The Essential Guide to Online Marketing

for Financial Services

1 The Essential Guide to: Email Marketing

Contents

Part 1. Introduction to Financial Services Online

Part 2. Research among Financial decision-makers

I. Customer Experiences to date

a. Banking
b. Investments

II. What the Future Holds

III. Conclusion

Part 3. Case Studies

I. Westpac

II. Conscious Investor

III. NRMA

Part 4. Getting Started

I. Adding Online to the Financial Marketing Mix

II. Key Opportunities

About the f2 Network

2 The Essential Guide to Online Marketing for Financial Services

Part 1. credit cards, mortgages and cash trusts to name
a few. Conversely, the number of independent
Introduction to Financial (non-bank) trading sites has declined.
Services Online Financial services is a broad area. In presenting
the survey finings, we have touched upon the
services most interesting in terms of consumer
Trafficking Money usage and their propensity to change this
behaviour in the future. Not all financial
Australia is one of the most 'wired' countries in
services which were covered in the survey9
the world, with approximately 53%^ of the
are presented in this brief synopsis of the key
population using the Internet every month. As
results. The focus is on those learnings that can
one of the first industries to recognise the value
be leveraged by financial services providers
of the Internet for optimising customer
today, to best meet the needs of customers,
profitability, financial services is one of the
both now and in the immediate future.
high-interest, frequently visited areas online.
Growing online even faster than the uptake of
the Internet itself, over 5 million people
Survey Methodology
currently visit finance-related websites each
month.^ To put it into perspective, 7 out of 10 The research was conducted as an opt-in survey
people who use the Internet on a monthly basis, across the f2 Network in July 2001. Over 5000
seek information that is finance related. people participated, from a demographically
representative sample of Australian Internet
users. Note that as the research was conducted
Banking on Profit on the f2 Network sites, the results represent
Since the first days of Internet banking, the opinions of people who are f2 users and are
Financial Service providers have focused on therefore not presented as being representative
customer profitability management, seeking to of all Australians.
replace existing communication processes and
high-cost service channels with lower-cost,
web-based channels. Despite appearances to
the contrary, the financial services category
has evolved from focusing on banking customers ^ Red Sheriff, August 02
to attracting new customers and promoting new
services. Looking back two years ago, the online
category (then attracting 2.2 million users
monthly) was dominated by the top 6 banks,
financial information sites and a few
independent trading sites.
In 2002, usage of Financial sites among
Australians has more than doubled, an array of
regional banks, credit unions and building
societies have a respectable online patronage
and an audience has been built behind providers
of non-banking services such as insurance,

3 The Essential Guide to Online Marketing for Financial Services

Part 2. People, who felt their banks had informed them
well about what online services were available,
Research among Financial had a much higher satisfaction rating with
Internet banking. ANZ and Westpac appeared to
services decision-makers
have been the most effective at this task, having
the lowest number of people claim they were
I. Customer Experiences to date unaware of the bank’s online services.

From the customer's perspective, their usage to

date in dealing with financial institutions online
has come of age. It is an everyday activity and
the survey responses reveal a surprisingly
positive experience.
It seems people have ‘cut their teeth’ on
Internet banking and share trading and the
positive online experience is leading them
beyond this to other areas of their finances.
Security fears are a contributing factor for why
people aren't actually transacting with financial
institutions online, but the majority of people
don't have any concerns over security. Only On a scale of 1 to 5 (where 1 is strongly disagree)
37% expressed concerns with security but, how would you rate the following statements?
surprisingly, the more money people have, the
less likely they are to be concerned. For
example, the research showed less than a third Internet banking isn't something that is only
of people earning over $100,000 per year were used on the odd occasion. 62% of our users
concerned, but around half of those earning said that on more than half of the occasions
under $35,000 had security concerns. they dealt with their bank, they chose to use the
Internet as the primary channel. While almost
1/3 said the Internet was their primary channel
Banking on 90% of occasions.

