Financial services firms gearing up for social media investment - Aite

Financial services firms gearing up for social media investment - Aite

Most US and European financial services firms still consider themselves social media novices or beginners but there is a widespread expectation that there will be significant investment in this new marketing medium over the next five years.

Of 166 executives surveyed by Aite Group, 21% say that their company is a complete social media novice and does not use it at all, while a further 39% have made the first tentative steps into the medium but consider themselves beginners.

Nearly a third categorise themselves as intermediates, with just eight per cent claiming to be advanced social media users, regularly using the tools of the trade.

Currently 30% of firms still have no dedicated budget for their social media initiatives, but this is expected to fall to just 10% by 2012, with many spending between six per cent and 10% of their total marketing pot on SM initiatives.

With this level of investment, Ron Shevlin, senior analyst, Aite, says that by 2012 firms will be expecting to see concrete results from social media, with around two-thirds looking to it to increase customer retention and nearly half expecting to generate revenue off its back.

"Because the industry is still so early in the evolution of this medium, Aite Group believes that no one can be quite sure which marketing objectives best fit social media efforts. What is certain is that banks can no longer ignore social media as a marketing tool," says Shevlin.

Banks that have so far flirted with the medium are beginning to invest in dedicated personnel to co-ordinate their activities. Citi, for example, is currently searching for a lawyer to oversee its initiatives, while Australia's NAB has also been hunting for a full-time marketeer to shape its use of channels such as Twitter and Facebook.

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