Banks and credit unions have fallen all over themselves trying to build a Facebook fan base… with little success, and even less ROI. But Facebook has an advertising platform with mind-numbing potential. You had better get ready, because this is a game-changer.
Neil Hiltz has seen the future of advertising in the financial industry, and it is Facebook. Granted, Hiltz may be a bit biased. He is, after all, the head of global marketing for financial services at Facebook. But as Hiltz spoke to nearly 500 banking professionals at the ABA Bank Marketing Conference in San Antonio, he laid out a compelling argument — an extremely powerful, persuasive case outlining what bank and credit union marketers can accomplish if they advertised on Facebook.
With over 1.15 billion users, Facebook is sitting on the biggest — and arguably the most valuable — database in the universe. They know everything about everyone. Okay, maybe not “everyone,” but they know what one out of every six human beings on earth are up to, and frequently with a greater level of insight than people’s closest friends and family members. For instance, they can tell who’s getting married, who’s moving and who just had a baby.
Financial institutions also sit on a goldmine of data. They know who’s got money, who needs money, how much money people make and where they spend it.
What if you could combine those two databases in a way that allowed financial marketers to target ads to consumers with near pinpoint accuracy?
Well, you can.
( Read More: Navy FCU Sells $200 Million in Banking Services on Facebook )
Targeting New Prospects That Match Your Best Customers
Let’s say, for instance, you want to grow new checking account relationships. You don’t want to target just anyone though. You want consumers who match a certain profile — those who use online banking, bill pay and mobile banking. Easy enough. You just run through your database and single out everyone at your financial institution who currently uses online banking, bill pay and mobile. Maybe you come up with 15,000 people (we’ll call them “digital accountholders”). You send this list to Facebook who quickly builds a profile of your best prospects — the best, most likely consumers you should target. All they need from you is an email address or phone number for each of your 15,000 “digital accountholders.”
You don’t have to tell Facebook what financial products this pool of people has or doesn’t have — they don’t care. All Facebook needs to know is that you’ve identified a type of consumer you’d like to focus on. Facebook uses your list to find users in its system attached to the email addresses and phone numbers you’ve supplied. Facebook can then build a profile of other users who match the “digital accountholder” segment you’ve defined. And Hiltz says you can do this with astonishing precision.
“Facebook ads are 90% accurate with our native targeting products — using geo, demo, interest, smartphone, etc., as variables. We can layer this targeting with the bank’s data to gain even more efficiency,” Hiltz explains.
“The ‘match rates’ between the bank data tables and Facebook audience tables are contingent upon the quality of the bank’s dataset,” Hiltz continues. “We can also work with trusted third-party data providers. We have existing relationships with Acxiom, Epsilon, and DataLogix, and are signing up even more data providers going forward.”
Hiltz says you’d be lucky to hit 38% of your prospective audience using any other system today — including the most sophisticated online ad targeting platforms available on other services (e.g., Google AdWords).
In the end, you’re able to present an ad for your eChecking account to Facebook users who have data profiles similar to your current “digital accountholders and live within a certain geographic radius. And the best part? You control the budget. If you can afford reaching 100,000 “lookalikes,” great; knock yourself out. But if you can only afford to reach 5,000, you just cap your Facebook campaign budget at that level.
Reality Check: Before now, you could never broadcast any type of ad with this level of precision and accuracy, and certainly never this easily. For all the hullabaloo about “big data” and its abstract applications, this is the first practical, tangible application financial institutions of all sizes can readily implement now — today — to generate new business. And this is the wave of the future.
Now before you get all anxious about privacy issues, Facebook has anticipated your concerns and built a slick system that addresses them. When you upload your list to Facebook, it uses a process called “hashing” to anonymize the data. This process makes it impossible for them (or anyone else, for that matter) to extract the original information you supplied. And your data is not stored, saved or retained by Facebook in any way. And remember, all you’re sharing with Facebook are email addresses and phone numbers — not account numbers and balances. Facebook only needs this information to identify users on its system who match your criteria (whatever that might be) in order to find other users with lookalike profiles. Facebook will never know what variables you used to build your list, nor do they need to. You are simply telling them, “Hey, these are the kind of people I want to target, so help me find more like them so I can put [this ad] in front of them.”
