Although the financial industry is not defined by Wall Street and Madison Ave. is no longer a hot spot for all the marketing and media agencies, these two streets still represent two very distinct worlds.
Over the past two years, I have been watching the show Billions on Showtime and this, along with a series of other events that I will describe here, lead me to believe that the marketing industry – more specifically the data-driven marketing sector – has a lot to learn from the financial sector.
1. Data Supply Chain
“P&G doesn’t want to waste time and money on a crappy media supply chain.”Mark Pritchard, P&G CMO
In fact, Nasdaq announced in March the planned launch of New York Interactive Advertising Exchange (NYIAX), a platform it claimed would reshape the future of how advertisers and media owners trade by taking ‘Wall Street tech to Madison Avenue‘.
With the service set to launch in beta later in the year, NYIAX claimed its offering would use blockchain technology to help bring greater transparency plus efficiency to the way all media is traded.
In fact, media inefficiencies are just part of the problem. The analytics value chain is another massive issue that is costing organizations money. As discussed in my recent webinar with guest speaker Richard Joyce from Forrester, 70% of organizations have poor quality or inconsistent customer data.
Such inefficiencies are not tolerated in the financial industry. Quality and real-time access to data is not a nirvana that they dream about like marketers, but an everyday necessity.
2. The Certainty of Insights and Recommendations
In the show Billions, hedge fund King Bobby Axelrod is constantly meeting with his team to discuss where to invest. It is their job to convince him on what investments to make. In one of the meetings, Bobby asks: How certain are you?
The response is epic: I am not uncertain.
In the world of digital marketing, another answer is much more common: Analytics is a directional tool. Where else would we spend millions of dollars based on directional information? In fact, as marketers, we can learn a lot from the financial sector about how to react to numbers, charts and presenting recommendations.
“Everybody has access to the information, we just know how to analyze it better.”
3. Portfolio Management
What if we looked at marketing activities and strategies as a portfolio of tests. Over the course of the next few months, we can put together x number of marketing experiments to reach one of the following business goals:
Increase the number of new customers
Increase the average order size
Increase the frequency of purchases
Identify and increase the most profitable customer segment
With this in mind, we could rate our marketing tests based on a number of factors, such as: Cost of implementation, time to learn, opportunity cost and potential ROI. This way, we could break down our marketing tests into themes.
In one month, we can’t accomplish everything, but we can build a systematic approach to improve our marketing even if one or two strategies are not performing as well as we expect them to. We minimize our risk.
4. Risk Management
Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events. All marketing campaigns can’t be effective, some we simply have to invest in to learn. Besides thinking about the best case scenario for our marketing, we need to consider how to minimize risk that poorly executed marketing campaigns can deliver to the business.
Risks can come from various sources including uncertainty in consumer behavior, threats from campaign failures, gaps in data collection or data accuracy, deliberate attacks from your competitors or events of an uncertain or unpredictable root-cause.
But what if we actually had models to mitigate uncertainties and risks in case some of our campaigns underperform? If a Facebook campaign fails, can we still end up in the green because other activities have achieved outsized ROI and covered our losses?
5. Let the Paranoia Begin
When we think about a financial loss, a picture of screaming, yelling (and often smoking) stock brokers comes to mind. However, as marketers, we tend to be quite relaxed about poorly performing campaigns. It seems like ‘What’s the worst that could happen, it is not like our livelihood depends on the Facebook campaigns.’
BUT IT DOES.
In 2017, it is estimated that 20+ retailers will closing 3,591 stores and at least 50,000 people will lose their job. Marketing is not the only reason for this, but it certainly is one of the reasons.If the job of an organization is to market and innovate, than we are responsible 50% for this.
In his recent interview with Charlie Rose, Jack Ma said:
“Don’t believe you will be good all the time. Be paranoid” Jack Ma
And I agree. It just might be that Facebook ads, sponsored content or Google PLSA are the keys to our own financial well being. If we want to have jobs tomorrow, we better start worrying.