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Thursday
Apr162015

Yes, But...How Fund Marketing Is Evolving

There’s a striking evolution underway of investment product marketing/communications. You may need to use a machete to find it, cutting through all the market insights, retirement and personal finance updates that overwhelm asset manager content streams. But look at just the product-supporting communications that are being created using modern-day publishing tools and you'll see what I mean.

There’s no question that we were due for a change, as I was reminded of Sunday via a tweet that I was cced on (yes, that’s a thing).

Tom Brakke aka @researchpuzzler lifted a “fund marketing flowchart” from a partial book draft written in 2000 by Clifford Asness, founder of AQR. Asness described the chart as a decision-making model.

 
Now, I might have been tempted to dismiss this as nothing more than nostalgic. But three accounts retweeted this Sunday morning tweet, six accounts favorited it and one account piled on. @MikeCraft6, a self-described “bond fanatic,” suggested that a fourth box be added: "Merge Fund into One of the Above."

I don’t know for sure that Brakke—an investment advisor and consultant respected for his views on investment management process and communications; I’ve mentioned him before—meant to bait me. But I took the tweet and the response to heart.

Fund performance advertising has been hated since well before the year 2000. It’s easy to understand why. The basis of the derision is that performance records aren’t something anybody can safely use. As has been repeatedly documented, too often investors felt suckered into “hot funds”—what we advertised. Craft’s add-on jab about merging funds just underscores that “fund marketing” has a trust problem that continues today.

Fund Marketing > Performance Advertising

We did more than performance advertising 15 years ago, but I’ll concede that performance advertising may have been the most outward sign of fund marketing dollars at work. Advertising space purchased to showcase a table of index-beating returns was a concise presentation. The results were offered as a shortcut for what there wasn’t room to say about how those results were produced. Good numbers were enough to get everybody's attention.

The top performers were the funds advertised, absolutely. This is a point that Asness said he had no issue with. “There is hardly a business in the world that insists on pushing its ugly tough-to-sell products as hard as its attractive ones,” he wrote in his book draft.

“Furthermore, if investors insist on shunning anything doing poorly recently, and buying only recent winners, it would be very unfair to blame only the fund companies for the selective advertising practices I discuss. They should not be required to tilt at windmills.”

Excellent, we’re off the hook with the man who created the flowchart in 2000. But it’s obvious—not just in this week’s tweets but elsewhere, including Brakke’s comments on this blog in December—that marketers need to do more than promote performance in order to build trust in mutual fund and exchange-traded fund (ETF) communications.

Unbounded by the constraints that limited Marketing's ability to communicate previously (i.e., explicit budget, production/delivery time and expense, and physical space to accommodate the message), today’s product communications are extending in many new directions.

Fund marketing is more than the one-trick pony that some may still see. Yes, space is still being purchased and top-performing funds are still being advertised. But the URLs and social icons included on the ads? They lead to a wealth of additional information that should foster smarter investment decision-making—hopefully resulting in fewer of those gotchas that sting advisors and investors.

As a test Sunday through Wednesday of this week, I sifted through the tweets sent by asset managers (as tracked by the Investment Managers Twitter list) and followed the links to just the product communications. This sample of this week alone suggests a bit of what’s changed since performance advertising defined fund marketing 15 years ago and more.

Going Direct

Access to their own publishing platforms enables firms to go direct, overcoming the budget and finite space limitations of using a media partner to reach advisors/investors. A regularly updated blog combined with social network updates provides for relevant, time-sensitive and friction-free communicating about much more than performance.

For example, here’s AdvisorShares, which weekly takes it upon itself to report on the active ETF market share, including tables of outflow and inflow data showing other firms’ funds.

And, of course, fund companies aren’t the only ones practicing their new publishing skills.

In the office today, marketers continue to sweat over the display and use of brand assets. Meanwhile, there’s a whole community online that’s also newly empowered to share their own text and graphic commentary about your products in the open on the Web.

While short-term performance consumes a significant amount of the attention of those posting to Seeking Alpha or StockTwits, other attributes are discussed as well. Below is a tweet with a screenshot that shows the changes in an ETF’s assets under management. For those paying attention, these product tweets provide insights on what's interesting to others about your products. 

