01 October 2014

Retail banks warned of social media marketing pitfalls

23 January 2013  |  11649 views  |  0 Facebook on smartphone

Despite spending a growing slice of their marketing budgets on social media activities, retail banking executives remain unclear about the value of the investment in the face of continuing consumer distaste for engaging with brands online, according to research commissioned by Pitney Bowes Software.

The study, conducted by Vanson Bourne, shows that more than seven in ten marketing directors in retail banking have seen a growing emphasis being placed on social media in their external communications.

In 2013 these firms expect to spend around 22% of their marketing budget on the likes of Twitter and Facebook, up from 16% in 2011, according to the survey of executives from retail banking in the UK, France, Germany, Australia and US.

This is considerably less than other industries though, with telcos in particular preparing to put 36% of their money into the emerging channel, says Vanson Bourne, which spoke to marketers in seven sectors.

The tentative approach may be explained by the fact that only just over half of marketers in retail banking are confident that their social media campaigns are effective, while nearly a third rate them as not.

This caution seems well-placed given that only a quarter of 3000 consumers quizzed use social media to follow and keep up-to-date with certain companies or brands, while more than three quarters are predominantly on the various platforms to keep in touch with friends and family.

If people do follow brands, around half are receptive to receiving their marketing messages. The reverse is true of communications from companies people don't follow, which 40% say they would be annoyed to receive missives.

Consumers rate unsolicited spam and pop-up advertisements as their worst experiences of social media marketing, and 65% say that they would even stop using a brand that upset or irritated them as a result of their online behaviour.

The research also suggests that marketers are using social media incorrectly - while customers want details on discounts, vouchers, and new products and service, firms are concentrating on unwanted newsletters and satisfaction surveys.

Customers and marketers both rate Facebook as the most important social media channel but while firms are spending the rest of their money on Twitter and Google+, customers prefer YouTube.

Kieran Kilmartin, marketing director Emea, Pitney Bowes Software, says that "there is still a disconnect between marketers' high expectations of social media, and the lack of desire among consumers to engage. The continued use of old-school 'broadcast' marketing models - which we have found across all sectors - is likely to turn people off, and at worst, trigger them ultimately to become 'brand blockers'."

Comments: (0)

Comment on this story (membership required)
Log in to receive notifications when someone posts a comment

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board, sign up now.

Related blogs

Create a blog about this story (membership required)

Related stories

11 January, 2013
01 May, 2012
25 April, 2012
27 March, 2012
10 November, 2011

Featured job

Basic £130-140K OTE £250K (no ceiling)
London based and across EMEA

Find your next job