Chances are, your community bank has some sort of marketing budget. And it’s probably safe to say that the majority of that budget gets pushed to traditional marketing techniques like sending out mailers or buying local billboard space. If these channels have worked for you in the past, you may be reluctant to “fix” something that may not be broken. However, it’s important to consider 21st-century technology — especially since it can significantly increase how far your budget can really go.
First, let’s define what’s generally referred to as “traditional” marketing. Traditional marketing includes five major categories: print, broadcast, direct mail, telephone, and outdoor. Although traditional marketing has evolved over the years, it still follows what is called the classic “four Ps.” Product refers to your deep understanding of your own product and how it would fit into your customers’ lives. Price means understanding supply, demand, and profit margins. Place is about getting your product in the right place at the right time for your customers to see. Promotion means the method through which you get the word out about your product to your target audience. Digital, or in this case, mobile advertising, also follows these four Ps. However, it does so in more effective ways than traditional advertising, which means you’re using your marketing budget more effectively.
Digital advertisers use a metric called “CPM” to measure how much money it costs for your ad to reach 1,000 people. Recently, experts compared the CPMs of different media channels. The cheapest CPM they found on a social media channel is $5.76 — that CPM can be achieved on Twitter. Linkedin isn’t too far off at $6.05, while Instagram sits at $6.70 on average. Facebook holds the most expensive CPM at $9.06.
Although these numbers have started to creep up since mobile and social media marketing are gaining traction, social media and in-app advertising are still significantly cheaper than their traditional advertising counterparts. For example, a direct mail campaign, several factors contribute to the final cost, including printing, postage, and even the time you spend just coming up with an idea for the campaign. This leads to a cost of $0.30 to $10 per person for the average direct mail campaign. Even on the low end, your campaign could cost $300 to reach 1,000 people. When you compare this to the $6.05 you’d spend to reach 1,000 people on Instagram, plus reach a more targeted audience, digital just makes sense.
Digital advertising also offers another cost-efficient metric — one that’s worth mentioning and doesn’t exist in the traditional advertising world. It’s cost-per-click, or CPC. Even though the CPM of Facebook is $9.06, you’ll pay far less for CPC, or clicks on ads, which is, on average, only $0.51. Twitter’s CPC is $0.53 on average, and Instagram is sitting at $1.28. Google reports that across all apps, not just social media, the CPC for display ads in the finance and insurance industry was $0.86 on average.
So, what do all these numbers mean? Well, it may not be the best idea to throw out all of your bank’s traditional marketing techniques. However, you should definitely consider allocating some of your budget to digital advertising campaigns to complement your current efforts. It’s a small price to pay for something that truly can have a huge impact.