Does native advertising have any future in mobile banking?

Does native advertising have any future in mobile banking?
A new trend in the digital publishing world is a shift toward ‘native advertising.’  Advertisers are beginning to make ads more subtle, blending them into the actual content of the website.  The ads are presented in a way that flows seamlessly with the voice and style their environment.  Sites like Facebook, Twitter, Google, and others have been doing this for a while, but only recently has editorial media adopted the style.  Some predict native ads will dominate digital channels across all industries in 2014. See below for examples from Twitter and Facebook.

Native ads in mobile emphasize minimal disruption in UX

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Source: Facebook iPhone App; Twitter
Unsurprisingly, banner ads have proven to be increasingly ineffective.  The unnatural placement of banner ads makes them all too easy to block or simply ignore, and the flashing lights, noises, ridiculous promises, or distracting mini-games can be extremely annoying.  In mobile apps, where real estate is more limited, native advertising has allowed for a much more natural flow for the marketing (as shown in the figure above), and the effectiveness has been impressive.  A study by IPG Media Labs showed that users looked at native ads 53% more than display ads.  They also were 32% more likely to recommend the product to a friend. Banks can learn important lessons from the way native ads effectively gain the attention of the user while still respecting user experience, especially in mobile app design.  Financial institutions are understandably wary about trying to push anything through mobile that might be considered an annoyance.  Adopting some of the principles of native marketing and integrating them into a cross-selling strategy may be a much more effective route to take. A couple of key takeaways:
  • Native ads don’t disrupt user experience: The key principle of a native approach to advertising is a seamless integration of the advertisement into the user experience.
  • Marketing can be well designed to fit into existing interfaces: Evernote (seen in the figure below) uses this principle to show that a properly design user interface can make ads appear very natural.

Evernote’s UI Allows for Ads While not Sacrificing UX

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Source: Evernote iPhone App
To drive adoption, banks have often been hesitant to heavily push marketing, fearing the disruption in user experience.  User experience is clearly one of the most important aspects of digital channels, but applying some principles of native advertising could enhance sales effectiveness.   Could this be the logical next step for banks with strong mobile adoption and a proven digital strategy?

User Experience Matters

User Experience Matters
Temenos is realizing that customer experience is very important to the banking industry, at least as important as core systems. Given the trend of customers interact with their bank via the Internet or mobile as often as call center or branch, a soup to nuts technology provider needs to provide best in class user experience across all channels. Temenos acquired edge IPK in order to improve their offering in the channels. They’ve invested in the past creating the ARC solution, and will undoubtedly use edge IPK to enhance that offering. This acquisition is somewhat reminiscent of the acquisition of Chordiant by Pega. Chordiant had bank specific technology to help with user experience across multiple channels. Pega was selling their platform into financial services and wanted to improve the offering with more financial services specific content. Both firms realize that customer experience is becoming more and more important as customers interact directly with the banking technology via a myriad of devices.

NACHA Payments 2011 Roundup

NACHA Payments 2011 Roundup
It’s been a busy few weeks. I rounded out a stretch of business travel with a visit to Austin, Texas for the NACHA Payments Conference. Bob Meara and I spent most of the time catching up with our clients and meeting some new and exciting prospects. My first day in Austin was a doozy, as I had a couple of speaking engagements to take care of weaved in between back to back meetings. I started off the day bright and early with a speaking engagement at a breakfast hosted by Fundtech. The topic on the agenda was, Achieving Competitive Advantage With Cash Management User Experience. Those of you familiar with my research know that I spend a lot of time emphasizing the importance of user experience in online banking, and I was happy to bring this message to the group. In the afternoon, I presented at the NACHA Payments conference along with Leslie Klein, Global Head of Marketing for Citi GTS. The topic of our presentation was, Demystifying Social Media: A Call to Action For Banks. The session was very well attended and there were lots of questions from the audience. There was a particular buzz in the room when I stated that I don’t believe banks presently belong on Facebook (more on that later, probably a good topic for a separate blog entry). Overall it was a good conference. The energy was positive and there appeared to be an increase in attendance. I noted an interesting shift regarding conference attendees and topics. Historically, most of the sessions were related to business or corporate banking with emphasis on payments. This year there appeared to be a lot more retail content, with sessions on mobile banking, mobile payments, regulatory issues, etc. There also was quite the focus on healthcare payments with a dedicated healthcare track. All in all it was a good event and I was glad to have made the trip down to Austin. On a personal note, I particularly enjoyed watching the mentalist at the Fiserv booth. Bob Garner has been a fixture at the Fiserv stand for some time now, and I always do my best to steal away and watch him perform for a few minutes. Bob has been able to tell me some pretty uncanny things about myself and my family (with no prior knowledge or prompting), and I have watched him do the same to others. It’s a great show – mind boggling, and highly entertaining. I’m thinking of recruiting him to be a Celent analyst – his IT spending predictions and forecasts would be spot on : ) Next stop on my conference calendar is Finovate Spring in San Francisco. Hope to see you there!