As banks head into 2020, marketing budgets have been coming into focus. Some institutions have already settled on higher spending levels ranging from 5% to 15%, while some plan increases but haven’t finalized things. One or two of a sample of institutions indicated that spending levels would remain steady with 2019 budgets, but that they will continue to rethink and redirect where the money goes to achieve the most productive mixes.
“We are looking to pull systems together to get a 360-degree view of our customers. We have to make it easier for our staff to serve our customers.”
— Dennis Rhee, First Financial Bank, N.A.
Bank marketers face a dual challenge: They have more to promote and increasingly sophisticated newer ways to promote their products and services. And no one in top management is handing them a blank check.
We asked bank marketers what their three top priorities were for 2020 spending. Dennis Rhee, CMO at First Financial Bank, N.A., Terre Haute, Ind., gave his three cents: “Digital. Digital. Digital.”
“The players are evolving, new players are continually coming into the business, and legacy players are having to look at every aspect of banking,” says Rhee, who arrived at First Financial, a $3 billion-assets institution, in 2018 after spending years in marketing vehicles for Harley-Davidson and Triumph Motorcycles and in other nonfinancial marketing posts. He has been amazed at how the nature of financial services competition has been changing so swiftly.
He points to two examples of the changed landscape.
First is the growth of Quicken Loans, which has been a highly successful disruptor on the home lending scene. In fact, through the power of its online Rocket Mortgage, it currently ranks as the top mortgage lender. In the third quarter 2019, Quicken closed a record $40 billion in home loans.
Second is the advent of the Apple Card, which in some ways isn’t a “card” at all. Applications, taken over an iPhone, are lightning fast and approved card accounts can be used immediately.
“Consumers expect that level of service,” says Rhee. One of his priorities as CMO for 2020 is to find martech that will break down silos inside the bank, to help meet such expectations.
“We are looking to pull systems together to get a 360-degree view of our customers,” he explains. “We have to make it easier for our staff to serve our customers.” Time delays can’t be tolerated anymore and transferring a customer’s call to another office for a decision or an answer should be on its way out by now, he insists. Rhee’s end game will be to be able to offer every customer a personalized banking package.
Rhee was one of the bank marketing executives contacted as a follow-up to The Financial Brand‘s analysis of overall bank marketing spending in 2018 to 2015. We reached out to a cross-section of banks for specifics about their 2020 marketing spending plans. We wanted to know not only how much they expected their marketing budgets to change in 2020, but where the money was going, especially where spending plans were shifting from past patterns. We also asked about anticipated spending on martech, an area that just keeps on growing in the variety of available tools.
For many of the banks, 2020 will be part of a continuing evolution in how they have been shifting their spending on marketing, not a cataclysmic one-year change. Take staffing, which we’ll cover in more depth later. The tendency has been to add more positions to broaden the bank’s expertise in skills that even five years ago couldn’t have had a label put on them. Some institutions have already added such staffers, some plan for it in 2020 or 2021.
Our earlier report was based on FDIC bank call reports, which give a total figure for marketing and advertising expenditures. That’s the only data in the federal reports and we wanted a fuller picture.
Blending New Marketing Priorities with Traditional Promotional Needs
Overall priorities given by responding bankers included marketing personalization, marketing automation, customer experience efforts, data analytics, and social media marketing. However, some traditional spending continues such as community programs and branding.
“It’s amazing how much has changed so quickly. Five years ago, digital advertising wasn’t even a marketing consideration.”
— Laura Wiegert, Investors Community Bank
At Bangor Savings Bank, a $4.5 billion-assets institution in Maine, Isla Dickerson, SVP and Director of Marketing, breaks out her top three priorities:
- Media — including digital, including programmatic digital, print, social and search marketing.
- Community relations, events and sponsorships.
- What she calls “connections marketing,” defined as unique ways to create emotional connections with the community and customers. Case in point: Buoy Local, a rewards app and card that gives consumers points for shopping locally and allows them to redeem those points locally.
At Investors Community Bank, Manitowoc, Wis., Laura Wiegert expects to increase her budget for 2020. While martech, personalization and customer experience are the top priorities, the bank, with $1.5 billion in assets, will apply extra marketing dollars to revamp its website and to promote a major product rollout, according to Wiegert, SVP-Marketing.
“It’s amazing how much has changed so quickly,” says Wiegert. “Five years ago, digital advertising wasn’t even a marketing consideration.”
Making ‘Digital, Digital, Digital’ the Centerpiece
Chris Nichols, Chief Strategy Officer at CenterState Bank, Winter Haven, Fla., says smaller margins have the institution, which tops $17 billion in assets, looking at increasing its return. “That revolves around having more intent in our marketing, getting more effective and doing more of it,” says Nichols. He says CenterState anticipates hiking 2020 marketing spending by 15%.
