Google’s Vision for the Future of Bank Marketing, AI, and Data

100% of advertising will be online and automated within five years, insists Google's Chief Evangelist. Making this brave new world of marketing work depends on feeding machine-learning algorithms with the right data and having the right KPIs in place. Financial institutions will need to refocus their performance marketing strategy through the lenses of stronger brand and superior CX.

No financial marketer questions the tectonic shift digital media has wrought on marketing and advertising. Yet even the most ardent digital marketing proponent might be startled by the prediction that 100% of advertising will be online and automated by 2025. Startled, and perhaps more than a bit skeptical. Although the pandemic has changed the situation to varying degrees, many financial marketers continue to find value in TV, radio, print and outdoor — and human input into what appears there.

The 100% figure is a little less startling, however, when you consider that about 55% of U.S. advertising was already online as of 2019, according to Nicolas Darveau-Garneau, Chief Evangelist at Google. The marketing executive, who is in touch regularly with the search giant’s biggest advertisers, also notes that the 100% consists of two components: First, about 65% of the ads in 2025 will be online ads. Second, the other 35% will also be digital, but not online.

“Whether you’re buying a billboard or you’re buying television, it will be a lot more like buying YouTube,” he says. “Machine learning algorithms are going to automate most advertising in the next five years.” The time that bank and credit union marketers spend today optimizing media, selecting keywords and placing the right targeting on banner ads will be done by machines more and more, says Darveau-Garneau.

“Machine learning is doubling in power every four to six months,” he points out. Even as that rate begins to slow, there will still be “a multiple thousand X improvement in machine learning power within the next ten years.”

That kind of dramatic change prompts two big questions from CMOs the Google exec speaks with:

  1. “If media gets more and more optimized, and I’ve got a machine learning tool competing against a machine learning tool, what do I do to win?”
  2. “If everything’s automated, what happens to my job and what does my team do?”

In answering the first question, Darveau-Garneau, who made spoke during a WPromote virtual presentation explores three key points:

  • Focus your performance marketing strategy on profitability versus short-term ROI.
  • Build a better brand.
  • Execute with amazing customer experience.

As he says, all three need to happen for institutions to be able to compete. The effort to accomplish that, which is difficult, also takes care of the question about job security: There will plenty of marketing jobs, just different, which Darveau-Garneau expands upon below.

Strategy 1: Reset Your Performance Marketing Priority to Profitability

Before he joined Google about nine years ago, Darveau-Garneau was steeped in performance marketing — essentially the modern digital marketing milieu of data and metrics with everything measurable. Yet he believes that to compete more effectively in the rapidly automating marketing world, many CMOs need to shift their thinking about performance marketing. They should create a marketing strategy that, simply put, “makes you as much money as possible, trying to squeeze every ounce of profit you can,” Darveau-Garneau states. That’s the most important KPI, he emphasizes.

While that advice may seem self evident, the Google marketer says few advertisers he works with are trying to make as much money as possible. Instead, many are trying to achieve the highest ROI.

And that is not the same thing.

“Maximizing cash flow is very different than maximizing ROI,” Darveau-Garneau states. “The best advice I can give you in your performance marketing strategy is to build a dashboard that motivates your marketing teams to maximize profitability, as opposed to efficiency.”

Don’t fall in love with your ROAS
Google tools today cannot automatically maximize a financial institution’s profitability, but Darveau-Garneau says they can produce maximum revenues out of a certain return on ad spend (ROAS). So a bank CMO can incorporate “maximum profitability” as a criteria for finding the right ROAS. But the Google exec advises being careful in selecting the right ROAS — whether that is five-to-one, seven-to-one or another number.

“Don’t fall in love with your ROAS,” Darveau-Garneau states. Test various numbers up and down to see which one makes you the most money. “Once you know what the right ROAS is for your business, he adds, “then make sure you get enough budget to cover full demand.”

Why customer lifetime value makes so much sense
“Managing a company based on customer lifetime value is the future of business,” Darveau-Garneau firmly believes. He ran four marketing (CX?) startups before joining Google. In hindsight, he says, he should have narrowed his customer database at these firms by building marketing based on customer lifetime value (CLV). This requires determining who a company’s top customers are and then acquiring more people like that.

While financial inclusion is a major theme in banking today, banks and credit union marketers can benefit from a CLV focus in terms of outreach and messaging for loans, savings, investments and many other products.

