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Online Marketing: How Do You Stack Up?

Earlier this August, 154 financial institutions participated in The Financial Brand’s 2010 Online Marketing Study, including 49 retail banks and 93 credit unions. 64 of the participants had $1 billion in assets or more. 66 had less than $500 million in assets. 46% described themselves as “novices” at online marketing, 43% said they were “intermediate” online marketers, and only 8% felt confident enough in their abilities to characterize their organizations as “advanced.” Nearly 4% admitted they don’t do any online marketing at all.

Nearly a quarter of all retail financial institutions said they allocate around 5% of their marketing budgets to online activities. 32% weren’t sure if their organization invests any money in online marketing. 6% knew the total: $0.

22% don’t track or measure their online activities, while only 8% do so all the time.

45% of banks and credit unions don’t have any online marketing staff. Nearly a third have only one full-time employee dedicated to online marketing activities.

46.40% have a Facebook page, 34.60% use Twitter, 24.80% are on YouTube and only 1.3% have a MySpace page. 5% are toying around with Foursquare. 18% of retail financial institutions have a blog.

While most financial institutions embrace email marketing, a surprising 31% don’t.

57% of banks invest in search engine optimization (SEO), while only 36% of credit unions do the same — a difference of 21%. By an even greater margin, banks are much more likely to utilize search engine marketing (SEM): 57% vs. 23%.

Banks are 20% more likely to have microsites, and are 36% more likely to run banner ads than their credit union peers.

Credit unions are less likely to have a mobile phone app. They are, however, more likely to have a blog, an online newsletter and ads in their eStatements.

You can download a raw Excel file with data from the 2010 Online Marketing Study. The file includes three worksheets with comparisons between banks and credit unions and breakdowns by assets. You can perform more granular comparisons with another separate file that includes the individual entries from each study participant.

Please note: If you use any of the data from this study, you must attribute credit to The Financial Brand.

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Comments

  1. Jeffry,

    Thank you for taking the time to conduct this survey and for sharing the results!

    Regarding the last graph related to marketing budget, I wonder if you could provide some clarification. I downloaded the raw Excel data and noticed that the question was phrased in there as:

    4. What percentage of your financial institution’s budget is allocated to online/digital marketing?

    In the graph in the blog post it uses the phrase “marketing budget.” Did the original survey specifically reference the marketing budget, or was it stated as shown in the raw Excel file?

    If the word marketing was not included in survey, is it possible that the banks & credit unions who responded may have reported the figure as a percentage of their overall budget rather than just their marketing budget?

    Jason

  2. Matthew Wehrly says:

    Also, with regards to question 4: Was it intentional to group other electronic mediums with online/internet based marketing initiatives? My only concern is that the money allocated to items such as digital signage could skew the percentage of the marketing budget that is truly being utilized for online/internet campaigns.

  3. I just checked the original survey and the word “marketing” was indeed not included in the phrasing of question #4. I don’t think the omission is statistically relevant, since 63.4% either didn’t know how much their financial institution invested in online/digital, or estimated it was between 0-5%. We could get hung up on the semantics of the question and whether respondents lumped in digital signage or used the organization’s overall budget, but it doesn’t really affect the conclusion: Most financial institutions invest almost nothing in online marketing (or have no clue).

    This suggests one of two things. Either banks and credit unions don’t take online marketing seriously enough yet to invest in it, and/or they believe that online marketing doesn’t require a significant investment. These conclusions are even more likely when you consider how few financial institutions have anyone directly responsible for online marketing.

    Also, please keep these other points in mind:

    1. Participants were almost certainly guessing how much budget their institution allocated to online activities. I doubt that most financial marketers can accurately recall how their budgets breakdown by activity, and that’s assuming they ever knew the correct breakdowns in the first place.

    2. It’s doubtful participants in the survey used their organization’s overall budget, because it’s unlikely that anyone other than a handful of CFO’s have any idea what the total operating budget for their financial institutions is. There are plenty of financial marketers who can’t even tell you with any degree of certainty what their own marketing budget is, much less what the budgets are for HR, training, IT, etc.

    3. The study’s 154 participants were mostly readers of The Financial Brand and those who follow @FinancialBrand on Twitter. It’s fair to assume that this group is largely composed of those working in a marketing capacity at their financial institution, and it’s likely that they skew towards the more progressive end of the online marketing spectrum. I shudder to imagine what the survey’s results might have shown when I think about those financial institutions who don’t read The Financial Brand, didn’t know about the survey, and probably haven’t the foggiest idea what SEO, SEM and Foursquare are all about.

    Bottom Line: I think the data you’re looking at here paints one of the rosier pictures of online marketing in the financial industry that you’ll find. I suspect that widening the number of participants (beyond just those who are online and reasonably savvy) would see responses for all questions trend downwards.

  4. JP,

    Good summary of the relevant facts. Well done…

    BK

  5. Jeffry,

    Thank you for expounding on the marketing budget results. You caught my attention with this statement:

    “Either banks and credit unions don’t take online marketing seriously enough yet to invest in it, and/or they believe that online marketing doesn’t require a significant investment.”

    My own experience would indicate that the word “and” would be result of an analysis of why the budget allocation is so low. I’ve yet to encounter anyone at a small or mid-size F.I. who has even mentioned the high cost of online marketing (excluding PPC) as most discuss it in the terms “free” or “costs next to nothing” to use. But I also see & hear many of these same F.I. executives expressing disappointment with the results of their efforts.

    I think those expressing satisfaction with the low costs and dissatisfaction with the results are losing site of the correlation between what you pay and what you get. The illusion of getting rich quick (and spending nothing to do it) using the Internet is still alive & well in 2010.

    Jason

  6. Jason, those are my conclusions as well.

  7. Shocking. Very valuable data. Thanks, Jeffry.

  8. @Jason and Jeffry – to expand on your thoughts… we too hear so many discussing online as a “FREE” channel yet many get discouraged when they don’t get any results. When asked what strategy they had in place the answer most of the time is “there wasn’t one”.

    Thanks so much for putting this together and excited (and scared) to see these results.

  9. Interesting data. While I’m not surprised, I am concerned. The data that I am most concerned about: 22% don’t track or measure their online activities, while only 8% do so all the time.

    Interesting.

  10. Great data Jeff! Thanks for putting this together and sharing it with all of us.

  11. larry luhr says:

    Interesting data. Thanks you

  12. Great survey and summary of results Jeff. I am also enjoying reviewing the raw data.

    You said “Also, please keep these other points in mind:

    1. Participants were almost certainly guessing how much budget their institution allocated to online activities. I doubt that most financial marketers can accurately recall how their budgets breakdown by activity, and that’s assuming they ever knew the correct breakdowns in the first place.

    2. It’s doubtful participants in the survey used their organization’s overall budget, because it’s unlikely that anyone other than a handful of CFO’s have any idea what the total operating budget for their financial institutions is. There are plenty of financial marketers who can’t even tell you with any degree of certainty what their own marketing budget is, much less what the budgets are for HR, training, IT, etc.”

    These two comments are shocking to me. Over the last 22 years I never worked in a marketing department or company where we did not know our budget (and company budget) and how we spent our money.

    @dmgerbino

  13. Very interesting data. I know I’m jumping in here a bit late but I’m not able to open your .xls spreadsheet. I would be interested in knowing how small regional banks are doing. Any updated information would be appreciated.
    Thanks,
    Dan

  14. Hi Dan,

    The data in this article here is from 2010. You can see similar (and more comprehensive data) in this updated article here for 2012. Unfortunately the data isn’t broken down in terms of banks vs. credit unions, but there are plans to do this in 2013 when the study is repeated.

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