The good news for financial marketers is that younger consumers appear somewhat less concerned about security than older ones. About half of people under 35 said they are extremely concerned when using the Internet for financial transactions, according to the Conference Board and TNS NFO, vs. 60 percent of those 35-54. Still, the numbers are sizeable enough to warrant attention.

Use Search

Search marketing is a large and growing presence in the toolkit of financial marketers. It makes sense: Mortgages, insurance and investments are among the most-researched products. As a result, there has been strong interest in keyword advertising on search engines.

The search engines are doing all they can to bolster interest; Yahoo! in May 2005 publicly released a study on the role of search marketing in financial decisions, while Google has done a deep study of brokerage search habits.

Use of the internet to research financial products is growing. In a survey conducted for Yahoo! and OgilvyOne, 61 percent of online users said the internet was the primary way they researched bank accounts, and 73 percent cited the internet as a main research source for investments.
 

A separate study by Media-Screen for Google highlights that search usage is particularly high for brokerage research.
 

What this means for marketers is that consumers are going into a financial purchase decision armed with more information than ever before.

However, the brokerage business, particularly the full-service segment, is finding it challenging to assess the possibilities of search. "We've seen adoption from them, but they're trying to figure out how this is going to work and whether this is an acquisition play or a branding play for them," said Google's Jon Kaplan in an interview with eMarketer. One of the issues, according to Kaplan and others, is the need to acquire a customer with enough money to invest, and how to use search to qualify someone.

When it comes to finding search terms that work, the prescription varies by type of financial services product. In Yahoo!'s study, people who searched for credit cards were most likely to use brand terms, such as bank names. People looking for information on deposits or loans were more divided on their term usage. Specific terms, such as "high yield savings account," and general terms, such as "loan" or "banking," were commonly used.

Developing a balanced portfolio of terms will be important for financial search marketers.

Think young
 
The online financial consumer is decidedly younger than the typical financial services consumer, and that has strong implications for the ways companies need to market online.

For younger adults, who are already accustomed to going online to get information about a product or service, the idea of researching that first big financial product acquisition online is no stretch of the imagination.

Online banking, in particular, trends younger. In the Yahoo!/OgilvyOne survey, 72 percent of people under 40 prefer to use the Internet to check balances, vs. 37 percent of those over 40. And 60 percent of U.S. online users ages 28-39 use online banking, according to the Pew Internet & American Life Project.

While security concerns are rising across all age groups, younger people are the least concerned, according to the Conference Board.

The common wisdom has often been to market financial products to older generations, since they are the ones with the money. But reaching out to younger groups has a particular benefit online. These people are just starting to form financial relationships, and their choices are often guided by the research they do online.

Witness Citibank's highly successful iPod promotion, which wasn't overtly aimed at the younger demographic but certainly hit that target.

Citibank in December 2004 began offering a free iPod to consumers who opened a checking account online and paid at least two bills a month online for a year. (Bank One--now part of Chase -- launched a similar promotion in spring 2005.) A Citibank spokeswoman told American Banker in May 2005 that the bank had given away "tens of thousands" of iPods.

Said Allen Schiffenbauer, chief research officer at the Brand Consultancy, in a February 2005 article on the Citibank promotion in Bank Technology News: "The kind of people who would like an iPod are just the kind of people a bank wants as a customer. It's a good match. It's well targeted and well thought out and a very expensive campaign.... It's the demographic all banks hunger for."

Marketing messages "focused on control and empowerment" will resonate best with these younger consumers, Yahoo! and OgilvyOne recommend in their study. In addition to message, marketers need to consider the environment. A look at Nielsen//NetRatings' list of the top 10 places where financial services companies advertised online in April 2005 yields no surprises, if older adults were what these banks were after: finance sites, portals, news, weather. But if the goal is to target younger consumers, the list categories such as music, gaming and entertainment.

Debra Aho Williamson is a senior analyst at eMarketer. This article is drawn from her recent report, Financial Services: Online Marketing and Advertising.