What Asset Managers Can Learn from Marketers About Data

Professional at desk analyzing data on dashboard

I began a career in marketing a decade ago. The industry I work in now is completely unrecognizable from where I began. As a digital native, I never envisioned myself working at Mad Men HQ, but I also never imagined that marketing would become not only numbers-driven, but an exemplar of how data can drive business growth.

For tech and ops pros, here’s a quick run-down on how marketing has always worked: marketers try creative ways to sway buyer sentiment in the brand or product’s favor. This can be explained in a few key steps:

  • Hypothesize buyer preferences to target your marketing content
  • Guesstimate where buyer attention is spent
  • Throw your hypothesis-based marketing content into your guesstimated venues (e.g., TV, billboards, conferences, magazines) and cross your fingers!
  • Revenues go up? Nice, maybe marketing helped. Revenues go down? Bummer, try some other guesses next time.

Of course, this is an oversimplification that undermines the strategy and creativity of my forebears, but it allows me to make a point. Every step in this process has been turned on its head. By tracking users as they navigate from email to social media to shopping we now know preferences, patterns, and attention habits. This allows marketers to create content that is targeted to buyers in the places buyers will see them, then track efficacy and tailor until the strategy is perfected. These kinds of analytics are no longer the pipe dream of marketing giants—quantifying and analyzing is easy and accessible, and most marketing professional now live in a world of metrics.

So how did marketing transform from a throwing spaghetti at the wall approach to becoming the most competitive and data-driven industry in existence? Any marketer’s Achilles’ heel used to be the inability to prove value. Marketers quickly seized the opportunities provided by the digital landscape to track and showcase their effectiveness. This eager early adoption helped marketers design better and better algorithms to predict behaviors, build more accessible technologies, and pivot their operating models to scale with exponentially increased data demands.

Investment management is simply not there yet. The disruptive potential of the new digital frontier is finally gaining the attention it deserves but this revolution is distinctly familiar to me—it intimates the changes that transformed marketing before and at the start of my career. That said, asset managers are building their new operating models and data architectures on a strong foundation.

In the front office, algorithms that use structured and unstructured data to predict market behavior are not groundbreaking. This is the bread and butter of the modern marketer. While the sophistication of market models and necessary latency complicate portfolio management technology, the AI framework exists. The middle and back office can take a similar note from marketers, particularly as it relates to data demands. Marketing platforms integrate with sales platforms with inventory management, all seamlessly run off a scalable cloud model. This is table stakes in consumer marketing. And don’t even get me started on enterprise reporting platforms and dashboards—from integration to user experience, we’ve got it dialed.

You don’t need a crystal ball to see where our industry is headed—catch a glimpse of Amazon’s marketing tools and technology infrastructure and you’ll probably get a good idea. What can investment managers do to get up to speed? Forget the old normal as quickly as possible. We live in a numbers-driven world now and things that involve guesswork, pen and paper, or non-scalable resources are going the way of the dinosaur.