Social media engagementFinancial sector analysis

Part OneMay 2012

Social media engagement:

Introduction

Social media has become a key part of an ever-changing network of communication; in a heavily regulated market, how can you afford not to listen to your customers in this space? We investigated the current landscape and would like to share this report of our findings and insights, together with a commentary on what Financial Services brands are doing right now.

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Contents03 Foreword

04 Where does social media sit in the UK?

05 What’s best for your brand?

06 Relevance to the UK Financial Services sector

07 What are you waiting for?

08 Getting going

09 When to jump in

10 Who’s doing what

12 In summary

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Social Media Engagement – part one © Studio Six 2012

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ForewordWelcome to the first Studio Six social engagement report. Social networking has changed the way we communicate in recent years; rapid communication direct with target audiences is now the norm. At Studio Six we have a variety of clients who see social media as a must-have – using it creatively on a campaign by campaign basis, employing a range of marketing disciplines from promotions and PR to advertising and research.

Other clients including many Financial Services (FS) companies have not yet seized the opportunities presented by social media for a range of reasons. FS is sometimes perceived as less able to adapt to new technology and social media is no exception. It poses a host of questions which do not always have straightforward answers. What is the best way to manage online reputation? How do you even begin to integrate social media into the marketing mix? How do you get started? How do you measure success and value?

There is, without doubt, an appetite in the FS sector for social media marketing. We hear this a lot: “We know we should be doing something, but we’re not sure what!”. Changes in job roles and new social media titles being introduced means there is often confusion as to who owns social media – marketing, digital, brand, PR…everyone?

For those brands that are fully immersed in social media marketing it is now a way of life, simply another comms channel offering strong and measurable results when carried out to best effect, but for many it is still a new area and there is no hard and fast, right or wrong solution – it’s a constantly evolving and changing medium.

We would be interested in any thoughts you have on any of our commentary offered in this report – it’s only through open communication, transparency in sharing best practice and pushing the boundaries of creativity that we can really make the most of social media.

John Argent Managing Director, Studio Six john@studio6.co.uk

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Where does social media sit in the UK?Social media has been a growth communications channel for several years now. In the UK, over the past two to three years, it has grown in terms of its influence and the possibilities it offers brands and companies for direct, engaging and compelling communication. However, it has also witnessed an increasingly keen self-publishing community, not just through the rise of the blogger but social media channels offer a means to directly, and publicly, contact a company about personal experiences, air views and grab attention in a way that was not previously possible. As a consequence, effectively managing and promoting engagement is the key to ensuring a strong online brand profile.

Overview of the main networks dominating the UK social media scene:

In terms of user numbers Facebook is by far the biggest and, for the consumer market, arguably the most influential:

• 845 million monthly active users (as at 31 December 2011)

• Over 30 million active UK users • It’s available in 70 languages• On average 30 billion pieces of new

content are posted every month.

Twitter’s influence has grown exponentially since its launch in 2006; it is a key news sharing and broadcasting channel for individuals and the media.

• 5.9% Twitter traffic is from the UK• It reached more than 150 million

tweets per day in 2011• 55% of active users access the network

through their mobile.

LinkedIn started in 2003 as a recruitment tool and it quickly developed into the most popular business networking tool.

• 4 million UK users• 30% of the community works in

companies under 1000 employees• 41% work in firms of over 10,000 staff• 41% are aged 35–54.

YouTube is the world’s biggest video sharing platform. It was created in 2005 by five former PayPal executives and was acquired by Google in November 2006. It is localised in 39 countries and available in 54 languages.

• 4 billion videos are viewed everyday • 800 million unique users each month• Facebook users watch the equivalent of

five years’ worth of video every day! • 700 YouTube video links are shared every

minute on Twitter• 70% of YouTube traffic is outside the US.

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Google+ Content sharing with in-depth comment threads being what users are actively looking for. Brands can be quite targeted with their marketing.

Pinterest A virtual pinboard; connect with others and share (‘pin’) your interests visually. Still in its infancy but holds huge potential for internet marketing.

