Timetric - Carlos Pallordet - Digital marketing in financial services

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  • 1. 1 Digital Marketing in Financial Services: An Overview of Global Best Practices Carlos Pallordet
  • 2. 2 2 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
  • 3. 3 3 Digital marketing offers brand new possibilities: The take-off of digital Digital allows companies to develop processes and employ channels to: Reach Respond to web-based consumers Signal Create and monitor brand awareness Inform Promote new products and services Discover Identify customer needs Improve Elicit feedback
  • 4. 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 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 and Africa Total Size: USD 11.6 billion Digital Advertising Spend in Financial Services (USD billion)
  • 6. 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 and Africa 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
  • 7. 7 7 • Key factors: – The rise of the internet – The spread of mobile: smartphones and tablets – Generation Y A new breed of consumers
  • 8. 8 8 • 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
  • 9. 9 9 • 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
  • 10. 10 10 • 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
  • 11. 11 11 • 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.)
  • 12. 12 12 • And they are ready to put their money where their mouth is: Generation Y (cont.)
  • 13. 13 13 • 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
  • 14. 14 14 • 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 of customer trust Lost revenue Source: Applied Research, 2011
  • 15. 15 15 • 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
  • 16. 16 16 • 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
  • 17. 17 17 • 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.)
  • 18. 18 18 • 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
  • 19. 19 19 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
  • 20. 20 20 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.
  • 21. 21 21 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
  • 22. 22 22 • 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
  • 23. 23 23 • 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.
  • 24. 24 24 • 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.
  • 25. 25 25 • 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
  • 26. 26 26 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.)
  • 27. 27 27 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
  • 28. 28 28 • 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
  • 29. 29 29 • 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
  • 30. 30 30 THANK YOU!