Financial Advertising on the Web. 

by Michael Hess
Posted 9/9/96

"I don't want to advertise on Barron's web site, for example,
because I feel that the users who go to that site already know
about my company." 

My shock was well disguised after listening to the marketing
executive from a major financial company. Our conversation
continued as we discussed online media strategies and the
effectiveness of ad banners on web sites. 

Explained the executive, "Barron's site attracts users who
probably already have my site bookmarked and therefore
know to go to my site when they're interested in my products." 

"By that reasoning," I responded politely, "you should pull all
advertising because everyone who should know about your
company and its services already knows all they need to
know...why also continue your magazine and broadcasting
advertising if you truly feel that way?" 

Although the power of the web is not appreciated by the
aforementioned executive, most of us acknowledge the
potential for financial companies who market their products on
the web. Forget about the endless data and research
predicting $1-gazallion of financial products will soon be
transacted over the Internet...the purpose of this article is to
impress upon financial companies the importance of a strong
web advertising strategy implemented immediately. 

The perfect web world for marketers finds Mr. Joe Moneybags
sitting in his den perched over his PC, slippers on his feet and
very involved in his favorite financial web site. Joe sees an ad
banner for a new mutual fund offering, clicks on the ad and is
transported to the area of the marketer's site that offers
information galore on the offering. Joe is interested enough to
invest and actually does make a transaction with a few mouse
clicks. 

That perfect web world is not too far off and the financial
companies that are working now to position themselves for
that day will benefit immensely. Allison Allott, Internet Media
Manager at Fidelity, says although the company isn't yet at the
point of doing transactions through their site, Fidelity knows
which fund applications are downloaded from their site and
sent in with money! Not bad...Fidelity is on their way! 

The web empowers marketers with new efficient sales
distribution strategies that few have embraced, affording
opportunity for those who move fast. Let's visit again with Joe
Moneybags, an active investor who gets on the Internet every
night checking out the financial markets and his portfolio. Joe
is surfing along and stumbles across an ad banner from
Fidelity promoting its customizable fund package for
college-saving parents. Joe either clicks on the ad banner, or,
he scrolls away. As long as Joe saw the banner, it was an
effective advertisement, proven by the following scenarios... 

The Ad Banner Gets Clicked Upon 
In this case, the benefits of online advertising are clear and
strong: Joe's request for more information is immediately
fulfilled as he learns how Fidelity can help him afford college
education costs for his two children. Joe reads Fidelity's
presentation and is then prompted to complete worksheets
that help him determine the proper strategy, which, of course,
includes investing in Fidelity mutual funds. 

The Ad Banner Doesn't Get Clicked Upon 
On the other hand, what if Joe wasn't interested in Fidelity's
college planner series and did not click on the banner? Joe
may not have been interested at that moment, but the ad made
an impression and now Joe knows more about Fidelity's
products and services. Our visit with Joe resumes the next
morning as he is walking to work. Joe runs into a friend who
tells him a dreadful story about how he couldn't afford to send
his daughter away to college so she is still living at home
while attending community college. Joe knows that he wants
to take back control of his house after his youngest child
graduates high school; Joe heads toward his office but is
drawn into a Fidelity investment center. Joe is motivated to
learn more about Fidelity's college savings plan! 

Even though Joe didn't click on the banner when he first saw
Fidelity's advertising on the web, it can be successfully
assumed that the online advertisement motivated Joe. Just as
Fidelity is changing their product lineup and the way they
service their customers, so too are Fidelity's customers always
changing: Joe gets a raise, he gets fired, he and his wife have
twins, he takes a leave...whatever - Joe's financial situation is
always changing. Joe doesn't think about it consciously, but
he relies on advertising to learn about the new products and
services offered by his financial partners. Advertising on the
web is no different than any other media: your company
advertises to remind consumers about your products and
services, and ultimately, to influence buying decisions! 

An ad banner featured on a web site is not just a direct
response invitation, it is a message. Like all other forms of
advertising, the ad banner exists to influence, be it in the form
of a direct response click, or as a message that reminds
customers Fidelity is open for business. Web direct response
rates are no different than other direct response vehicles
...rates (or, in web terms: "transfers") average 1% to 10%. Turn
the numbers upside-down and critics may contend 93% to
98% of Fidelity's advertising was a waste...don't believe that
for a second! 93%-plus of the ad banner impressions that were
not clicked upon were still valuable because the message was
delivered. 

Personal perceptions and judgments are constructed in
pieces, through advertising, word-of-mouth, and experience.
All forms of advertising, including ad banners on web sites,
contribute to consumer perception and buying decisions. Just
because one of the most attractive elements of ad banners is
its immediate response doesn't mean direct response is the
only reason why a company should advertise online. The web,
therefore, faces the same challenges facing all advertising
media: how does a marketer maximize the effectiveness of
their online ad message and assess its value? 

