How to invest in better marketing - Part Six
Review sites attract shoppers seeking advice like investors seeking advice from online sources.
With the majority of consumers today researching online before making a purchase, many base their decisions upon a blogger recommendation. Similarly, many shopping channels with review sites are likely to see a lot of activity as well.
The same is true with online sites for investors shopping for more information. From Morningstar, Scottrade, Schwab and E-trade to Fidelity and Vanguard, these “shopping channels” help investors get advice on what to buy, what to avoid and what price to pay for the right investment (product).
And just as e-commerce reviews are extremely important to consumers when making a purchase, investors also use their “go to” sites to determine the quality of their investment choices, learn about the 3-, 5- and 10-year yields, beta reports and rankings against indexes. All in the quest of gathering information and making the best investment decision.
It’s the same with the average online shopper looking for clothing, watches, beauty products, wine and furniture. They’re more likely to buy a wine if it gets a high rating from Wine Spectator or Robert Parker, or purchasing an appliance or automobile after reading a review by Consumer Reports. In fact, some research by Influence Central indicates that more than 90% of consumers find an online review more important than input from a salesperson. And after reading an online review and deciding to make a purchase, nearly 80% of consumers buy the product online.
No doubt, a considerable percentage of investors say that online reviews and ratings of mutual funds, stocks and bonds influence their purchase decisions more than financial advisers. People don’t change their stripes just because they’re purchasing a municipal bond versus a cabernet sauvignon.
Big data has changed the face of marketing today in much the same way it has changed Wall Street.
Thanks to new developments in technology, large marketers today have almost as much data at their fingertips as large investment houses on Wall Street.
The beauty of marketing today is that brands can really show a return on their investment. The data allows marketers to demonstrate impact in a much more transparent way than in the past. It’s measurable and trackable. And those marketers with the financial resources and expertise to leverage big data analytics effectively can create greater economic power for their brands in much the same way as large investment advisers can create greater return for their clients.
Big data gives marketers the potential to track the behavior of consumers in stores and online, helping them to determine why they act the way they do. The tools available to marketers today are extraordinary. The automation of media planning and buying through the use of data and algorithms, known as programmatic, is no less impressive than programmatic trades on Wall Street.
For the marketer it means fewer wasted impressions. More relevant placements that deliver the right message to the right person at the right time. But even with all the tools, a marketer still needs to be telling the right story with the right creative. They must clearly understand the consumer they are targeting just as investment advisers must have a clear understanding of the emotional needs and aspirations of their clients.
And just as marketers would be skeptical about whether the insights and conclusions derived from big data are accurate, or whether the historic actions of these people are reliable predictors of their future behavior, similarly investment advisers must be skeptical of the data they receive in light of false ratings issued by Standard & Poors in 2011, and all the creative investments like derivatives that were marketed by the big brokerage firms and banks, contributing to the 2008 meltdown.
So many of today’s marketers are getting caught up with new media and all the data mining that’s achievable that they forget about the most important task of all—creative and context.
Sequent Partners, a brand and media metrics consultancy, contends that algorithms should optimize for effectiveness more so than efficiency because the latter often overlooks creative and context.
Sequent’s research has found that creative drives about 70% of advertising’s effectiveness. Based upon that same research, if programmatic algorithms are too focused on reaching the right person at the right time, they may lose sight of the creative. And if the creative doesn’t fit, 70% of the ad’s effectiveness has been nixed says Sequent.
In other words, “there’s zero value in running ads that don’t work,” asserts Sequent.
Although many financial advisers have the ability to review volumes of research and data, ultimately they are being paid to establish an investment strategy that will diversify a client’s portfolio in ways that can produce the highest yields based upon their risk tolerances. There’s zero value in crunching the numbers if the investor’s portfolio doesn’t perform.
And like investment advisers who must intelligently interpret the data to advise their clients on the why’s, many simply spread their client’s dollars amongst a few low cost ETF’s, Index Funds, and bond funds and call it a day.
Similarly, many marketing managers simply shuffle money around the brand's tried and true tactics, rather than guiding marketers to not simply allocate funds, but to recognize new opportunities.
Stuart Dornfield is an award-winning freelance creative director and copywriter with 40 years experience in marketing, strategy, advertising and production. A former senior vice president and creative director of Zimmerman Advertising (Omnicom), the 13th largest agency in the U.S., and the co-founder of Gold Coast Advertising, the third largest agency in South Florida, Stuart now offers his creative services and marketing insights as a freelancer with offices in New York and Miami.