“Martech is not so much about the stack, but that it’s more like a puzzle that we’re trying to put together. We have to figure out what works best for our customers.”
— John Hanley, Equity Bank
Digital channels will continue to be a major focus, according to Nichols.
“Managing Yelp reviews, using YouTube, producing videos and podcasts, and establishing partnerships and digital remarketing are still relatively new tactics for us,” Nichols says. Major martech investments are underway for 2020, as well. This includes investments in artificial intelligence-based tools, upgrades to the general tools in the bank’s stack, and a major move: adoption of the Salesforce Marketing Cloud. This comes on top of major martech investments made in 2019, according to Nichols.
At Bankers Trust Co., Des Moines, Iowa, marketing technology investments were made in 2019 and will continue in 2020, according to Emily Abbas, SVP and Chief Marketing and Communications Officer at the $4.7 billion-assets institution. In 2019 the investment was in software that automates email marketing and which helps Abbas and her staff better track campaign engagement. 2020’s martech investment will enhance the bank’s LinkedIn marketing efforts.
“We’ve been working on thought leadership and employee advocacy in a more focused, manual way over the previous 18 months,” says Abbas, “and this new tool will help us broaden and streamline the process, particularly when it comes to engaging employees and measuring results.”
For John Hanley, SVP and Senior Director of Marketing at Equity Bank, Andover, Kan., feels that the quantity of martech isn’t what’s important.
“I feel like it’s not so much about the stack, but that it’s more like a puzzle that we’re trying to put together,” says Hanley. “We have to figure out what works best for our customers.” Martech is among the top three spending priorities for Hanley’s bank, which has $4.2 billion in assets and which does business in four states.
Social Moves from Sideshow to Only Show
Social media tools are particularly important to Eric Nutter, Vice President and Director of Marketing at First United Bank & Trust, Oakland, Md. Nutter says that the bank, which has offices in Maryland and West Virginia, has moved almost completely to digital advertising in most markets. Nutter says that he finds it very helpful and efficient to be able to target consumers both geographically and demographically through social media advertising and digital marketing. He also likes the ability to conduct A/B testing prior to broad launches on digital. One campaign he ran recently had over 100 variations based on audience member characteristics.
“I can spend $200 to push my message to 25,000 people. I can’t buy anything else that cheap.”
— Eric Nutter, First United
Nutter uses one particular tool for managing social media advertising activity on most platforms — the bank has a significant following on Facebook, for example. But an exception is LinkedIn.
“I haven’t found a tool yet that I like for managing LinkedIn advertising,” says Nutter. For now, he’s administering this advertising manually.
Digital advertising complements efforts that First United, with $1.4 billion in assets, makes to maintain the community banking feel it built over 119 years of service, Nutter says. “We continue to look for the most cost-effective methods of gaining awareness and exposure, while providing our message of helpfulness to our communities,” he explains.
Nutter reflects that when he urged that the bank get involved in social media around 2010, the platforms were considered at best a sideshow to bank marketing’s main events, such as traditional media.
“It’s amazing how things have shifted,” says Nutter, “to being the only show, instead of a sideshow. I can spend $200 to push my message to 25,000 people. I can’t buy anything else that cheap.” The bank hired someone to focus on Facebook, social has so taken over its media mix.
Bank Marketing Remains a People Business
As the ways that banks reach out to customers and prospects evolve, the skills necessary to run a marketing department continue to change. Banks queried address the changing talent needs in different ways.
Investors Community Bank’s Laura Wiegert arrived six years ago as a staff of one, she says. Since then she’s added a marketing specialist and a digital marketing specialist. In 2020 she hopes to add a part-time support position, and in 2021, she hopes to bring another professional marketer on board.
Wiegert says the digital marketing position became a must as the bank ramped up its online presence. The job involves management of organic search, paid search, online listings, and the bank’s website.
Emily Abbas says Bankers Trust has been building staff in recent years, including hiring a digital marketing manager in 2019. With a team of ten people now, says Abbas, her department virtually works as an internal marketing agency, and no additional hires are planned for 2020 nor 2021.
While some of the respondents use outside firms, there was a strong tendency to prefer to work with inhouse experts.
“Since bank marketing is a core competency, we have historically tried to develop most of our capabilities internally,” says CenterState’s Chris Nichols. “At present we have about an 80% inside, 20% outside split.” The bank uses contractors and agencies with specialized focuses, such as Community Reinvestment Act efforts, marketing to Hispanic consumers, and some of the technical aspects of artificial intelligence.
A similar approach is used at Equity Bank, according to John Hanley. While his staff of four has traditionally each had its own separate skills, such as public relations, data analysis, design, and account executive skills, he says the bank has shifted to broaden each staffer’s skills so they can backstop each other.