Five years ago, the normal institutional financial services marketing mix looked considerably different to what it is today. If you cast your mind back to January 2017, digital marketing was flourishing, but so too were analogue marketing channels. A consistent question during planning season was always around the number of events planned for, whether that be industry conferences, proprietary and/or hospitality. While the answer to the former was probably yes, these and other brand activation channels were in my opinion, equally, if not sometimes more effective than digital (back then).
But times have changed
Over the past couple of years, digital marketing has dominated activities for obvious reasons. During 2020 at the height of the pandemic, I recall a conversation where someone expressed a strong opinion that we were likely to see the end of analogue activities (including most physically attended events) post pandemic. At the time I rebuked that suggestion, not with any data to support my opinion, but more in the hope that the human element of marketing was not completely dead. I cannot count how many times valuable insight from a client, competitor and/or an industry participant was gained from the networking at these type of events. Something that email, Zoom or Teams will never replicate.
There has always been one constant in describing the institutional marketing world. It is a relationship business. I don’t believe that can be built as effectively using just online channels. Remember that I’m coming at this from an institutional / large b2b angle and not the small business, retail, or consumer. In my world, for the past couple of decades, the various services being promoted are long-term mandates (in the main). Whereby winning a new client resulted in five to ten years’ tenure of business. Therefore, Account Based Marketing (ABM) has always been a significant focus of each year’s revenue targets in addition to cross and/or up marketing/selling, which is something that cannot be successful without flourishing relationships. If clients are not advocates for existing services received, good luck in trying to persuade them to buy more. But can relationships be maintained and nurtured at a digital level only?
The scale and tools now being deployed in digital marketing are significant and continue to grow. Looking at its definition it is “the promotion of brands and products to connect with customers using the internet and other forms of digital communication. This includes not only email, social media, and web-based advertising, but also text and multimedia messages as a marketing channel”. The key word here is ‘channel’, and while it is probably accounting for more than 95% during pandemic times, it is still a message delivery mechanism. If the pandemic was not restricting our movement, would digital marketing be so high an allocation? I don’t think so. While it would still probably represent most activities, I strongly doubt that analogue channels are dead and buried.
So is the digital marketing function becoming an untamed beast? If you cast your mind back a decade ago, it would be strange to have any marketing discipline, whether that be digital, events, design, communications, etc. defining their own ABM or brand strategy. They would have defined plans, but they would be born out of the overall segment, regional, and/or product plans that encompassed a multi-channel approach which ensure consistency and avoidance in over whelming existing and potential clients. Yet, today given the technical complexities that digital incorporates, I’m starting to see that emerge whereby the tail is almost wagging the dog. Segment and/or product marketers (i.e. the generalists) are may start seeing a trend of disenfranchisement over these distribution channels as the Head of Digital Marketing rises from equal to higher stature within an organisation.
The fundamental role of marketing according to the Chartered Institute of Marketing (CIM) is the “management process responsible for identifying, anticipating and satisfying customer requirements profitably”. Marketing covers a broad array of disciplines and the output, while extremely important, is one aspect. Without the relevant research to understand the potential and existing customer, plus a good knowledge of the products and services on offer, where and how they meet a clients need, how they should be positioned and messaged, as well as being distributed, the marketing department is in effect in danger of becoming multi-siloed and/or an in-house tactical agency.
So why is this happening?
A cynical mind might suggest that all things digital is first and foremost a lot easier to measure and therefore easier to justify resources in a world where finance departments continue to sharpen their pencils around budget time. To the untrained eye, impression numbers always look huge (yet tell you very little). Engagement rates can be measured (be it sometimes anonymous), MQLs can be quantified and recorded more rapidly into the CRM. The bottom line is that the speed and data provided in proving success is impressive to a politically minded and cost conscious organisation. Given the customer tender process can be anything up to eighteen months, the actual ROI or COA can sometimes be overlooked.
The reality through a less negative lens is simply the evolution of marketing has moved us there. Even if Covid-19 reaches towards a Zeta variant, at least 8/10 things we do will be online as that’s where most of the target audience are, but more importantly expect us to be. I've always felt that whatever new concept is being used today in the FMCG sector, it will take around 10 years or so to be embraced and adopted into institutional FS marketing. Not for the want of trying to introduce some of it earlier but its hard to imagine today that a CFO, COO or CIO is active on TikTok or experimenting with the metaverse soon. That picture may change a decade from now. The analogue methods though will still exist in some shape, especially events, but I think those activities are likely to further evolve in becoming a sales initiative for ABM and client upselling. Many sales people tend to think that's where it is today. It's a fine line given the need for brand activation around these initiatives but one that needs to be considered. After all, regulation such as Mifid II was one of a bunch of nails in the coffin for corporate hospitality, meaning events may almost be the last bastion where sales can network with a bunch of their clients without both they and client filling out compliance forms before and after.
What does this mean?
Marketers need to be pretty confident in understanding not only what is available in digital marketing but how it all works. We need to know this stuff to be effective as it has already become the dominant component of our profession. To that end, it will not be long before the ‘digital’ is taken away from ‘digital marketing’ as it becomes a redundant word. In effect, marketing is digital. This is why it is concerning to see that digital skills among financial services marketers have fallen over the past 12-18 months and overall lower than other industries.
The CMO / Head of Marketing needs to examine their future organization structure to ensure it makes sense. Some prefer to have it aligned by product, some by segment, others by region together with the "functional" disciplines (events, digital, etc.) to feed into and support the one strategy. The principles of marketing are unlikely to change no matter how many additional "Ps" someone tries to add. The way we communicate though will continue to evolve and that is what any successful marketer needs to keep an eye on, embrace it and partner with their 'digital' colleagues to be effective.
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