BofA’s Paskalis: Understanding Consumers’ Movement Patterns Is Crucial

When it comes to privacy issues, financial services, along with healthcare, rank as the top concern that consumers are worried about protecting.

So it’s not much of a surprise that retail has taken the lead in the use of proximity tools like beacons to form a one-to-one, online-to-offline connection between brands and mobile consumers.

Following a panel session at day one of Ad Age’s Digital conference, we caught up with Lou Paskalis, Bank of America’s SVP, enterprise marketing/media and communications executive, to get his sense of whether beacons have a place in consumer banking and financial services. In short, he contends that consumers are still feeling “creeped out” in an era of ever-more sophisticated behavioral- and location-targeting and digital devices.

And while some might argue that beacons are a one-way communications channel, Paskalis has an important point that location tech companies should heed. Yes, beacons don’t necessarily collect data. And yes, they primarily send notifications to consumers who have actively downloaded an app and decided to turn on their smartphone’s Bluetooth receiver.

But with application of the technology increasingly heading toward retargeting beacon users on other devices after they’ve visited a retail shop or movie theater, Paskalis is saying that the industry doesn’t want to wait to face a situation similar to the ad blocking debate currently roiling publishers and agencies.

The time to balance consumer privacy and convenience is now, Paskalis says.

GeoMarketing: During your panel session talked about the idea of getting passed “advertising” and for brands to be more active in “telling stories” as “traditional digital” ads are dead. Can you elaborate on those thoughts?

In this overwhelming, desperate battle to be relevant, we’re looking for every bit of context so that we can create something that has real value for consumers. It can be a great piece of content, such as advice or a product offering a solution for a consumer’s immediate need.

Because digital ads are more transactional than anything else, they’re not engaging to most consumers. They’re almost a “monologue” in a world that expects “dialogue.” This is an era where the consumer is in control. We had the industrial era. We had the age of distribution. We had the information technology era. Institutions were in control.

Now we are an era where the consumer has the choice and we need to compete for attention. Banner ads don’t that. They’re never going to get modified to do that.

But in the case of video that tells a story that’s delivered within banner-like format, that’s an exception. If we can contextualize it. If we can match it to what’s on people’s minds. Mindset, motivation, need-state, and do they open to my brand’s message. Those are the four things we need to understand. We need to provide something of value in that environment.

When it comes to attracting people to a physical place, like a bank, does the use of location-data force marketers to offer a solution as opposed to simply promoting the brand?

Location is immensely important. But more important than location is movement data. It’s much more important for brands to understand the predictive analytics from what drives someone from point A to point B.

What does that mean for this individual? That’s the question we’re forced to answer. And we have to do it in an anonymized, privacy-compliant way. From there, we can start to understand that this is a regular, unique life pattern that leads someone from the gym to a Best Buy.

Armed with that understanding, we can put a different solution set in front of that consumer. That’s when we personalize the message and the solutions. That’s when we become more relevant. And what that entails is, we get out of the advertising business and we get into the marketing business. That’s when we win with consumers.

How do you view the role of the physical bank branch as so much focus by both brands and consumers shifts to mobile?

We spend a lot of time thinking about that at Bank of America. The bottom line is that the banking center can be a solution center. It must be.

When you’ve got the breadth of services that we offer — remember we’re not just Bank of America, we’re Merrill Lynch — we have everything from cradle-to-grave in terms of financial needs that someone might have. When it comes to incorporating mobile, that allows us to have less emphasis on tellers and lines, and more emphasis on conversation and advise.

We’re very lucky. We have a 5,100 footprints around the country and all of those could be solution centers as opposed to a traditional bricks-and-mortar bank. That’s how our leadership is thinking about it.

When we first talked about the use of beacons, you seemed to feel that it was still too early to see if these devices had any practical use for a mobile consumer in a bank. Have you changed your view?

Do you remember that BCG Growth Share Matrix of stars, question marks, dogs, and cash cows? I think beacons belong in that question mark space.

I do think that there’s something there. But on the active-passive continuum, we’ve got to find a more passive way for consumers to share that information. Turning on the beacon’s ability to “reach me,” I just don’t think we’re getting there. I believe there’s value in the thought of beacons and sensors, but the application is not yet mature.

Are consumers just not ready to embrace beacons and all that they entail?

MillwardBrown does a study every couple years where they ask, “Would you allow an advertiser to track you in exchange for more valuable, more relevant ads?”

Last time they did the survey two years ago, 49 percent of people said “yes.”

That’s up 10 points from the previous time they asked. Next time, they do they survey, it’s probably going to be the tipping point.

Getting from that issue — which is specifically about ads versus having something that the consumer perceives as valuable information being offered to them — this is about the perception of reality. And the perception that consumers have about digital technology and marketing: “Man, [marketers] are tracking me everywhere I go.”

I have a friend who has Alexa [Amazon’s voice-responding digital assistant that powers its Echo connected device] and she unplugs it at night, because she doesn’t want Alexa to listen to her. There is this creepy factor even in things we appreciate.

It crossed what I call the George Orwell line: beacons are a sort of surrender that most people are not yet ready to make. We got to find a different way forward, but with the same idea, an idea that allows consumers the comfort that they’re not being tracked indiscriminately, while offering as much responsiveness and convenience as possible.