Bank on it: Financial media networks are the next big opportunity
Opinion
There is real power in what financial institutions know about their customers and serious potential in how this can be used to benefit shoppers, especially in conjunction with retail media networks.
Do you have well-managed customer data, a desire for stronger margins and a bit of operating leverage? Consider yourself a media owner.
Nothing has made that more evident than the gold rush in the retail sector in recent years and retail media has continued to garner excitement and investment. GroupM forecast global retail media revenue to have reached $119.4bn in 2023, expecting revenue by 2028 to exceed that of linear TV and connected TV combined.
In the UK, supermarkets like Tesco have paved the way in offering first-party data to advertisers through its Clubcard loyalty system introduced almost three decades ago. Since then, many other retailers have followed suit. Meanwhile, Boots launched a media group, providing a full-service offering to its brand partners — this closely echos trends already seen in the US from the likes of Walmart, Target and Kroger.
Even convenience retailers like Co-op launched networks, proving that they, too, can become media owners and compete with the big players in this space.
As retail media networks (RMNs) grow and the opportunity is realised, it’s clear that retail loyalty programmes aren’t the only makings for media.
The financial industry can pivot its carefully managed consumer-level purchase data to customer insight of value to others, particularly in the advertising world. Already, first movers are making strides to evolve a meaningful media proposition.
One thing we know is that data is what makes the new advertising world go round, but differentiation of how that data is applied will determine the winners in this new space of financial media networks (FMNs).
The maturation of FMNs
In April, Chase Media Solutions launched as a digital media business to connect brand partners with first-party financial data from the bank’s millions of customers. Similarly, European challenger bank Revolut announced it is looking to tap into its data and become a media business.
Many other banks that have historically outsourced their ”offers” are reconsidering contracts and what it would take to manage in-house and sell directly.
We’re on the cusp of an explosion in this space, but with such an opportunity also comes the challenging responsibility to maximise brand and consumer benefit. Our relationship as consumers with our bank, credit cards and payment apps is much deeper and more trusted. Not only are there legal obligations to maintain, but brands must also answer consumers’ question: why do you have the right to use my data?
With so many companies launching networks, another question will be: do we need another player? FMNs need to prove to buyers why their data matters and what is unique about their inventory, brand power and, most importantly, performance.
They must build an offering that brings value to the customer. At the same time, they must think outside traditional display ads and offers, and design a new playbook built on valuable experiences and unique assets to potentially serve new buyers.
Connection between networks
While FMNs’ primary advertising audiences differ from RMNs, there is a commonality: data that delivers conversion.
The potential for collaboration is just waiting to be unlocked. With many retailers having more demand than inventory they’re willing to monetise on their owned platforms, they are looking more to offsite partners. And while this has initially been a boon to all the major media platforms, RMNs continue to look for innovation and more lucrative and high-performance partners.
There is real power in what financial institutions know about their customers and serious potential in how this can be used to benefit the busy lives of shoppers. Streamlining connected retail experiences that ease the number of plans, orders and decisions consumers have to make might be worth sharing data for.
Say, for instance, I want to go on vacation and purchase a flight with my credit card. In an ideal world, this could then trigger a pick-up of an Uber at the airport, based on my arrival time. From there, a grocery order automatically arrives at the house that I’ve just booked via Airbnb — and so on. Help me focus on what matters to me — time with my family and friends — and you’re welcome to have my personal data.
You can quickly begin to see how the sharing of first-party data between relevant partners could be a game-changer for future consumers. Banks already collaborate on behalf of customers around safety and fraud prevention. So, with these connections in place, it’s just a matter of understanding how you could provide more value to the customer.
Customer first: inside and out
It will be critically important to build FMN operating models that are customer-centric. As an FMN, you carry a higher responsibility for customer experience both morally and legally.
The side benefit? Launching an FMN to monetise your owned websites, apps, CRM communications and more sets a direct return on investment (ROI) baseline for your own marketing to compete with, upping your game in how messages can be relevant and break through for cross-selling of your products or driving customer retention.
This laser focus on ROI has been a priority for many marketers in recent years and, as many are also the media network owners in their companies, they now have the ability to tell the ROI story from both a direct revenue and marketing delivered perspective.
The optimisation of offers tailored to the customer is table stakes and we’ve found that those who invest with media in mind tend to improve overall experience.
So, with more businesses and sectors emerging in the media space every day, and buyers investigating the opportunities they bring, we are on the cusp of a vastly different — yet powerful — media landscape that can revolutionise customer experience and transform growth potential.
Donna Sharp is managing director at MediaLink