The Future of Marketing Investment Opportunities for Firms
Financial rewards are no longer the only success-determinants of investment opportunities. Technological, geopolitical, and societal changes now play a major role in the success of these opportunities.
In light of the Covid-19 pandemic, regional and international conflicts, firms have had to change how they present investment opportunities to investors. According to Deloitte, since the beginning of Covid-19 crisis, there has been noticeable changes in how investment are made. Structural investments are down 21%, equipment investments are up by 5% while intellectual property investments are up to by 12% (Bachman,2022). While investors are primarily interested in their Return on Investment(ROI), the suitability and sustainability of investment opportunities are under increased scrutiny.
The challenge lies with firms to prove that their investment opportunities are shock proof. The increasing threat of global pandemics and geopolitical conflicts push companies to find new investment marketing methods (Zhan, 2021).Additionally, these firms have to show the attractiveness of these investments(Sabirov et al., 2021).
Companies in the past focused on four main ways to lure investors: the company's profitability, its business trajectory, the executive and management team, and the investment opportunity. However, these are no longer enough. Substantive changes in the global value chains have affected the investment landscape(Zhan, 2021). These changes have a domino effect on the marketing of investment opportunities. According to data from McKinsey & Company, there was a 45%increase in consumer online presence in 2020 (DiResta et al., 2020). As a result, companies increased their online advertising practices.
As an investor, what to invest in is just as important as whom to invest in. With markets and governments pushing value chains to be more proactive in sustainability, there are more investments in funds dedicated to these practices. In 2020, research from UNCTAD showed that funds dedicated to global sustainability had a market value of $1.2-1.3 trillion, divided as follows:$260 billion in green bonds, $105 billion in social bonds, and above $900billion in sustainability-themed equity bonds (United Nations Conference onTrade and Development et al., 2020). Investments in these bonds are expected to grow with the push to realize Sustainable Development Goals (SDGs).
By the third quarter of 2021, there was an increase of 20% investment in information processing equipment over the pre-pandemic level (Bachman, 2022). In the same period, investments in intellectual property rose by 8%, largely due to investments in software. Zoom for example saw its market share jump by approximately$93 billion (Bradley & Stumpner, 2021). A greater look into sustainable investments show an increased value in telemedicine, online shopping, and remote education.
Companies depend on visibility to get more investors. For decades, firms have used proven marketing mediums like television and radio. However, with the emergence and continued growth of the internet and social media, there is a significant shift in the financial resources afforded by marketing departments to these tools. At the end of 2020, advertising through social media was about $132 billion, which projections show will surpass $200 billion by 2024 (Statista, 2021). However, even with the growth of social media advertisement, television was the second most used medium in 2021 behind the internet, raking in $66Billion in the United States (Guttmann, 2022).
Traditionally, investment opportunities were marketed by firms within certain circles of individuals and enterprises, thus keeping a near-closed loop for inclusive investing. The traditional investment advisory industry in Thailand mainly deals with high-net-worth individuals (HNWI) (Singapore Management University, 2022).Through their relationship managers, firms would look at the investment goals of these individuals, how much they are willing to invest and risk, and the time involved. They would then create an attractive investment strategy and present this to their clients.
While such a system is adequate for certain investors, it is not financially inclusive. The digital transformation has enabled greater access to more investors. Between 2021 and2022, there was a 10% increase in social media users (Statista, 2021). This is an increase of approximately 376 million people. A percentage of these are potential investors. Robowealth, a Fintech start-up based in Thailand, deals with this issue by employing technology to drive investment decisions(Singapore Management University, 2022). The start-up reaches more consumers through digitization and algorithms, enabling even low-income earners to make investments. The consequence of this is an expanded financial ecosystem.
The challenge with marketing investment opportunities today is not only tied to financial risks. Rather, public perception has an increasingly broader role in how opportunities are presented.The me-too and woke era has exposed gaps previously ignored in marketing campaigns. Strategic messaging is more important now than ever (Kidd et al.,2019). Using a wrong word or phrase in a marketing campaign could not only kill an entire campaign but also damage a brand's image and that of investors involved to the public. Marketing Return on Investment (MROI) is extremely important for firms.
Today’s consumers are the future investors. Consumer interactions with firms today will inform their investment patterns tomorrow.While the Covid-19 pandemic greatly affected brand visibility, it steered marketing campaigns to a more customer-centered approach. Companies can leverage their consumers' and investors' online presence to influence their buying and investments respectfully. By 2019, organic search and direct marketing were the marketing channels with the best ROI. Data from Statista showed that 21% of firms that employed direct marketing were successful in their marketing campaigns (Statista, 2021b).
Marketing tools and departments are now more data-focused than before. Organizations can rely on AI to create their investor profiles and tailor-make investment opportunities that fit specific clientele.While Relationship managers as is the case in Thailand could do the same, they do not enjoy the same levels of data that modern marketing tools have. Consequently, firms are technologically empowered to manipulate the tools and data to present the exact investment opportunities that investors would show interest in.
Big data lets firms learn a lot about their clients’ areas of interest. AI enables them to predict market patterns. Technological advancement has accelerated access and the creation of business insights from consumer research, trend forecasting, and competitor analysis. If the patterns are promising and lucrative, firms present this information as investment opportunities to their investors.
The future of investment marketing lies in firms leveraging technology, AI, data, and market patterns to create data-backed and well-presented metrics that will appeal to investors. Moreover, this data will help improve investment strategy by creating investment opportunities that are resilient to global crises, societal changes, and predicted market disruptions.
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