 

Multi-threaded

Previously, fewer than a handful of funds received extra marketing support. Those were the funds whose impressive performance made it easy for wholesalers to engage advisors. It was a backward-looking approach, no question.

But today's product-focused blogs support multiple products. It’s the rare firm that hammers home one fund and ignores all others.  

In addition to aiding investor understanding, this multi-threaded support serves at least two purposes for a firm: 

  • It showcases the thinking of all the teams. The “global breadth and depth” of the firm is made real with posts from a blogging stable that includes portfolio managers, portfolio strategists, investment and research analysts.
  • A continuous (vs. sporadic) focus assures a ready supply of content, which will help when the market rotates and there’s heightened interest. 

Check out Franklin Templeton’s Fixed Income Almanac, a new "one-stop shop" for portfolio manager perspective and historical data.  

Back in the day, portfolio management had a top-down, locked down approach to being available to Marketing. As a former shareholder report-writer, I sometimes wondered whether the goal was to reveal as little as possible.

This kind of thing from Motley Fool Funds just wasn’t happening in 2000. 

 

From Advisor-Only To ‘Please Share’

Content-sharing isn’t a new concept to fund marketers. But the party line has changed quite a bit. Having thrown in the towel on keeping advisors from sharing product content with their clients (more can be said when the content is prepared for licensed professionals), marketers now are motivated to create shareworthy information.

With this enlightenment comes the recognition that it’s a short list of people who are going to share your product performance data with their social networks. Performance is only one attribute of an investment product and maybe even the least differentiating. There’s also the fund’s story including its process and its holdings, its portfolio management (often featured in old tyme advertising but in a more distant way), its role in a portfolio, its expenses (the focus of many ETF communications).

The qualitative information that’s provided via these product communications is something that robo-advisors aren't able to factor into their algorithms. 

Where previously we would have relegated a risk discussion to the smallest typeface at the bottom of a printed page, check out WisdomTree's 800 words on risk.

The post comes to a favorable conclusion regarding the index underlying the EPI ETF. But does that mean that this content is little more than self-serving?

If we were talking about those posts that begin with, “Is it time to consider (insert product category here)?” I’d have to agree, yes. Not a fan. But WisdomTree's elaboration leads to a more informed buyer of its ETF after a run-up.

And then there's this Rochester Funds tweet about Puerto Rico sales tax collections. It’s a narrow, product-related update that couldn’t have been effectively distributed, and wouldn't have commanded any marketing support, in the old world. 

 

Storytelling possibilities expanded with the rise of ETFs and specifically slice-of-the-market ETFs. A story is much easier to engage with than past performance.

See this infographic on the global water supply, which Guggenheim distributed along with its press release commemorating World Water Day 2015. Guggenheim started with why and then closed by focusing on water “as an attractive investment opportunity” and its global water ETF CGW. 

Sometimes—as happens often with PureFunds’ tweets—the connection between the story (another cyber hack) and the solution (the cyber security ETF HACK) is short and sweet. This series of tweets represent a whole different interpretation of drip marketing. 

 

It Takes A Village, Not A Family

The presentation of products on fund company Websites has improved immeasurably in the last 15 years.  

But for this post on product marketing, there’s one change worth mentioning: The opening up of fund comparison tools to include all products. It really wasn’t so long ago that these tools were limited to building portfolios with just the Website sponsor’s products, the so-called family of funds. I believe that Putnam deserves credit for blowing that model up, and most if not all firms have followed the lead.

This represents a shift in understanding toward a practical emphasis on how the products can be used. In isolation, past performance helps not very much. Over the years, marketers have learned that fund providers should help with how their products work with others' products.

Content-wise this week, Nuveen offered almost 12 minutes on to how to use small caps in a portfolio and Ivy Funds commented on using a commodities allocation. Wells Fargo Advantage Funds launched a month-long series on using alternatives.

If you’ve been on the inside these last several years, the changes occurring aren’t news to you. The social launches, the video production, the whitepaper manufacturing all have added both to the workload and the expectations of fund marketing. And, you have the best understanding of how much more there is to do.

