As Mountain View, Calif.-based Google branches out beyond simple search functions, it should come as no surprise that it has a strategy aimed at financial services. While the Internet giant isn't launching a "Google Bank," the company has established itself as a partner for financial institutions by helping them acquire customers through a service called AdWords.
According to John Kaplan, the head of Google's financial services vertical and overseer of relationships with some of Google's biggest financial services advertisers, the service goes beyond traditional sales. "We're a consultative sales force," he explains. "Our team shows clients which keywords to run [when including themselves in a Google search] because we know what works."
Kaplan explains that AdWords is an advertising tool designed to optimize banks' online presence, starting with the basics — Web search. Similar to an auction, clients bid on certain keywords that consumers are likely to enter when searching Google.com for a financial service. Ad placement on the search results page —at the top or toward the bottom — depends on factors such as the click-through rate. Those ads with higher click-throughs, for example, tend to be placed on top since "they are more relevant to our users," relates Kaplan.
Click-throughs depend on the quality of the ad text the bank writes to attract users, Kaplan continues. This, too, is something with which Google assists clients, he notes. But ad placement is not a ranking of financial institutions, emphasizes Kaplan. "If you're a big bank, great. But if you're not relevant to our users, you won't be on the top [of the search list]," he remarks.
Google has offered the AdWords service since 2000, changing it to the present cost-per-click model in 2003. But, Kaplan relates, he has seen considerable adoption over the past two years. "My team works with the top 100 banks," he says. "Ninety percent are using it. Beyond that, a lot of smaller banks are using it, too," he adds.
"You're getting people engaged directly in your product because they're typing a query and are potential customers," Kaplan continues. "With traditional marketing, such as direct mail campaigns, there's a lot of waste."
According to figures provided by Google, the search engine refers approximately 45 percent of total search traffic directed to banking sites, 35 percent of search traffic directed to brokerage sites and 39 percent of search traffic directed to insurance sites. This makes Google the No. 1-ranked search tool for financial services. As such, Kaplan says, Google should be viewed as a valuable partner to financial institutions. "It's not really about selling," he explains. "We help clients figure out the proper way to acquire new customers. A lot of math goes into this to determine the ultimate cost per acquisition. But we're not really sales people — we're educating our clients."