PEER-TO-PEER platforms may be pitching themselves as an alternative to mainstream banks but many are relying on traditional methods when it comes to advertising.
Property P2P platform Lendy has recently announced sponsorship of the Cowes Week sailing regatta, while business lender Ablrate has been announced as a sponsor of the PGA EuroPro Tour’s £100,000 Shoot-Out competition.
This marks a move into areas where big financial brands typically operate and suggests a trend of platforms relying on mainstream methods to attract investors and borrowers.
Other firms such as RateSetter have used adverts on the London Underground and Crowdstacker has run adverts in print publications, while Zopa and Funding Circle have used TV campaigns.
But Frazer Fearnhead, founder and chief executive of The House Crowd, prefers to invest in digital marketing.
“The mass market isn’t ready for this yet,” he said. “There is not enough awareness so we find word of mouth is better. Our clients are happy to recommend us.”
Business P2P lender Folk2Folk also believes word of mouth cannot be underestimated.
“Borrowers and lenders that have a great experience tend to be your best marketers as their recommendations to friends, family and business network are so valuable,” said Mat Gazeley, spokesperson for Folk2Folk.
Branding and public relations experts say a mix of traditional and digital methods is best. Joshua Van Raalte, chief executive of PR agency Brazil, which looks after P2P clients such as Assetz Capital, says different tools are needed for young social-media-savvy investors, compared to older customers who may be more comfortable with traditional media, while PR and third-party endorsements are useful to attract borrowers.
“In terms of influence, word of mouth is without doubt the best, however the trick is how to perpetuate that through marketing,” he said.
“We use a combination of social and traditional marketing techniques for our P2P clients, and it is the soft approach that works best.
“Investors and borrowers generally do not like being overtly marketed to.”