Essential Guide Online Marketing Finance

8/14/2019 Essential Guide Online Marketing Finance

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The Essential Guide to: Email Marketing1

The Essential Guide to Online Marketingfor Financial Services



Contents

Part 1. Introduction to Financial Services Online

Part 2. Research among Financial decision-makers

I. Customer Experiences to date

a. Banking

b. Investments

II. What the Future Holds

III. Conclusion

Part 3. Case Studies

I. Westpac

II. Conscious Investor

III. NRMA

Part 4. Getting Started

I. Adding Online to the Financial Marketing Mix

II. Key Opportunities

About the f2 Network

2 The Essential Guide to Online Marketing for Financial Services



Part 1.

Introduction to Financial

Services Online

Trafficking Money

Australia is one of the most 'wired' countries in

the world, with approximately 53%^ of thepopulation using the Internet every month. As

one of the first industries to recognise the valueof the Internet for optimising customer

profitability, financial services is one of thehigh-interest, frequently visited areas online.

Growing online even faster than the uptake of

the Internet itself, over 5 million peoplecurrently visit finance-related websites eachmonth.^ To put it into perspective, 7 out of 10

people who use the Internet on a monthly basis,

seek information that is finance related.

Banking on Profit

Since the first days of Internet banking,

Financial Service providers have focused oncustomer profitability management, seeking to

replace existing communication processes andhigh-cost service channels with lower-cost,

web-based channels. Despite appearances tothe contrary, the financial services category

has evolved from focusing on banking customersto attracting new customers and promoting new

services. Looking back two years ago, the onlinecategory (then attracting 2.2 million users

monthly) was dominated by the top 6 banks,financial information sites and a few

independent trading sites.

In 2002, usage of Financial sites amongAustralians has more than doubled, an array of

regional banks, credit unions and buildingsocieties have a respectable online patronage

and an audience has been built behind providersof non-banking services such as insurance,

credit cards, mortgages and cash trusts to namea few. Conversely, the number of independent

(non-bank) trading sites has declined.

Financial services is a broad area. In presenting

the survey finings, we have touched upon theservices most interesting in terms of consumerusage and their propensity to change this

behaviour in the future. Not all financialservices which were covered in the survey9

are presented in this brief synopsis of the keyresults. The focus is on those learnings that can

be leveraged by financial services providerstoday, to best meet the needs of customers,

both now and in the immediate future.

Survey Methodology

The research was conducted as an opt-in survey

across the f2 Network in July 2001. Over 5000people participated, from a demographically

representative sample of Australian Internetusers. Note that as the research was conducted

on the f2 Network sites, the results representthe opinions of people who are f2 users and are

therefore not presented as being representativeof all Australians.

^ Red Sheriff, August 02




Part 2.

Research among Financial

services decision-makers

I. Customer Experiences to date

From the customer's perspective, their usage to

date in dealing with financial institutions onlinehas come of age. It is an everyday activity and

the survey responses reveal a surprisinglypositive experience.

It seems people have ‘cut their teeth’ onInternet banking and share trading and the

positive online experience is leading thembeyond this to other areas of their finances.

Security fears are a contributing factor for whypeople aren't actually transacting with financial

institutions online, but the majority of peopledon't have any concerns over security. Only

37% expressed concerns with security but,

surprisingly, the more money people have, theless likely they are to be concerned. For

example, the research showed less than a thirdof people earning over $100,000 per year were

concerned, but around half of those earningunder $35,000 had security concerns.

Banking

Internet banking is not just something that

people think is useful; it's something that is

considered indispensable.

In fact, 53% of respondents claim "they don't

know how they managed without it."

Satisfaction with how banks are performing in

this area is also extremely high. Only 15% ofpeople didn't think Internet banking was a great

service.

4

On a scale of 1 to 5 (where 1 is strongly disagree)

how would you rate the following statements?

The Essential Guide to Online Marketing for Financial Services

Of the last 10 times you interacted with your bank,

how many were via the Internet?

People, who felt their banks had informed themwell about what online services were available,

had a much higher satisfaction rating with

Internet banking. ANZ and Westpac appeared tohave been the most effective at this task, having

the lowest number of people claim they wereunaware of the bank’s online services.

Internet banking isn't something that is onlyused on the odd occasion. 62% of our users

said that on more than half of the occasions

they dealt with their bank, they chose to use theInternet as the primary channel. While almost1/3 said the Internet was their primary channel

on 90% of occasions.



