As banks prepare for Q4 and the end of the fiscal year, it’s time to start thinking about how your 2018 digital marketing budget will look. According to The Financial Brand, the average bank spends about .073% of its assets on marketing (ex: a bank with $300,000,000 in assets would budget $219,000 for marketing). Top priorities for 2017 spending included technology for compliance and regulation, security, and mobile device management (American Banker). However, as fintech continues to disrupt how banks do business, 2018 will bring an increase in funds allocated to digital solutions like social media management and compliance software, messenger apps, artificial intelligence, and social media advertising. In the first of this 4-part series, we will discuss how analyzing the past and predicting the future are key elements in determining your budget in the new year.
The Year in Review
The key to moving forward, is to look back. Take a look at how your marketing campaigns have performed to date (hopefully you have set your goals and benchmarks). A simple way to determine if campaigns have been successful is to look at your bottom line – did the campaign bring in new business or increase revenue?
Here is a basic equation if your marketing campaign cost $6000, and gained the bank 15 new accounts worth $100,000.
Revenue – Campaign Spend/Campaign Spend = ROI
(Ex: $100,000-$6000/$6000 = 16% ROI
This is just one way to calculate campaign success (and probably the one metric that matters most to your CEO). If your goal is not ROI, but rather brand awareness, you can calculate engagement metrics, social media reach, website traffic, or whatever data point is important to your bank’s business goals. What’s important is to look at historical data and make fact-based decisions about 2018 spend based on those numbers. Discontinue whatever has not met your goals, and redistribute budget to the campaigns that met or exceeded expectations.
After you have looked back, it’s time to predict the future! What trends are you seeing in FinTech, and should you invest? Are your competitors? What is going on in Washington, and will new legislation affect how your bank does business? Is your mobile app getting more visitors than your brick & mortar branches? How is your bank being affected by payment systems like PayPal and Apple Pay?
There are numerous questions to consider as you try to predict what will result in the most growth in the new year. Do your research, and figure out what tools you might need to stay competitive or create efficiencies. How much would it cost to implement a mobile app or social media management tool? Reach out to a few vendors of choice and figure out pricing. Make sure to include these purchases as line items in your 2018 budget.
Here is something else to consider when considering your digital marketing budget: be flexible. The fluid nature of digital marketing might necessitate a quick pivot to accommodate consumer demand or competitive advantage.
So, what programs do banks invest in most? In part 2 of this series, we will deep dive into “Innovation Budgets” and what strategies are getting results. In the meantime, download our tip sheet, 4 Tips for Determining Your Social Media Marketing Spend to help you get started!