Internet banking is not just something that

people think is useful; it's something that is
considered indispensable.
In fact, 53% of respondents claim "they don't
know how they managed without it."
Satisfaction with how banks are performing in
this area is also extremely high. Only 15% of
people didn't think Internet banking was a great
service.
Of the last 10 times you interacted with your bank,
how many were via the Internet?

4 The Essential Guide to Online Marketing for Financial Services

Investments
Regular banking isn't the only financial service
that people have been turning to the Internet for.
Shares, insurance, mortgages, managed funds
and superannuation are all areas where people
are actively using the Internet to help them
research, purchase and manage their financial
relationships.
On a scale of 1 to 5 ( where 1 strongly agree disagree)
how useful do you find the internet for investing?
Respondants have acknowledge that the most
valuable contribution the Internet has made to
their financial situation is by helping them
research potential investment decisions. Using
it to trade/buy and manage their investments
was also of value, but the fact that people can
seek further information, compare products and
become better informed before they make
purchasing decisions is seen as its most
important role.
On a scale of 1 to 5 (where 1 is strongly disagree)
how would you rate these statements with regard to investing?
Three-quarters said they use the Internet for
researching potential investment decisions.
Around 60% said it was useful for managing or
purchasing investments.
5 The Essential Guide to Online Marketing for Financial Services
II. What the Future Holds
If the current experience of online financial
services is so positive, what does the future
hold for financial service providers? Where will
the category's online growth come from based
on customer intentions?
Overall, the research indicates the future is very
positive for financial service providers. Like
many categories, further growth will be driven
by both people's experience with the Internet,
which comes from the time they spend online,
and their increasing demand for a broader and
deeper range of financial products.
Over and over again, research conducted on our
Network proves the longer people have been
online, the more positive their perceptions of
online financial services and the greater their
propensity to research, transact and manage
their finances online. For example:
• 59% of people who have been using the
Internet for at least 4 years claim "I don't
know how I managed without Internet
banking", while only 35% of recent adopters
felt this way.
• Half as many experienced users were
concerned about security than recent
adopters
In fact three to four years of experience online
mostly doubles people's usage and tendency to
be positive about and consume online financial
services.
On a scale of 1 to 5 (where 1 is strongly disagree)
how would you rate these statements with regard to investing?
However, the majority of our users experiences
with online financial services to date, has been
largely around replacing existing products and *
processes such as bank transfers, phone trading
and bill payment etc...with online processes
and services.
For financial companies, this means ultimately
reducing the costs associated with operating
branches, call centres and transaction handling.
Yet the research indicates the future
opportunities for financial services online is In the next 12 months which of the following activities relating
to insurance do you think you will do on the internet?
about creating new revenue streams from a
* Look up details of existing policy, change details etc.
range of products and independent from a
persons primary bank.
The research has shown that increasingly,
consumers are using the Internet to research Investments
and purchase financial services. They are
turning online to seek richer information and The investment category is a clear growth area
make convenient comparisons before drawing and usage of the Internet to research
up their ‘financial shopping list’. Investments will increase 11% in the next 12
months to almost reach market saturation at
83%.
Insurance It is managed funds that will experience a huge
surge in demand, increasing +35%. Almost 60%
The Internet plays a key role in decision-making
of survey respondents indicated they would
related to Insurance products. Users are more
invest in managed funds over the next 12
likely to research and apply for Insurance
months.
products online, then manage or pay for an
existing policy, making it an excellent
acquisition tool.
• Two-thirds of users will do some form of
online insurance-related activity in the next
year. Primarily, they will use the Internet to
research products (followed by providers)
and make a decision on what policy to
go with.
In the next 12 months how much do you think you are
• While only a quarter will use the Internet likely to put into managed funds?
to manage their existing insurance policies.

