When one door closes, another door opens. This has never been more true in the case of cookie deprecation (yes, it’s still happening), and the deluge of ad dollars waiting to be spent on cookieless first-party purchase data. Retailers were first to capitalize on the demand with retail media networks (RMNs), but more recently, financial institutions have also seen the massive opportunity in their troves of transaction data.
Traditional banks such as JPMorgan Chase and more modern fintechs from PayPal to Klarna are spinning up their offerings into a new category of ad platform called Financial Media Networks (FMNs). According to the latest eMarketer predictions, FMN spending will quadruple by 2026, reaching $1.5 billion in ad spend. Where retailers have deep data on spending only within their own walls, FMNs have broad spending data across the entire retail landscape, unlocking opportunities for verticals that were previously underserved by RMNs, such as insurance, automotive, and quick-service dining.
Like RMNs, what first attracts advertisers to FMNs is their ability to target and measure sales outcomes using deterministic, cookieless purchase data. In the era of signal loss, this has multiple benefits. Higher quality data for targeting based on real-world purchases, with the ability to use that same data for closed-loop measurement. However, there are a few major challenges standing in the way. If not resolved, it means stunted growth and less utility for brands.
Unlike RMNs, FMNs are not siloed within one retailer’s walls. They have access to purchase data across the entire consumer spending landscape. For instance, marketers can leverage FMN transaction data to target and measure shoppers from an entire category, such as Home Depot and Lowes, instead of just Home Depot.
Yet, there is one major gap in most FMN offerings: product-level data. For many brands, this is a gap they’re looking to fill, and lack of product-level data could be a non-starter. Continuing with the hardware store example, a marketer at Sherwin Williams can see ad exposures and subsequent sales at Lowes and Home Depot, but they can't tell if a consumer specifically bought a Sherwin Williams product.
There are two possible routes to gaining product-level data. One is partnering with retailers or other data owners, yet this could be an uphill battle considering FMNs could be in direct competition with RMNs. The next option, which many banks are already attempting, is building shopping experiences into their apps.
How much time do you spend in your banking app? For most people, the answer is likely not much. While banking apps have a steady stream of passive purchase data, capturing eyeballs on an hourly basis is not their forte. Today’s consumers typically have a very winding path to purchase, and trying to complete a purchase in your banking app, no matter how seamless, does not jive with typical consumer behavior that involves research, comparisons, and deal seeking. “Many of these credit card networks don’t have the critical mass of traffic, they have a great data signal,” said Seth Dallaire, chief revenue officer of Walmart, in AdAge.
Another option for expanding reach is off-site advertising, using consumer data for targeting and measurement across the web. This presents a significant privacy challenge – especially for banks who already have lofty privacy rules. Financial institutions would potentially need to ask consumers to opt-in to sharing their transaction history for the purposes of advertising, which is not a relationship traditionally held between consumers and banks. Following the banking crisis earlier this year, distrust of banks is high, and explicit data sharing could be an unrealistic expectation.
Additionally, the Consumer Financial Protection Bureau (CFPB), which was established in reaction to the 2008 Financial Crisis, has a major remit to ensure consumer transaction data is protected from bad actors and industry misuse. There are several laws pending approval, and the upcoming election will likely have a major influence on the future of FMNs. FMNs undoubtedly have an opportunity, but significantly more challenges standing in their way than others in their competitive set.