Will this work serve to bolster trust among those unimpressed by the attention given hot products? I believe it will, with more, and more relevant, communicating yet to come. As always, your thoughts are welcome below.  

A few of the examples above are from firms that I have worked for or currently work for. To exclude them from a round-up post would be to penalize my clients. However, I was not involved in/compensated for anything cited above. When I refer to something that I’ve done for a client, I disclose it.

Thursday
Apr092015

7 Examples Of How Context Matters For Mutual Fund, ETF Marketers

You can’t control the U.S. mail. If your large cap growth promotion happens to arrive at a financial advisor’s office on a day when the stock market is tanking, well, that’s how it is. Shake it off—you didn’t know, how could you? Looks like that piece is not going to work as well as you’d hoped.

And, that pretty much sums up the powerlessness of a direct mail marketer. Moving on…

Communicating online is less forgiving. Digital marketers are assumed to have control of their online communications including not just the What but the When and even the Where and the How.

Add to this mix the fact that financial advisors are not just reachable online but also more knowable online. This heightens expectations that communications are relevant and appropriate.

The context of what's being communicated is an increasingly important factor to consider in the planning and execution of mutual fund and exchange-traded fund (ETF) marketing. 

“Context” is a concept that’s open for interpretation, and I’ll admit to taking some liberties below. But let’s start out right, with a definition, courtesy of an ebook from StrongView, Context Changes Everything.

StrongView explains context “as a combination of the consumer’s [client’s] disposition and situation, coupled with the business’s disposition and situation.”

Disposition refers to the essence of who a consumer is and includes demographic and behavioral data. Situation refers to dimensions that are constantly changing—location, social setting, sentiment and needs, for example.

“The relevance of a firm’s interactions is related directly to its understanding of customer context,” StrongView writes.

One of my favorite non-asset management examples: Do you remember when NetFlix accidentally released Season 3 of House of Cards in mid-February? Boston residents thought that was by design, as a consolation as Boston braced for another blizzard. Think of the goodwill engendered if that had been the intention. 

If you don't already, I’d encourage you and your team to begin to pay attention to context. Who knows how the Apple Watch is going to rock content marketers’ world, starting with tomorrow's pre-orders. But it seems a safe guess that “wearable” content delivery will make context-awareness even more important.

To urge you along, I offer the following list of how context can make a difference. It’s in no particular order and in a slightly different tone. I’ve let myself go snarkier than usual to make obvious to you the need for alertness on the part of marketers, supported by enabling technology including customer relationship management (CRM) systems, marketing automation and Web, email and social analytics. Opportunities abound for relevant communicators. This is a partial, random list—surely, you can think of more?

What Not To Do

1. Overestimate The Compelling Value Of That PDF

Send a blast email with a link to a PDF at a time of day when you'd reasonably expect most recipients to be checking their email on smartphones. Do you communicate across multiple time zones? Right, well, you could stagger the email sends by location, drawing on regional information no doubt extractable from your CRM. It is more work. How important are those PDF opens to you?

1A. Burn Through Your New List

Use your hard-fought-for list of conference emails to email attendees while the conference is underway. Please don't. They won’t read your introductory message then, and all you've done is waste an opportunity. Conference attendees are battling to stay on top of their business emails, yours will be one they’ll be happy to quickly dispose of. Choose your time and message wisely.

2. Play Hide-And-Seek With People Who Are Already Stressed

Move your tax-related content from one place on the Website to another in the months between January and April. Oh, and don’t sweat the details about trying to map redirects to every single (likely Google-indexed) page. Are you trying to incur the wrath of your clients and the people who answer the phone lines at your firm?

The graphic below is excerpted from a Google Finance Trends infographic (link opens a PDF) that reports that tax-related searches are starting earlier in the year, and that more are happening on mobile devices. Plan your enhancements for during the off-season.

3. Dawdle With The News

Twitter is all about what’s happening now or maybe in the last 24 hours. A February tweet announcing the availability of your 12/31 communications is going to impress no one. That’s not what Twitter is for, I wouldn’t bother.

Did you see the number of firms that jumped on the Lipper award announcements last week? InvestmentNews published this list immediately after the evening ceremony March 31 and quite a few firms took to Twitter the very next day. Looks like Thornburg needed a full day but imagine how that ginormous image looked in a tweet stream.

