What Are Consumers Really Doing When They Research Financial Products Online?

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Forrester Research found that across a range of eight financial products, at one end, 59% of consumers researched their choice of credit cards online, while at the other end, 34% researched their life insurance decision online. Even at the low end, that’s a pretty healthy percentage of customers.

But where are they really going when they research online?

In the January 2008 issue of Direct magazine, an article on financial services marketing quoted Ogilvy New York’s chief operating officer as saying:

Consumers are going to very interesting places to get their information. It’s amazing how many of them are going to YouTube and not the obvious places like blogs to understand products.”

My take: YouTube? Not the “obvious places like blogs”?

I can’t find data from any research firm that reports online research behavior down to the type-of-site level. But I find it really hard to believe that any significant percentage of consumers use YouTube to research their financial product decisions. Especially those over the age of 30.

(FYI: I went to YouTube and searched for “credit cards.” The first link was to a video in which someone puts 24 credit cards into a blender to see what happens. I guess if the American Express card comes out most intact, then it must be the best card on the market)

And since when did blogs become an “obvious place” to go to research financial products?

I know of BankDeals and some blogs that focus on personal money management, but many other potential sources of information are just ad-hoc rants and raves from bloggers. And with the exception of Wells Fargo and some credit unions, none of the major banks, brokerages, or insurers have blogs.

When asked if financial services marketers are investing in social media, Ogilvy’s COO responded:

Yes. With one of our financial services clients, we’ve actually created networks of influencers who play a role in advocating the brand. And with another client, we have an online community of more than 1,000 people who regularly provide feedback on products, customer experience, and advertising.”

I really wished she would have named names. Who are these influencers, how many of them are there, and — most importantly — what measurable impact on sales have they had?

Sorry, but I’m not buying any of this. While not specific to financial services, Forrester did find, regarding online product reviews, that bloggers were the least trusted source of information.

Bottom line: While the number of people who research financial products online is approaching — or exceeding — a majority for some products, the number willing to put a lot of time and effort into their financial decisions is far less.

Sure, there are some who will scour the Net for every bit of information they can find to help them decide between high-yield savings accounts or credit cards. But a lot more just hit the search engine and go to the sites of the firms that are already on their short list.

Having said this, I do believe that a FI-sponsored blog still has a role in helping build relationships with existing customers. But I’m not buying Ogilvy’s claims.

Technorati Tags: Marketing, Banking, Forrester Research, Ogilvy

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