YouTube A way to boost your brand image, often with helpful ‘how to’ content. More engaging and memorable than a website for ads and viral campaigns.

LinkedIn A professional networking channel – serious news and comment, a place to showcase individual team credentials.

Twitter The home of ‘microblogging’. Follow and be followed by individuals and organisations sharing a mixture of serious news and exciting announcements.

Facebook A slice of internal culture and personality. Facebook’s recent Timeline introduction for brand pages is definitely geared towards allowing brands to craft and communicate an engaging personality.

What’s best for your brand?

There are niche social networks which are springing up all the time, targeting a specific interest group or audience (IFAonline.co.uk is a good example of a strong niche network in the FS sector). New competitor platforms to rival the primary channels are also being launched, the most notable of these is Google+ which was made open to UK users in October 2011. It is mostly dominated by US-based independent Financial Services firms.

The blogger community is an increasingly influential community and there is a proliferation of bookmarking sites available (StumbleUpon, Delicious, Reddit, etc). The rise of mobile access to social networks has been a key development in recent years and, with the growth of the app industry, many companies are seeing more opportunities than ever before for direct customer and client engagement.

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Relevance to the UK Financial Services sector• The much-discussed Retail Distribution Review (RDR)

which will come into force in the UK in January 2013 has ramifications for how Independent Financial Advisors (IFAs) source and manage their business interests and leads. Social media is perfectly placed to offer a strong contact channel between IFAs and their prospects

• Consumer retail brands (for example, banks and insurers) are already finding that social media channels present both opportunities and challenges for dealing directly with customers and for identifying and acquiring potential business

• Much focus on social media has been directed towards the consumer sector and, while it may have been a more natural tool for the consumer brands to embrace, the rise of B2B social media marketing should not be ignored. Business brands are increasingly looking to social networks and not just to the natural business social channel Linkedin. Facebook’s influence in the business sector, particularly for targeting SMEs is growing and Google+ is sure to follow suit.

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What are you waiting for?Compliance in a regulated world Financial services firms fall into one of two camps when it comes to compliance issues and social media. They have either decided to invest, be proactive and engage with social channels, applying the offline compliance regulations to their activity; or they have stayed well clear. In a world where the ramifications for getting it wrong are widespread, and heavy, many companies who have so far gone down the ‘wait and do nothing’ route are now realising that this is not an option. But getting started can be the hardest part of taking the plunge into the social media space.

The FSA in the UK issued its ‘Financial Promotions Using New Media’ guidelines in June 2010 which provided advice on social media usage. The body states it will continue to monitor the use of ‘new’ media, advising members that they ‘must ensure that any financial promotion is compliant with all the relevant rules and have the systems in place to deliver this’. This was the same year that US FINRA (Financial Industry Regulatory Authority) published its first social media guideline document which led to a notable increase in social engagement by major banks and financial firms in the US.

While social media has placed a new set of demands on the sector, 2012 should be the year where we see more financial brands adapt and develop their communications activity to include and integrate social platforms.

Regulatory compliance should no longer be seen as an excuse The checklist for establishing and maintaining a presence is already in place: any financial-related messages, claims and promotions are already subject to scrutiny under advertising guidelines; individuals are required to undergo verification before any advice is offered and stringent controls over data handling already govern much of how companies operate. If companies can meet these existing demands they should have the confidence to take the next step and see where social media can add value to their existing communications.

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Getting going From a Financial Services perspective social media represents a direct-to-consumer/client channel which, used in the right way, can offer fast, cost effective and tangible commercial benefit. Here is our four-step process in integrating social engagement into a financial services-based business:

Strategic planningDevelop a digital and social media strategy in line with your business strategy. Integrate social activity into existing campaigns and consider product propositions for social platforms. Start listening!1

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4 Content planning

Surprisingly, this is often the element that is neglected by brands – a great idea and campaign concept will take on a life of its own once in the social space. Creating a robust content plan which is responsive and flexible to online dialogue is vital. Getting the right resource and team in place is crucial in order to handle response.