That’s the way to do it. If your announcement is still working its way through your process, I’d say that ship has sailed on Twitter—the news was so last week. (Your timely addressing of bad news would be expected, too, but let's save that for another list, another day.)

Off-topic but I also really like TIAA-CREF’s use of its Twitter header image to promote its Lipper dominance. Where is it written that asset managers need to use a moody photograph of their headquarters as their Twitter image and never ever change it?  

4. Advertise 24/7 If You Can Help It

Pay for broad match AdWords searches all day and all night. Unless you are convinced that financial advisors are looking for solutions in the wee hours, I have one word for you: dayparting. Let the non-advisor (most likely) night owls amuse themselves with organic search results or run up some other firm's pay-per-click budget.

5. Get Caught Sleeping At The Wheel

Release a blog post on your firm’s philanthropy (or whatever) on the day the Fed raises interest rates for the first time in seven years. Throw your body in front of this if you have to.

If you’re not fortunate enough to have a blog contributor offering a reaction post that day, don’t publish anything. It’s better to say nothing than to reach your blog subscribers—on a day when they’ll be paying extra attention to what you contact them about—with something that suggests that your team is either on autopilot or blissfully unaware.  

6. Just Stroll In There Like It's 1999

Fail to train your wholesalers how to check for LinkedIn profiles and updates (including links to blog posts), tweets and Facebook updates prior to calling on advisors. Advisors research their clients (and vendors) and you can be certain that they expect others to be doing the same due diligence on them. I may have mentioned this before.

7. Lump Everybody Together

Track and report on your Web visitors as one homogenous group, as if desktop, table and mobile sessions all yield the same experience. As if all visitors regardless of device have the same motivations or needs. 

If you were to segment the traffic, you would see some eye-opening differences.

Note: Blane Warrene, co-founder of Arkovi Social Media Archiving, now financial technology speaker and advisor and editor at large of TheDigitalFA, and I discussed the state of asset manager marketing on Blane’s Digital Well podcast last week. Blane is fun to talk to and it’s a freewheeling discussion (what was supposed to be 30 minutes turned into 40). If you check it out, here’s hoping there will be something in it for you.

Tuesday
Mar312015

Protected Tweets? Don't Be So Sure

The Twitter account belonging to the business combination of Columbia Management and Threadneedle, made official yesterday, provides the latest illustration of the risks involved in publishing on platforms that are beyond your control. Fortunately, the specific risk in this case is likely non-existent to minimal.

We’ve been lulled into a sense of security about the protection provided by Twitter's offer to “protect" tweets.

In fact, the ability to protect tweets was an important first step in how most mutual fund and exchange-traded fund (ETF) firms became comfortable with how Twitter worked. Still today prior to announcing an account to the world, a firm will test its processes and get familiar with the system, sending tweets never meant to be communications for the public.

Other established accounts are tweaking what they’re doing including, as Columbia and Threadneedle did, renaming and even “repurposing” existing accounts. These activities can involve temporarily sidelining accounts by turning the protection on and pivoting the account with a new name, bio and redirected scope.

I'm also aware of a few accounts whose tweets have never been public and use the stream as a sort of private reading list for analysts and other approved followers.

Define Protection

Based on something I spotted yesterday, here's a note about the extent of the protection provided by Twitter training wheels.

Curious whether there was a new Twitter account handle to go with the Columbia/Threadneedle deal, I did a Google search and found the first result: @ThreadneedleAM, with the start of a tweet about the transaction.

A click on the Twitter account name brought me to a Twitter profile that showed that @ThreadneedleAM was an account whose tweets are protected. As an aside, note that Twitter doesn't use the term "protected account," protection is extended to just tweets.

But how could that be? What source was Google’s search result pulling from?

In the screenshot below, note the tiny dropdown arrow to the right of the Twitter name and the Cached box. Clicking on the box provides access to a page showing Google’s cached tweets on the morning of the day before—when, evidently, @ThreadneedleAM was still up and running. The tweet shown in the search results, from January, can be seen on the page. (The account had been tweeting as late as March 17. To show here, I just pasted the January tweet on top of the more recent tweets.) 

