Investing in marketing means marketing like an investor

Market like an investor with Automata

Marketing is an investment. The more time and money you put in, the greater the return (or at least that is the hope). Sure, there are limits to your return based on the size and saturation of your market, but for most SMBs and burgeoning enterprise companies, your marketing budget cannot be big enough. If you could turn every dollar into a dollar and a nickel, you would find every dollar you have to throw at that magic machine, right?

Many marketers waste time and money on efforts that don’t yield a consistent positive return. The results are often difficult to measure because there are many factors related to a company’s performance that have nothing to do with marketing. However, if we were able to isolate the effects of a marketing campaign in terms of dollars and cents similar to a simple financial investment, we could objectively determine what works and what doesn’t.

Financial Investors

Conceptually, financial investment is much simpler than marketing. Both have the same underlying goal. Spend money to make money, as they say. Financial investors give a company capital to operate, develop and grow with the hope they will return with more value. Marketers spend money on processes and engagement in the hope that more customers will flock to their company willing and able to spend. A notable shared experience between marketers and financial investors is the attempt to identify where to send the money. For investors, it’s which companies are more promising and poised for rapid growth. For marketers, it’s which audience or market segment is most ready to buy the thing they are selling. In both cases, the parties are identifying potential investment avenues. Despite the similarities, the tools used are quite different but share some key similarities. Marketers have a lot to learn from the success and failures of financial investors.

Trigger Points

A variety of trigger points are available to investors for analysis. They identify companies that are poised to rapidly grow in value of the coming years by observing the size of the target market, the strength of leadership and other investors, IP acquisition and the competitive landscape. Only investing in companies with these positive indicators that point to growth should lead to overall growth across a large enough portfolio. Some will undoubtedly fail, but the hope is that the successes will make up for the failures. This is not to say that there is a magic bullet in financial investing (obviously). The hard part is accurately identifying these trigger points to gain a marginal edge over the market. If the analysis is done with more accuracy and precision, the probability of a positive outcome goes up. The most successful hedge funds invest heavily in analytics and predictive models for a reason. Every new data point goes in to the overall assessment of the promise of an organization, but accumulating accurate data points is the most important underlying objective. The same goes for marketing. The more relevant prospects you spend money marketing to, the greater the probability to land a deal.

Marketing like an investor

Marketing strategies are quite similar to investing. Identifying who to target and how to target them is similar to deciding where to distribute investment funds. It might be time to start marketing like an investor. Tools and techniques used by investment firms can include tracking product success and failures, how engaged a customer base is on social media and even things as far as analyzing the traffic to and from a particular set of retail stores. For example, in an article in Financial Times, they described the “unsurprising” expected uptick in Wayfair’s revenue that was predicted due to the observed increase in mobile app downloads in the previous month. Combining a number of public source indicators of this kind can help paint a picture of the overall health and activity of an organization.

Identifying which companies to market to demands a similar approach. Ingesting the maximum amount of relevant indicators will increase the probably that you are spending your marketing budget in the right places. Using public data indicators to correlate success and failure within your own marketing and sales efforts increases the probability of a successful targeting strategy. Knowing the members of your target market as well as an investor would will lead to a more successful and efficient use of marketing resources.