As financial services take marketing in-house, their agencies scramble to keep up
As financial companies take their PR and advertising in-house, agencies that focus on finance are rushing to keep up.
The finance industry’s embrace of in-house marketing cuts across categories, with established brands like Prudential, JPMorgan Chase and Nationwide as well as fintech startups like SoFi, Stash and Wealthsimple having created in-house marketing and content arms.
These companies share other industries’ reasons for taking their marketing in-house. They want to cut marketing costs, release products faster and have marketers and product developers work closely, using their wealth of customer data. In-house structures also mitigate concerns with agency turnover. For financial companies in particular, doing their marketing in-house makes it easier to take advantage of complex subject-matter and compliance expertise. Financial tech startups often are moving at breakneck speed, and it takes too much time to bring on a traditional outside agency.
“The inefficiency of agencies is pretty well known by [finance] entrepreneurs,” said Cory Cruser, partner of experience innovation at Lippincott, an agency with financial services clients. “The CEO of one digital bank I was working to design stated it perfectly: ‘I used to be an agency guy — and I never want to hire an agency again. I just want the people I like from the agency.'”
If you can’t beat ’em…
Traditional agencies of record have carte blanche on all things creative and programmatic, but agencies are moving to consultancy models to keep pace. According to a recent RWS/US survey, 35 percent of 115 agencies surveyed said a majority of their assignments are project-based; for 16 percent, over 80 percent of their work is project-based.
At New York-based Vested, a 3-year-old agency whose clients include Morgan Stanley, Peerstreet and Elevate, president Binna Kim said in-house agencies are great for a company with enough funding and a supportive culture, but not all companies have that. And for companies with in-house shops, agencies can advise them on overall strategy.
“Institutions and fintech companies are looking for more than just a PR agency or graphic design or search agency — they’re looking for creative ways to solve business problems,” Kim said. “‘I’m going to do just this work within this size of retainer for the client is not as effective as ‘We’re going to be a fluid, consulting firm, and depending on who we’re trying to reach, we’re going to put together the right mix of channels to accomplish that goal.”
Project-based models also let agencies experiment with new models. Bevel, established last year, does PR for startups like Acorns, BitPesa and investment firms like Greycroft and Fine Day Ventures. Jessica Schaefer, Bevel’s CEO, said since it’s not always practical for an early-stage company to create an in-house marketing team. Bevel embeds employees inside clients’ firms. Schaefer herself serves as chief communications officer at Acorns while working on other client accounts.
“For a lot of these companies, their end goal is some sort of exit strategy; they don’t necessarily need to have a full-time communications person,” she said. “It’s extremely important to have access to company data and also to understand the vision and company strategy and leverage PR to help drive strategic goals.”
As for revenue models, Schaefer said that if an early-stage startup isn’t cash-flow positive, the agency can take equity in the startup, which lets the agency become more vested in its success.
Hire financial experts
Other agencies, such as Boston-based Back Bay Communications, are trying to stay relevant to financial services companies by recruiting staff who don’t have traditional PR background, including those with finance expertise.
“We have an eclectic mix of people, less than half of which worked in PR. People have degrees in ancient history, international relations and financial services. We have a number of former journalists as well,” said Bill Haynes, Back Bay’s CEO.
Focus on the stalwarts
As upstart firms take marketing in-house, one area of opportunity for agencies is to focus on traditional financial services. Agencies can help legacy institutions modernize and update their images to appear more consumer-friendly and tech-savvy.
“The real place for agencies to continue to be valuable is with the traditional banks — helping them realize more meaningful fintech-like value propositions,” said Cruser. “Most of my time these days is spent helping traditional financial service institutions deliver value propositions that compete, or ward off, fintech. This is a new way of thinking for many traditional banks.”
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