Financial services brands are spending more on digital advertising.
eMarketer projects that financial services advertisers will spend $19.62 billion on digital channels overall this year, nearly double the $10.85 billion they spent in 2017.
Affiliate spending is set to grow as well in part because it is a performance-based channel. In financial terms, it’s a smarter investment vehicle than some because you are paying for the results that you ultimately get.
Rakuten Advertising’s Director of Business Development, Financial Services Craig Dadika offers three reasons why financial advertisers should be allocating more resources and attention to performance marketing.
People are banking more online
The COVID-19 pandemic has accelerated interest in online banking and financial products. In fact, during the pandemic, an April 2020 study by William Mills Agency showed that 73% of American adults were more likely to use digital banking and digital payments. We believe there are several reasons for this:
- People are spending more time at home and connected to the internet.
- Bank branches were closed in the early stages of the pandemic, which necessitated more of a shift towards doing more financial activities online.
- Mortgage rates are hitting historic lows, which is driving interest in home buying and refinancing.
- People are also growing more comfortable making larger purchases on the internet, which has led to a rise in popularity of buy now, pay later services like Klarna and Affirm.
Dadika says that while many of the branches that were closed in the early months of the pandemic have reopened, a consumer’s comfort level with in-person banking hasn’t returned to pre-pandemic stages – and might not for a while.
“Customers are focused on doing more of their daily tasks online,” Dadika says. “That includes applying for a credit card and opening a checking account. This is precisely why a performance marketing solution is necessary for every financial institution.”
Customers are looking to publishers for new credit offers
Online marketplace sites are extremely popular with financial services customers because they help educate people on which financial product is the right fit for them.
Dadika says this makes having a strong presence on these sites with information that explains the benefits of a card or other offering a crucial part of any online marketing program.
“These sites are teaching people more about the various financial products they can obtain online,” he says. “They allow shoppers to educate themselves about which products are the right fit for them and compare benefits across multiple brands on a single page. You need to appear at the top of searches for these types of sites. Nobody wants to be on page two of a financial comparison site.”
“You want to work on a co-branded page that links from a publisher’s site to yours while still incorporating some of the publisher’s branding,” Dadika says. “This helps you establish trust with the consumer and the partner while increasing your chances of both converting the customer and building a stronger relationship with the publisher that referred that customer to you.”
Affiliate generates better return on investment
It’s no secret that digital marketers, regardless of the vertical, are reevaluating their budgets to determine which channels can get them the best return.
Affiliate marketing is an optimal practice to maximize return because advertisers pay only when results are achieved. In fact, a 2019 report from the Performance Marketing Association shows that affiliate generates an average ROAS (return on ad spend) of 12:1.
“The affiliate channel is also safer because you’re not spending money for customers who may not convert,” Dadika says. “In a bad economy, a lot of customers are window shoppers. Because of that, CPM (cost per thousand impressions) and CPC (cost per click) costs can increase. With affiliate, you’re only paying when a customer actually converts.”
Before embarking on an affiliate program, Dadika recommends identifying the types of customers you want to reach, how you are going to define the success of a program, and dedicating resources to monitor your program on a regular basis so you can make real time adjustments to offers in order to get better return on investment.
Ready to learn more about how our tools can help you jump start your performance marketing program? Contact us today.