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Asset Manager Marketing Playbook for Trying Times

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4 months ago

4 months ago

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In a precarious climate, the temptation for asset managers is to counter economic contraction and fee pressures by cost cutting; and marketing budgets are often first on the chopping block. But a knee-jerk reaction can result in lost ground. 

The better approach is to use this unpredictable period to make strategic marketing investments, based on a thorough analysis of performance and growth areas.

When inflation escalates and central banks hike up interest rates, that’s when we see clients fleeing into safer investments with lower fees – often short-term savings accounts. And asset managers find themselves squeezed from all directions.

Fees fall, there are outflows from active strategies, margins shrink, and the pressure never abates. Even with shifting consumer behaviours, global conflicts and rumours of a recession lingering, firms know they must remain competitive. They must retain existing clients – and constantly seek to grow assets under management.

For some firms, the response to this pressure has been to control costs and improve efficiencies through waves of redundancies, or combining multiple job functions into single roles.

Marketing budgets are also commonly stripped, including content marketing and paid distribution. But there are many cogent arguments for maintaining – or even strategically increasing – marketing budgets in tough times.

Lessons of the past

Time and again, history has shown that businesses reap the rewards when they maintain their marketing efforts through economic downturns. In a study conducted in 1999, companies that decreased their marketing efforts in a recession saw their market share drop by 0.8%. Those that maintained their marketing and advertising levels had an increase of 0.6%, while the companies that increased their advertising enjoyed an increase of 4.3%.

McKinsey research published in 2019 tells a similar story. During the 2008 recession, companies that drove growth during tough economic times achieved above-market total shareholder returns (TSR) for the following ten years.

Stay the course, retain and differentiate

While some of that research pertains to consumer companies, the principles apply equally in asset management. There is solid logic behind the notion that staying the course pays off for firms.

For starters, when other firms pull back on their content marketing and advertising, the “noise” in markets quietens. This gives an opportunity to stand out, gain market share and diversify into new segments.

When firms continue to invest in marketing, their clients feel reassured by their ongoing commitment to their products and services. Bear in mind that your clients’ organisations are also potentially facing economic instability. When you clearly communicate ‘business as usual’ at your end, you reinforce your own stability and reliability, particularly if your competition disappears from view. And you’ll be front of mind when your audience is ready to make a decision.

Getting clear about where to spend

For all of the above reasons, tough economic conditions call for an “investor mindset”. But firms should take an analytical approach. The key is identifying areas where the ROI isn’t great, then reinvesting marketing dollars in high-growth areas, where there’s likely to be better ROI. McKinsey has great advice here. Firms need to examine their various marketing budgets versus performance; look at the marketing messages, channels and types of content that have successfully inspired and informed the audience.

Also consider spreading marketing budget over an end-to-end mix of search, paid social, multiple content marketing formats and native advertising, alongside traditional advertising.

Asset managers should stay visible across the full funnel, from awareness, to consideration, to direct revenue-driving, using tools like search engine marketing (SEM) to support content and drive conversions at the bottom of the funnel. If your competitors are scaling back their digital marketing efforts, it’s a good time to run Google search ads – clients looking for specific brand names and not finding them will see you there as an alternative. (Also, with fewer competitors bidding for advertising real estate, costs per click reduce.)

When running these kinds of campaigns, ensure you’re getting targeting advice from a professional who will analyse relevant data, identify trends and insights to achieve maximum ROI. In a push to save money, some firms are turning to programmatic marketing, using automated bidding and placement platforms that buy and sell digital ad space in real-time. But used in isolation, the results won’t be the same.

Take a fresh look at your content

Firms don’t need to be continually reinventing their content – it’s exhausting and expensive. Think creatively about how you can deliver fresh, impactful content without over-investing. One way is to atomise ‘big rock’ content pieces. Start with a core content piece, e.g., an annual survey, research report or event, that you then build out into a schedule of webinars, live discussions, social media posts and more.

Generally, put fresh eyes on the content you create and make sure it’s not already out there in some form, that it’s on-brand and timely. Money spent on cookie-cutter, tone-deaf, poor-quality content and messaging is wasteful.

It might also be a good time to get back to the basics of your brand, reinforcing your brand promise and the consistency you offer, ensuring all elements in your marketing mix are instantly recognisable.

Winning firms view uncertainty as an opportunity

In the same way that firm-wide efficiencies are being created through investments in technology platforms, a competitive edge and business growth must be supported by investments in marketing. Position your firm for future success by staying where your market can see you, so you can weather economic turbulence and rebound stronger.

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