5

On a scale of 1 to 5 ( where 1 strongly agree disagree)

how useful do you find the internet for investing?

II. What the Future Holds

If the current experience of online financial

services is so positive, what does the future

hold for financial service providers? Where will

the category's online growth come from basedon customer intentions?

Overall, the research indicates the future is very

positive for financial service providers. Likemany categories, further growth will be driven

by both people's experience with the Internet,which comes from the time they spend online,

and their increasing demand for a broader anddeeper range of financial products.

Over and over again, research conducted on ourNetwork proves the longer people have been

online, the more positive their perceptions ofonline financial services and the greater their

propensity to research, transact and manage

their finances online. For example:

• 59% of people who have been using the

Internet for at least 4 years claim "I don'tknow how I managed without Internet

banking", while only 35% of recent adoptersfelt this way.

• Half as many experienced users were

concerned about security than recentadopters

In fact three to four years of experience online

mostly doubles people's usage and tendency tobe positive about and consume online financial

services.


how would you rate these statements with regard to investing?



how would you rate these statements with regard to investing?

Investments

Regular banking isn't the only financial service

that people have been turning to the Internet for.Shares, insurance, mortgages, managed funds

and superannuation are all areas where peopleare actively using the Internet to help them

research, purchase and manage their financialrelationships.

Respondants have acknowledge that the mostvaluable contribution the Internet has made to

their financial situation is by helping themresearch potential investment decisions. Using

it to trade/buy and manage their investmentswas also of value, but the fact that people can

seek further information, compare products and

become better informed before they makepurchasing decisions is seen as its most

important role.

Three-quarters said they use the Internet for

researching potential investment decisions.Around 60% said it was useful for managing or

purchasing investments.



However, the majority of our users experienceswith online financial services to date, has been

largely around replacing existing products and

processes such as bank transfers, phone tradingand bill payment etc...with online processes

and services.

For financial companies, this means ultimately

reducing the costs associated with operatingbranches, call centres and transaction handling.

Yet the research indicates the futureopportunities for financial services online is

about creating new revenue streams from arange of products and independent from a

persons primary bank.

The research has shown that increasingly,

consumers are using the Internet to researchand purchase financial services. They are

turning online to seek richer information and

make convenient comparisons before drawingup their ‘financial shopping list’.

Insurance

The Internet plays a key role in decision-making

related to Insurance products. Users are morelikely to research and apply for Insurance

products online, then manage or pay for anexisting policy, making it an excellent

acquisition tool.

• Two-thirds of users will do some form of

online insurance-related activity in the next

year. Primarily, they will use the Internet toresearch products (followed by providers)

and make a decision on what policy togo with.

• While only a quarter will use the Internet

to manage their existing insurance policies.

6

In the next 12 months which of the following activities relating

to insurance do you think you will do on the internet?

* Look up details of existing policy, change details etc.


Investments

The investment category is a clear growth area

and usage of the Internet to researchInvestments will increase 11% in the next 12

months to almost reach market saturation at

83%.

It is managed funds that will experience a huge

surge in demand, increasing +35%. Almost 60%of survey respondents indicated they would

invest in managed funds over the next 12

months.

In the next 12 months how much do you think you are

likely to put into managed funds?

*



There are two clear segments driving demand.The 'traditional' older, high-worth investors and

an emerging group of younger, new entrants

who enter the market at the lower-value levels$10K-$20K. This segment is researching

Managed Fund investments online in differentenvironments to the more traditional group.

They are looking for environments that offermore hand holding as opposed to sophisticated,

share trading sites.

The research shows, while the majority of users

intend to purchase or trade investments online,less movement is expected in this activity area

which will remain stable at around 60% of users.

In terms of purchasing or trading of Investmentsonline, the most popular products remain

Shares and Managed Funds. The segments that

do intend to increase their online purchasingand trading are those users who are already

seeking out business and finance content andusing financial sites such as TradingRoom,

Personal Investor and Shares on our Network.These users are high-income earners who tend

to experience fewer fluctuations in spendingpower during market turns.

After Shares and Managed Funds, Residential

Property and Personal Superannuation are thenext two investment areas researched online by

users.

7

Which of the following types of investments do you think

you are likely to seek information about online?

Which of the following types of investments do you think

you are likely to trade/purchase online?




Residential Property

Approximately 34% of users will research

residential property online in the next 12months. Not surprisingly, a similar number will

be searching for a new home loan or switchinghome loan providers in the next 12 months.

