Just as asset allocation remains a fundamental of investing, it could just as easily be applied to other areas of investment operations, such as marketing, communications and more.
While investment managers approach asset allocation with a keen eye on diversification, and investors are told to do similar, many organisations have lately tended to focus their marketing and communications spend on one channel.
Consider how over the past few years, the largest allocation of marketing and communication has focused on all things digital. A large part of this has gone to Google and Facebook, which now control over a fifth (20%) of global advertising spend between them (from nothing over a decade ago). And these two have captured two-thirds (64%) of all the growth in global advertising spend over the past four years, reported AdNews earlier this year (May 2017). Then there is LinkedIn for the business market.
Like investing, is it bad to focus all your marketing assets in one area? Does your organisation need to diversify its marketing and communications?
That, of course, depends on your customers. What do they read and view, how do they best connect with you, what worries them, what motivates them? What channels do they already use – newspapers, radio, television? What social media do they pay the most attention to?
Today’s consumers, like you, tend to use a majority of channels for their information, education and entertainment. So, you need to do the same – in other words diversify your marketing and communication across a range of channels.
The key is to determine the allocation mix that works best for you and your organisation. Here are some things to consider when determining how to allocate your communications and marketing spend.
Digital – More than meets the eye
Whatever your company, digital matters to you because it matters to your clients.
Whether your customers are institutions or mum and dad investors, they’ll be operating largely in the digital sphere, whether they are ordering a taxi, reading the news or searching for investing advice.
So the key question for communications and marketing teams isn’t whether to invest resources in digital media, rather they need to determine which forms of digital media to invest in.
Let’s look at a few popular options.
Google Adwords remains the favoured way to get on page one of Google searches (ahead of Search Engine Optimisation). Advertisers pay to display brief advertising copy, product listings, and video content within the Google search engine. If people use your Adwords to search Google, your product or service displays at the top of the page. Searches conducted on mobile rank you higher than desktop searches in their algorithms.
LinkedIn is increasing in importance for business-to-business marketing, but it has to be educational and useful, rather than self-promotional. One effective way organisations are engaging with their target audience is through the creation of LinkedIn groups. This is where a group is formed and information is posted and curated by an ‘independent’ group owner and ‘members/clients’ are invited to join to learn the latest about their profession, segment, or the like.
Instagram also allows the formation of groups and is particularly useful where visual content is the focus. Organisations can also form and curate ‘channels’ on YouTube of related content.
Build it and they will come
Meanwhile, organisations are increasingly creating their own channels. This can range from improved websites complete with blogs to direct client communications and video/YouTube channels.
According to PwC, two in three marketers have seen a shift in marketing spend from ‘bought’ to ‘owned’ channels. The survey also found that one in four marketers spend between 20-30% of their budget building and maintaining their own channels.
The nature of owned channels is also changing. Owned channels used to primarily be an organisation’s website. Today, websites are increasingly being developed as portals for communicating—not just a one-way flow of product pushes along with some information, but also enabling some comment and feedback.
Twitter provides another channel and similarly enables an audience to follow a particular Tweet feed, creating its own channel. US President Donald Trump favours this channel to distribute his messages.
Print and Broadcast – Do comms marketing pros still need traditional media?
Old school media still has a role to play in most communications and marketing strategies. While the circulation of many newspapers and magazines are dropping, major publications still have broad reach and the best publications have earned a level of trust from their audiences that gives them authority and status – so traditional media coverage can help you gain credibility.
Also, social media feeds on traditional media. Bloggers often write about the news as they hear it or see it on traditional media, and so if your story makes it traditional media, there’s a good chance it will be seen on social media as well.
The important thing is to choose traditional media outlets that your customers or clients are consuming. For some financial sector firms, that may be the Australian Financial Review.
However, for others, trade media may reach their market better, as it is focused and considered a ‘must view’ if you are to keep up with developments in your industry. This is why some trade media publications are growing while national and metropolitan media have contracted.
So, what should your marketing allocation contain?
Tap into and create an expanding range of channels to get your messages across.
Apply the rule of diversification – if you put all your eggs in one basket and one basket breaks, all your eggs will be broken. If you diversify across channels and one isn’t cutting through, you can make up for it elsewhere.
Also, the whole can be greater than the sum of its parts. Bloggers talk about newspapers articles. Facebook can be used to bring potential customers to your website or video channel. There is a symbiotic relationships between the different platforms.
Of course, asset allocation isn’t just about diversification, it’s about analysing which asset types are appropriate for an individual’s risk appetite and one’s expectations of returns.
Similarly, it’s important to not just blindly follow trends, or even to necessarily divide your resources evenly between all available platforms. It’s better to ask what’s the solution for your organisation to reach existing and new customers?
Ask your clients/customers how and where they want to receive content. Listen, and respond.