In the world of business, it’s easy to wonder: marketing vs advertising - are they one and the same, or two aspects of a powerful overarching strategy?
While both play pivotal roles in building brand awareness and driving sales, understanding the difference between the two can be a game-changer for any company, including those in the fintech sector.
Whether it's a startup aiming to establish a market presence or a global brand looking to expand its reach, knowing when to focus on comprehensive marketing efforts versus targeted advertising tactics is the key to achieving goals.
In this article, we’ll explore the core elements of each, exploring how marketing builds a solid foundation while advertising amplifies messaging.
Ready to learn how these tools can work together to elevate branding? Let’s get started!
What is Marketing?
Marketing is a business practice that involves identifying, creating, communicating, delivering, and exchanging product and service offerings that provide value for customers, clients, partners, and wider society.
Effective marketing strategies help businesses to isolate how to best serve their potential customers, while simultaneously maximising revenue.
In business to consumer (B2C) marketing, marketing efforts are directed towards individual consumers. For example, a fintech app like Revolut may use targeted marketing campaigns to reach a younger audience looking for payment solutions.
Whereas, in business to business (B2B) marketing, marketing efforts are directed towards other like-minded businesses. A financial services company like Plaid might turn its focus to data aggregation services for other financial institutions that need to streamline their processes.
Throughout both marketing strategies, a marketing team must consider the following factors to best engage with their target audience:
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Orientation: Marketing orientation refers to the guiding principles of the business of the business itself. Organisations must use this guide to orientate their products, sales, production, or marketing.
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Environment: The marketing environment refers to every important factor that could impact the execution of a company's marketing strategy or decision making. A fintech company should consider both the internal environment within their organisation, as well as external macro and micro-environmental factors, such as regulatory changes.
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Market: The target market refers to the characteristics of a company's ideal customer base. Market research and audience segmentation efforts can help to isolate geographic and demographic factors to help sell a company's products or services. For instance, a digital wallet service might focus on urban millennials who frequently use online transactions.
By considering these factors, companies can create a successful marketing strategy that best engages their target audience.
The Marketing Mix
With marketing being a very broad term, it's important than a business' marketing efforts focus on the fundamental aspects of building and growing a business.
This is where The Marketing Mix comes into play. First coined by Jerome McCarthy in 1960, the term outlined a decision-making matrix for marketeers.
Initially, The Marketing Mix was divided into the 4Ps:
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Product: The products or services that the business offers that addresses the needs and desires of potential customers. A fintech start up might offer a mobile banking solution that simplifies transactions for users.
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Price: How much new customers would be willing to pay in order to receive the product or service. Defining the price also dictates how profitable a business is likely to be. For example, a low-cost fintech service may attract more users by emphasising competitive pricing compared to traditional banking fees.
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Place: This is where and how potential customers are likely to find and access a business' products or services - including retail stores, resellers, distributors, and franchising.
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Promotion: How your business communicates the benefits and uses of your product or service. This is where advertising may be incorporated into the marketing plan.
Over the years, the matrix has further developed to become the 7Ps:
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People: This includes everyone involved in providing the business' services. In the fintech industry, having qualified staff who understand both technology and finance is essential to delivering exceptional service.
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Process: The standard of operations within an organisation, that people follow to ensure customer needs are sufficiently met.
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Physical Evidence: The ultimate goal of marketing strategies is to obtain tangible proof of the benefits provided to customers by using the product or service. For a fintech company, positive user reviews on app stores can serve as compelling physical evidence of customer satisfaction.
What is Advertising?
Advertising is a business strategy in which a company pays to place its messaging or branding in a particular location.
Businesses leverage advertising efforts to promote their products or services, as well as establish corporate branding. When deployed effectively, advertising campaigns can help to drive traffic and customer acquisition, as well as boost sales.
Ad campaigns are a one-way channel of communications, allowing companies to broadcast a message to a large audience pool.
Unlike other types of marketing and public relations, companies have control over advertising marketing. When embarking on ad placement, companies have full control over the content promotion.
Advertising strategies aim to do the following:
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Educate the target audience on products and services.
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Persuade potential customers that the products or services are superior to the competition.
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Improve customer perception of a brand or organisation.
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Generate demand for a product or service. For example, a fintech start-up might run social media ads to showcase the value of their proposition.
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Attract a new target audience to purchase a product or service.
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Retain and nurture existing customers.
The Difference Between Marketing and Advertising
A common misconception is that marketing and advertising are interchangeable, but they are two entirely different disciplines with key differences.
While both practices focus on the promotion and sales of a company, they each take a different approach. Marketing itself is a disciple, and advertising is just one branch of it. While marketing goals are to increase sales, advertising's objective is to induce customers.
However, despite being different, they work together to increase brand awareness and drive customer acquisition.
Types of Marketing
Digital Marketing
Digital marketing refers to the digital application of marketing strategies to electronic devices, such as computers, tablets, and smartphones.
Digital marketing encompasses strategies such as search engine optimisation, email marketing, direct mail, content marketing, and much more.
A fintech company may leverage content marketing to create blog posts that educate potential users about financial literacy.
