DIGITAL ADVERTISING has become a significant component of bank marketing budgets in recent years, likely because it is often less expensive than traditional marketing tactics, such as direct mail or mass media. In addition, digital marketing allows banks to expand their reach well beyond their existing network of bricks
and mortar branches. On the internet, modifications to promotions can happen instantly if
campaign tactics are not reaching their target customers effectively. Unlike marketing before
the internet, banks can easily change creative content, messaging, offers, and learn more about
the effectiveness of their frequency and reach.
While marketing managers are eager to pursue digital strategies, it is important for compliance
professionals to understand the mechanics around digital marketing and how these digital techniques
may introduce new risks to the organization. Compliance professionals also need to understand
how to measure and monitor the objectives and reach of a digital campaign to measure success
and be able to demonstrate to regulators that marketing tactics include all areas of communities
in which the bank operates. Compliance professionals also need to guard against biases that may
be introduced in the digital arena, including when geographic criteria are factors.
Common Types of Digital Marketing
Banks have a wide array of options available for digital marketing. The most common form is the bank’s own digital
assets, including their website, mobile applications, blogs,
social media pages, and email distributions. Typically, bank-owned digital assets are relatively low risk. Most banks have
well-established governance around their own digital assets
that ensures content has been compliance approved.
Another type of digital marketing is search engine mar-
keting, often referred to as “SEM” or “paid search”. When
using search engine marketing, banks bid to win placement
of their ad in a search engine’s sponsored link. When a con-
sumer clicks on the bank’s ad, the bank pays a fee to the
search engine. Pricing for these types of ads are dependent
on several factors, including the keywords used, geography
where the ad is running, and how many other competitors
are bidding against the bank for the best placement. For
example, a bank may pay a higher price for ad placement
on the keywords “mortgage loan” in San Diego, California
than it would pay for placement on the same keywords in
Bismarck, North Dakota. Search engine marketing tends
to be very effective because the bank knows with relative
certainty the consumer is actively seeking “mortgage loans”
and a click through to the bank’s website will typically lead
to higher conversion rates.
Display advertising is also an effective tool used in bank
marketing. Display advertising is essentially paid advertising
on a third-party website or within a third-party mobile application (e.g. Pandora, Candy Crush, etc.). Display advertising
is often in the form of banner ads, but can also include voice
content or video ads.
Social media advertising is a form of display advertising
that is performed within a social medial platform. Banks
purchase space directly from the social media platform.
Content can include traditional ads, videos, educational
articles, and much more.
BY RENEE W. HUFFAKER, CPA, CRCM