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Seeking Marketing Alpha
Marketing in the Capital Markets
Having my head in emerging markets and cross-asset trading these days, I’ve been finding the term “alpha” unavoidable. TABBGroup’s Adam Sussman recently spoke on investment in emerging markets as a way to achieve alpha. The industry is all aflutter about cross-asset and multi-asset trading as a means to seek alpha. The concept of exceeding benchmark performance permeates our business in the form of whitepapers, webinars, forecasts and executive briefs.
But let’s some of us be honest, that concept is sorely lacking when it comes to marketing strategy. Many companies say they want the most bang for their marketing buck, but when it comes down to it, they hang all their hopes on one monolithic whitepaper or live event. This is similar to what I call “practicing wishcraft” – taking any action to say you did something and wishing for some magical outcome. There’s a difference between spending money for the sake utilizing available budget and spending it to achieve what I like to call “marketing alpha.”
I seem to be on a roll with the specialized terms. Like a marketer (LOL!).
Anyway, as I mentioned in a previous blog post, banks are under increasing pressure to reduce overhead and increase profit margins via technology consolidation. However, since the financial crisis began, companies across the board have been faced with budgetary challenges that have made buyers cautious and salespeople crazy. The new reality is one of longer, more complex sales cycles with today’s web-enabled buyer in the driver’s seat.
Brave New World of B2B MarketingUnlike the Aldous Huxley novel, effective marketers have moved away from treating customers like cattle and feeding them marketing soma. Why? Because the buying behavior of capital market buyers has changed dramatically in the past few years, rendering the majority of old-school marketing practices ineffective (and as a result, expensive). Truth be told, old-school marketing was about creating noise to be heard over the competition and get in the door. It used to be about one-way push. Now it’s about two-way engagement.
In earlier times (some might call them “the good old days”), the company with the most marketing dollars often got the most sales, simply because the customer recognized their name. But as more companies enter the race, more companies start making as much noise as possible. The Internet and email make it easier and cheaper to make noise, resulting in a virtual cacophony of marketing claims barraging customers every day – with everyone claiming to be “the leading, number-one, unique, value-added, trusted provider” of “robust, innovative, cutting-edge, high-performance, ultra low-latency technology….”
Yawn.
How can every vendor be the “leading provider”, anyway?
If you’re in marketing or sales and have not heard the terms “content marketing” or “inbound marketing,” then it’s time to start paying attention to the evolving best practices in marketing. The pressure is on for Marketing to support Sales and help to generate revenue. Your performance depends on it.
Let’s face it folks, our customers are not idiots. They’re sick of the noise, and they no longer trust the marketing puffery. They’re also getting really good at tuning out the noise. They use spam filters, caller ID, gate keepers, DVRs and any number of other methods to tune out advertising and marketing messages.
That doesn’t mean they’re not still buying, but they’re getting more savvy. THEY are in control of their buying process. Research shows that most business buyers of technology do all their early research about business problems and possible solutions BEFORE they talk to a sales person. In fact, their buying processes are generally 75% complete before they’re willing to engage with Sales. So how do you go about influencing the buying decision of a buyer who is wary and weary of traditional marketing hype? How do you now differentiate yourself from your competition?
Achieving Marketing AlphaContent marketing is about creating educational content that helps your prospective customers understand their business problems, gain a vision of how to solve the problem, and build a business case to get internal buy-in. This content can take the form of whitepapers, blog posts, live events or video. As you provide the prospect with high quality content – information that they can rely on to steer their decisions, you’ll gain their trust and have a significant influence over the buying decision. To quote Ardath Albee, author of eMarketing Strategies for the Complex Sale, “Publishing compelling content builds credibility.” This credibility is what gives you competitive advantage.
At this point, you’re probably thinking, “That’s interesting, but how do I get this great content to the customer?
That’s where inbound marketing comes in. This technique uses high-quality content, strategically placed, that is found by prospects who are looking for it and as a result, are ready to engage with you. (talk about warm leads!). According to inbound marketing specialist HubSpot, “72% of companies who blog weekly have acquired customers through their blog.” As a new form of lead generation, inbound marketing is bringing in revenue for companies who have really dug in and focused on sharpening their marketing strategy.
The question arises, “O.K., now how do I incorporate inbound marketing and content marketing to my process?”
