Promoting financial services products online has always been a competitive industry with big profits at stake. From banking and investing, to accountants and wealth advisors, the financial services industry is a broad sector. And with the growth of digital banks and disruptive new online financial products, online advertising is more important than ever for almost all of these specialist services.

An additional factor is the cost of financial services marketing. With some of the highest CPC in the digital marketing industry, and potential for big returns, it’s no surprise that marketing banking, investment or financial products is big business.

But where there is money to be made, fraud follows close behind. Click fraud and ad fraud are huge problems for digital marketers, costing the industry as a whole an estimated $35 billion in 2020.

And for those selling financial products, the cost of fraud has an even greater impact.

How much do banks spend on marketing?

Based on data from financial services clients of ClickCease, the average rate of fake/fraudulent traffic is just over 20%.

Read our 2020 report into the state of click fraud on SMEs here

When you consider that banks, insurers and other financial institutions spend around 12-15% of their budgets on marketing, this is clearly a huge amount.

Some of the biggest marketing spenders (2018 figures) include: 

  • American Express ($2.5 billion)
  • Capital One ($2.17 billion)
  • JP Morgan Chase ($3.2 billion)
  • Bank of America ($1.5 billion)
  • Citibank ($1.4 billion)

It’s worth pointing out here that those totals aren’t entirely pay per click on Google or Facebook Ads, but everything from print to TV. 

In the US banks spend around 2% of their marketing budget on digital advertising. So for the big guns, this implies a figure of $40 million per year for each wasted on click fraud and ad fraud. 

Even smaller banks, credit unions, insurance brokers and local financial businesses are paying out anything from hundreds of thousands to millions on PPC ads each year.

So how much is this per click?

According to WordStream, the average cost per click for financial services is around $3.44 for search and $0.84 for display ads. 

However, clicks can jump to well over $40, especially in the financial services industry. Some of the most expensive CPC are:

  • Insurance $54.91
  • Mortgage $47.12
  • Loan $44.28
  • Credit $36.06
  • Transfer $29.86

Source: WordStream

How does click fraud affect financial businesses?

The problem of click fraud and ad fraud has been a hot topic in recent years as more businesses become aware of the issue.

Ad fraud refers to the process of fraudulent publishers hosting ads on their site and then artificially inflating clicks or impressions to collect a bigger payout.

Click fraud however is a more complex issue with financial marketing. Although such a high end and respected industry might not seem the place to attract inter-business clicks, there are some intriguing stats from our own data.

We looked at three financial services clients using ClickCease and found the following traffic analysis:

Client #1: Volume of fraud 19% – 60% over threshold, 28% fraudulent device

Client #2: Volume of fraud 13% – 38% over threshold, 35% bounced traffic (spam)

Client #3: Volume of fraud 3% – 80% VPN, 11% out of geo

Client #4: Volume of fraud 23% – 40% fraudulent devices, 25% bounced traffic

Client #5: Volume of fraud 24% – 65% bounced traffic, 15% VPN

To define what each of these imply:

  • Over threshold: Visitors clicking multiple times within a set time frame
  • Fraudulent device: Can indicate either a device identified as not genuine such as a browser hosted on a server (bot), or traffic from a malware app
  • Bounced traffic: Spam, usually bots
  • VPN: Virtual private network – often used by click farms and bot operators to disguise their location
  • Out of geo: Traffic from outside the targeted traffic area but that has managed to click/view the ad

Based on an average spend of $10,000 per month, many of these financial services marketers are saving at least $2000 by blocking fraudulent traffic. 

In fact, from the examples above, some of these ClickCease clients are saving around $12,000 per month.

However, blocking fraud on banking, insurance and financial campaigns does more than just save ad dollars.

The impact of click fraud on digital marketing

With click fraud and ad fraud, the obvious problem is that your ad spend is wasted. Thousands of dollars gone to traffic sources that have zero chance of converting. 

Although some marketers shrug this off as the collateral damage, the truth is that the impact is more widely spread than this. And when it comes to marketing for financial services, this can spell hundreds of thousands of wasted dollars each year, and more…

Distorted KPIs

Looking at KPIs such as traffic, impressions and clicks might lead you to the conclusion that your ad spend is hitting the target. 

But if 20% of that traffic isn’t genuine, this skews your analytics and causes additional unnecessary ad spending.

Inflated CPC

Most ClickCease customers find that by blocking fraudulent clicks, their average cost per click actually comes down. The reason for this is multi-faceted, including an improved quality score and reducing competition on fake clicks.

Wasted conversions

Click fraud also generates additional disruptive activity such as robo/automated calls, abandoned shopping carts, additional downloads and spam leads. Blocking fraud clicks means you reduce the chances of these fraudulent actions and the associated workload to rectify them.

Maximize your marketing

For financial services including banks, insurers, mortgage providers, investment funds and wealth managers, investing in PPC ads means more chances of maximizing your ROAS.

Reducing the wastage from click fraud means more chances of conversions, a lower CPA and a more of your ad budget to spend on targeting genuine customers.

The truth is that 90% of all PPC ad campaigns are affected by some level of click fraud, although with financial services products the figure is closer to 100%. Put simply, your financial services ads are wasting money on nothing.

ClickCease is the industry leading click fraud prevention solution, with over 2 million ad campaigns protected and by far the biggest IP blacklist of known fraudulent sources. 

For PPC campaigns on Google Ads (including YouTube ads and display network) or Bing Ads, ClickCease blocks all those bad clicks while letting the good guys in.

To find out how much fraud affects your financial services marketing campaigns, sign up for a free traffic audit.