In recent years, banks and credit unions have made a notable shift in their marketing strategies, reducing their spend on traditional advertising channels like TV, radio and billboards while investing more heavily in digital marketing. This change is driven by the reality that most financial research and decisions are now made online.
Today’s financial institutions understand that their audience is turning to digital platforms to compare products, read reviews and make financial decisions.
Why Digital Marketing is More Effective for Financial Institutions
For banks and credit unions, digital marketing offers a more precise, cost-effective and measurable way to reach consumers compared to traditional advertising. This is especially crucial when financial institutions need to target specific audiences and maximize their advertising dollars.
Contrary to the belief that only large national banks can afford to dominate the digital space, digital marketing is within reach for all financial institutions. Local and regional banks can achieve significant market presence by focusing on their immediate geographic areas and tailoring their marketing efforts to the needs of their communities.
For instance, while national banks may occupy 10-15% of the digital landscape in a given local market, mhp.si’s clients consistently occupy 30-40%. This presence spans search, display and connected TV, all of which are essential for reaching today’s digital-savvy consumers.
The Decline of Traditional Advertising
Traditional advertising is no longer delivering the same returns on investment it once did. According to eMarketer, financial institutions will decrease their spending on traditional media by 3.3% in 2024 while increasing their investment in digital by 18.2%. The reason is simple: today’s consumers spend more time researching financial products online than they do consuming traditional media.
From January to June 2024, financial institutions spent the following amounts on paid search:
- HELOC: $81.4 million, capturing 41 million Google searches with only 3.79 competitors per query.
- Checking Accounts: $49.8 million, capturing 41.4 million searches with only 3.01 competitors per query.
- Mortgages: $274 million, capturing 401 million searches with only 2.93 competitors per query.
While these figures might seem high, they break down to an average spend of just $922 per month per bank or credit union. This makes digital marketing a highly affordable and scalable option for even the smallest financial institutions.
Measurable Results: The Digital Advantage
One of the biggest advantages of digital performance marketing is the ability to track results in real time. Unlike traditional media — where it’s nearly impossible to measure how many customers came from a billboard or radio ad — digital marketing provides clear metrics for success.
For example, the average cost of a billboard is around $7,000 per month, but it’s difficult to determine how many checking account applications that billboard generated. In contrast, mhp.si’s digital performance marketing campaigns average $36 per application. That same $7,000 could generate 194 checking account applications through digital channels.
Similarly, a TV ad schedule might cost $15,000 per month, but there’s no clear way to measure how many HELOC applications resulted from the campaign. With mhp.si’s digital strategies, that same budget could lead to 416 HELOC applications.
This level of precision and transparency is simply not possible with traditional advertising methods, making digital marketing the clear choice for financial institutions that need to optimize their marketing dollars.
When Traditional Advertising Still Has Value
While digital marketing offers significant advantages, traditional media still has its place, particularly when it comes to community outreach and brand awareness. TV, radio and print advertising are excellent platforms for showcasing your institution’s involvement in local events, fostering a sense of community and brand awareness.
However, when the goal is to drive specific actions — like opening new checking accounts or applying for a loan — digital marketing offers unparalleled effectiveness. By targeting customers at key moments in their decision-making process, banks and credit unions can more efficiently capture leads and convert them into loyal customers.
The Power of Household-Level Targeting
One of the most effective strategies in digital marketing is household-level targeting. By using data to identify key behavioral traits and interests, financial institutions can deliver highly-personalized advertising to potential customers at critical points in their journey.
It’s important to note that 88% of financial decisions are made within the household. This makes household-level targeting especially effective for banks and credit unions looking to engage potential customers where these key decisions are being made.
For example, targeting a 2-10 mile radius around each branch location based on customer behavior allows banks and credit unions to reach “in-market shoppers” who are actively searching for products like checking accounts or credit cards. This level of precision ensures that your marketing dollars are spent reaching the right people at the right time, increasing your chances of conversion.
At mhp.si, our exclusive Doppio® platform leverages 255 behavioral and data layers to identify consumers who are in the market for financial products. Whether they’re searching for a new checking account, considering a HELOC, or exploring credit card options, Doppio® allows financial institutions to deliver highly-targeted messaging that resonates with potential customers.
Embrace the Digital Future with mhp.si
The digital transformation of financial marketing is well underway, and banks and credit unions that fail to adapt risk being left behind. As more consumers turn to digital platforms to research financial products, institutions that invest in digital performance marketing will enjoy a competitive edge, driving more conversions and growing their market share.
With mhp.si’s expertise and exclusive insights as a Google Premier Partner, financial institutions can navigate the complexities of digital marketing with confidence, ensuring that their marketing strategies are optimized and compliant for today’s digital-first world.
