Carlos pallordet digital marketing in financial services


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Carlos Pallordet from timetric delivered this speech on global best practices in financial services in Singapore in April 2014.

The Digital insurer particularly liked the insurance example of successful social media campaigns, the use of charity t engage with customers and some early adoption of allowing consumer reviews on insurance products and services

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Carlos pallordet digital marketing in financial services

  1. 1. 1 Digital Marketing in Financial Services: An Overview of Global Best Practices Carlos Pallordet
  2. 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 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 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 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 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 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 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 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 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 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 12 • And they are ready to put their money where their mouth is: Generation Y (cont.)
  13. 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 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 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 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 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 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 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 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 Individuals could browse through the entries and like, share or comment on each other’s photos.
  21. 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 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 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: • 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 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 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 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 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 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 (, 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 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 30 THANK YOU!