6 The Essential Guide to Online Marketing for Financial Services

There are two clear segments driving demand.
The 'traditional' older, high-worth investors and
an emerging group of younger, new entrants
who enter the market at the lower-value levels
$10K-$20K. This segment is researching
Managed Fund investments online in different
environments to the more traditional group.
They are looking for environments that offer
more hand holding as opposed to sophisticated,
share trading sites.
The research shows, while the majority of users Which of the following types of investments do you think
you are likely to trade/purchase online?
intend to purchase or trade investments online,
less movement is expected in this activity area
which will remain stable at around 60% of users.
After Shares and Managed Funds, Residential
Property and Personal Superannuation are the
next two investment areas researched online by
users.

In terms of purchasing or trading of Investments

online, the most popular products remain Which of the following types of investments do you think
Shares and Managed Funds. The segments that you are likely to seek information about online?
do intend to increase their online purchasing
and trading are those users who are already
seeking out business and finance content and
using financial sites such as TradingRoom,
Personal Investor and Shares on our Network.
These users are high-income earners who tend
to experience fewer fluctuations in spending
power during market turns.

7 The Essential Guide to Online Marketing for Financial Services

Residential Property
Approximately 34% of users will research
residential property online in the next 12
months. Not surprisingly, a similar number will
be searching for a new home loan or switching
home loan providers in the next 12 months.
These figures differs slightly by bank.
Demand for residential property and mortgages
Our research shows, those most likely to be
seeking a mortgage in the next 12 months are
younger, experienced Internet users with high
household incomes. They are visiting the
property site, domain.com.au on our Network,
as well as business and finance sites, such
as BRW.com.au and Moneymanager.com.au,
which provide broader information on asset
management.
Superannuation
One-quarter of users will research personal
superannuation online in the next year. The seg-
ments most interested in researching personal
superannuation online are high-income earning
males and 'employment seekers', looking to
change jobs and employers.
8 The Essential Guide to Online Marketing for Financial Services
III. Conclusion
Overall, the research demonstrates that cus-
tomers have had very positive experiences
researching, managing and purchasing most
financial services online. They use it often and
are highly influenced by it to make financial
decisions.
The move users have made to adopt the Internet
for transactions have been nothing short of
stunning. Testimony to this is the fact that the
major remaining growth opportunity for Internet
banking lie with recent Internet adopters, where
around 1/3 are unaware of the banks online ser-
vices.
Further growth will be driven by both people's
increasing experience with the Internet, which
comes from the time they spend online, and
meeting their information needs comprehen-
sively and at the right time in their decision-
making process.
Some of the key opportunities or actions that
financial service providers might consider
implementing based on the findings of the
research are outline in Part 4 of this document.
Part 3.
Case Studies
I. Westpac
Objectives
Today 30%-40% of all prospective mortgage
customers use the Internet to research their
home loan choices. Westpac's aim was to
increase considerations among people with a
need to finance their property purchase.
Realising that researching online today meant
transactions for tomorrow, Westpac aimed to
not only acquire new home loan customers, but
to become the best at doing it online.
Strategy
Realising that people didn't purchase home
loans, they purchase property, Westpac forged
an Alliance with f2's trusted property
site - domain.com.au. Forging a strategic
Alliance ensured Westpac is now in an ideal
environment, attracting vast attention from
prospective home loan customers. This allowed
Westpac the first mover advantage, exposing
their brand and acquisition tools to a highly
targeted audience in the midst of the property
purchase process.
The key advantage of the Alliance Program with
f2 for Westpac has been from deeper integration
into the content of the site allowing them to
target consumers at the most optimal moment
in the purchase decision process. For example,
Westpac mortgage calculators appear at the
base of every property details page within a
search so users can calculate their monthly
payments and allowable borrowing levels based
on the property they are interested in.
9 The Essential Guide to Online Marketing for Financial Services
Further, f2 integrated a 'Home Loan Centre'
within the site, using content from Westpac's
own site.
Through a longer-term approach to planning
online advertising, Westpac was able to secure
key advertising positions for an extended
time period.
Results
Westpac was able to target a high proportion of
f2's AB customers at a point in their lives when
they were reconsidering their financial situation.
With content integration driving 75% of the
traffic, conversions have resulted in high-value
applications averaging twice the bank's average
mortgage and just recently drew down a $1.2m
loan.
Through the strategic Alliance, f2 and Westpac
have worked together to optimise the
partnership, ensuring Westpac is now in a
leading position versus their competition.
Through a long-term approach and dedicated
optimisation, Westpac has online knowledge
& experience well ahead of their competitors.
They are well positioned in today's mortgage
marketplace and to grow their online channel
as customer demand increases.
II. Conscious Investor With limited prior online advertising experience,
Conscious Investor briefed the f2 Network
Objectives
to develop the advertising creative for the
As a provider of web-based investment software campaign. This not only simplified the
to individual and professional investors, development process but also meant that
Conscious Investor needed to reach a large creative alterations, which helped to improve
financial audience, comfortable and experienced the results, could be dealt with quickly and
with the using the Internet. Conscious Investor's efficiently.
primary aim was to drive immediate sales of
their investment software through the use of
their website. A secondary objective of the Results
campaign was to reduce the cost of sales Conscious Investor was able to promote its
through online automation of the sales process. products to an active and affluent audience
Conscious Investor's target audience includes seeking financial and investment information.
individual investors and superannuation funds As a result, high quality leads were generated to
holders as well as investment professionals be followed-up by their sales team, with 10% of
such as accountants, fund managers and people signing up for a product demonstration
financial planners. As the investment software and 20% subscribing to their monthly
is accessed online, their target had to not only newsletter.
be financially savvy, but also have trust and Over the course of the campaign, sales
experience using the Internet. increased dramatically, with 1 in every 146
people visiting the Conscious Investor website
converting to a customer.
Strategy
A two-month campaign was developed for
Conscious Investor which ensured a good mix
between broad reach and highly targeted
environments. This was achieved through
advertising on the homepage and within the
daily eNewsletters of the f2 Network's leading
finance site, afr.com. In addition, the campaign
included the f2 Network 'black strip', which
reaches around 1.5 million experienced,
high-worth f2 users monthly.
Afr.com users are high-value customers who
are concerned with issues such as wealth
management and visit the site regularly to seek
information to assist them make financial and
investment decisions. Advertising on the f2
Network black strip enabled Conscious Investor
to achieve volume and exposure across the
entire f2 Network.