“The best advice I can give you,” says Darveau-Garneau, “is don’t try to forecast customer lifetime value perfectly. Just do it approximately — quintiles or deciles.” One example of how to use CLV as part of efforts to personalize marketing is do A/B testing of landing page conversions to see which one converts better for your high CLV customers compared with average customers.

Nicolas Darveau-Garneau more people marketing in five years quote

Don’t worry, marketing jobs aren’t going away
While automation will increasingly handle things like selecting brand placements, Darveau-Garneau maintains that marketing work will shift to things such as building CLV models, segmenting customers in clever ways, optimizing creative and having the right data structure and the data sets to feed into the machine learning algorithms.

“I actually think there will be more people doing marketing five years from now than there are now,” he states, “because it’s going to be easier in some ways, but much more complex in other ways.”

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Strategy 2: Brand Marketing Still Matters

You could describe Nicolas Darveau-Garneau as a reformed performance marketer. For much of his career, he never did any brand marketing. As he describes it, performance marketers always have this tension about brand marketing because they like to measure things accurately to be sure they’re not wasting money. He’s changed his tune now to the point where “Build a strong brand” is the second of his three key strategies for marketers to be ready for the future.

Darveau-Garneau points to the fintech Credit Karma as a great example of a company combining performance marketing with great brand marketing. There is an extraordinary amount of value created by building a strong brand, he insists. This includes having consumers go directly to your site, or searching specifically for your brand on Google, or generating higher conversions.

These advantages are harder to measure than the clicks, leads or sales that result from pay-for-performance advertising, but they can be measured over time. Darveau-Garneau counsels patience to those skeptical of brand marketing’s benefits. It takes three months to a year, he says, to see the impact of a consideration or awareness campaign.

To financial marketers who still need convincing, he recommends starting small and trying out a branding campaign in one state (or possibly one part of a state) and tracking how business does there over six months. This doesn’t require a big investment in a “hardcore attribution model.” If successful, it can then be expanded.

“Brand marketing is becoming a lot more like performance marketing,” the Google exec states. Brand marketing should be optimized in real time, and held accountable, he states, “but give it some time to work.”

Also — to the point raised earlier — as machine learning makes performance marketing easier, it diminishes the competitive advantage. That makes building a strong brand that much more important, Darveau-Garneau emphasizes. Ideally, financial institution marketers that can combine the skill sets of both disciplines will be in a good position, he believes.

Strategy 3: Get Rid of the Friction in Your Experience

Bank and credit union marketers can be doing great performance marketing and great brand marketing, “but if you’re sending these clicks to a site that doesn’t perform very well, it’s going to be hard to compete,” stresses Darveau-Garneau. A simple example is having a fast mobile site. He cites data from Chinese ecommerce giant Alibaba in which an already good conversion rate jumped 76% when they built a much faster mobile site.

Friction is the enemy of great digital experience, which in turn robs marketing of much of its power. The Google executive counsels CMOs to remove anything that creates significant friction: remove one field from a form, for example, or add Google Pay or Apple Pay to your app. Get the ball rolling so your marketing and digital banking teams start looking for things to remove to streamline the customer experience.

Don’t get hung up on mega projects that are huge investments and take forever, like breaking down data silos and merging them all into one vast data lake, Darveau-Garneau advises. Such projects should be undertaken over the long term, but think about small projects in the short term.

“I’ve seen a lot of marketers trying to get things perfect from the beginning, as opposed to peeling the onion and just getting better every day,” Darveau-Garneau observes.

One More Thing: Don’t Abandon Omnichannel Marketing

With the surge in ecommerce unleashed by the pandemic’s arrival, financial marketers may be wondering whether omnichannel marketing even makes sense any more versus concentrating solely on online digital.

While acknowledging the difficulty of forecasting what will happen to in-person commerce (and in-person banking), Darveau-Garneau firmly believes that whatever new normal arises, people will once again venture into retail facilities, “so having an omni-channel strategy makes a lot of sense.”

Financial marketers should be sure to include in-branch and other channel data beyond website and mobile data in what they share with the machine learning application they use. In the case of Google, Darveau-Garneau advises not to think of the company as driving just your online business. “We can help you drive your store business as well.” The company now has tools to integrate data, revenue and margin, for example, from physical locations into its smart bidding algorithms.

Importantly, Darveau-Garneau says Google has found that for many customers, including those in banking, consumers who buy both online and in-store often are much better customers than those who don’t.

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