carlos pallordet digital marketing in financial services
Post on 22-Jan-2015
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Digital Marketing in Financial Services: An Overview of Global Best Practices
Carlos Pallordet
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Why are we here?
– The need of the financial services industry to overhaul its value model
– Trust and customer engagement
– Web-based consumers
The drivers of digital marketing
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Digital marketing offers brand new possibilities:
The take-off of digital
Digital allows companies to develop processes and employ channels to:
ReachRespond to web-based
consumers
SignalCreate and monitor
brand awareness
InformPromote new
products and services
DiscoverIdentify customer
needsImprove
Elicit feedback
4 4
And the financial services must adapt:
• Financial services customers are turning digital
• Digital media is expected to become the largest marketing channel
• The rising stars of digital marketing: social media and marketing
• But there are major challenges to overcome…
The take-off of digital (cont.)
5 5
• Financial services companies have turned to digital marketing:
The rise of digital marketing
2.591.81
0.59
2008
Total Size: USD 5 billion
5.7
3.43
2.41
2013
Americas
Europe
Asia-Pacific
Middle-East andAfrica
Total Size: USD 11.6 billion
Digital Advertising Spend in Financial Services (USD billion)
6 6
• A trend that is expected to continue in the future:
The rise of digital marketing (cont.)
Digital Advertising Spend in Financial Services (USD billion)
5.7
3.43
2.41
2013
Americas
Europe
Asia-Pacific
Middle-East andAfrica
Total Size: USD 11.6 billion
9.44
5.09
4.79
2017
Total Size: USD 19.5 billion
Source: Timetric forecasts, based on Nielsen and eMarketers data
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• Key factors:
– The rise of the internet
– The spread of mobile: smartphones and tablets
– Generation Y
A new breed of consumers
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• Rising internet penetration has been the core driver of digital marketing:
The rise of the internet
Source: International Telecommunication Union
0.0
20.0
40.0
60.0
80.0
2008 2009 2010 2011 2012 2013
% of individuals using the internet
Developing countries
Developed countries
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• Which, in turn, has been driven in part by the spread of mobile broadband:
The spread of mobile
0.0
20.0
40.0
60.0
80.0
2008 2009 2010 2011 2012 2013
% of individuals with active mobile-broadband subscriptions
Developing countries
Developed countries
Source: International Telecommunication Union
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• Gen Y takes center stage. The oldest members of Gen Y, a population cohort characterized by its embrace of digital technologies, turn 34 this year
• Key insurance demographic. As they purchase homes and start families, Gen Y will come to represent an increasing share of total insurance business
• Customer relationship primacy. They are reaching the age where they decide on a primary financial services provider, perhaps for life
How can companies secure their business?
Generation Y
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• This new generation of customers eschews traditional business-to-consumer interactions
• It expects a richer set of offerings from its provider:
– Innovative user experiences
– Mobile access (over 66% of Gen Y prefers to bank by mobile – PwC, 2011)
– A collaborative approach built around social media – they trust their peers more than their provider
– Gen Y expects to have a voice
• They are the best-informed consumers ever – they will switch providers mercilessly, and only respond to those offering real intrinsic value
Generation Y (cont.)
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• And they are ready to put their money where their mouth is:
Generation Y (cont.)
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• Despite this, insurers are lagging behind in the digital sphere
• An EY survey of insurers worldwide found that:
– 79% of insurers considered themselves to “only play the digital game”
– 47% “have no single cohesive digital strategy”
– Almost 70% dedicate less than 10% of their business and IT development budget to digital
• Why have insurers been slow on the uptake?
Insurers’ reaction
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• Narrow view of potential short-term costs:
Insurers and digital (cont.)
1,038,401
650,361
641,993
638,496
619,360
Avg. costs of a social media incident (USD)
Reduced stock price
Litigation costs
Direct financial costs
Damaged brand reputation/loss ofcustomer trust
Lost revenue
Source: Applied Research, 2011
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• This isn’t to say that insurers have avoided digital entirely…
• Unlike a few years ago, it’s rare today to find a personal insurer with no social media presence whatsoever
• But insurers are often using social media simply as a form of customer service:
– Twitter and Facebook allow the creation of a rapid feedback loop between customers and insurers
– Posts and comments allow insurers to track consumer sentiment
• Some companies are keen to make a bigger splash…
Insurers and social media
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• Insurers can also make great use of video-sharing websites:
– Large reach:
• 1.3 billion unique online-video viewers by end of 2012
(83.8% of global internet users)
– Allows insurers to link to easily link their off-line and on-line campaigns
– Video comments give consumers a voice and can drive consumer purchasing decision
– Can be very cost-effective
Online video
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• Video-sharing allows TV ads to reach a younger demographic who don’t watch TV
• Very cheap, but can also generate high traffic
Example: Allstate’s Mayhem and Mala Suerte commercials:
– Large footprint (most viewed clip: 1.6 million views)
– Links off-line and on-line campaigns
– Linked in to Facebook – the Allstate Mayhem Facebook page has 1.8 million likes
Online video (cont.)