Compliance considerations

Regulatory compliance is often cited as a barrier to entry for social media marketing. In fact, while we stress the importance of compliance, adequate testing and audits, together with effective, regular monitoring of social media activity can significantly reduce any risk.

Competitor analysisAs we will see in Part Two of this report, in some Financial Services sectors there is an increasing amount of ‘noise’. Identifying, assessing, and analysing competitor activity regularly can help you avoid the proliferation of copycat activity that exists online as this could drown your activity out.

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When to jump in?At no point do we advocate participation for participation’s sake. There has been a knee-jerk reaction in many FMCG sectors to jump on the band wagon – creating multiple Twitter handles and company profiles on LinkedIn, Facebook, et al. The net result can be a portfolio of poorly managed, monitored and irrelevant social media profiles. As with any marketing activity, intelligence and research is the vital starting point, as is looking at the target market. Surprisingly not all brands audit social media network usage, test relevance for their brand, nor observe engagement behaviour before committing to social media campaign activity.

The social space has naturally been dominated by consumer brand activity, however that landscape is fast changing and B2B spending on interactive online marketing is forecast to double in the next five years (source: mashable.com).

It is important to note that while a financial brand may decide that social networks are not relevant, the public may have other ideas. It follows that, irrespective of plans (or not) for proactive engagement, monitoring and listening to chatter on the networks is no longer a choice – it is mandatory for both consumer and B2B brands.

Cost £££With tightening budgets (not to mention the focus that the financial sector – notably the banking community has been subjected to throughout the recession), the cost for new ventures is and continues to be a major stumbling block.

That said, cost is perhaps the least viable of reasons for brands to shy away from engagement in social media marketing – partly because, if properly planned, researched and executed, social media marketing can actually present a positive cost benefit against traditional above the line/promotional campaigns. Social media activity has the ability to tangibly enhance the above the line activity, as well as reinforce the messaging in an engaging media.

As with any emergent sector, social media is subject to an ever increasing range of products and services designed to provide help and support to companies looking for solutions. And this is where cost can be fairly viewed as a barrier to entry. There is a proliferation of effective (but often costly) monitoring services, which, although they provide strong data and intelligence on brands online, can mean that there is not a great deal left over from the pot (which may also have

been put together from other marketing budgets) to then move into campaign development and implementation. The answer may be to harness or invest in in-house resources and training.

Skills Whether using agency or in-house support, much of the (FS) social media commentary, research and analysis is still generated across the pond in the US. This provides a challenge for UK FS firms who are faced with regulatory pressure to access credible experts and sources which are relevant not just to the UK but to their specific sector.

The agency community is fast up-skilling and with increased recruitment investment in-house into senior strategic social

media roles – credible experts are emerging but this relatively new marketing discipline still has some

way to go.

One area where companies can access relevant support is through training – the social media sector lends itself very well to free, online assets which can be accessed by anyone with an interest and it’s worth keeping an eye out for webinars offered by

many media titles. Trade bodies in the marketing communications field offer many

different courses – the impact and quality of these cannot be guaranteed but it is certainly worth

committing some of the training budget to up-skilling in-house teams as well as tapping into agency knowledge.

Reputation – being comfortable with the lack of controlThis perhaps represents the biggest cultural shift required by the Financial Services sector – one where detail, control and close management of all communications has been a way of life. Those days are gone and the ability to exert absolute control over external messages has ceased to exist. To view this as a reason not be in the social space is a mistake. Your public – whether consumer or business audience – can now have their say whether or not you are listening. Brands that have not created their own profiles will find that exerting any influence is nigh-on impossible if they have not established their own online identity.

“only 61% of brands directly respond

to consumer messages on Twitter and 55% of companies

respond to fans who have posted on company pages”

Mr Youth, December 2011

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Who’s doing what? It’s a common misconception to think all brands are using social media – sometimes surprisingly, the most likely brands are not necessarily active in the social space or, some are active in the US, but not the UK (ING is a good example of this with a great US presence but notable by its absence in the UK). Once you have figured out the way ahead, the limitations are almost endless in terms of how creatively you apply your social media strategy.

