Digital Marketing & Finance are More Similar than You Think
The topic of career change is endlessly fascinating to me. I wouldn’t say I’m a seasoned “working adult” but having hustled for money since I was 17, one could say I’ve been in the workforce for quite a while already. As much as I am inexperienced in the matter of drastic career changes, I think it’s safe to say that the transition will alway reveal interesting nuggets both about the working world and about yourself.
I never intended to become a marketer. I’m still adjusting to that label since it replaced banker. The switch from banking to marketing is not as difficult as I initially thought. Sales and networking are skills that are transferable.
Funnily enough, the background in banking has propel my career in marketing somewhat. Beyond that, I found plenty of similarities in how marketing and investment operates. Here, I will share 4 things that are similar in both fields
There Is Always A Strategy
Both for marketing and investing, there is always a strategy to help guide the decision-making process.
One of the first thing I’ve learnt in digital marketing is the marketing funnel. It looks something like this:
Those of you who love investing will notice how familiar this looks. Yeah, you guessed it, that ever-trusty fundamental analysis of stocks. Side note: Check out my step-by-step investing workflow guide where you’ll see this inverted pyramid too.
Why is having a strategy important? Both marketing and investing involves real dollars. You’re going to put money into a venture in the hopes it does well. It doesn’t make sense to go in blind, throwing money willy nilly on whatever stocks or whichever marketing channel and then waiting around to see if it works. Having a strategy means that you’ve thought things through. Having a strategy means that you have something to fall back when things to wrong. Hey look! This part doesn’t work, let’s go back to the strategy and adjust it. It’s a way to optimize your limited resources (i.e money) to best maximize the return on investment.
The funnel strategy helps marketers define the customer’s journey to purchasing your product. First, raise awareness of your brand, then get people interested and ultimately, you want to convert them into a loyal customer to your brand.
With investment, the top-down or bottom-up approach helps investors identify assets that are undervalued relative to the market or the industry.
Measuring Return on Investment
So you’ve already put a strategy in place and you sank in some money into a marketing effort or an investment, now what?
After every investing decision be it in an asset or in a brand, you need to always review and re-calibrate based on the results. These results are usually measured by how much you’ve earned back from the initial money you’ve put in.
In investment, the most basic measurement of return is Return on Investment. This is further complicated by what constitutes return; dividends, capital gains from price appreciation, interest income and so on. Other factors are also considered when measuring Return on Investment for finance such as tax implications.
The same concept can be applied to marketing. Every dollar spent on marketing needs to show some sort of result. Now, with marketing it’s much trickier because some results can’t easily be extracted. For example, if a brand agrees to pay an Instagram influencer RM 5,000 for a post, what sort of metrics should the brand use to calculate the return from that investment? You can measure results based on the number of likes on the post, the reach and impressions the post received. But these measures doesn’t directly give you indication of increases in sales.
While some marketing spending can be difficult (not impossible) to measure, others are straightforward. With Facebook Ads, for instance, you can measure the Return on Ad Spend. This is evaluated by how many sales you made in dollar terms from spending money on that ad.
Subject to Market Sentiment
Both marketing and finance are beholden to the people. If consumers react well, the company profits, investors are happy, everybody wins. But if people react badly, then hell breaks loose.
Companies often do research to figure out how a customer will react to a marketing campaign. Such research entails figuring out their purchasing habits, what principles their customers value, and how to cater a marketing message to them. But at the end of the day, one misstep from your marketing team could spell disaster for your entire brand. Take the case of The Fish Bowl.
For people in the investment community, we know how market sentiment affects the way stocks and bonds perform. During periods of high uncertainty, indexes plummet and people move to cash or safe haven investments like gold.
During stressful times such as recessions, people spend differently. And so, marketing during a bad economy would yield a poorer result, especially if your product or service is not a necessity. Notoriously, tobacco companies are defensive stocks because people smoke more when they’re stressed.
Company profitability and the marketing budget tend to have a symbiotic relationship. The more a company makes money, the more it can invest into growing its brand and reaching out to new potential customers.
Everyone Wants to Make a Quick Buck
In both the fields I worked in, I mostly dealt with people. This is ironic considering I’m a natural introvert and I don’t do well in social settings but that’s besides the point. When dealing with people, I learned to notice patterns in the way people behave when it came to investing money be it in stocks or in a marketing plan. People want to see quick results. Humans are impatient and short-sighted, if something isn’t moving right now, our brain perceives that it will never move.
Change doesn’t happen overnight
It’s hard to get people to see past their biases. While you can present facts and proof to someone to convince them to spend some money on advertising or NOT make an impulsive trade, most of the time, people make irrational decisions.
A large part of my jobs were to spend time convincing people over and over again to stick with their strategies and to trust the data. And boy, that’s a tough job.
This exercise in finding similarities in two different fields shows us that no matter where you start out or how you start over, there’s always things that you pick up in your old job that you can use in your new one. So, if you’re facing a crossroads in life like I did, trust your capabilities and trust your skills.
Know that where you are in life you got there by learning and improving. Now go out there and kill it, folks.
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