Emerging TechnologyMobileBank of America’s Lou Paskalis on mobile: think marketing not advertising

Bank of America's Lou Paskalis on mobile: think marketing not advertising

“The old-world rules of reach, frequency and scale don’t work anymore. The new world is about engagement, value exchange and utility-based marketing.”

When you are targeting individual customers with relevant messages at the right time on mobile (or any other digital platform) that isn’t advertising, it is engagement marketing.

In the age of one-to-one marketing there is no excuse for rude, interruptive, irrelevant advertising, particularly on such a personal device as a mobile phone, so it’s not surprising that we are seeing a rise in the use of ad blocking on mobile devices.

That’s why Lou Paskalis, senior vice president; enterprise media executive at Bank of America believes advertising, as we know it, is over and marketing is having a renaissance.

It doesn’t bother him one bit that he’s doing the interview sat in the foyer of the Interactive Advertising Bureau (IAB) conference at Mobile World Congress (MWC).

How important is digital and mobile marketing in Bank of America’s world?

As an industry, we are experiencing a fundamental shift from an advertising era to a marketing era. For too long, consumers have had to endure ads in return for access to content.

Now due to the proliferation of choice and technology they don’t have to endure those ads. And we as marketers need to recognize that we need to engage them differently.


We need to understand what’s on their mind and instead of disrupting an idea we need to join in with that thought. We need to add value to what they’re experiencing instead of trying to divert their attention to something else.

This is the renaissance of marketing. We are reinventing how we encourage consumers to try new things and to enter a relationship with our brand.

The old-world rules of reach, frequency and scale don’t work anymore. The new world is about engagement, value exchange and utility-based marketing. Content is no longer about me the brand marketer, but is focused on the needs and interests of the consumer. 

What has brought this change about?

It is multiple things. It started off with the confluence of multiple channels. For a few years we’ve been talking about first screen and second screen, for example, how a person uses a mobile device while they are watching TV.

Then there’s ad skipping. Ad skipping is a real problem for the industry, because we have done things that are invasive, disruptive, and impolite, particularly on mobile devices. This is a very personal device and consumers are like: I don’t want these ads.

It’s also consumer expectations. The bar is no longer static in terms of consumer expectations. In the past it was: you have to endure the ads to get the content. Now the consumer rightfully demands: if you want my attention, then earn it.

Give me something back of value. Know the context in which you are reaching me. Give me something to use there, don’t just bark your product at me, contextualize it as a solution for what I need, or I am doing or what I might be doing.

The consumer is also becoming less concerned about: “Big Brother is watching”. Millward Brown reports that 49% of consumers aged 29 to 54 would rather marketers tracked their activities online and provide more relevant ad choices – up 10 points from the last time they did that survey.  What will that survey look like in a year or two? A majority.

So now the question is: how do we build on the consumer willingness to enter a value exchange, without exploiting it?

This mobile device is a relationship device; a personal device; a relevant device and a brand proposition reappraisal device.

If your brand doesn’t work on this device as well as it does on other applications, someone is already disintermediating you from you customer set, you just don’t know it yet.

BOA mobile

So what does that mean for marketing strategy?

You need to apply a customer relationship management [CRM] mind set to the digital environment. Plenty of marketers have CRM on the website, in their call centers and other owned touchpoints.

My hypothesis is that we use the wealth of available third-party data to take CRM into third-party environments, such as ESPN.com and Facebook.

In the post advertising era, marketers have to compete for relevance to get attention. A great way to get attention is to tell stories in chapters. Facebook call this the atomization of content.

I want to be able to serve you the first chapter in one environment and chapter two in another environment. Is that creepy? Maybe, but I don’t think it will be long before consumers get used to it even come to expect it.

So this will require different algorithms, relationship marketing, understanding and EQ.

Would you like to explain EQ?

EQ is emotional quotient. So if your body language tells me you weren’t interested, I would stop talking, but because you continue to write my EQ tells me you are interested and so I carry on talking.

The challenge is how we do EQ at scale. With digital marketing when I can’t see your face, what are the signal sets that I can use? I have no idea. But I know that we need to figure that out, because this is the route to sustainable marketing.

