Financial institutions are typically timid when anything new comes along. With digital marketing however, they seem to have cast aside their sense of caution and jumped in head first. But there are indications that digital marketing channels arent performing as well as hoped or more likely, financial marketers havent yet learned how to use all these new digital tools wisely. A large portion of money expended on digital channels appears to be wasted.

This is a bit ironic because the primary benefit of digital marketing is supposedly its cost-efficiency. All the data digital marketing channels generate should empower financial institutions with the insight they need to target audiences with pinpoint accuracy and eliminate the waste historically associated with traditional media like newspapers and TV.

One might assume that email, for instance, would be an ideal channel for financial marketers, but that may not be the case. One troubling indicator is that only 81% of bank emails actually reach the intended audience. Were not talking about unopened emails, or unclicked solicitations. Almost 20% of customer emails are blocked, sent to a spam folder or otherwise rejected (e.g., dead addresses). In concrete terms, that means that about one-fifth of the money financial marketers spend on email marketing is wasted. And dont forget: most community-based institutions typically only have email addresses for half their customer base.

The explosion in digital display doesnt look to be paying the dividends that have been promised. More than half of all digital advertising is not viewed at all. One study from research firm Lumen used laptop-mounted eye-tracking sensors found that only 44% of digital display ads receive any views at all. And, of those, only 9% earned more than a one second worth of attention! Only 4% received more than two seconds of engagement. In other words, 90% of digital display advertising is wasted.

Perhaps the most blistering evidence of waste is the low clickthrough rates of online display ads. In the U.S. ? across all formats and placements ? the number of readers clicking a digital ad compared to total impressions averaged a paltry 0.07%. (Editors Note: For comparison, ads on The Financial Brand generate a clickthrough rate 10x greater than the industry average).

There are several reasons that clicks on banner ads are so low. 61% of consumers say they dont want to be interrupted or distracted. 58% claim that banner ads are irrelevant to them. 57% of users report being afraid of receiving spam from advertisers, or of getting a virus.

Reality Check: Financial marketers must do a better job of tailoring ads to their audience, and educating them about web security safeguards. Audience segmentation and personalization of messages must be driven by a strong data analytics strategy.

And an even more troubling issue is ad fraud. More than half of all online ads are not being seen by a human ? a staggering 54%, according to research from comScore ? but these are still being counted as billable impressions. In other words, bots and non-human scripts are being used to deceptively bill advertisers.

A study from the Association of National Advertisers and bot detection company White Ops found that online ad fraud will cost brands $7.2 billion globally in 2016, up 14.3% from the $6.3 billion the company estimated for the year prior. Online media platforms are promising ads will be seen by real live human being, but they arent actually delivering what they promise.

Digital advertising is a new area for many financial marketers ? most of whom admit their inexperience in the space ? which suggests greater degrees of knowledge and diligence is needed to avoid the recklessness and waste thats been so prevalent in the banking industry. The very first tool digital marketers must master (if they havent already) is Google Analytics. When venturing into the digital arena, nothing beats high-quality back-end analytics for determining your return on ad investment. Carefully evaluating each channel leads to a well-considered, cost-effective digital campaign that minimizes waste.

Digital channels dont supplant the ground rules of marketing. Just like traditional media, marketers must match the channel with the right job. For instance, digital display cant be expected to sell products. They are more like billboards that build awareness, convey the brands essence, and nudge consumers down the buying path.

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