Unlike the Tamagotchi, These Trends Are Predicted to Stay Around
Trends come and go. Around the same time as the Tamagotchi digital pet craze (a $900 million money-spinner for toy company Bandai America), Britney Spears made ultra-low waist jeans a thing. These jeans were so low that you couldn’t sit down without revealing the proverbial ‘plumbers.’
Whilst some trends are clearly fads, we’ve compiled a list of themes in investor marketing we think are likely to be big in 2021 and beyond.
We’ve heard ad nauseam how the COVID-19 global pandemic created a fundamental reorientation of our state of affairs. For listed companies, it necessitated a shift from in-person to online investor marketing. Any initial dubiety towards Zoom roadshows, webinars or online investor events was overcome by the realisation that online offerings were cheaper, more time-efficient, more accessible to a wider group of people, more comfortable (board shorts and business shirt?), and the ROI is often much higher.
While there will always be a place for in-person marketing and relationship building, we predict digital investor marketing spend to grow exponentially among our listed clients over the next 5 years.
According to a recent Brunswick survey, over 50 per cent of investors have traded off ideas gleaned specifically from social media platforms such as Twitter and LinkedIn. We expect this figure to continue to rise. In a way, investors who consult social media are trying to get an information advantage and are not relying on company information and traditional news sources alone.
Unprecedented levels of younger investors entering the market, we feel, is also supportive of our argument that social media usage for investment research and decision-making will continue to grow. To leverage this growth, we expect to see more listed companies using financial influencer strategies to promote their stories.
Given social media marketing is a low-cost and efficient way of communicating with a large investor audience, it’s a lost opportunity (at best) and a communications risk (at worst) if your company isn’t incorporating it into your investor marketing strategy.
The media landscape is shrinking, and coverage of small and mid-caps is dwindling, so we predict more and more companies will take control of their narrative and develop their own content.
‘Content is king’ is an old adage in marketing and communications but is equally applicable to investor relations. ‘Content’ refers to any material that an investor consumes: an ASX release, a company factsheet, a presentation, a video, podcast , newsletter (you get the idea).
Content development requires resources and time, but if it is consistent and of high quality, it can be highly effective when used for investor relations. Content is in fact critical to any company, so much so that 47 per cent of users will read more than five pieces of content from a company before speaking to the company’s representative. The figure is even higher just before investing. This means companies need to be actively producing a steady stream of ‘evergreen’ content that can help shape investors’ perceptions of the company.
Rise in Self-Directed Wealth
Individual investors are on the rise, thanks in part to the availability of free trading platforms. The recent Game Stop saga with online trading platform Robinhood is a prime example of the investment clout of self-directed retail investors (defined as those who don’t use a traditional broker or money manager). It is difficult to get a complete picture of the number of DIY global investors, but one report indicates there are around 54 million self-directed investors in the US alone. Retail investors now account for roughly 20 per cent of daily NYSE trade volume. On peak days, those figures push upward to 25 per cent.
Artificial Intelligence (AI) and Deep Learning
According to fund manager ARK Invest, deep learning will add $30 trillion to the global equity market capitalisation during the next 15-20 years.
In their ‘Big Ideas’ research, ARK wrote, ‘Until recently, humans programmed all software. Deep learning, a form of artificial intelligence (AI), uses data to write software. By “automating” the creation of software, deep learning could turbocharge every industry.’
The applications for investor relations are endless. At Investability, we are excited at the prospect of using AI to help reveal trends in investor sentiment and engagement, predict share price movements, and then use this data to optimally position our clients.
ESG and Purpose-Based Investment
Companies that prioritise ESG and purpose-based investing are more likely to outperform their peers. Stocks with higher ESG ratings performed better in 2020 than others, reaching a record high of $489 billion, according to Fidelity International. Millennial investors, in particular, prefer companies that are socially responsible and committed to making a positive impact in the community.
Millennials are the investors of the future. As digital natives, they are unafraid to leverage technology to build wealth. They seek investment opportunities that align with their values. In a survey from the Institute for Sustainable Investing, 86 per cent of millennials said they are interested in sustainable investment opportunities. They prefer to invest in companies or funds generating market-rate financial returns that also are pursuing positive social or environmental impact.
Need Help Leveraging These Trends?
Get in touch to find out how we can help your business get recognised by the investment community. Reach out online and we will be in touch.