This ability to see opportunities before they arise, both in the short and long term, seems to be one of the defining characteristics of great marketers and traders.
3. Risk Management Is Key
While everyone understands the risks associated with trading, many may not understand the level of risk associated with marketing…. And I’m telling you, the risks can be pretty high.
A large part of stock trading is risk management – this involves making market assessments in order to mitigate losses as much as possible. With the volatility seen in markets today, this makes sense. A common strategy used by advanced traders is hedging, which allows a trader to offset potential losses through the potential gains of another financial bet.
In the world of marketing, things aren’t much different. Many marketers manage hundreds of thousands to millions of dollars on behalf of their clients, who all expect to see a ROI. Like traders, marketers always have to consider risk management – what can be done to minimize losses and maximize potential for profits. And like traders, we hedge our bets.
With every business there are a myriad of channels that can be utilized for marketing efforts. The combination of the channels used depends entirely on the business and it’s audience. However, that gives marketers an opportunity to hedge their bets. Splitting ad budgets between Facebook, Instagram, LinkedIn, TikTok or Google allows a marketer to hedge bets between these platforms.
To take things more granular, marketers will even hedge their bets within a single platform. Any competent marketer will understand the concept of A/B testing, and in today’s marketing environment it is a necessary step for risk management. A/B testing (or split testing) is the process of comparing two marketing assets, usually differentiated by a defined variable, and measuring the difference in performance. This A/B testing allows you to figure out which ad has the best chance of success, and over time can inform how future ads are developed.
4. We both move the markets
Whether you believe it or not, traders AND marketers are responsible for moving the markets. As with many of these points so far, the case for traders seems pretty straightforward – they literally are the ones buying and selling the stocks, directly influencing market movements.
But here’s the case for marketers.
Marketing is all about crafting the public’s perception of a brand. Our job is to control the narrative, and in doing so, we influence people’s feelings towards the brands around them.
Cristiano Ronaldo, through the action of just removing Coca Cola bottles from his table during a press conference, saw Coca Cola lose 5 billion in stock value. I highlight this to say, perception is everything, and marketing is all about perception.
Another great example of this can be seen in what recently happened in GAP’s stock price. Upon striking a 10 year deal with Yeezy, owned by Kanye West, GAP saw their stock price increase 42%. Before a single article of clothing was ever even released, GAP saw 1 Billion dollars of value added to their market cap. That is the power of marketing, and the power of ideas.
While there are a bunch of other similarities that also stand out to me, these were what I thought I would start with. I hope it’s now clear how similar both marketers and traders are, and the role we both play in the markets. If you enjoyed this read, check out the other amazing blogs on the website – and if you want a badass team that markets like Buffet trades, hit us up and let’s start a conversation!
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