All Facebook needs from you is a list of users to profile, an ad to show to your lookalike targets, and a budget. That’s it. It’s no more creepy or unusual than using the geodemographic data marketers have traditionally used for the last 50 years, it’s just slicker and more accurate.
Using Facebook to Cross-Sell to Existing Customers
There are infinite possibilities for financial marketers with Facebook’s advertising model. In the example above, financial marketers can identify new prospects based on a profile of existing relationships. But Facebook can also be used as an on-boarding and cross-selling tool with your current customers/members.
Like what Navy FCU recently did. They wanted to increase adoption of their mobile banking application, so they generated a list of members who use Navy Fed’s online banking system but haven’t yet downloaded the Navy Fed mobile app. Then they popped into Facebook’s ad system and said, “Here, show this ad to anyone on this list who regularly accesses Facebook from a mobile device.” It’s brilliant. And it worked — big time.
Reality Check: Some banks and credit unions have been reluctant to use email as a marketing channel (for various misguided reasons), so they’ve not bothered to collect email addresses from their customers or members. Huge mistake. To really make Facebook’s ad platform hum, you’re going to need those email addresses, so you had better start harvesting them now. In every account application you use and every contest/giveaway you run, you have to be asking people for their email address. Why do you think retailers like Old Navy are asking for your email address every time you make a purchase?
Targeting Facebook Users Based on Profile Information
The real power of Facebook’s advertising platform is the ability to find people who match your criteria. But if the idea of sharing customer data (of any sort) with a company like Facebook weirds you out, you can still put Facebook’s vast user database to work.
If, for instance, Navy FCU didn’t want to upload any member information to Facebook, they could have easily said, “Okay, we want to show an ad for our mobile banking product to anyone using a mobile device to access Facebook.” You could even get more granular with it, and show different ads specific to iPhone, iPad and Android users. If you have a large Facebook following like Navy FCU does, you could limit your ad to only appear in front of your fans.
Or let’s say you wanted to sell home loans. What kind of consumers are mostly likely to need a home loan? Young couples are a good segment to target. No problem. Facebook has roughly one million U.S. users in its database who are engaged to be married. Why not slap a home loan ad in front of them? Design your ad, set your geographic range, and fix your budget — viola! If you want to get fancy, you can create “his” and “her” versions of the ad. “His” ad can focus on rates, money and savings, while “her” ad could focus on lifestyle and family dreams.
“In the old days, you sent one message on multiple channels,” Hiltz observes. “But Facebook allows you to tailor multiple messages to multiple audiences all on one channel.”
Reality Check: Just a few years ago, you would have never known that Joe and Jane Customer were getting married until after the fact. But thanks to Facebook’s massive database of (highly personal) user profiles, you can start marketing home loans to betrothed couples months ahead of their wedding.
( Read More: Is Facebook the Future of Account Opening? )
Fans Not Required
You’ll notice we haven’t really talked about “fans” or “Likes” much. That’s because you don’t need any fans or Likes to make Facebook ads work. You can run a successful, highly-targeted product campaign on Facebook whether you have one fan or one million — doesn’t matter. All the data used to target Facebook users in an ad campaign is completely independent of what’s going on at your corporate page.
This is great news for small and medium sized financial institutions. Community banks and credit unions have always struggled to build their Facebook fan base. And besides, no one’s really sure what a fan is worth. So you can stop sweating over those fan-building promotions that never really seem to generate the engagement you were hoping for, and shift your attention over to the ads instead.
At least with the ads you’ll know what you’re selling, who you’re selling it to, and why… and there’s a clear ROI.