust financial services firms, and are very aware of the conflict of interest scandals that have plagued the industry.

Mass media advertising isn’t going to fix the problem.

Financial firms have to target advisor-holdouts with direct communications that: 1) demonstrate what it’s like to work with an advisor; 2) are upfront and transparent about fees; and 3) provide compelling offers (a few firms have found success with invitations to dinner at a fancy, local restaurant) to get these potentially lucrative prospects to take action.

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Bank’s Ad Spending Effectiveness

AdAge reported that Miller Brewing is shelving its Man Law ads. Apparently, Man Law #1 is “advertising must boost sales.” If that’s so — and who am I to challenge Man Law — then some banks may have to re-think their ad spend.

Using data compiled by TNS and published in American Banker (pw req’d), I looked at the ad spending of the nation’s big banks, and the asset gains (or declines) they’ve achieved, to calculate the change in assets per ad dollar spent.

(Methodology note: TNS reported ad spending for the first three quarters of 2006. I annualized that spending, and then divided the change in the bank’s assets from 2005 to 2006 by the annualized ad spend).

Here’s what I found:

……………………………………..Asset Change……………..Asset %
Bank……………………………….per Ad $…………………….growth

HSBC………………………………1650………………………….25.1
Bank of America………………..1117………………………….15.7
Wells Fargo………………………..766………………………….14.8
US Bank…………………………….642……………………………4.6
BB&T………………………………..567……………………………9.9
JP Morgan Chase…………………502………………………….13.4
SunTrust……………………………309……………………………7.2
Wachovia…………………………..297……………………………8.2
WaMu……………………………….248…………………………..13.1
Citigroup…………………………..202…………………………….5.1
Fifth Third…………………………113…………………………….2.9
PNC…………………………………108…………………………….4.5
National City……………………(69.8)…………………………..(1.7)
____________________________________________________________

Due to strategy differences, this isn’t an apples-to-apples comparison. Much of HSBC’s asset growth likely came from their high-yield online savings account push (according to Direct magazine, HSBC Direct acquired 350,000 customers since launching in November 2005). And with nearly half of their total ad spend going to the online channel, they got a good bang for their ad buck.

But when comparing banks with the [relatively] same geographic footprint, there are significant variations in assets gained per ad dollar spent. BB&T added $567 in assets for every ad dollar they spent compared with the $308 in assets that SunTrust gained.

West coast-centered Wells and WaMu (yes, I know it has a presence in NY) had relatively similar asset growth, yet Wells’ ad effectiveness result is three times better than WaMu’s.

And in the slower-growth midwest markets, US Bank put up $642 in assets per ad dollar — more than five times better than Fifth Third or PNC. Put another way: For PNC to have achieved the same ad effectiveness rating as US Bank, it would had to have reduced its ad spend by 83%, from $38.3 to $6.4 million.

Now, I’ll be the first to admit that this metric isn’t perfect, and that there were any number of factors that influenced the actual asset growth rate beyond the advertising. Should banks reduce their ad spend? I don’t know. But here’s what I can’t help but wonder:

How many banks tracked their ad spend against asset growth throughout the year and adjusted their investment between media, lead generation, and direct sales efforts?”

My bet: Very few. (You’re right, I’m hedging — I don’t think any of them did).

Many banks lack: 1) the ability to model the effects of different investment levels across their marketing opportunities (i.e., market mix models), and, just as — if not more — importantly, 2) the decision-making processes that would enable them to re-allocate funds and make mid-course corrections.

These capabilities could improve the ROI of marketing investments as much as any other investment that marketing makes.

Digg!

Want To Compete In The High-Yield Savings Accounts Market?

Then get ready to pony up some serious online advertising dollars.

According to data compiled by TNS and published in American Banker (pw req’d), financial services firms competing for deposits by offering high-yield savings accounts are spending big bucks online.

Granted, online spending from the big firms doesn’t support just their high-yield savings accounts. But through the first three quarters of 2006, Wamu spent $12.5 million on online ads, Citi chipped in $19.5 million, while HSBC anted up $20 million (47% of their total ad spend).

Big spending isn’t limited to the big banks. Early entrant ING Direct spent $9.4 million, slightly more than the $9.1 million that Emigrant Savings spent. [Point of reference: US Bank, the 10th largest bank in terms of assets, spent $11 million on ads across TV, print, radio, online, and outdoor].