If Used Properly, Ad Banners Go a Long Way 
Ad banner creative is definitely a heated topic among ad
executives throughout the country. Although the 468 x 60 pixel
ad banner is much maligned, it is an intrusive piece of real
estate that can make a strong impression. Most marketers who
have been advertising on the web quickly realized how
important it is to prominently display their company logo in the
ad banner. Perhaps a better "click" rate can be earned when a
teaser strategy is pursued, similar to MCI's "Shop Naked"
banner - which offered no mention of the company. A marketer
should only be concerned with users who click on their banner
because of genuine interest. In that light, a strong creative
strategy probably includes either a product feature or offer as a
compelling invitation to attract interest. Considering
ninety-whatever-percent of banner impressions won't be acted
upon, the advertiser can't afford to not include the company
name with a specific product message! 

They Won't Come if You Just Build It, You Have to
Send Out Invites! 
A recent International Data Corp. (IDC) survey of Fortune 500
companies found that they spent from $840,000 to over $1.5
million just to get their sites up and running. Even if your
startup web costs are not nearly that high, your company has
spent a lot of money to launch and maintain your site. You
must reinforce your initial investment by implementing an
aggressive online advertising plan to drive customers and
prospects into your site. Because of the web's enormous
clutter and competition, you won't attract your core audience
without aggressive online advertising. 

Don't fall prisoner to the most common excuse currently used
by marketing executives: "we haven't figured out how to use
our site." That response is not acceptable...especially given
the speed of this race! Have you tried asking your customers
and prospects what they want from your site? Their answers
will help you determine why your site exists. Don't stall your
advertising plans until your site "has its act together" as there
is one very important thing to remember about the web:
theoretically, your site will never have its act together because
the web is organic and constantly moving forward. To
maximize the benefits of your site, you will have to move at the
same pace of the web. For thought and action-provoking
information, read "Art of the Web Plan" in the September 1996
issue of Internet World. 

Putting Your Online Ad Dollars to Work 
Currently most media planners/buyers throughout the country
are trying to determine the best way to utilize the web for
optimum advertising efficiency and impact. One thing is
certain, however: the web should not be planned and bought
strictly according to either the print or broadcast model. A
financial company should not limit its advertising only to
financial content providers because the web, as a whole,
involves an extremely upscale group. 

Currently, the web is a very self-selecting media that is
attracting a very upscale demographic audience. In the August
1996 PC Computing magazine, John Dvorak argues: "Many
insiders realize that the demographics for today's typical web
user are frighteningly attractive. But...few advertising agencies
have spotted the web as a once-in-a-lifetime opportunity..."
Referring to research conducted by the Georgia Institute of
Technology, Dvorak claims the Internet audience is one that
"won't last forever" in terms of its concentration of affluent,
intelligent users. Any research on the web will show that it
reaches an incredibly attractive audience that is highly male,
educated and affluent. As usage increases, demographics will
dilute. These are influencers that financial companies need to
be in touch with now. This group that is currently on the web,
you'll agree, represents a very nice slice of the American
consumer pie! 

There currently does not exist a correct or incorrect web media
strategy, which is why companies often refer to their online
spending as a test. WebRep, which specializes in online
advertising sales on behalf of our 12 content providers,
contends that the web may be a place where testing never
ends. As an advertising vehicle, the web shares
characteristics of print and broadcast. Broadcast is used by
advertisers because it provides a mass audience; print offers
the advertiser a one-on-one conversation with prime prospects
in a complimentary editorial environment. WebRep believes
the web can be used as a mass-reach and targeting vehicle:
financial companies should advertise on specific content sites
that present quality financial information, and, advertise on
other sites that don't! Why? For the same reasons financial
companies use print and broadcast to communicate with prime
customers. The site on which you advertise will also dictate
your creative strategy: Vanguard, for example, should
probably offer a message on a financial site that is slightly
more technical than a banner placed on a sports or news site. 

Remember Dvorak's thoughts, wherever you go on the web,
whatever the site, an incredibly attractive demographic has
assembled. Oh sure that will change, as Dvorak contends,
with time comes mass appeal and the dilution of
demographics. According to the non-profit National Council of
Individual Investors, there are currently one million active
cyber investors and that number is expected to double in the
next 18 to 24 months! The message is clear: get a plan in
motion...go ahead and jump in, the water's fine and it's not
going to get any finer! 

Michael Hess co-founded WebRep, an independent
representation firm specializing in online advertising sales.
Michael held a Series-7 license and sold financial products
before entering the publishing business in 1989, which
included experience as Los Angeles Manager for Esquire
magazine. Prior to founding WebRep, Michael launched the
San Francisco office for SmartMoney magazine in 1993
serving as the Northwest Advertising Manager. Michael can
be reached at (415) 776-4866 or e-mail mhess@webrep.net. 
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