These figures differs slightly by bank.

Our research shows, those most likely to beseeking a mortgage in the next 12 months are

younger, experienced Internet users with highhousehold incomes. They are visiting the

property site, domain.com.au on our Network,as well as business and finance sites, such

as BRW.com.au and Moneymanager.com.au,which provide broader information on assetmanagement.

Superannuation

One-quarter of users will research personalsuperannuation online in the next year. The seg-

ments most interested in researching personalsuperannuation online are high-income earning

males and 'employment seekers', looking to

change jobs and employers.

III. Conclusion

Overall, the research demonstrates that cus-

tomers have had very positive experiencesresearching, managing and purchasing most

financial services online. They use it often andare highly influenced by it to make financial

decisions.

The move users have made to adopt the Internet

for transactions have been nothing short ofstunning. Testimony to this is the fact that the

major remaining growth opportunity for Internetbanking lie with recent Internet adopters, where

around 1/3 are unaware of the banks online ser-vices.

Further growth will be driven by both people'sincreasing experience with the Internet, which

comes from the time they spend online, andmeeting their information needs comprehen-

sively and at the right time in their decision-

making process.

Some of the key opportunities or actions that

financial service providers might considerimplementing based on the findings of the

research are outline in Part 4 of this document.


Demand for residential property and mortgages



Part 3.

Case Studies

I. Westpac

Objectives

Today 30%-40% of all prospective mortgage

customers use the Internet to research theirhome loan choices. Westpac's aim was to

increase considerations among people with a

need to finance their property purchase.Realising that researching online today meant

transactions for tomorrow, Westpac aimed tonot only acquire new home loan customers, but

to become the best at doing it online.

Strategy

Realising that people didn't purchase homeloans, they purchase property, Westpac forged

an Alliance with f2's trusted propertysite - domain.com.au. Forging a strategic

Alliance ensured Westpac is now in an ideal

environment, attracting vast attention fromprospective home loan customers. This allowed

Westpac the first mover advantage, exposingtheir brand and acquisition tools to a highly

targeted audience in the midst of the propertypurchase process.

The key advantage of the Alliance Program withf2 for Westpac has been from deeper integration

into the content of the site allowing them totarget consumers at the most optimal moment

in the purchase decision process. For example,Westpac mortgage calculators appear at the

base of every property details page within a

search so users can calculate their monthlypayments and allowable borrowing levels based

on the property they are interested in.

Further, f2 integrated a 'Home Loan Centre'within the site, using content from Westpac's

own site.

Through a longer-term approach to planning

online advertising, Westpac was able to securekey advertising positions for an extendedtime period.

Results

Westpac was able to target a high proportion of

f2's AB customers at a point in their lives whenthey were reconsidering their financial situation.

With content integration driving 75% of thetraffic, conversions have resulted in high-value

applications averaging twice the bank's averagemortgage and just recently drew down a $1.2m

loan.

Through the strategic Alliance, f2 and Westpachave worked together to optimise the

partnership, ensuring Westpac is now in aleading position versus their competition.

Through a long-term approach and dedicatedoptimisation, Westpac has online knowledge

& experience well ahead of their competitors.They are well positioned in today's mortgage

marketplace and to grow their online channelas customer demand increases.




II. Conscious Investor

Objectives

As a provider of web-based investment software

to individual and professional investors,Conscious Investor needed to reach a largefinancial audience, comfortable and experienced

with the using the Internet. Conscious Investor's

primary aim was to drive immediate sales oftheir investment software through the use of

their website. A secondary objective of thecampaign was to reduce the cost of sales

through online automation of the sales process.

Conscious Investor's target audience includes

individual investors and superannuation funds

holders as well as investment professionalssuch as accountants, fund managers andfinancial planners. As the investment software

is accessed online, their target had to not onlybe financially savvy, but also have trust and

experience using the Internet.

Strategy

A two-month campaign was developed for

Conscious Investor which ensured a good mix

between broad reach and highly targetedenvironments. This was achieved throughadvertising on the homepage and within the

daily eNewsletters of the f2 Network's leadingfinance site, afr.com. In addition, the campaign

included the f2 Network 'black strip', whichreaches around 1.5 million experienced,

high-worth f2 users monthly.

