BankNewport and Pandora: Convenience over Rate

Originally posted by Melanie Friedrichs on The Andera Blog. Follow us on twitter@AnderaInc.

Like many of my coworkers and peers, when I want to listen to music at work I usually tune into Pandora’s free internet radio.  A few days ago while I was changing stations I noticed an unusual advertisement:

BankNewport is an Andera client, so I excitedly grabbed a screenshot. The advertisement was interesting for two reasons:

1) The Medium

I don’t usually see advertisements for financial institutions on Pandora, (usually I just get ads for shoes) and at first I thought BankNewport’s mobile offer was a retargeted advertisement that I was seeing because I had recently visited BankNewport’s website. We wrote a blog post about retargeting opportunities for financial institutions in October, and sometimes I feel that wherever I go online I am haunted by advertisements for Ally bank (the legacy of research for another post I wrote about their identity verification procedures in the same month).  However, when I asked Terri Massoud, the Vice President/Director of Marketing at BankNewport, I learned that the bank was actually advertising direct.

Really, Pandora, I don’t like shoes THAT much.

To pay for music royalities Pandora places banner ads on its website and plays a radio ad every few songs.  (Read more here.) The advertisements are annoying, but Pandora’s service is worth it; Pandora allows listeners to create and save custom “stations” based on one or several songs, or to tune in to more traditional genre stations like “Early Jazz” or “Top 40,” and learns your preferences over time.  Like Netflix and Amazon, Pandora has successfully unlocked the value of big data.

Pandora applies its big data expertise to its advertising.  First, Pandora advertisers choose where they would like their ad to appear, as a banner on their website, as a banner on their mobile application, or as an audio spot between songs, or some combination thereof. Then Pandora allows its advertisers to select the demographic they want to target; BankNewport chose to target young people in Rhode Island, a category into which I fit.

Like retargeting ads, this strategy increases clicks per impression, reducing CPM for advertisers but allowing Pandora to charge more for its advertising real estate.  Earnings reports suggest that it’s paying off for Pandora. BankNewport only launched its advertising spot with Pandora two weeks ago, so it’s too early to tell what the result will be, but I’m curious.

2) The Offer

Traditionally, financial institution advertisements include an offer for a special rate on a deposit or loan product, with slogans emphasizing long term financial benefit, but BankNewport chose to feature their mobile banking application and emphasize convenience through technology. The strategy is a great example of how financial marketing has shifted to respond to an environment where convenience, not rate, is the differentiator.

Terri was kind enough to answer some questions about why BankNewport chose to feature their mobile application and about BankNewport’s wider mobile strategy:

When did you first launch your mobile banking application?

We launched our mobile banking app in October of 2012. It’s necessary to meet the needs of our customers and the way they choose to bank, shop, and communicate.  The mobile landscape is evolving and constantly changing. BankNewport is very conscious of this and is consistently on the lookout for additional and greater technologies to offer our customers.

What volume of traffic do you see on your mobile banking application today?

Since our launch on October 12, 2012, we have had 1,263 customers download our app. Our March report showed a 5.34% increase over the previous month and we can only expect that to rise.

Why did you decide to feature your mobile banking application, instead of a more traditional product offer?  

Well, first off, it’s a new product/service, so we want to create awareness that we have a mobile banking app. We also have a strong focus this year to reach a younger demographic in which this convenience service is appealing, something they desire and frankly expect of their bank.  All banks have the traditional products, but not all offer the convenience services.

How does your emphasis on mobile fit into your wider marketing strategy?

BankNewport as an organization consistently strives to offer the best products and services along with the lastest technology to enhance the banking experience.  Because convenience means different things to different people, banks today must be all things to all customers. We have all of the services available for our current customers and those of the future.

What are your priorities for the next year?

We’re always looking forward to new and improved technologies.  Without divulging any secrets, next year our customers will be able to enjoy mobile alerts, mobile remote deposit, ebills and mobile wallet to name a few.

Since I’ve started writing this article, I’ve also heard an audio advertisement for BankNewport on Pandora. Has your institution launched an unusual or novel marketing campaign recently? If so we’d love to feature you on this blog; contact us at info@andera.com.