10 The Essential Guide to Online Marketing for Financial Services

III. NRMA Results
Objectives NRMA saw results instantly. In week 1, there
was a 109% increase in online premium
As the first company to offer insurance
estimate transactions. As a result of the
premiums online, NRMA promoted their online
exposure, 8.5% of the people visiting
premium estimates on the drive.com.au site.
drive.com.au ended up at the NRMA website for
The objective was to increase usage of the
an insurance premium quote. Further, almost
Internet as a premium estimate channel and
30% of all car insurance premium estimates are
reduce the pressure on their call centres.
provided online, up from 12% prior to the
campaign.
Strategy
The strategy was developed together with
Sydney advertising agency, Saatchi & Saatchi.
Shunning a demographic approach, Saatchi &
Saatchi recommended NRMA address the car
purchase process, in an attempt to move car
insurance premium estimates higher up the
decision tree. NRMA set out to 'own' the leading
motoring site, drive.com.au, which attracts
people searching for a car to purchase and
approached the f2 Network for a solution that
went beyond the banner.
As NRMA wanted to avoid a heavily branded
campaign, drive.com.au developed
customised ad placements to include the
unbranded NRMA formats.
Drive.com.au also included a text link in the
left hand navigation, which simply read, "Get an
insurance estimate". Given the subtle branding
and relevance of the offer, people were
genuinely interested and responded accordingly.
Drive.com.au and NRMA later expanded this to
include a new 'Insurance Centre' which
converted 84% of visitors to the NRMA website.

