January 2013


 

Wisdom shared by Lee A. Pseudogrammaton:meditate

Intention-of-marketing-decision-makers-to-invest-in-social-media-by-sector1

Declining Investment

Investment in social media marketing by financial services companies has declined sharply since the end of 2011, according to Fourth Source. While in the last quarter of 2011, 22% of companies in the financial services sector were investing in social media, this fell to 8.5% in the first quarter of 2012 and 6% in the second quarter. This is a marked turn around.

A More Cautious Approach in 2013

study commissioned by Pitney Bowes Software and conducted by Vanson Bourne shows that, compared to other industries, retail banks and credit unions are beginning to lack confidence in the effectiveness and business value of social media, and plan to invest less in it in 2013.

This independent study compares social media marketing trends among marketing directors to consumer attitudes about social media marketing in The US, UK, Australia, France and Germany. It analyzed seven business sectors: fast-moving consumer goods, insurance, the public sector, retail, retail banking, telecoms and utilities. The results for retail bank marketing:

  • Decision-makers are split 50/50 in their confidence in being able to link social media spend with their organization’s profitability.
  • Just 53% are confident that their social media campaigns are effective (Only the insurance sector came out lower in terms of rating their campaigns as effective  at 49%.)
  • 31% rated them as not effective.

Early Adopters

The survey also showed that retail banking has consistently ranked among the earliest and most aggressive industries to adopt social channels. In fact, 

  • 74% of retail banking marketing directors in retail banking saw a greater emphasis being placed on social media in their external communications, which is significantly higher than average (69%), and second only to the telecommunications sector (81%).

Expect Modest Spending Increases

The research shows social media spend in retail banking, as a share of marketing budgets, will still increase incrementally over the next few years:

  • Spending was 16% in 2011, when banks were among the biggest spenders on social media.
  • It is expected to climb to 22% in 2013.
  • By contrast, other sectors like telecommunications will be committing over a third of their marketing budgets (36%) to social channels.

Consumers Haven’t Been Enthused

The pullback in retail banking can be seen as a realistic assessment of the risks of and consumer responses to social media marketing.

Risks – 65% of consumers surveyed say that they would stop using a brand that upset or irritated them with their social media behavior. According to Kieran Kilmartin of Pitney Bowes Software:

It is not surprising that retail banks have been keen to jump on the social media bandwagon early on, but are now taking a step back to evaluate this new channel more thoroughly,” says The continued use of old-school broadcast marketing models in social channels is likely to turn people off, and at worst, trigger them ultimately to become ‘brand blockers’.

Consumer Response – The response to bank social media marketing has been less than enthusiastic, showing a lack of desire among consumers to engage:

  • Only 26% of consumers use social media to follow and keep up-to-date with companies or brands.
  • Banks and credit unions don’t rank high on their priority list.

Top Challenges for Retail Banks

Pitney Bowes finds that the greatest challenges for retail banks are:

  • Dealing with all the data being generated as the number of customer touch points increases (50%).
  • ROI, and connecting online engagement with new customers (42%)
  • Managing the amount of time and money spent on social networks (42%).

Consumer Disconnects

Identifying which social media channels to invest – Beyond  Facebook (considered to be the most popular and trusted social media site) marketers disagreed about other social media outlets, and appeared slightly out of step with consumer sentiment. They indicated that they devote most of their remaining spend on:

  • Twitter (57%) and
  • Google+ (51%)
  • Marketers rated YouTube as only fifth.
  • Yet consumers prefer YouTube over Twitter and Google+ .

Conflicting Perceptions about Brand Interaction – The study shows some disconnects about the reasons that consumers interact with brands on social media:

  • Consumers are most interested in discount or money-saving vouchers, new products and services, and upcoming sales and events.
  • Yet fewer than 10% of marketers surveyed mention this.
  • Marketers highly rate the effectiveness of newsletters, information about their organization’s social responsibility and customer satisfaction surveys.
  • Yet these were least interesting to consumers.

Opt In is important – The study shows that building trust and familiarity over time is vital:

  • 48% of social media users who choose to follow brands  are positive towards receiving their marketing messages.
  • Yet 40% say communications from companies they don’t follow are annoying.
  • They rated unsolicited marketing (‘spam’) and pop-up advertisements as the lowest form of social media marketing.

Conclusions

The research would appear to suggest that it is challenging for financial brands to engage with social media consumers in emotionally meaningful ways. Of course, this has always been a challenge for financial services marketers, given the often cold and transactional as well as complex and confusing nature of their products. Another observation is that marketers have been quick to embrace new social media, but have not been as adept at gleaning the behavior and attitudes of social media users.

Some companies – notably in the property and casualty insurance sector – have been more successful than others in transitioning to the moving picture. Alstate, Geico, Progressive come to mind. In the banking sector, only Ally Bank stands out for their clever vignettes.

mkting confusion

keep-in-loop-cartoon

obvious

The Great Guru Greenspan

earned more than spent

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