Goals (the "what")

Ultimately, a common goal of all investment managers is to grow their assets under management (AUM) over the long-term.

Generating sales (inflows) of the firm's products and preventing redemptions (outflows) of money already invested — alongside any overall rise in the prices of underlying investments — contributes to the firm's AUM growth.

Marketing attribution for product flows

With an increase in the availability of data and focus on marketing as a business cost, marketing teams are increasingly trying to measure flows into their firm's investment products that have been sourced from, or influenced by, marketing activity.

However, within business-to-business (B2B) investment management, trades in or out of a firm's investment products are not made online — website visitors can't simply open an investment account or invest in products directly through the firm's website. Trades are either handled by the sales team or conducted entirely through a third-party investment platform, which means that transaction and holdings data often isn't available. This makes it essentially impossible to attribute flows to marketing activity — even before any challenges with the attribution itself would need to be considered.

Therefore, we won't be trying to attribute product flows to marketing activity.

Marketing return on investment

Another vaunted concept is marketing return on investment (ROI) (otherwise known as marketing ROI, or return on marketing investment), which can apparently be used to help assess the return of specific marketing campaigns and identify which are generating the most value versus their cost — or to assess the value of the marketing team as a whole.

Like a lot of other marketing concepts, it's almost completely unusable in the real world, and even more so in B2B investment management. We can see why this is the case by looking at how it's calculated:

As an example, a marketing investment (e.g., a campaign) that generated $6,000 of incremental value and cost $5,00 would have a marketing ROI of 20%.

However, it's impossible to compute any value within this formula. We can't attribute product flows to marketing, and so can't calculate any incremental value that might have been generated (we could try and use an alternative measure of value, but can we really assign a monetary value to each new lead, or page view, that was generated?). Costs can't be calculated either, as they would have to somehow be correctly apportioned across internal and external teams for work that might have been used in multiple projects.

Therefore, we won't be calculating any marketing ROI numbers.

SMART objectives

There seems to be a general consensus that SMART objectives should be set for a digital marketing strategy, to provide direction and measure the team's performance. Based on this advice, should we create some digital marketing objectives — for website visits, leads generated, bounce rates, email opens, and so on?

My answer is a firm no, for several reasons. The first is the multiple flaws with the objectives themselves. To help point them out, let's assume we have a simple objective: to increase annual website visits by 100% versus the previous year. I would have several questions for the person who came up with this objective:

• What was the rationale for choosing the specific number? Usually, there wasn't any — it was chosen arbitrarily.
• Can it account for quality? We may decide to publish more specialised website content to attract a lower volume of website traffic made up of visitors who are more in-line with the firm's ideal target audience. According to our objective, we have failed, as it can't take this simple nuance into account.
• If, at the end of next year, we haven't met the objective (or exceeded it), what would we do about it? The answer is the same for both outcomes: nothing. The objective isn't actionable.
• If we doubled the desired increase to 200%, would that change anything about our approach? Apart from simply spending more on advertising (a rather blunt tactic), our output wouldn't change based on the size of the value we choose for our objective.

Another issue is getting the key performance indicator (KPI) data needed to measure objectives (such as the number of website visits). This can be surprisingly challenging, as data often sits across different systems (such as Google Analytics for the website, or the marketing automation system for email and leads) and teams often lack the technological capabilities to pull them all together in one place to make automated reporting possible.

Finally, SMART objectives are very difficult to adopt in practice, and I suspect that almost no teams actually use them. Marketers either don't know they exist, or — when they do create some — find it very difficult to fit them into their team's working schedule. Periodic analytics review meetings tend to become a chore and are eventually abandoned. Reporting usually ends up as a few neglected website reports and an occasional presentation of the outcome of a marketing campaign (usually via a Powerpoint presentation of numbers without context).

Due to these issues, we won't be setting SMART objectives.

As a brief aside, it's worth mentioning that there are many areas, mostly outside the B2B investment industry, where SMART objectives do make sense. For example, a firm with a specific website conversion objective that is directly linked to revenue — such as applications for a credit card — can monitor and optimise the conversion rate over time by analysing large amounts of data and using it to make small, incremental changes to the website (for a credit card company, the conversion rate would be the number of completed credit card applications as a percentage of website visits).

In contrast, typical website journeys on B2B investment manager's websites are short and involve simple searches for information, with transactions dealt with elsewhere — there isn’t much to optimise.

Goals

So, in place of attributing product flows, calculating marketing ROI, or creating SMART objectives, what should be used instead?

My suggestion is to not spend much time worrying about it. Instead, we will set a simple, non-target based goal — support the growth of firm AUM over the long-term — and leave it there.