11 The Essential Guide to Online Marketing for Financial Services

Part 4.
Getting Started
I. Adding Online to the Financial
Services Marketing Mix
Online advertising and e-marketing can be used
effectively to meet a variety of marketing objec-
tives from brand awareness to loyalty and reten-
tion.
• Investments lead the way for customer
As with any other media, the key to being suc-
cessful online comes from overall campaign
integration, where a mixture of traditional and
digital media is used.
Planning online upfront as part of the marketing
mix is imperative, as opposed to developing a
• Affluent Audience for Business
separate campaign, with additional, inconsistent
creative. Online advertising can become a costly
exercise if it is treated as an after-thought and
developed separately to the overall campaign.
Given the role the Internet plays among financial
audiences, there are unique opportunities
available to financial service providers to better
leverage the Internet in marketing campaigns
and sales processes.
• Integrate Online into the Sales Process.
II. Key Opportunities
Some of the key opportunities or actions that
financial service providers should consider are
listed below.
• Target Experienced Internet Users.
For financial services, the value of targeting
experienced Internet users first should
not be overlooked. In most instances,
experienced Internet users were more likely
to research, purchase, manage and develop
strategies online.
12 The Essential Guide to Online Marketing for Financial Services
• Consider Decision-making environments.
To increase penetration of services linked to
major purchase decisions, such as home
or cars, get in early. Products such as
insurance, superannuation, personal loans
and mortgages should be considered at the
same moment people are making decisions
about which house or car to buy. It is at this
point where users enter the market for a
new financial service and tend to re-evaluate
their financial situation.
acquisition. Without a doubt, the biggest
opportunity for utilising of the Internet as
a channel is in the area of Investments,
where it has a big role to play in customer
acquisition.
and Finance content. The context in which
the advertising is placed is critical. Not
surprisingly, Business and Finance site
users have the most interest in researching
and purchasing Investments online. This
allows for simpler, more powerful targeting
strategies for Investment providers. They
also happen to attract a spend- empowered
audience.
In order to leverage the expected growth in
Managed Funds and other Investment
products, providers should be well positioned
within these sites and channels online. They
should utilise a mixture of online advertising,
information dissemination and prospectus
distribution to showcase products and
generate leads for out-bound telephone or
direct sales teams.
• Use the Internet upfront in your go-to-
market strategy and plans. Get in at the
beginning of the purchase decision-making
process, before the sales cycle starts.
This is when people are using the Internet
most and when you can generate the most
leads.
• Know your customers and, if possible, your
competitor's Internet marketing behaviour.
User behaviour will differ from brand to
brand and is often driven by the traditional
marketing mix your competitor employs.
If your competitor never or rarely advertises
online, chances are they will not have highly
experienced Internet users among their
customer base. This is a potential advantage
for you.
• Finally, be selective about your partners.
Work with agencies and publishers with
experience and who will work hard for you to
get results. In the experience of our Network,
every advertiser is different and while there
are many general learnings about online
marketing relevant across industries and
brands, there is usually a period of discovery
and optimisation required.
13 The Essential Guide to Online Marketing for Financial Services
About the f2 Network
Fairfax's f2 Network is Australia's leading
publisher of online news, finance and
classifieds. One in every four adult Australians
use one or more of the f2 Network's websites,
eNewsletters and direct email services every
month^#. The quality content from Fairfax
newspapers and magazines combined with
trusted online brands, such as smh.com.au,
theage.com.au, afr.com, brw.com.au,
drive.com.au, domain.com.au and
mycareer.com.au attracts an audience base
second to none in the AB demographic and
Active Internet User psychographic.
f2 offers highly targeted Internet sites and email
services for Financial providers to reach affluent
consumers while they are actively researching
and purchasing financial products and services.
Among the f2 Network's advertising clients
are some of Australia's best known companies
such as Qantas, Westpac, NRMA,
Commonwealth Bank, Microsoft, IBM, Intel,
Optus, Telstra, Budget, Ford, Audi, Central
Equity and many more.
For advertisers, the f2 Network is an essential
media partner. We can prove advertising through
our sites and email services deliver results
and make commercial sense. For a more
customised advertising solution, please contact
one of our experienced f2 Media team members
(02 8596 4444) or for more information visit:
www.f2.com.au/adcentre
^ Red Sheriff, August 02
# Roy Morgan, June 02