Consumer demand in payments – and across the finance industry – is evolving. As digital transformation in finance continues to take form, expectations for more intuitive and highly customized digital experiences are at an all-time high. This demand has opened the door for increased competition in the payments space as more agile, digital-first players like Zelle and Coinbase continue to transform not only how consumers are thinking about payments, but also how chief marketing officers (CMOs) must look at their marketing functions to engage these digitally driven consumers – at the risk of being left behind.
In an effort to compete, we’re seeing legacy financial service companies swing for the fences with their digital marketing efforts – investing in the out-of-the-box and “trendy” tactics that often fail in yielding return on investment (ROI). Meanwhile, traditional marketing channels like search engine marketing (SEM) – that has proven value in delivering prospects and insight into consumer behavior – are put on auto pilot and frequently overlooked.
So how can marketing leaders better leverage SEM to keep up with their competition and learn from consumer shifts?
Why Search Engine Marketing?
SEM has the power to check all the boxes for CMOs – customer acquisition, brand awareness, customer experience – but historically the search landscape has been a blind battlefield. A recent survey of CMOs showed that 92% believe SEM can help them make more informed business decisions, yet less than half are monitoring how they’re performing within their industry. As the race to digital marketing maturity in the industry intensifies, finance marketers must look to SEM to both improve their customer journey across touchpoints and find ways to contend with competitors aggressively increasing their spend and capabilities across the digital ecosystem.
Examining the Finance Search Landscape: Enter the Challengers
Legacy players like Bank of America, Capital One and Wells Fargo are leading the search market currently. With millions of dollars spent on paid search each year, these big players are dominating the share of impressions throughout the industry. Yet even so, these companies are failing to see an equal share of conversions from their efforts. This shows us that while the leaders may be spending the most money and reaching the widest audience, they aren’t resonating as well with consumers as they could be – which could be disrupting customer experience and hampering ROI.
On the other hand, up-and-coming payments players like Coinbase are most likely spending less on this channel but they are being far more effective in meeting consumer demand for personalized experiences, using highly targeted messages that allow prospects to immediately and seamlessly take action.
This divergence is giving emerging companies the opening to challenge and steal market share from the industry leaders. So how can leading players defend their position? And conversely, how can emerging players use these trends to their advantage?
Customer Experience is King
One thing we can learn from emerging players in the finance search landscape is the value of customer experience. Consumers are exposed to 4,000 ads every day, making mindshare an ever-growing and invaluable measure of success for marketers. To effectively compete in the search market, companies must focus their efforts on delivering the right message to the right audience at the right place and time. As the digital-first business model continues to disrupt payments, Coinbase and other emerging players are seeing an upper-hand by being able to meet consumers where they’re already at. Meanwhile, more traditional companies like Citi may be spending more money to achieve the same results as they work to fully understand what their audience needs from their digital experiences.
However, legacy players have the opportunity to optimize customer experience by monitoring what’s working well for competitors and their own customers’ journey. With these insights, marketing leaders will be able to deliver more tailored, personalized offers that connect with their target audience. Staying attuned to competitor strategies can also allow marketers to identify new audience segments in areas with less competition.
Capitalizing on Brand Value
There’s no denying that brand recognition of legacy players like Bank of America, Wells Fargo and Capital One plays a role in its influence in the search market. But with elevated competition eating into their margins, these legacy companies may be finding it harder to protect their position. Just as a poor customer experience can prevent conversions during the acquisition phase, a frustrating experience with any brand on any channel can have lasting effects on a consumer’s opinion of that brand.
What’s keeping legacy brands like Wells Fargo at the top of the finance search market though is its ability to capitalize on searcher intent and create a seamless process for prospects to take action. But for challenger brands, establishing this level of brand awareness in the crowded market can be an uphill battle. The same is true for brands like Discover, which is seeing both below average performance in the search market and a decline in the share of new customers, in comparison to competitors like American Express.
To address elevated competition, a dedicated investment in brand awareness strategies across the search market will be key. By doing so, marketers can ensure prospects are able to differentiate their brand’s offerings from its competitors. In addition, delivering clear calls-to-action from the awareness stage on will ensure prospects keep that brand top of mind when they are ready to take action.
Beware Unexpected Competitors
Monitoring competitor activity is an effective way to learn more about customer journey, optimize spend, and identify new market opportunities. But when it comes to digital marketing, direct business competitors aren’t the only thing payments companies should be keeping an eye on. In the search landscape, any company that is targeting the same audiences with similar offers is a threat to market share.
Companies with relevant products and services – like Home Depot, Hilton, and Best Buy – are successfully competing in parts of the finance search market, taking consumer mindshare and engagement away from industry players. As the payments market continues to become more crowded, legacy and emerging players alike need to ensure they’re taking a close eye to industry intruders that could be overtaking audiences’ attention.
Global investment in SEM is expected to reach nearly $110 billion by the end of 2020, with finance continuing to lead the charge. To stay on top of evolving customer behavior and increasing competition, finance CMOs must continuously monitor their search performance to determine how, when and where they can optimize efforts across touchpoints. More important still, they must begin to see and understand SEM as a strategic imperative for driving company growth, improving customer experience, and catalyzing digital transformation.