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Financial institutions have been investing in marketing for many years to attract new customers and members. Community banks and credit unions, in particular, rely on marketing efforts to maintain their depositor base and grow their loans.
However, in today’s digital age where everything is done online, the question arises: do credit unions really need to invest in digital advertising? The answer is a resounding yes.
But with so many options and strategies available, what works and what doesn’t? To help credit unions make informed decisions, this article will delve into the topic of digital advertising and its potential benefits for credit unions.
Before discussing the importance of digital advertising, let’s first understand what traditional marketing for credit unions entails. The core business model of credit unions relies heavily on building strong relationships with members and the local community. Therefore, traditional marketing efforts for credit unions often involve community events, sponsorships, and local advertisements.
They also rely on word-of-mouth marketing from satisfied members and referrals from existing ones. While these methods have been successful in the past, they are becoming less effective as more and more people turn to digital platforms for their financial needs.
Traditional marketing is failing to reach a large segment of the population, especially younger generations who are more likely to be digital-savvy and prefer the convenience of online banking.
According to a study by Mickinsey, new bank revenue from digital sales is expected to make up 40% within the next few years. In Western Europe, banks already report half of their new revenue from digital sales, while the USA is not far behind. With traditional marketing methods becoming less effective, credit unions need to shift their focus towards digital advertising to stay relevant and attract new members.
To help credit unions better understand the benefits of digital advertising, here are 7 major advantages that it offers:
Credit unions have a unique target audience, which primarily consists of individuals and small businesses looking for personalized financial services. In the community, there may be a specific demographic or geographic area that credit unions are trying to reach.
With digital advertising, credit unions can easily target their ideal audience through various criteria such as age, income, interests, and location.
For example, a credit union in a college town may want to target students and young adults with low-interest student loans and banking services. With digital advertising, they can easily reach this specific demographic through social or search advertisements.
When credit unions reach their ideal audience, they are more likely to see an increase in conversions and new members.
One of the core values of credit unions is their focus on community building. Digital advertising can greatly support this effort by allowing credit unions to connect with people in their community through targeted social media campaigns.
By sharing information about community events, sponsorships, and success stories of existing members, credit unions can build a sense of community. More community engaged with the credit union can translate into more loyalty and stronger relationships with members.
Digital advertising is not only effective in attracting new members but also in retaining existing ones. Retargeting advertisements, for example, allows credit unions to reach out to members who have shown interest in a particular product or service but haven’t taken any action yet.
Cross platform advertisements help in keeping current members engaged by showcasing new services or special offers. If a member sees an ad for a product or service they are interested in, they are more likely to stay with the credit union rather than switch to a competitor.
In a case where a member is no longer using a particular service, digital advertising can also be used to educate them about other services that could be beneficial to them.
Digital advertising offers credit unions the opportunity to upsell or cross-sell their products and services to existing members.
For example, if a member has a checking account with the credit union, the advertisement can highlight the benefits of opening a savings account as well. If a member is looking for a mortgage, the advertisement can showcase the low-interest rates offered by the credit union.
Upselling and cross-selling not only increase revenue for the credit union but also provide valuable benefits to members. With targeted digital advertising, credit unions can easily reach out to members who are most likely to be interested in these offers.
In the financial industry, larger institutions often have bigger marketing budgets and resources to reach a wider audience. However, digital advertising allows credit unions to compete with these institutions on a more level playing field.
Programmatic DSP in advertising, for example, allows credit unions to target their ads to specific websites and publications that are relevant to their audience. This means they can reach potential members on popular financial websites or industry-specific publications without having to pay premium advertising rates.
The budget-friendly nature of digital advertising allows credit unions to be more competitive and reach a larger audience without breaking the bank.
Local communities are an important aspect of credit unions, and digital advertising allows them to specifically target these communities. With geofencing technology, credit unions can set a virtual perimeter around their physical location or a specific community area.
A user within this geofenced area can then be targeted with advertisements promoting the credit union and its services. This not only increases brand awareness but also encourages potential members to visit the credit union for more information.
Now, almost every industry relies on digital channels to showcase their expertise and provide valuable information to customers. The more trust and credibility a brand has, the more likely it is to attract new customers.