The above raises questions about the extent of the protection of tweets. Twitter clearly states: "Protected tweets will not appear in Google search; protected tweets will only be searchable on Twitter by the account holder and approved followers."

What I stumbled upon involved the cached tweets of an account in transition. The transition apparently involved the deletion of @ThreadneedleAM tweets and a flipping of the status of the visibility of its tweets. While I have no first-hand knowledge of the Columbia Threadneedle strategy, I'd guess their assumption was that those tweets were gone and out of sight for good.

Back to Twitter's About public and protected tweets help page, see the last sentence here: "Unprotecting your tweets will cause any previously protected tweets to be made public."

And, the dropdown arrow and the Cached box devices lead me to believe that Google sees value in cached—even if subsequently deleted—tweets.

Know The Limits

Previously, I have thought that Google’s inclusion of real-time tweets in search results (via an agreement reached with Twitter early this year) would be only positive for the investment management industry. I’m still convinced that it will significantly help lift awareness of the keyword-conscious, timely content that you’re tweeting about.

But the combination of Twitter's qualifications on the extent of protection given to protected tweets and Google's ability to display cached tweets makes the terrain a tad more bumpy. It could be trouble for otherwise unaware asset managers, financial advisors or any brands or professionals whose communications are regulated. Proceed, of course proceed, but with additional caution. Make sure you know the limits of Twitter's protection.  

This isn't about Columbia Threadneedle, of course. It just happened to provide yesterday's example.

If I worked there, I'd be thinking, "The least you could do is mention our new Twitter account name." So, here's a tweet yesterday from the new (repurposed) Columbia Threadneedle Twitter account, @CTInvest_US, and check out the newly branded Website

 

Thursday
Mar262015

Rethinking The Appeal Of Sausage Making

I headed out for a walk, looking forward to listening to my dear podcasts. Few things make me happier. Really. And that’s been true for years. Maybe someday someone will study the brain on podcasts. In my experience, listening and walking encourages meandering thinking that eventually leads to somewhere.

Because this work is never far from my mind, I returned not relaxed from the walk but all fired up about what I’d heard and what it made me think of. I’m going to publish this post, despite a nagging feeling that I should have saved these thoughts to share with friends via email. I’m used to their “You OK?” responses.

Behind The Scenes

The walk started as I was shaking off some frustration on behalf of a client. “How can a business not even know who’s using its products,” I muttered to myself as I switched on the Slate podcast about The Americans. It’s an FX drama about the marriage of two KGB spies posing as Americans in Washington, D.C. in the 1980s.


(Oh. Right. Television. Television producers don’t know who's watching their work.)

The Americans is a show that I watch faithfully every week. It’s not appointment TV for me because I’m a cord-cutter who doesn’t pay for FX. Instead, I pay $1.99 to stream each show on-demand from Amazon using Roku. (Hey, my explicit payment is one way that somebody, if only Amazon, could know that’s me watching, isn’t it…?)

In another time, that would have been it. A 45-minute transaction, over and out. But part of the reason I need to keep up with each Americans episode is that I am then ready to listen to the spoilers podcast and read the multiple blogs about the show. Time is of the essence. The show isn’t everything, it’s just the start.

All of the surrounding content—most of which isn't created by the program producer—makes for a richer experience. The Americans is the television show I recommend to others. It’s excellent (don’t get me started), but I also have a much deeper understanding of and appreciation for it.

The podcast, specifically, is a behind-the-scenes look at the production. I love hearing about the intricacies of filming a stakeout scene, what goes into setting an actor on fire and why there are three as opposed to four stalls in the FBI ladies’ room. This is the detail underlying the decisions about what eventually makes it into the final edit. When the producers and writing team as well as the cast climb the stage to claim their Emmy or Golden Globes awards, I will feel as if I know them all.

The podcasts contain spoilers so if you watch the Americans, don’t listen to this SoundCloud file unless you’ve already seen Episode 3. Everyone else, just listen to the story starting at the 6:30 marker of a scene that involves the spies "disappearing" a body from a hotel room. This is the sausage being made.

