Why Your Bank Should Be Advertising on Mobile

Bank Mobile Advertising

If you are like most banks, you probably don’t have big dollars allocated in your budget for advertising and of those dollars, probably less is focused on digital and probably nothing invested in mobile. That would be a mistake as the performance of bank mobile advertising has dramatically improved over the last several years. “Mobile is eating the world” is a common refrain and many banks are pursuing a mobile first strategy where all other delivery pipes like call centers, branches, ATMs and online applications support mobile banking. If your bank isn’t advertising on mobile, it will soon as it is just a matter of time. In this article, we give an overview of what mobile advertising is, what it costs and showcase some effective tactics that we have learned.


The Rise of Mobile


At CenterState Bank, approximately 36% of our customer base interacts with us through some channel via mobile. Mobile banking, checking our website or reading our email now happens over mobile more than it ever has. Most bank customers always have a phone within arm’s reach 24/7 per day. On average, if your bank customers are like ours, they spend two to four hours per day on their devices -almost as much as online usage and more than print, TV, radio and outdoor advertising combined. Where time on print, TV and online is dropping, time on mobile continues to skyrocket.


What is Mobile Advertising


The beauty of digital advertising is that you can target and micro-target your audience. For both online and digital, 60% of ad impressions reach the intended demographic. That used to be an unheard of number in bank marketing when you consider other traditional channels such as print, radio, outdoor and in-branch are closer to 15% on a good day.


Mobile ads for banks break down into generically three different types if you exclude mobile video and ads that appear on a mobile social media channel like Facebook (we consider both video and in-app advertising as part of social media marketing):


Native ads: These are ads that are built into applications that don’t look like ads at all but function as lead generation. The example is that there are many real estate applications that will allow users to connect to a select group of lenders. If you can find the right application that fits your bank product or brand, these are the most effective that offer the best return on investment.


Banner Ads: These are the least effective, but the most common and can range in size from small like the example below or large, so it takes up most of the screen. These ads have no animation, are the least expensive but have also proven to be the least effective for banks.


Interstitial: Next to native advertising, interstitial ads are our next favorite because they take up the entire screen to give you enough real estate to make your point, have animation, music and command attention.


Bank Mobile Ads

Targeting Your Customer


If your bank is not familiar with mobile advertising, the poetry of the approach is that you can target your ad like no other channel. If you want to target female millennial parakeet owners after lunch that are actually in your branch, you can do that (if you do, call us because we need to talk). Before you laugh, the allure of mobile advertising is that you can likely reach your target customer at the point of inflection.


For example, an effective advertising campaign for banks is to run a native ad on LoopNet Commercial Property Search App. The app is the go-to app for real estate investors and shows commercial properties for lease or for sale and can be profiled so that a user can input their search criteria. At the bottom of any map or search result, banks can advertise to provide financing and by clicking ‘Contact Banker” can be connected right away. Banks have the ability to target just specific searches, geographic areas or other criteria. Thus, your potential client can get a financing quote exactly at the time he or she needs it. They don’t have to call anyone, walk into a branch or email their banker. Friction is removed, and your bank gets premium visibility near a point of decision. What would you pay for a lead like that?


In fact, for those in the 18 to 30-year-old demographic, mobile advertising can reach the intended target 61% of the time or better than online advertising (below). 


Mobile Ad Targeting Effectiveness


Being able to target a person’s location is huge advantage of mobile over all other forms of bank advertising. For example, targeting airports is a popular one for banks as affluent business people usually have extra time to browse their phones while waiting for a flight. However, banks can get much more creative. How about targeting just your current waiting customers that walk into your branch to inform them of your health savings account?  Better, how about targeting your competitor's branch so customers can see alternative loan or deposit options?


It doesn’t stop there. Banks can choose to advertise on Apple iOS devices only since those customers tend to be more affluent. Certain job functions, such as CFOs can be targeted or those interested in specific activities such as travel, saving for retirement or those that work in a non-profit. In the last two weeks, advertising running on business news sites relating to taxes, year-end planning, the new Presidential administration or the repatriation of cash balances have been getting clicks.


One very potent methodology for banks is to combine tactics. One of the best affinity tactics is to target school alumni. Better than almost every method we tested, creating an advertisement based on school affinity and a school event such as a football game when promoting a banker that is an alumni, is almost guaranteed to get an above average number of clicks. Church relationships and professional certifications, like marketing to all CPAs, are also very effective tactics.


Below are some other ideas:


Ways Banks Segment Customers


Time To Market


Unlike traditional marketing, where it may take six to eight weeks to create and run a print advertisement, mobile is almost instantaneous. Create an ad, set your rates and upload and you can be live within minutes not months. That make advertising around events such as keynote speakers at conventions and news is extremely effective as you can catch customers when they are feeling the passion and motivated to act.


Cost of Mobile Advertising


Another huge advantage of mobile is that you can restrict your advertising to certain investment levels and target particular days, hours or length of campaigns. Bankers that use mobile fall in love because rates are market and success driven with almost perfectly quantifiable information. A banker that advertises in the local paper has no idea how many people saw the ad or how many read the ad. With mobile, you not only know how many “impressions” you achieved, but how many clicks you received. Further, you know where, when, what device, and many other variables. You can also pull the ad at any time making experimenting and testing easy. The more restrictive you want to get about your target audience, the more expensive it is.


Designing a mobile ad is inexpensive and runs between free (if you do it in-house) to $500, with an average of $350 per ad. Once created, you can choose between paying for clicks (called cost per click or CPC) or per thousands of impressions (called cost per thousand or CPM). Banks can also pay a monthly fee for being included in an app. Most mobile advertising works by bidding on placement. The highest bidder gets placed until their daily budget is used up.


By way of example, if our goal is to get our bank brand more known, we may advertise on various advertising networks around our branch. This would be relatively inexpensive. For Orlando for example, this price is about $1.00 per thousand impressions for a small ad or about $5.00 for a larger interstitial ad. Thus, we may set a limit that we want 5,000 impressions per day for the small ad, for a total cost of $5 per day. If everyone else is bidding $1.25 per thousand, then it may take us awhile to get our 5,000 target. Each mobile marketing app will tell you the historic and current price as well as your expected cost. Most banks ads for impression are in the $0.15 and $1.50 range.


If your goal is to promote a specific service or product such as a business interest checking account, then it is best to pay per click. Here, banks don’t pay unless the target user clicks on the ad. The cost per click is around $1.60 and paying $15 is common if you want to micro-target your audience such as in our girl with the parakeet example.


The Economics


Banks can expect a click-through rate of about 0.85%. If you can convert 3.5% of your customers at the average prices mentioned above, then that works out to be about $45 per customer acquisition. That is our benchmark for a retail customer and is fairly inexpensive compared to other channels. A business customer may be three times that conversion cost.


Putting It Into Practice


At a minimum, every bank should experiment with mobile advertising to at least understand the effectiveness and capabilities. A typical bank budget for a $1B asset sized bank might be to allocate 3% to 5% of the total marketing budget to mobile advertising utilizing various tactics. The more you experiment, the more effective you will be and your return on investment will grow. Like online advertising, once you see the effectiveness of mobile, it is hard to ever go back to print, radio or TV.