On January 24, I will be discussing this with a panel of the foremost experts on modern marketing in a live web event. These speakers are at the top of their game as authors, bloggers and recognized thought leaders in content and inbound marketing. They will discuss the differences between and the convergence of these techniques as well as practical approaches for getting it done as part of a holistic marketing strategy. The goal of this live web event is to give you clear insight into current marketing techniques, going beyond the hype to what works now. We want you to be better equipped to build a compelling case to gain the funding to implement these techniques.
I highly recommend that you tune in for this hour long session. You can ask questions in advance of the event and online during the Q&A process. I’ll be moderating, and will be joined by:
- Mike Volpe, CMO of HubSpot and a master at inbound marketing (HubSpot generates 40,000 leads a MONTH!)
- Ardath Albee, author of eMarketing Strategies for the Complex Sale. Ardath consults for some of the largest technology companies in the world and is well-known speaker on best practices in content marketing.
- Robert Rose is Strategist In Residence at Content Marketing Institute. He co-authored the book Managing Content Marketing – The Real-World Guide for Creating Passionate Subscribers for Your Brand and is also a speaker and consultant in high demand.
- Marcus Sheridan ("The Sales Lion") is a master blogger who teaches companies how to blog effectively to bring in business. He’s also the author of three books and numerous e-books. Marcus actually inspired this event when he drew attention to a debate between proponents of content marketing vs. inbound marketing on his blog. That post attracted more than 80 comments. You can read that post here: http://www.thesaleslion.com/inbound-vs-content-marketing-compare-hubspot/
It’s No Longer About Marketshare, It’s About MindshareThe days of “spray ‘n pray” are over. Buyers want to know what’s in it for them, what of value you have to offer them that meets their need. They’re unaffected by perceived market share. They’re seeking a Trusted Advisor to help inform their entire buying process. Achieving that coveted role requires an understanding of what works in this context and directly affects your ability to generate revenue.
Are you struggling with creating an effective marketing strategy? Do you find yourself mistaking tactics for strategy? Are you just a little bit shaky in your understanding of current marketing language? Are you struggling to achieve “marketing alpha”? Join us for:
The Great Marketing Debate Conversation
Tuesday - January 24, 2012
1:00 - 2:00 PM EST (10:00 - 11:00 AM PST)
Click here to register now.
The old marketing model is broken. Time to start the new year with a new foundation for a solid marketing strategy. Here’s your opportunity to learn from four of today’s top marketing thought leaders. They’re passionate about what they do, so the discussion will be quite lively.
Join us, won’t you?
Cross-Asset Trading
In this installment of the TrendSpotters Thought Leadership Series, we consider the evolution of cross-asset trading, how the industry is changing, and the drivers behind these changes. Joining me are Harry Gozlan, CEO and Founder of smartTrade Technologies, and Greg Wood, Futures Business Development Manager at Credit Suisse’s Advanced Execution Services.
Because of the complexity of this topic, we've segmented this episode into two parts. This post contains part 1.
My interview with Harry and Greg was fascinating. They stand at the forefront of this cross-asset trend, and the shared a lot of interesting insights with me. I invite you listen in by clicking below:
Podcast (Part 1): Download (16.1MB)
Click here to read a transcript of the conversation.
Podcast (Part 2): Download (24.5MB)
Click here to read a transcript of the conversation.
Emerging Trends in Cross-Asset Trading
In the interview, Harry Gozlan points out that buyside demand, particularly from hedge funds have driven the evolution of cross-asset trading. Hedge funds asked for a “single access point to multiple assets to do cross-asset trades, either through auto-hedged securities…,cash against futures, basis trades,” or other combinations. Gozlan points out that traditionally, banks have maintained “siloed FX, equities and rates systems… [assembling] a single entry point to all these assets to provide a kind of cross-asset service to clients.”
As Greg Wood comments in the interview, “People are taking natural steps of looking for alternative alpha. They may be trading domestic equities first. Then they look into cross-border trading. They use derivatives as a hedge… or as an alternative source of alpha. This introduces multi-asset capacity to their trading, where they want to be able to trade each of these asset classes in a similar manner, and then ultimately, manage, risk manage, [and] position-manage those asset classes.”
Cross-asset trading, much of it over-the-counter (OTC), can involve any number of instruments, from conventional equities and fixed income products with FX components, to interest rates and futures, also often involving foreign exchange as well as options for hedging. But while the siloed approach can work in the short term, growing volume in cross-asset execution requires the technological capabilities to exploit and actively manage an institutional client’s overall book of business with the trading partner. This requires a standardized approach to pricing, routing and execution, and ideally should enable clients to use similar execution algorithms across a variety of trading instruments.