Social Media Marketing
A subset of digital marketing, social media marketing leverages social media platforms - such as Facebook, X, Instagram, LinkedIn, and TikTok - to reach new and existing customers.
These marketing activities allow companies to take advantage of earned media from individuals outside of their organisation. A fintech firm might run targeted ads on LinkedIn to connect with professionals in finance.
A more recent trend in social media marketing is influencer marketing, where users with a large following are compensated for promoting a company's products or services. For example, a financial app might choose to partner with a well-known personal finance advisor to effectively reach their target customer.
Global Marketing
Rapid internet growth and globalisation, has seen some of the biggest companies develop into global brands.
Global marketing enables these organisations to deploy unified marketing activities that reach customers at a local, regional, national, and international level at the same time.
A fintech company with an international presence might tailor its marketing strategies to comply with regional regulations while maintaining a consistent brand message.
Relationship Marketing
Relationship marketing relies on strategies that help to retain and satisfy customers, with the goal of establishing brand loyalty.
For example, a fintech firm may implement a loyalty programme that rewards customers for using their platform regularly.
Brand Management
Brand management is implemented to create a bond between a brand and its customers.
To successfully manage a brand, it is necessary for the company to evaluate its products or services, as well as its logo, design, packaging, and other elements.
A successful fintech company will assess its branding to ensure it communicates trust and reliability, characteristics that are crucial in the financial services industry.
Product Development
This is the process of transforming a business opportunity into a tangible product or service worth selling. Development can occur with both new and existing products.
Successful product development involves many marketing concepts, as well as in-depth market research and analysis.
A fintech may use customer feedback to improve a pre-existing app or launch new features carefully tailored to users' needs.
Types of Advertising
Traditional Advertising
Traditional advertising refers to advertisements such as print ads and broadcast media, such as radio and TV commercials.
A financial institution may run TV spots highlighting their new mortgage products.
Retail Advertising
These advertising strategy refers to when ads are placed within retail stores with the goal of maximising sales.
Common examples of retail advertising include product placement, ads on shopping carts, and product displays.
Although this type of advertising is more targeted at retailers, it can be applied to financial services. A financial app may make the strategic decision to advertise in a technology store to attract tech-savvy customers.
Digital Advertising
This term refers to ad placement on the internet in media and other websites - including contextual ads in search engines, banner ads on websites, video advertising, and sponsored content, such as influencer marketing.
Mobile Advertising
Mobile advertising refers to ads placed on both mobile and smartphones - including automated diallers, banners to download apps, and click-to-call ads.
A fintech app may choose to use mobile ads to encourage users to download their mobile app directly from search results.
Native Advertising
This form of advertising blends in with pre-existing content on websites or social media platforms.
These ads look like an organic piece of content, providing a seamless user experience while promoting a product or service.
A financial services organisation might place native ads in online publications that have a focus on personal finance tips.
Out-of-Home Advertising
This type of advertising refers to adverts placed outdoors, typically in high-traffic areas to maximise the amount of attention received.
Common examples of outdoor advertising include billboards, banners on the outside of buildings, and branded vehicles.
A fintech company may use a billboard in a high-traffic metropolitan area to target busy business professionals.
Pay-Per-Click (PPC) Advertising
Pay-per-click refers to advertisements designed to drive traffic to a company's website, typically placed at the top of a search engine or on social media channels.
Advertising agencies can derive extensive customer data from these ads, only having to pay when a customer clicks on the advert.
Fintech firms can use PPC to drive traffic to a bespoke landing page to promote a new service.
Programmatic Advertising
This type of advertising uses automated systems to buy and sell digital ads, allowing businesses to reach their desired target audience across multiple platforms with real-time bidding and optimisation.
Fintech companies can use programmatic advertising to efficiently target specific demographics interested in financial services.
When to Use Marketing or Advertising
Marketing and advertising have distinctive roles when promoting a product or service, and knowing when to use each can significantly impact a business' success.
Marketing is a much broader strategy that encompasses defining target audiences and creating a comprehensive plan for reaching and engaging with these audiences. It is essential for establishing a foundation, particularly for startups and new businesses, like a new peer-to-peer lending platform.
By prioritising marketing, businesses can define their brand identity, refine their value propositions, and develop a sustainable approach to scaling.
Advertising, on the other hand, is a specific tactic used within a larger marketing plan. It involves paid promotion through channels like social media, search engines, and traditional physical media. Established businesses with a clear marketing plan, such as a well-known investment firm, may benefit from advertising to increase brand awareness or drive short-term sales.
However, without an overarching marketing strategy, advertising alone may not resonate with the target audience or yield sustainable results.
Conclusion
Understanding the balance of marketing and advertising is truly the key to fintech success.
Marketing lays the groundwork, defining who the target audience is, what they want, and how to best reach them. Advertising, then, becomes the megaphone, amplifying a fintech's message to the right audiences with precision.
Together, they create a dynamic duo - one that can propel any financial institution to new heights, whether they're just starting out or pushing for the next level.
Need a tailored approach to make the most of both? Blue Train Marketing can help your fintech craft a strategic marketing plan, build your brand identity, and optimise advertising efforts to deliver measurable results.
Visit Blue Train Marketing to see how we can drive your business forward!