Sustainable marketing is not about how many dollars you have to spend to outshout your competitors.

Those days are done. I can get more done with fewer dollars if I understand the consumer’s need state, mindset, motivation and EQ.

And what does this mean for your business?

Fundamentally it means we have different ways to connect with consumers. Bank of America has nine core product lines: home loans, car loans, chequing, saving, credit cards, wealth management, retirement, investment. What we want is to have a lifetime relationship with customers and provide those services as needed.

Now I have different ways to contextualize them. I have different signals to say: hey, I should be talking to this customer about this. We need to position these as solutions when they are going through a particular life stage, like first home or first child.

This is a similar concept to what we did with probabilistic targeting, but now it’s a one-to-one thing, it’s a very precise thing and that is exciting. It’s a message popping up at exactly the point the consumer needs some content.

Whereas probabilistic is maybe they are in the market at this time, because they fall into a broad category of target consumers.

But isn’t that just contextualized advertising?

In a probabilistic world a couple of things don’t work well: I can’t sequence my messaging to you and I can’t tailor specific things like geography or life style. But in a deterministic world I am advertising to a market of one.

Is that advertising? No, I would say that is marketing. It’s no different to being at the fruit counter in a store and the assistant discussing oranges, apples and bananas with you. That’s not advertising, it’s marketing engagement.

So how possible is it to do this today?

So what is required is some introspection on the part of the marketer, because so much of the investment today is based on transaction outcomes: did this banner ad make a sale?

What we need to measure is: did this interaction increase the strength of the relationship between brand and customer.

It is moving from transaction value to lifetime value of the customer.

And how do you measure that?

In a digital world it is simple. You divide your world into segments based on homogenous need state. These segments are narrower than traditionally, so you might have 18 segments rather than four or five.

Then you assess the total segment value based on product lines you would sell to that segment. Determine what your current share is and how you would grow it.

You can correlate brand relevance or brand saliency – i.e. here’s a brand for someone like me – against that segment.

Using traditional market research as a measure you can see that as you brand goes up, the total value of the segment goes up proportionally. It’s quite a simple model. So we are measuring probabilistically, but we are marketing deterministically.

The relationship should be deterministic, it should be one-to-one. We to say this segment is responding to our stimuli, and our share of their business is going up disproportionately.

This is what is great about a multiline company: when they get to the next fresh hold, e.g. when they need retirement planning, they are already in a great relationship with Banks of America.

I have no idea why I bought this device, this Apple Watch. But I have such a great relationship with Apple that I am prepared to put up with all their foibles like battery life – hence I am willing to carry around a battery pack this big – and I am going to buy the next thing from Apple.

boa apple watch

That is what Bank for America wants with its customers: lifetime value through relationship marketing.

And it is all going to be done through mobile devices, which is why I am came to Mobile World Congress. I want to learn everything I can about the mobile platform. How to engage people by mobile, as well as what people don’t want. Who the new vendor partners are. I also want to know who is thinking like this, because not a lot of marketers aren’t yet, but increasingly I am sensing momentum.

So how much of your media business is digital and mobile?

It is a complex attribution challenge so we use multi-touch attribution (MTA). We have worked with Convertro (owned by AOL) to build an ecosystem where we can see with fairly good accuracy where all the various touch points are.

I can’t tell what proportion of our media is digital, but let’s say for the financial services we are at the north end for digital as a proportion of total spend.

We focus on digital because it is accountable and because it helps us engage in those relationships.

boa center

And how much of your sales business is digital and mobile?

I can’t tell you that either, but we have 5,100 banking centers around the US and they are still very important.

This is where a lot of our customer relationships start because they are on the corner, but as we grow the relationship we find that people elect to use the convenience of our mobile app and online banking.

It is hard to tease out where those relationships start and where we start to cultivate those relationships, which is increasingly through digital environments.

While the interview took place at the IAB conference, Lou Paskalis was a speaker at the MMS @ MWC conference.

Andy Favell is ClickZ columnist on mobile best practice. He is a London-based freelance mobile/digital consultant, journalist and web editor.

Contact him via LinkedIn or Twitter at Andy_Favell


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