So, there are a few things you may want to consider before jumping in:

  1. What are you going to tell your existing customers (you know, the ones with today’s low rate accounts)?
  2. How are you going to reallocate your marketing budget to accommodate the commitment in online advertising it will take to compete with the current market entrants?
  3. What are you going to do to keep these customers, who are likely to churn through accounts at every movement in the rates?

Please don’t expect some Chief Deposit Officer to come swoop in and save the day. That isn’t going to happen.

p.s. Email me for a white paper on what you can do to increase deposits.

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BankerSpank: Cute, But Ineffective

bankerspank.jpg

A series of ads on BankerSpank.com parodies the PC/Mac ads, this time with Bank and Credit Union.

They’re cute ads…but they won’t drive any business a credit union’s way.

One reason why Apple fanatics are devoted to the brand is that they see themselves as different from the stuff-shirted, boring business types who use PCs. The PC/Mac ads capture and celebrate that self-perception.

But do credit union members see themselves as being different from bank customers? Or do they prefer to do business with credit unions because of the superior service they receive? (I’m betting on the latter).

Credit union execs will fall in love with these ads a lot faster than consumers will. And, yes — some bank will sue for “unfair advertising practices.”

Emotional Or Informational Advertising?

According to an article on uwnews.org, researchers from three [state of] Washington universities found that:

Consumers who are skeptical about the truth of advertising claims are more responsive to emotionally appealing ads than ones peppered with information.”

Emotional ads were characterized as “providing an emotional experience that is relevant to the use of the brand; informational ads predominantly provide clear brand data.”

Although these findings might not apply to all products, the research does have important implications for financial services marketers.

Today’s financial services consumers are skeptical. But in financial firms’ zeal to make an emotional connection with consumers through their ads, many have failed to meet one of the stipulations of the research study: Relevance.

Financial services firms seem to be falling over each these days, promising to help consumers “achieve [reach, fullfill] their dreams.” But this emotional plea falls short of being an “experience relevant to the use of the brand.”

Rather than asking “what emotional connection can we make through our advertising?”, financial firms need to understand “what emotional connection are we good at making today?”

They would find that emotional connections vary by customer. Some make an emotional connection based on the interpersonal relationships they have with the firm, some become attached because of the objective guidance and advice they receive, while others are driven by the convenience and operational effectiveness they experience.

Few consumers (and I’m being generous), when asked about their bank or brokerage, would say “they helped me achieve my dreams.”

Back to the ad storyboard, financial services firms.

Innovations In Bank Marketing

freechicken3.jpg

Here’s how [I imagine] this came about. Overheard at the Management Committee meeting:

CEO: We need to increase deposits. Any ideas?

Marketing guy: We could give away iPods.

Finance guy: Too expensive.

Retail banking guy: My brother-in-law has a chicken farm. We could give those away.

IT guy [mumbling about an email he read on the Blackberry he was playing with under the table]: Hmm….that’s a good idea.

CEO: I guess it’s a done deal then. Let’s move on. What’s next on the agenda?

Disclaimer: The above conversation is fictional. Any resemblance to real bankers is purely coincidence.

p.s. What do you think they were doing with those chickens that would warrant a service charge in the first place?

Advertising On Airport Security Bins

A brilliant idea. Here’s who should advertise there (and their message):

  • Handi Wipes. “Cuz’ God knows what’s been put in these bins.”
  • Banks. “Bank with us. Our lines are shorter than this one.”
  • Amtrak. “If you rode the train you wouldn’t need this bin [well, not yet].”
  • Cialis. “By the time you get through this line, Viagra will have worn off. With Cialis, you’ll still have 34 hours to go.”
  • Geico. “Got 15 minutes? Hell, you’ve got 115 minutes!”
  • DeBeers. “Diamonds are forever. Which is about how long it took you to get through this line.”
  • Microsoft. “Where do you want to go today? (Not that it matters — you’re not going anywhere!)”
  • American Express. “Don’t leave home without it.”
  • Capital One. “What’s in your wallet? (Never mind, we’re about to find out).”
  • Travelex. “Did you see what the guy in front of you put in here? Travelex travel insurance kiosks — Gate 17.”

Anybody have any more suggestions?