Client demand is not uniform and not static. Whereas large institutional traders or hedge funds may need to execute and measure several components in multiple series of trades, other clients require reliable execution and reporting predominantly for trading in one instrument. Servicing both kinds of client order flow – and any number in between demands a simply designed yet flexible system that standardizes the trading workflow.
Risk management and best execution mandates are also placing demands on sell-side firms to provide more execution transparency. This demand will only grow in the future, requiring firms to standardize their approach to market data aggregation, internalization, and smart routing while also consolidating and harmonizing their approach to risk management across instrument types.
We invite you to read smartTrade’s informative whitepaper on the evolving landscape of multi-asset trading:
Meeting Multi-Asset Trading Challenges: Workable Approaches for Success in a Dynamic Capital Markets Arena
This whitepaper goes into detail about the components needed to build a global multi-asset trading platform.
TrendSpotters by PropelGrowth is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
Growth In Trading In Emerging Markets
Emerging markets become interesting to a broader spectrum US and European asset managers when they offer enough scale and liquidity to “move the needle” in a large portfolio or investment strategy. Traditionally, this scale has only been available in the large emerging economies such as China and Brazil; but we see increasing opportunity in other markets as they grow, encourage domestic participation, and open up more to foreign participation. In the event, we’ll talk specifically about which countries offer scale today and which markets are poised for providing that level of scale in the next one to two years.
Drivers of Scale and LiquidityThe ideal driver of this scale and liquidity is domestic market participation and an increasingly vibrant derivative market. In the 1990’s there was a rise in international flow into emerging markets, particularly in Latin American, which resulted in foreigners becoming the dominant players in many cases. This can become a problem. As shown historically; institutions have a tendency to repatriate moneys at home when their own domestic markets are under pressure. This then results in an exaggerated sell-off in the emerging markets.
But today’s markets are much more stable and sustainable because of strong domestic participation. In the past decade, emerging markets have seen 600-700 percent growth in cross-border trading to over 4 trillion dollars in 2010. Domestic participation has held steady at around 65%, indicating that domestic investment is growing at the same rate as international flow. Interestingly, there has been a similar increase in cross-border trading in the derivatives markets, culminating in over seven billion contracts traded last year.
In our conversation, Roberts shared his thoughts about three markets we’ll highlight in the panel discussions.
PolandPoland requires all citizens to contribute 7 and a half percent (7.5%) of their incomes into pension funds. This has created substantial growth in Polish pension funds, and consequently attracts listing business. Many Eastern European companies list in Warsaw because the available money creates increased liquidity for their listings. As the market grows, liquidity increases, and market rules and regulations change. As a result, the market has attracted increased international flow – from both long-term investors and high frequency traders. This makes Poland a very interesting emerging market. In addition, the Poland derivative market has grown alongside its equity market.
TurkeyTurkey is a bit different. According to Roberts, the level of domestic institutional participation is still relatively small, but growing. Approximately 2/3rds of the trading on Turkdex and the Istanbul exchanges is retail. Turkey is a relatively large player in the emerging market “bucket” and sits firmly in the tier just below BRIC with ambitions to be a regional financial hub. Turkey has made large strides in recent years, highlighted by significant changes in its market rules and regulations and a new trading platform for Turkdex that will be implemented Q1 of 2012.
IndiaIndia has one of the highest savings rate in the world at approximately 7% of income. This increasing wealth creates substantial market opportunity. The Indian markets are growing quickly, and domestic retail investors now account for approximately 60% of trading volume. It should be noted that the trading in derivative instruments is approximately 10 times that of equities. The Indian markets are evolving and working to attract more foreign and domestic participation, as highlighted by continued market reforms and continued introduction of improved technology. All this solidifies India’s position as an important BRIC nation.
Come Join the ConversationJoin us for a dynamic and informative evening as we talk about these markets and others on November 22 in London and December 1 in New York. Tabb Group will share results of their recent research in the emerging markets, and we’ll have a lively panel discussion about some of the tricky issues around market access, regulatory issues, and infrastructure needs for trading in these markets. The panels will include renowned industry experts who will share some of their hard earned knowledge and expertise in how to be successful trading in the emerging markets.
Register here for the London event.
Register here for the New York event.
Warm regards,
Candyce