With digital advertising, credit unions can showcase their expertise and knowledge in the financial industry. By sharing informative and educational content through social media or search advertisements, credit unions can gain trust and credibility with potential members.
When community perceives the credit union as an expert in the financial field, they are more likely to turn to them for their financial needs.
One of the biggest advantages of digital advertising is the ability to collect data and insights about potential members. Through various tracking tools, credit unions can gather information on which ads are most effective, what type of audience is responding to their messaging, and how they can improve their campaigns.
The data gathered allows credit unions to make data-driven decisions and adjust their advertising strategies to better target potential members. With this valuable information, credit unions can continuously improve their campaigns and see a higher return on investment.
Credit unions shoud be strategic in their choice of digital advertising channels. Here are some of the popular channels that credit unions can leverage for their digital advertising strategies.
Search advertising, also known as paid search or pay-per-click (PPC) advertising, is a powerful tool for credit unions to increase their brand awareness. By bidding on specific keywords related to their services and targeting relevant demographics, credit unions can place ads at the top of search engine results pages.
Search ads allows them to reach potential members who are actively looking for financial services. As these ads appear at the top of search results, they are more likely to attract clicks and drive traffic to the credit union’s website. With the right targeting and messaging, search advertising can be a cost-effective way to boost brand awareness and attract new members.
Social media is a key platform for credit unions to connect with members and build relationships. With the right social media advertising strategy, credit unions can reach potential members who may not have heard of them before.
Through targeted ads on platforms like Facebook, Instagram, and LinkedIn, credit unions can showcase their services and engage with potential members. These ads can also be used to promote special offers or new products, encourage engagement with the community, and build brand loyalty.
Video advertising is a highly engaging and effective way to reach potential members. With video ads, credit unions can showcase their services in an interactive and visually appealing manner.
These ads can be placed on various platforms such as YouTube, social media, or even through programmatic advertising. By incorporating storytelling and showcasing real experiences of members, credit unions can connect with potential members on an emotional level and build trust.
The advance algoithms of programmatic video advertising also allows credit unions to target specific demographics and interests, ensuring that their ads are seen by the right audience.
Audio advertising is a great way for credit unions to reach specific audiences, such as commuters or music lovers. Ads can be placed on popular streaming services like Spotify or Pandora, reaching potential members while they listen to music or podcasts.
Podcasts are also becoming a popular advertising platform, with many credit unions sponsoring podcasts related to personal finance or business. The intimate nature of podcasts allows credit unions to connect with potential members on a more personal level.
Audiobooks and digital radio are other channels that credit unions can explore for targeted audio advertising.
CTV (Connected TV) is the future of television advertising, and credit unions can reach the Gen Z and millennial audience through this channel. CTV ads can be placed on popular streaming services like Netflix, Hulu, or Amazon Prime Video, allowing credit unions to reach a wider audience than traditional TV ads.
Every home with a smart TV or streaming device is a potential reach for credit unions. Cord cutters in particular, are a key demographic for credit unions to target through CTV ads.
Programmatic advertising is a data-driven approach to digital advertising, allowing credit unions to target specific demographics and interests. With programmatic ads, credit unions can place their ads on relevant websites that are visited by potential members, ensuring strategic ad placement.
This type of advertising also allows for real-time optimization and adjustment of campaigns based on performance data. Credit unions can also leverage programmatic advertising for retargeting, reaching potential members who have previously visited their website or engaged with their brand.
The contextual targeting feature of programmatic advertising allows credit unions to target audiences based on the context of the website they are visiting. For example, a credit union can place their ad on a financial advice website or blog, ensuring that it reaches an audience interested in personal finance.
Geotargeting and geofencing allow credit unions to target potential members in specific locations such as their physical branches or events they are sponsoring. Behavorial targeting allows for reaching potential members based on their online behavior and interests. By utilizing these targeting methods, credit unions can ensure that their ads are seen by the right audience, increasing the chances of conversions and ROI.
Credit unions may not have the resources or expertise to navigate the complex world of digital advertising on their own. This is where a programmatic partner can be incredibly valuable.
VenziMedia, a programmatic advertising company, specializes in helping credit unions create and execute effective digital advertising strategies. With our expertise and advanced technology, we can help credit unions optimize their campaigns for maximum ROI.
