Banks spend big on affiliate marketing, reveals SMI

Pippa Chambers
By Pippa Chambers | 4 December 2017

One of the largest areas of ad spend growth for the big four banks is affiliate marketing, according to figures from a new Standard Media Index (SMI) data hub.

The findings were revealed after advertising data group SMI created a bespoke industry database for Australia’s four pillar banks - ANZ, CBA, NAB and Westpac.

SMI, which uses advertising expenditure data sourced from media agency payment systems, says the “world-first database” shows the aggregate digital ad spend of these banks for the first time.

When looking digital media spend it found that spend in the affiliate marketing sector had grown to 14.1% of the banks’ digital ad spend in 2017, up from 11.7% in CY2015. This was mostly through comparison websites.

In the first quarter of 2017 the affiliate marketing slice for the banks grew as spending remained stable, while expenditure in other sectors fell.

Until last year there was no official industry guidelines for the affiliate marketing/performance marketing sector in Australia. As a result, Interactive Advertising Bureau (IAB) Australia’s Affiliate Marketing Working Group published the first Affiliate Industry handbook for the Australian market in October last year.

Speaking to AdNews, MD Asia-Pacific at performance marketing business Rakuten Marketing, Anthony Capano, says the finance industry were among the early adopters of affiliate marketing in Australia.

“We’re now seeing a trend where brands in the financial sector are looking for innovation, better optimisation, and working more collaboratively with publishers to drive cost effective customer acquisition,” Capano says.

“This is a trend we are seeing across the entire affiliate marketing industry, which has had phenomenal growth in 2017, with more retail, travel, telco and insurance brands turning to the affiliate marketing channel."

Capano adds that it’s great to see the trend continue and says affiliate is a channel that typically drives the highest return on ad spend for advertisers.

See: Performance Marketing 101.

SMI AU/NZ MD Jane Schulze said the lack of digital transparency was a large issue for the banks given half their advertising budgets are now allocated to digital media.

“As there was no alternative, the banks were relying on highly inaccurate estimates of their digital ad spend. But as anyone in the industry knows, it’s almost impossible to gain any level of accuracy when estimating digital ad spend as you just don’t know from which pipe the advertising came, nor the costs involved,’’ she said.

“But by collating the banks’ actual data in a highly secure fashion, we were able to deliver an interactive database which shows them exactly where the industry has been spending its Digital ad dollars, and to show that split further across key marketing divisions.”

The new SMI banking hub means the big four now have their industry’s full digital media ad spend history for all digital sectors. This includes search, social media, programmatic, content sites and video sites – as far back as 2008, and each sector’s ad spend can be split further into key ad formats, such as display and online video.

As another example, the data shows that while the four banks grew their combined ad spend on digital media by 5.8% in CY2016, by the first quarter of 2017 the demand reduced significantly with the Q1 2017 total back 9.0% from the same quarter in 2016.

See: Ad spend crashes as retailers stockpile budgets to fend off Amazon

The banks’ actual spend data shows this was mostly due to a large 33% quarter-on-quarter fall in ad bookings to the search market (resulting in its share of bank ad spend falling to 20.2%), with the only growth in the quarter coming from the smaller ad Exchanges and social sites digital sectors.

SMI also worked with the banks to segment their ad spend into their own industry categories: brand/sponsorship, consumer banking, business banking and institutional banking.

Schulze says this private database, which is only accessible by the banks and their media agencies, creates a foundation for further data development as SMI could now further split the data by product-based campaigns, such as credit cards or home loans.

“Many high value industries grapple with a lack of transparency in the media market, and SMI has committed itself to solving this issue in myriad ways,” Schulze says.

She says some of the banks are now also keen to see the industry’s actual ad spend for all major media such as total TV, total radio, total outdoor etc and it's now working to deliver that.

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