Social media and streaming may get all the hype, but the fastest growing advertising medium belongs to good old-fashioned retailers. This year, brands are projected to spend 8.5%
more than last year on advertising in brick-and-mortar stores and on e-tailers’ owned websites and apps. Known as
retail media networks (RMNs), these platforms take advantage of retailers’ first-party data and proximity to shoppers, displaying personalised ads to consumers in the environment where they are most ready to buy. The idea is that whether these ads appear
in a supermarket aisle or an online marketplace, they all rely on the same currency: loyalty to a given retailer.
Yet amid soaring growth, advertisers still cannot easily prove that ads on RMNs contribute to sales, nor can they determine the effectiveness of these campaigns across networks, retailers, or online to offline. That presents a huge opportunity for financial
institutions. With compelling propositions for engagement — and the data to back them up — banks and payment providers can position themselves as proven channels for merchant promotions, discounts, and loyalty rewards.
The financial industry already has experience with rewards programs, such as cashback on credit card purchases, that demonstrate tangible and measurable value for all parties. In addition, no one is closer to the customer when they make a purchase than their
payments provider. By leveraging long-standing customer relationships, unrivaled insights and personalised experiences, financial firms can help brands attract new customers while reinforcing the benefits of loyalty to their own cardholders and clients.
Here are three factors to consider:
- Trust is paramount
While consumers love deals, they also want their data and privacy to be protected. This is an area where financial firms already typically stand out, with an industry-wide reputation for data security.
Advertisers, likewise, won’t commit resources until they trust a media platform — and that confidence starts with accurate measurement and attribution. Today, advertisers are concerned that RMNs are grading their own homework, telling them what they want
to hear instead of proving what’s truly effective. In fact, as a result of opaque measurement and spotty reporting,
two-thirds of consumer goods companies haven’t learned how to maximise their return on investment in these channels.
Financial firms can overcome this obstacle by tying consumer behavior, such as clicking on an offer, directly to actual purchases made on a website or in a store. Going forward, they could then use this consumer-consented data to perfect the audience for
each offer.
- The right program, not just any program
From old-school coupons to digital discounts offered via credit card, the value exchange must be mutual. Shoppers find value in rewards and discounts, and the economics work for brands that gain a new customer or maximise relationships with existing ones.
With so much digital noise, choice, relevancy, and flexibility matter now more than ever. Designing an offers strategy to deliver incentives that consumers actually want — based on their demonstrated preferences and signaled intent — can be a long-term advantage.
For example, a retailer could create a credit card-linked offer for loyal customers to earn currency valid at their store even when shopping elsewhere. That rewards loyal customers by giving them more purchasing power with the brand, and in turn the brand
sees the return on that spend in-store.
Successful programs experiment with different types of offers at different points in the shopping experience to find what works best and to meet the consumer where they are at any given moment.
- Be good at a few things
Like any organisation, financial firms can’t be good at everything. My advice: Be good at what you're good at. For everything else, find a trusted partner.
For example, sophisticated media networks typically optimise campaigns by running many variations of an ad across as many as 100,000 different formats and placements. These enormous real-time experiments require advanced data science and, increasingly, AI
to find the precise formula that will make the ad campaign a success. Few financial institutions are equipped to manage these complex processes at scale.
Partnering with the right network allows brands to reach key audiences and consumers, find new channels for advertising and reach a broader base of advertisers. Partnering also gives FIs visibility into what is working across the industry to optimise advertising
for their customers and open access to smarter insights, helping firms measure the effectiveness of a campaign.
Media networks are attracting a lot of attention as advertisers look to be more strategic with their digital dollars. However, consumer habits, how ads are delivered and measured, as well as the expectations of advertisers themselves, are all changing rapidly.
Financial firms possess a natural advantage in this space, including strong client relationships, experience delivering rewards, and a legacy of protecting consumer data. Now is the time for them to seize the media network, and opportunity to cement client
loyalty while building a new source of revenue.