By: Abe Kasbo
So what does marketing have in common with the investing? Plenty. There two distinct types of marketing approaches, the individual investor and the institutional investor. Some typical traits of marketers as individual investors are:
1) Overwhelmed by day to day marketing responsibilities among others
2) Approach branding as a “To Do.” And says something like “We have to brand ourselves.”
3) Usually rely on marketing activities rather than marketing plans
4) Usually rely on little data to understand true impact of marketing
5) Usually rely on relatively small timeframes per marketing event in making marketing decisions.
6) When business is flat or down, blame “marketing”
The individual investor typically reacts to the market’s gyrations. Their horizons are short, and immediate gratification is required. Their psychology and well being is typically tied to the swings of the market. Their portfolio is up, and theyâ€™re looking for a guest appearance on CNBC. The market is down and they’re in sell mode!
By contrast the institutional investor has a long-term view of the market and views his / her investments as vehicles to gain and retain wealth over time. Up or down, they are tied to strategies and not individual stocks. Warren Buffet’s decision to invest in a business rarely involves market timing and his success is necessarily a reflection of his long-term view of businesses he buys and the markets they are in.
Today more than ever, companies and their marketing executives must act as seasoned institutional investment managers rather than individual investors. Focusing on the long term view of building their businesses by rolling out concerted and thoughtful campaigns, rather than swinging for the fences by dropping marketing bombs.
We understand that CMOs are under tremendous pressure to perform and because companies want results yesterday, but those in the executive suite must advocated and guide company leadership beyond the sexiness of certain marketing vehicles and down to the business of marketing. After all, marketing is a business imperative. When companies and their CMOs act like professional wealth managers or institutional investors, they benefit from:
1. Objective and complete view of the market, allowing them to plan and roll out smart campaigns
2. Recognizing that the company is in the business for the long run, CMOs can plan and execute traditional and non-traditional campaigns for the long haul, while more immediate marketing activities are taking place.
3. Becoming “media agnostic” allows you to focus your marketing dollars on only what seems to be effective. And when something fails, be sure to understand exactly why. Strategy and execution is key; everything else, though important, is a commodity.
4. Remember, like investing in equities, past performance of your marketing efforts are not indicative of future results. Whether a campaign or activity has worked or failed, be sure to revisit that scenario to properly assess the reasons it worked (ie: repetition of message, great placement, etc.), or failed (not enough impressions in the market, bad target and message, etc).
5. A good marketer understands that branding is a result of what their enterprise does, rather than an activity that must take place. So rolling out a new logo and look is only considered branding only if placed in the context of an integrated marketing plan, media distribution plan, etc. And running print advertising must consider other variables like creative, timing, web, among other things.
6. Understanding that marketing takes work and active management.
As marketers, companies must move to an institutional investor mind frame to get the most efficient and effective results in the market place.