By Beth Tait, Managing Director at Go Inspire Insight
Search advertising in the finance sector tends to come with a higher price tag than for other industries. Tighter regulation in this industry leaves businesses with limited scope to differentiate their products and pricing, making competition fierce. Across all industries*, the average cost per click in Google Adwords is approximately £1.95, while the finance and insurance sector pays an average of approximately £2.50. The rewards on this investment are also high, with a conversion rate of 5.1% compared to the general average of 3.75%. However, for many businesses, conversion rates may be hiding inefficiencies, where the budget for paid search advertising is not being used optimally.
Where is the waste?
Considering the higher advertising cost for finance businesses, it is vital to frequently reassess how much of the budget is delivering a return, and how much is going to waste. To begin with, marketers must carry out a thorough analysis of how well campaigns are working, from the efficiency of keywords to the clarity of landing page content. This is likely to immediately produce areas for attention. For instance, one study on keyword relevance found that that the average PPC account is producing all of its sales from just 12% of its keywords.
In a highly competitive marketplace, this optimisation is essential. However, companies should be going a step further and carrying out deeper analyses of purchasing journeys in their customer base. Indiscriminate search advertising assumes that all customers are net new customers with similar behaviours. Attitudes to money management and financial services vary across each demographic; this is taken into consideration in offline settings, so why not online? If businesses can gain a better understanding of how each customer is approaching their search for financial products, they can then determine where paid search makes most sense – if at all.
Does this intelligent analysis lead to concrete savings? To gauge how much paid search spend can be saved, Go Inspire Group conducted a series of control tests with its customers between 2018 and 2020, covering the behaviours of over 500,000 consumers. Using the typical proportional savings on paid search spend from the test results, Go Inspire then built a model to demonstrate the level of savings available in a number of industries. A conservative estimate is that UK financial services businesses could be saving £88.2 million of their paid search budget.
|Sector||Estimated wasted spend on paid search 2020
(£ million – based on annualised data on H1 2020)
|Computing and Consumer Electronics||75.8|
Marketers may be at a loss when it comes to refining their paid search strategy in practice. The following are key actions that finance marketers can incorporate into their planning, based on Go Inspire Group’s own campaign optimisation strategies.
- Build a 360o customer view
There are many tools available to create a complete view of customer activity and behaviour, yet many businesses have yet to implement one. The goal is to build a picture of a typical customer journey: the channels consulted and the trigger points that lead to final purchase. Offline platforms still have their place, but businesses must determine to what extent this is the case. To do so, they must be tracking both online and offline behaviour.
- Create customer segments
Getting to know typical purchasing triggers then allows companies to understand which stage their customers are at, and whether they can be encouraged to increase their spending and become long-term customers. It also allows segmentation according to value, loyalty and future potential.
- Avoid assumption at all costs
Older consumers, for instance, are not necessarily increasing their use of digital channels following the pandemic: while just under a quarter of over-75s in England have increased their internet usage since the pandemic hit, this is mainly driven by existing users going online more often. Any shift online would therefore greatly disadvantage non-digital segments of this demographic.
- Refine remarketing
Customers that have already purchased should not be receiving remarketing messages without an understanding of their intent. If a customer returns to buy an accessory, for instance, remarketing messages may put them off.
- Check brand name bidding
Companies may be wasting money by presenting paid search adverts to customers who were looking for them anyway. This is another reason why understanding customer journeys and intent is critical.
- Know your phantoms
Paid search is lost on ‘phantoms’, who visit a page – often by accident – and never return. Remarketing to phantoms can damage your quality score (based on click-through rates), which then increases cost per click. However, it is usually the case that around a quarter of phantoms have interacted with a company in the past, and therefore may respond to a paid search message.
- Keep going
Customer behaviour is regularly evolving so marketing offers and messages must be adapted regularly to stay fresh and relevant.
The financial services sector has a specific set of challenges when it comes to advertising. Apart from the higher rates, businesses must also navigate regulatory constraints and lack of trust from consumers. It is especially critical for companies in this sector to carry out their due diligence thoroughly to make sure that they are getting the most out of their budgets, and providing the best possible service to customers looking to buy their products.
*The data is reflective of a sample of US-based accounts.
 WordStream, Google Ads Benchmarks for YOUR Industry [Updated!], 23 April 2021
 Digital Marketing Institute, 5 Reasons PPC Campaigns Fail (And How To Avoid Them!), 16 February 2016
 Age UK, Nearly two million over-75s in England are still digitally excluded in a COVID-19 world, 5 March 2021
 The Drum, Five common digital marketing problems for the finance sector – and how to overcome them, 15 February 2019