In recent years, the advertising community has seen a surge in Retail Media Networks, with the latest trend being the rise of financial media. As the retail media landscape evolves and third-party cookies continue their slow demise, fintech companies are seizing the opportunity to capitalize on their extensive first-party data to create new revenue streams and enhance their advertising capabilities by way of the newly coined Financial Media Networks (FMNs). Numerous new FMNs have launched over the last few months, from Paypal who announced their FMN launching on May 28, 2024, to the recent announcement from Chase Bank of the launch of their FMN aptly named Chase Media Solutions.
As first party-data is pivotal to providing advertisers with unique audiences, FMNs can provide more opportunities than most existing Retail Media Networks (RMNs). Layering their vast data resources with advanced technologies like machine learning (ML) and artificial intelligence (AI) will give FMNs a ad targeting advantages across the buyer journey. This recent growth signifies a significant shift in the ad tech landscape, with fintech poised to become the next frontier for retail media.
Retail media networks have transformed the advertising industry by using first-party data to deliver engaging, targeted ads. These networks are a lucrative business, expected to achieve $140 billion in spending worldwide in 2024. The success of RMNs stems from their ability to use first-party data to offer precise audience targeting, a critical advantage as third-party cookies become obsolete.
Financial institutions, with their rich data sets, see an opportunity to replicate this success. Unlike retailers who only know what customers buy from their stores, fintech firms like banks and payment providers have a comprehensive view of customers' financial transactions across various platforms. This breadth of data allows them to build robust financial media networks, offering advertisers in-depth insights into consumer behavior on a much larger scale.
While the potential of FMNs is enormous, there are lingering challenges to address. Privacy concerns are at the forefront, with fintech companies needing to ensure transparent data usage and robust opt-in mechanisms. However, the depth of their data and existing regulatory frameworks can help mitigate these concerns, fostering trust and compliance with both users and advertisers.
Technology integration is another challenge that fintech companies must address when building their FMN. Implementing advanced ML and AI technologies requires significant investment and expertise. However, the payoff is substantial, offering fintech firms the ability to deliver highly targeted and effective advertising campaigns.
“Commerce and advertising are deeply connected, and we believe that the advertising platform we are building at PayPal will become a must-use marketing channel for merchants big and small” -Diego Scotti, executive vice president and general manager for PayPal’s consumer business and global marketing and communications
For advertisers, FMNs represent a lucrative opportunity. The detailed consumer insights provided by fintech data, combined with advanced analytics around incrementality and attribution, can lead to more effective campaigns and higher conversion rates. Moreover, FMNs can cater to luxury and high-end brands, expanding the reach of these advertisers beyond traditional RMN ecosystems.
PayPal's advanced offers platform uses AI to analyze vast transaction data, generating consumer insights and personalized deals. Merchants pay based on performance rather than impressions or clicks, making PayPal a competitive ad partner.
Chase Offers targets ads based on customers' purchase history, published on Chase's channels. Customers get cash back when they activate offers and make purchases. Brands benefit from acquisition, incremental sales, and a performance-based pricing model.
Klarna's ad arsenal includes in-app ads, CRM, audience extension, programmatic ads, search marketing, affiliate marketing, and a creator program. These tools help 550,000 merchants reach over 100 million users.
These financial media examples demonstrate how fintech companies leverage extensive transaction data and advanced technologies to create effective advertising platforms. Advertisers can utilize these networks for both on-site and off-site advertising across various digital environments, driving engagement and revenue growth appealing to the sophisticated needs of modern advertisers.
Innovative ad technologies are instrumental in helping fintech companies develop and optimize their Financial Media Networks (FMNs). Flexible ad tech partners like Kevel provide the necessary infrastructure and tools to seamlessly integrate ad serving into fintech platforms. Solutions emphasizing scalability, privacy compliance, and user-friendliness enable fintech firms to swiftly enter and compete in the ad market.
Furthermore, technologies that support ML and AI deployment for enhanced ad targeting and personalization are vital for FMNs. These capabilities allow fintech companies to fully utilize their data, delivering tailored advertising solutions that boost engagement and revenue. By partnering with advanced ad tech providers like Kevel, FMNs can unlock new revenue streams and offer advertisers unmatched targeting precision.
The rise of Financial Media Networks marks a significant evolution in the advertising landscape. By adopting the retail media model and integrating advanced technologies like ML and AI, fintech companies are poised to pave the path to the next frontier for retail media. The future of advertising lies in the strategic use of first-party data, and fintech companies are uniquely equipped to drive this change, setting new standards for consumer engagement and ad effectiveness.
With the support of innovative ad tech partners like Kevel, fintech is well positioned to become a major player in the ad tech industry, unlocking new revenue streams and offer advertisers unprecedented targeting capabilities.
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