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• Social media allows insurers to create campaigns largely driven by the users themselves:
– Gives individuals a voice
– Generates a sense of involvement among consumers
– Lets users do the footwork, potentially reducing costs
User-driven campaigns
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Some user-generated content campaigns are relatively simple:
• ICICI Prudential Life of India created a YouTube advert entitled Achche Bande
• Ad “celebrates the everyday goodness of the Indian family man in his various roles”
• Invited individuals to tweet positive things about the men in their life using the hashtag #AchcheBande
User-driven campaigns (cont.)
• Huge success in India - hashtag trending on Twitter and over 350,000 advert views
• Many similar campaigns based on users’ tweeting around a chosen theme
• Examples below from Metlife’s #LifesLittleWins and AXA UK’s mother’s day #AXATreat
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While others are more involved:
User-driven campaigns (cont.)
AIA Hong Kong’s Real Life HK photography contest:
• Asked Hong Kong residents to upload photographs of their day-to-day lives, with the best images being selected to win prizes.
• All entries uploaded to social photo-sharing website Pinsta.me. Individuals could browse through the entries and like, share or comment on each other’s photos.
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SafeAuto’s user-driven social media campaigns:
Do The Jingle:
• Contestants must record their own version of SafeAuto jingle and upload to YouTube.
• Winner selected by popular vote to win $5,000 and appear in SafeAuto commercial.
• The winning video in 2014 received over 400,000 votes.
User-driven campaigns (cont.)
Name Your Car:
• Individuals must upload a photo of their car to the company’s Facebook page, along with an appropriate name
• $1,000 cash prize
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• Several insurers have launched social media campaigns based around charitable donations:
– Creates social media traffic - to contribute, people must usually go through the insurer’s social media sites
– Builds a sense of individual involvement
– Positive social impact, reflecting well on the brand
– Link between insurers’ products and selected charity
Charity and social media
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• United Concordia, a U.S. dental insurer, ran a competition in which users who liked the company’s Facebook page could vote for one of three health charities.
• The winning charity by votes would receive $20,000
Charity and social media (cont.)
Source: mobilemarketer.com
• The competition microsite and Facebook page also provided consumer information about dental health
• Daily voting drove repeat traffic to the company’s website and Facebook page.
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• Insurer The Hartford is the official disability sponsor of the U.S. Paralympic Team
• Current What Defines You campaign aims to raise $100,000 for the U.S. Paralympic team
• To donate, individuals simply have to post “what defines them” on the campaign’s Facebook page, Twitter (#WhatDefinesYou), or microsite
• The company donates $1 for each post
Charity and social media (cont.)
Sample Facebook post:
Sample Twitter post:• Supported by YouTube videos
of interviews with U.S. Paralympians
• $5,600 raised so far.
• Encourages viewers to consider the effect disability could have on their lives.
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• Increasingly, companies are utilizing apps and games to reach consumers:
– Online gaming market grew at CAGR of 10% from 2008 to 2012, to USD 35 billion
– Utilizes vast mobile market (over 2 billion mobile broadband users worldwide)
– Draw in a younger demographic
– Can easily be linked into social media via leaderboards and in-app posts
Gamification
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Several insurers have experimented with apps that combine road safety with game and social-media elements:
Tricky Traffic - mobile game by insurer GEICO:
– Encourages road safety among younger drivers
– Competition among users via achievements and leaderboards, with app posting scores to Twitter and Facebook
Gamification (cont.)
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Aviva Drive:
– Uses GPS to track how safely a user is driving and award them a score.
– High scores entitle the user to a discount on comprehensive car insurance
Gamification (cont.)
– Users can unlock achievements and post their scores to Twitter and Facebook
– Aviva insurance can be purchased from directly within the app
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• Consumer reviews common in social commerce, but traditionally absent from insurer websites
Customer feedback
• But especially in the UK, online customer reviews could no longer be ignored (Confused.com, Compare the Market, etc.)
• Aviva UK now hosts disaggregated customer claim reviews for car insurance and home insurance products, giving customers a voice
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• A successful social media campaign involves two types of integration:
– It integrates consumers, giving them a voice and a sense of involvement
– It integrates different media channels to create a unified experience
• Insurers must develop digital marketing strategies along these lines to attract a new generation of consumers
• Or face displacement by more innovative competitors
Final remarks
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THANK YOU!
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