Process More So Than Product

The conventional wisdom is that sausage making is to be avoided. According to this helpful explanation found on UsingEnglish.com, “if something is ‘like watching sausages getting made,’ unpleasant truths about it emerge that make it much less appealing. The idea is that if people watched sausages getting made, they would probably be less fond of them.” (I don’t doubt that’s true about sausage sausage. As a student in Animal Sciences at the University of Illinois, my niece made sausage and claims to have been scarred by the experience.)

But it’s the insight into the "sausage making" that’s forging my relationship with The Americans.  

The point: There’s value in transparency and openness.

The packaged product is one thing but how did you get there? That’s what people increasingly want to know across the board today. Yes, but what’s in a Big Mac? How diverse is Apple’s workforce? Please tell me that these cosmetics were made with plants and not animal hooves.

Ask a brand advocate to explain his affection for a company and the response will more likely cite how a company does business than what’s produced. In my example, the more I hear about the budget concessions involved in the making of a television show I like, the more I like it.

Why wouldn’t this be the case, too, for information surrounding a mutual fund or exchange-traded fund (ETF), I wondered while walking. There’s a difference between at-home entertainment and intangible products on which trusting investors place their hopes and dreams, I’ll grant you that. But I’d argue that if the sausage making is of interest to a television fan, it might be at least of equal interest to an advisor or investor.

My description of how I relate to The Americans includes a lot of emotion. But I have nothing at stake. If the show were to decline, I’d mourn but eventually I’d move on and find something else to watch.

Funds Solve Problems

The engagement of an investment product user is on another level: the advisor puts his or her own brand on the line when recommending a fund. More often than not, the expectation is that the product will remain in place for an extended period of time.

And yet, many of us marketers seem to view the using of mutual funds and ETFs as transactions—as the endgame as opposed to the start or extension of a relationship that involves emotions.

Years ago, this business seized on “solution” as a synonym for investment product. While we use the word, we don’t necessarily think about its meaning. Consider the advisor using one of your funds for the very first time. There’s no gun to his or her head (sorry, that’s the influence of The Americans)—the selection is likely the result of an evaluation process: your product emerged as the winner, the best. There are expectations, to be sure, and optimism or even enthusiasm about how this product is going to work.

Fast forward and it’s conceivable that experience in the fund produces a positive or negative response, and that, too, is factored into what happens next.

"Storytelling" is a concept that I've seen investment marketers struggle with. Since The Walk, I'm thinking that sausage making-telling is what has the greatest potential in this space. Of course, the market has a capacity for thought leadership and research. But aren’t advisors likely to be most invested in what they’re invested in?

What Digital Enables

Advisors seek access to the managers of their funds, as can be seen whenever there's an opportunity for a physical meeting. Digital and social enablement of more timely, more frequent, more relevant, more granular updates can deepen understanding of investment process, challenges and responses, and more. Meaning can be derived from every incremental video clip, conference call, email and tweet, ostensibly strengthening product ties.

Never has there been a greater appetite for (and supply of) content that can build and nurture relationships. This is a terrific time to be charged with communications that drive and support product usage, acknowledging user sentiment good and bad.

Unfortunately, that’s not what I always pick up on when I talk to marketers responsible for product communications. Here’s what I sometimes see: 

  • An inferiority complex. If you’re blasting an unsegmented email list of tens of thousands of names to announce the availability of fact sheets, then I’d shrink too. But to product-users it may not be possible to over-communicate about the decision-making and color (aka the sausage) surrounding your products and portfolio teams.   

Hold your head up, don’t be shy about distributing updates that have information value and appeal. Let yourself believe that what your firm has to say about an ongoing product relationship will be welcomed, appreciated, referred to, relied on. (And, turn to your analytics for substantiation.) 

  • A nonchalance about relationship signals. What about the advisors who register on your Website, subscribe to your newsletter, attend your Webinars, follow and maybe even retweet your tweets, use your funds? They’re doing their part to have a relationship, they’re signaling their interest in the sausage making. Don’t let that attention go unrequited. Smart firms have started to distinguish between who’s into them and who just isn’t, and communicating accordingly.
  • A factory floor approach to how to communicate. Yes, asset manager content production demands have multiplied. Granted, there are plenty of technical publishing issues to keep an eye on. Systems can automate fund data display, and shareholder report-writing robots can formulate narrative based on the data. Uniformity has its place. 

