BOW + ARRO

Targeted Musings on Financial Marketing

Key marketing takeaways from Inside ETFs 2018

Inside ETFs, held in Hallandale Beach, Florida, is the biggest event of the year for most ETF Issuers and service providers in the ETF ecosystem. The team at Arro Financial Communications was there this past week, meeting with current and prospective clients, absorbing new trends and shifts in the competitive landscape, and catching up with our friends in the industry.

It’s clear that the ETF industry is maturing in some ways, even as innovative new entrants continue to surprise with unexpected, timely products, as well as new twists on old concepts. When it comes to marketing, every ETF issuer, whether they’re new to the space or an established player, faces similar challenges in terms of gathering mindshare, ensuring product visibility, and educating investors on their respective funds’ key value propositions.

Amidst the crucible of meetings, presentations, and meet-and-greets, at this year’s Inside ETFs, the Arro team made sure to take note of emerging and ongoing trends in ETF marketing. What follows are our key takeaways:

 

For ETF issuers, educational content remains king…

“Investor education” seemed to be the phrase uttered most often as discussions turned to ETF marketing, and for good reason. As the ETF space has matured, the complexity of products on offer has also increased—it’s now critical to ensure that prospective investors grasp higher-level concepts such as core/satellite holdings, factor investing, alpha, beta, and strategic/smart beta, among many others. In short: investors are unlikely to put their money into products they don’t understand. Along with this sizable knowledge gap, investors have also become increasingly suspicious of overt advertising.

 

…and even with their own internal marketing departments, there’s always more to be done.

The growing consensus among ETF marketers facing these challenges is simple: quality educational content is no longer optional—it is an absolute must. To this end, many issuers are seeking to create their own full-blown ETF education hubs, featuring content both broad and deep, on a variety of topics and from across the multimedia spectrum, including short, timely blog articles, lengthier white papers, animated videos (more on this in a moment), think pieces, and infographics. The pivot from ETF issuer to content powerhouse is not always an easy one, which is how many marketing initiatives can fall through the cracks. By remaining focused on regularly producing quality content, and perhaps working with an outside vendor to augment their existing capabilities, ETF issuers can make significant strides towards bridging the educational gap and connecting with potential investors as a trusted source of information. The AUM growth is likely to follow.

 

Increasingly, ETF issuers are recognizing the storytelling power of animated videos.

It’s become something of a truism to say that the financial services industry often lags a bit behind other industries when it comes to marketing, and the slow-but-accelerating adoption of animated videos is an instructive example. Only in the last year or so have we seen ETF issuers recognize the potential for harnessing animated videos in product-specific contexts, to quickly explain top-level concepts and entice potential investors to learn more. In a culture that is rapidly shifting away from the written word, the power, effectiveness, and versatility of animated videos cannot be understated.

Related: If Content is King, Video is Emperor

By explaining 2 or 3 overarching value propositions in a colorful, lively manner, animated videos accomplish a number of tasks at once: engaging a potential investors, personalizing an ETF brand, and serving as an introductory “primer” on what may be a complex fund. At the end of the video, potential investors are primed to learn more and dive into the minutiae of a fact sheet, white paper, or prospectus. We think we’re likely to see many more “animated investment cases” in 2018, as ETF issuers continue to embrace the power and potential of multimedia.