Your Advertising Budget – Are You Getting Your Money’s Worth?

Today’s financial institutions are in a very competitive environment. We have to compete with larger national and regional banks, credit unions, and other community banks, not to mention fintech and other entities that seek to capture our best, most profitable customers. Separate from our efforts to keep our existing customers from being raided, we must aggressively pursue new consumers and businesses to join our institution as customers. And if someone were looking for a new banking relationship, they would need to know that we exist, what services we offer, and why we feel they should consider us as their primary financial institution. To achieve that end, we advertise.

Chances are, you have a marketing department or, at the very least, someone who handles marketing for your institution. And it’s also likely that you have a marketing budget. But when was the last time you took a serious look at how that budget was being spent? Is it possible that the money you spend on advertising isn’t being targeted to the places where your new prospects would be in a position to see it or hear it? What percentage of your marketing budget is allocated to digital marketing, targeting those searching and surfing online? Further, what percentage of your budget is allocated to telling your story?

As a former director of a small community bank in South Georgia, I sat on the marketing committee. That put me in regular contact with the staff members making decisions on marketing and advertising for our institution. It gave me a close-up view of what community banks deal with from a marketing and advertising standpoint. My first takeaway was that much of what we refer to as “advertising” is actually advocacy.  Sponsoring a little league team, putting a placard on the fence of the high school baseball field, adding your name to the football boosters, and getting a mention in the community play handbook — these are all examples of advocacy. Now, does that mean no one ever opens a new account having been exposed to your institution through this method? Of course, it happens. We do those things to show support for our local community, non-profits, and schools (and it’s important we do so!), but let’s not fool ourselves into thinking that these are legitimate efforts to attract new prospects to our brand.

So then, what are the typical FI non-advocacy advertising activities? I would consider the following:

  • Billboards
  • Bus stops benches / signage
  • Newspaper
  • Radio
  • Television
  • Direct mail
  • Email
  • Social media posts

How many of those methods of advertising is your institution actively engaging in?  Were you surprised at that last bullet? Is social media really a location for advertising? You bet! It may surprise you that many organizations with significant advertising budgets are now spending as much as 50% of their budgets on digital marketing, specifically focusing on the online community related to surf/search and tapping into the broad reach of social media. You may think digital advertising is no different than the other traditional advertising methods I listed above, but smart marketers utilize digital tools to access data and specifically target information to those most likely to seek it. And they can do so with precision. Here’s one example:

Suppose I wanted to highlight consumer lending as an outreach to potential new customers. One way I might do that is to provide a targeted ad to individuals shopping for a car. If that was your institution’s goal, would you park an officer at all the area car lots and try to identify who was shopping? Not likely. Because nearly everyone has location services activated on their cell phones, you can use a “geofence” to isolate any cell numbers that enter a specific geographical area. Therefore, a bank could geofence all of the area car lots and, as a result, send a targeted SMS ad for a car loan to the cell phones of those individuals who are shopping for a new car.

The above is but one example of many. But as this example indicates, the individuals are being uniquely selected based on their active shopping mode — something that any traditional marketing method would be hard-pressed to achieve. Still, that SMS text to the individual at the car lot may not be viewed as particularly positive. After all, it’s still a push ad, albeit a targeted one. Is there another way for a financial institution to generate the prospects it desires in a manner that would be positively perceived? There is. It’s through curated articles and storytelling. Let me explain.

People are drawn to stories, not facts and figures. Even in the new car example, someone is more likely to read an article about how a single mother with limited income secured a car that allowed her to work versus one showcasing a “great rate on a car loan available at First National Bank.” And frankly, banks do have great stories to tell. The problem is that we’re not good storytellers. Our failure to tell our stories with enthusiasm impedes our ability to effectively market to the next generation. Millennials and Gen Z are motivated by emotion. They want to “feel good” about where they shop and the companies they engage with, and banks, although wrongly perceived, are not considered “good” by many young people today. And let’s face it, we need these young new customers to fill up the top of the funnel as our super seniors and older baby boomers pass away

Consider that there is a story about how a millennial couple was able to start a business. The story evokes the hardship they experienced, struggling to make ends meet as they worked to get their business off the ground. It talks about the assistance they received with financing and business advice, which directly contributed to their success. Just an all-around feel-good story. Now imagine that story posted on your institution’s website. It’s your story, written by a professional writer, and not focused on your bank in a way that feels “salesy” but still evokes a strong response. The story is then further promoted to the online community in your service area. It begins to show up in feeds via Facebook, Instagram, etc. People read the story, “like” it, and subsequently share it with their friends. It starts to go viral, and your company’s offering is embedded in the story so readers can engage by clicking through for more information. That click takes them to a specific landing page you’ve set up, highlighting your company’s offer. This type of digital marketing will likely generate better results than other traditional advertising efforts. Because it is story-based, and it’s telling an authentic story.

I recognize that as community financial institutions, it may be difficult to understand how you would engage the elements needed to make something like I described occur. Recently, I was introduced to a service called PROPS.  I learned about this company while at the ICBA conference earlier this year. PROPS provides a service that exactly mirrors the functionality I referenced above. They maintain a cache of professional writers across many different areas of expertise and interest — and professional writers know how to evoke emotion. So PROPS works with financial institutions to curate professionally written articles on topics that align with the sales goals of the institution. That’s step one. Step two is to take that content, post it on the institution’s website, and start promoting the story to a targeted digital audience. Now, this isn’t an exact science. I can send a piece of snail mail to a specific address, but digital marketing goes where it goes. The technology and algorithms available to today’s digital marketers can target the recipients with enough specificity to ensure that you are not getting responses from far outside of your service area. I have looked at how this works, and it seems like magic. But it’s real. The response rate is significantly higher than any traditional advertising, and the prospects are aligned with your targeted acquisition goals.

PROPS is not for everyone; a full commitment to digital marketing is not cheap. But for institutions looking to transition into the digital age of marketing and who appreciate the need to “advertise” exactly where the prospects they seek are, then this is worth exploring further. FNBB is not connected with PROPS, and there may be other companies that offer similar services you should explore. But one way or another, it’s time for you to take stock of your ad spend and see how re-directing it to focus more on digital marketing may make the most sense for your institution in the years to come. For more information on PROPS, contact Joe Perello at