But—hang with me here—let’s not lose sight of the poetry in the sausage making. No one can shape the story like you or you with raw material from your Investments or product teams. C’mon, humor me—and everyone else on the receiving end of your communications. 

Back to The Americans again, listen to the spirit and personality as the cast and crew share what went into their final product. It’s not just the information that’s being imparted, it’s the commitment to it. Product communications, especially, deserve some energy.

All of you aren’t working with Hollywood professionals. It’s possible that your subject matter experts don’t intuitively know how to explain the sausage making in an appealing way. In addition to everything else that has to do with content routing, review, production and formatting, that’s the creative work that falls for you and your creative teams to do with an ever-growing box of tools that includes graphics, imagery, video and interactive. That’s why there’s Marketing.

Your turn, your thoughts?

Thursday
Mar192015

How Social Media Is Influencing Institutional Investor Investment Decisions

If your mutual fund or exchange-traded fund (ETF) firm markets to institutional investors, you’ll want to check out social media survey results that “astounded” the research firm and “awed” an asset management marketer. Social media, the data suggests, is making a difference not only in how institutional investors source information but in the subsequent action they take, too.

In November and December 2014, Greenwich Associates, working with LinkedIn, fielded an online survey of 256 global institutional investors including 100 in North America, 105 in Europe and 51 in the Asia Pacific. The survey targeted decision-makers and influencers of investment decisions at their institution (top three titles: chief investment officer, portfolio manager, investment analyst) who used digital platforms at least once in the past year to learn about financial topics related to their investing role.

The global cut of the results was the focus of a LinkedIn Marketing Solutions Webcast last week, whose replay you can listen to below. In addition to Greenwich and LinkedIn presenters, Legg Mason’s Director and Head of Global Web Services Kerry Ryan presented best practices and results to date of some LinkedIn success using sponsored update campaigns to target institutional investors.

A report on the Europe-only survey data is due this week, with a report on the North America results scheduled to be released next month. Expect there to be some differences from the global cut, according to the presenters.  

LinkedIn, Facebook And Twitter

Most surprising to Greenwich’s Managing Director Dan Connell and Ryan was that one-third of investors surveyed said they’d taken information learned via social media to start a discussion with or choose to work with a particular asset management firm. This is the first work to document this, I'm fairly certain, and the research may open many eyes.

As he reviewed the results, Connell seemed delighted to report that LinkedIn scored as the preferred social media source, with 48% of all institutional investors using the platform. The first slide showing the usage of the social networks even grays out all but LinkedIn.

In my opinion, such parochialismand as interesting as it was, the inclusion of a happy LinkedIn advertiser as part of the program—devalues the independence of the research. The work also includes useful insights on investors’ reliance on Facebook, Twitter and YouTube, and can serve a higher purpose than just to support interest in LinkedIn. The following is a screenshot of one of the slides, with annotations added by me.

One surprise not discussed, for example: Almost half of institutional investors (47%) say they use Facebook to learn about investment products/services. This is slightly higher than those who use LinkedIn for that purpose (45%). The finding is at odds, by the way, with what ShareThis reported about the finance content that gets shared on Facebook. 

Notwithstanding the cheerleading for LinkedIn, the full 56-minute presentation is worth your attention. Here are just a few highlights to pique your interest and prompt you to hit the play button. 

  • Nearly all (97%) institutional investors use digital media sources for professional purposes and 79% use social media at work. That's a dramatic change in the last five years, Connell noted.
  • Institutional investors are turning to social media for insights, opinions and content relevant to their investing roles. And, those insights are influencing decision-making.
  • The survey provides four answers related to investors’ interest in asset management firm content and executives specifically, and other answers related to investment product and services are relevant, too. Are you working with executives who are dragging their heels about whether they need to have a social media (probably LinkedIn) presence? Data in this table, which I created to highlight the asset management questions, might be helpful.


  • Legg Mason’s 22 sponsored updates have produced an overall 0.48% clickthrough rate and 0.54% engagement rate. Since the start of the year, the company page has attracted 346 new followers.