January 2006
A crowded playing field may boost online marketing costs

Online marketing spending has been growing beyond expectations the past several years. Financial services companies spent $5.7 billion on online marketing in 2004, and that number should rise at least 18% a year going forward, according to a recent webinar presented by the Financial Services Council of the Direct Marketing Association ("Mining the Potential of Online Marketing for Powerful ROI").

The top two reasons cited for this impressive and steady growth are:

1. Trackability. The ability to track open and click-through rates has been critical to benchmarking a marketing campaign's return on objective (ROO). But the bar is being raised. Pressure is mounting for marketers to measure spend against performance in terms of cost per lead and cost per sale. "Cost per click," "cost per action" and "pay for performance" are phrases that are becoming common e-marketing vernacular.
   
   While most companies continue to struggle with how to master this sophisticated level of tracking, there's no question that it can best be accomplished online. On average, the DMA estimates the cost to acquire a new customer online is $24 less than the cost of acquiring that same customer through more traditional methods, such as magazine, trade publication and television advertising.
    
2. "Eyeball time." Time spent on the Web also continues to increase in both the B2B and B2C realms. And who is spending the most time online these days may surprise you. Forrester Research reports that among all demographic segments, middle-aged women are using the Internet the most to purchase and make purchasing decisions.
   
   Spending in offline media remains steady, but traditional mediums now often serve as a catalyst to draw intended audiences online.

As broadband Internet usage continues to grow, marketers have begun to create full, multi-sensory experiences for their clients and prospects with online video. Video spots, like on-demand mini-movies, can launch from Web sites, newsletters and even e-mails for a fraction of the cost of a national television or magazine campaign. What's more, this new medium is fully trackable.

The DMA webinar left attendees with a sobering thought: As the online community of buyers and sellers increases, so will the competition for attention. As getting noticed becomes more challenging, tracking the effectiveness of e-marketing campaigns will become more critical. As a result, the cost of "real estate" in cyberspace will likely skyrocket in the near future. Marketers were cautioned to consider putting a solid, trackable infrastructure in place as soon as possible.

A request for your input

Financial Publishing Services Co. will present a session entitled "A Financial Institution's Guide to Effective E-Marketing" at this year's Windy City Summit Conference. To make this session as relevant as possible to you, our subscribers, we would greatly appreciate your input.

Which, if any, of the following topics would you find helpful in such a session? Please click here to respond via e-mail. Note: Your information will remain confidential and no solicitations will be made as a result of your input.

• How to build a stronger e-mail database
• How to cross-sell more services
• How to increase open rates and click-through rates
• Web analytics (Web traffic trends, analysis and reporting)
• How to incorporate your CRM system into your marketing program
• Other ( please explain)

 . . .
FPS regularly works with financial services companies to maximize the impact of their client communications, including e-mail and online communications. To find out how we can help you develop effective strategies for communicating with corporate financial executives, contact FPS President Vince DiPaolo at 847-501-4120 or [email protected]. You can also write him at the following address:

Financial Publishing Services Co.
464 Central Avenue
Suite 8
Northfield, IL 60093

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