Looking at some of the key sectors which make up Financial Services, here is our pick of examples from social media campaigns in the world of banking, wealth management, investments and insurance. Part Two of our series investigates deeper into these sectors.

Aviva http://www.facebook.com/Aviva

The insurance giant has been one of the most active UK-based insurance firms to get involved in the social space. They have launched several campaign-based initiatives which include social media branded environments as well as integration with ATL activity.

The group’s media relations activity around their initiatives prompted some strong coverage in 2011. The Healthy Cheer Facebook campaign which asked users to nominate their friends on the branded Facebook page who were engaging in health activities achieved strong attention from the marketing press. Other Facebook activity by Aviva focuses on Ollie’s Garage to promote Aviva’s savings on insurance. There is also some good corporate social responsibility content promoting the company’s work in the charitable sector.

Aviva also has a strong YouTube presence with “You are the big picture” – www.youtube.com/aviva

Coutts http://www.coutts.com/

The private banking and investment firm may not be an obvious choice for a brand embracing what social media has to offer when you consider its niche, high net worth customer profile. However, the company has successfully integrated the direct communication elements that social media offers with a significant and influential following on its active Twitter profile @CouttsandCo, a less active but well designed and set up YouTube channel, and a growing interest in its company Facebook page.

This is a great example of how a financial brand is utilising what social media has to offer, not over complicating it but being consistent with its message and true to its brand, allowing stakeholders to interact with them in whichever way suits them. Presumably the traditional Coutts customer may not be accessing the bank through these channels but with the need to constantly evolve to stay relevant, no matter how established your brand, Coutts is a good example to watch, follow and like.

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HSBC / First Direct – social media news room http://www.newsroom.firstdirect.com/

A user-friendly, bespoke platform that sits on the main First Direct site. It’s straightforward and original and offers a good, central place to get access to the latest news about the brand. Primarily targeted at journalists and bloggers but with consumers increasingly comfortable with self-publishing opinion in their spare time, the ‘access all areas’ nature of this site works very well. Acting as an aggregator for news and discussion from a variety of sources, the newsroom pulls in content from YouTube, Flickr and Twitter. Simple but effective.

RBS Group

Utilising the principal of social media – canvassing and actively inviting public opinion is what RBS Group is doing with the relatively recent launch announcement (Marketing, 17 Nov 2011) of its social CRM initiative. The bank is currently trialing ‘Helpful Live’. Designed to proactively seek consumer opinions on its brand, products and anything else for that matter, this initiative hasn’t yet been expanded to social media platforms but that is surely the natural next step? Although, to date, neither Nat West nor RBS have been particularly prolific on Facebook, with Wikipedia pages dominating the search results

– so it may be some time before we see active communities being built through this channel.

Lloyds Banking Group

The UK household banking brand is engaging at a basic level currently; mainly using Twitter as a customer service tool, (which has been very successful for the bank with an average of 13 tweets daily), Facebook for one general fun app “Lloyds TSB Me”, but not for anything more creative; and YouTube as an extension of the website. A good start but social media offers so much more potential for a brand of this stature.

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So, in summary…In the UK things seem sporadic in this sector to say the least. FS brands haven’t really got going with social media in a truly meaningful way but there is huge potential to take the initiative and lead from the front.

There are a few social media campaigns such as Aviva, Ollie’s Garage and banks like Barclays are leading the way with new innovative mobile-friendly apps. However, there seems to be a disjointed approach with some brands ‘dipping their toe’ but not really following through with any confidence.

Our next report in June 2012 delves deeper into the different banking sectors and explores how each sector – Banking, Insurance and Wealth Management – is currently using social media channels, and how this varies within each.

We hope this has been useful or interesting. Please contact us if you would like to discuss any of the points raised.

Look out for the next instalment of this

Social Media Engagement sector analysis coming soon!

…if you can’t wait, contact Ruth Clarke

today!

Colkin House, 16 Oakfield Road, Clifton, Bristol BS8 2AP

Call 0117 915 0066 Click Studio6.co.uk

Or join us on twitterand LinkedIn

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