Social Media Targeting
Many banks are looking to social media platforms as a marketing
tool. Facebook is the largest player in the social media advertising
space, but other platforms, including Instagram, Twitter, LinkedIn,
and even Snapchat are gaining more and more bank advertising dollars. Audience targeting within social media platforms
is a little different than audience targeting online. Each social
media platform builds an advertising profile for individual users based on the user’s account profile and engagement history.
For example, your personal advertising profile within Facebook
includes advertisers whose websites you have visited and advertisers who have uploaded a contact list to Facebook with your
Additionally, Facebook puts users in categories based on
Facebook’s own algorithms and assignment methods. This can
include using both online data and even offline data, such as your
shopping history at a local grocery store. Wait! How does Facebook
get your grocery data? Many retailers who have loyalty clubs share
their user data and purchase history with social media platforms.
The social media platforms match the loyalty club data to your
social media profile through methods like matching the phone
number you have associated on both accounts.
Once social media users are assigned to advertising profiles,
advertisers can target specific audience attributes using hundreds
of different categories. A bank might serve savings account ads to
users who follow The Dave Ramsey Show, or HELOC ads to users
who follow HGTV. Banks might also target followers of sports
teams for team branded debit cards or credit cards to users who
are interested in fashion.
Another tactic of social media advertising is the use of look-alike
audiences. When marketing to a look-alike audience, the social
media platform finds consumers who look and act similar to the
people who engage the best with your bank’s social media page
and posts. Facebook and other social media platforms are very
vague and tight-lipped around what factors go into identifying
look-alike audiences; however, factors generally include demographic information, interests, and purchase behavior.
If managed correctly, banks can use digital marketing and social
media marketing without discriminating or being perceived as
redlining. Data aggregators, social media platforms, and advertising
companies all use algorithms to support audience targeting and
ad buying. These algorithms are proprietary and vendors rarely
provide bank compliance personnel with details around how the
algorithms behave. While vendor algorithms likely do not include
overt attributes related to fair lending, there is no way to know
whether attributes in vendor models may be a close proxy for a
prohibited basis. Compliance professionals must pay close atten-
tion to campaign reporting to monitor the level of compliance risk
exposure. That means knowing how the marketing campaign is
designed, how it will operate, and what the objectives are before
the campaign is launched.
Digital campaign reporting can include many different metrics. Compliance professionals should pay particular attention
to geographic targeting to ensure all areas of the bank’s communities are covered by their digital marketing. Most vendors
can provide a geographic breakdown (at least to the zip code
level) of where ads were delivered. Compliance professionals can
geocode the information
to determine penetration
into majority-minority or
areas. Geographic targeting
results are especially critical when advertising mortgage products. Compliance
professionals should also
review sites where ads
were placed to ensure
of all protected classes of individuals.
When gaps are identified in audience targeting, the bank should
consider a supplemental digital buy that is specifically targeted to
the audience who may have been excluded from previous campaigns. Supplement digital buys can counter-balance identified
gaps and demonstrate to regulators the bank is taking meaningful
steps to include all areas and individuals within its communities.
For more information, see the article, Social Discrimination by
Brian Waters in this issue of ABA Bank Compliance on page 26.
Reviewing Campaign Execution
Digital advertising campaigns can be altered with the click of a
button. Marketing teams often make campaign adjustments to
pause underperforming tactics or increase budget dollars assigned
to high performing tactics. So while the compliance department
may have approved a digital campaign strategy prior to it being
deployed, how the campaign is executed may look very different
by the campaign end. Compliance professionals should expect
detailed reporting from marketing teams around how the campaign was executed, what keywords or audience targeting was
modified during the campaign, and how the marketing dollars
were allocated across the campaign.
Digital Redlining Risk Assessment
Digital marketing will get attention from your regulators, whether
conducted online on within a social media platform. Because the
regulators will be paying attention, from a Compliance Management System standpoint it makes sense for compliance professionals
to review the bank’s digital marketing practices. The challenge is
there is no established regulatory guidance for how to conduct
this type of review. There is also no certainty that your testing
will be accurate because the models used in digital advertising
are murky and may lead to erroneous conclusions.
Digital targeting tactics have different
levels of risk and complexity,
depending on how they are used.