Afr.com users are high-value customers whoare concerned with issues such as wealth

management and visit the site regularly to seek

information to assist them make financial andinvestment decisions. Advertising on the f2Network black strip enabled Conscious Investor

to achieve volume and exposure across theentire f2 Network.

With limited prior online advertising experience,Conscious Investor briefed the f2 Network

to develop the advertising creative for the

campaign. This not only simplified thedevelopment process but also meant that

creative alterations, which helped to improvethe results, could be dealt with quickly and

efficiently.

Results

Conscious Investor was able to promote its

products to an active and affluent audienceseeking financial and investment information.

As a result, high quality leads were generated tobe followed-up by their sales team, with 10% of

people signing up for a product demonstrationand 20% subscribing to their monthly

newsletter.

Over the course of the campaign, sales

increased dramatically, with 1 in every 146

people visiting the Conscious Investor websiteconverting to a customer.




III. NRMA

Objectives

As the first company to offer insurance

premiums online, NRMA promoted their onlinepremium estimates on the drive.com.au site.The objective was to increase usage of the

Internet as a premium estimate channel and

reduce the pressure on their call centres.

Strategy

The strategy was developed together withSydney advertising agency, Saatchi & Saatchi.

Shunning a demographic approach, Saatchi &

Saatchi recommended NRMA address the carpurchase process, in an attempt to move carinsurance premium estimates higher up the

decision tree. NRMA set out to 'own' the leadingmotoring site, drive.com.au, which attracts

people searching for a car to purchase and

approached the f2 Network for a solution thatwent beyond the banner.

As NRMA wanted to avoid a heavily brandedcampaign, drive.com.au developed

customised ad placements to include the

unbranded NRMA formats.

Drive.com.au also included a text link in theleft hand navigation, which simply read, "Get an

insurance estimate". Given the subtle brandingand relevance of the offer, people were

genuinely interested and responded accordingly.Drive.com.au and NRMA later expanded this to

include a new 'Insurance Centre' which

converted 84% of visitors to the NRMA website.

Results

NRMA saw results instantly. In week 1, there

was a 109% increase in online premiumestimate transactions. As a result of the

exposure, 8.5% of the people visitingdrive.com.au ended up at the NRMA website for

an insurance premium quote. Further, almost30% of all car insurance premium estimates are

provided online, up from 12% prior to thecampaign.




Part 4.

Getting Started

I. Adding Online to the Financial

Services Marketing Mix

Online advertising and e-marketing can be used

effectively to meet a variety of marketing objec-tives from brand awareness to loyalty and reten-

tion.

As with any other media, the key to being suc-

cessful online comes from overall campaignintegration, where a mixture of traditional and

digital media is used.

Planning online upfront as part of the marketing

mix is imperative, as opposed to developing aseparate campaign, with additional, inconsistent

creative. Online advertising can become a costly

exercise if it is treated as an after-thought anddeveloped separately to the overall campaign.

Given the role the Internet plays among financialaudiences, there are unique opportunities

available to financial service providers to betterleverage the Internet in marketing campaigns

and sales processes.

II. Key Opportunities

Some of the key opportunities or actions that

financial service providers should consider arelisted below.

• Target Experienced Internet Users.

For financial services, the value of targeting

experienced Internet users first shouldnot be overlooked. In most instances,

experienced Internet users were more likelyto research, purchase, manage and develop

strategies online.

• Consider Decision-making environments.

To increase penetration of services linked to

major purchase decisions, such as homeor cars, get in early. Products such as

insurance, superannuation, personal loansand mortgages should be considered at the

same moment people are making decisions

about which house or car to buy. It is at thispoint where users enter the market for a

new financial service and tend to re-evaluatetheir financial situation.

• Investments lead the way for customer

acquisition. Without a doubt, the biggest

opportunity for utilising of the Internet asa channel is in the area of Investments,

where it has a big role to play in customeracquisition.

• Affluent Audience for Business

and Finance content. The context in which

the advertising is placed is critical. Not

surprisingly, Business and Finance siteusers have the most interest in researching

and purchasing Investments online. Thisallows for simpler, more powerful targeting

strategies for Investment providers. Theyalso happen to attract a spend- empowered

audience.

• Integrate Online into the Sales Process.

In order to leverage the expected growth inManaged Funds and other Investment

products, providers should be well positionedwithin these sites and channels online. They

should utilise a mixture of online advertising,information dissemination and prospectus

distribution to showcase products and

generate leads for out-bound telephone ordirect sales teams.




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Essential Guide Online Marketing Finance