The Best Fund Marketing ROI In An Inflationary Environment

Fundraising costs have not been spared as inflation has inherently diminished the value of a dollar allocated to marketing. Marketing expenditures are rising across the board... how much, you might ask? 

In-person events are easily 2x vs. just 3 years ago, and digital advertising YoY costs are approximately +15% for Google, +60% for Facebook, and on average +40% across industry associations. Rising data and subscription costs are to blame, but increased competition due to success in online outreach to LPs over the last two years have played a bigger role. Simple economics: demand has gone up, and prices have followed. In a traditional sense, placement agents are asking for more too. 

This begs the question: where can I extract the best fund marketing ROI now? 

For a one-time investment with the best marketing ROI: Your Brand.  

Before institutional investors enter the due diligence phase, they want to know about the Manager’s process, approach, strategy – the value propositions that bolster all investing decisions – unflappable principles regardless of market conditions. But depending on LP segments, how that brand is messaged needs to be adjusted appropriately i.e. a focus on risk mitigation, the team, technologies, transparency, etc. 

For Managers with multiple strategies in a volatile (+ inflationary) environment, the right messaging is key in making the overarching brand relevant to specific LP segments. 

For longer-term investments with the best marketing ROI: Email Marketing 

Email marketing continues to be unmatched when it comes to the return on investment it drives across all industries. However, in the Alternatives industry, pre-send testing, the leveraging of external analytics tool, and discipline [of providing quality thought leadership consistently] itself is often lacking. 

Assuming a strong brand and well-segmented investor database with tailored messaging, emails play both a top-of-funnel and mid-funnel role in the Fund Marketing lifecycle. They help you identify your most engaged prospects and automate internal / external follow-ups. They also help you bring dormant leads back to life, and with the right tools, you’ll know immediately to re-establish dialogue. 

Investors are people too. They check their email every day… :-) 

Notable mention: LinkedIn Ads came a close second in our list for lead-generation purposes. There’s a lot to be said about how LinkedIn offers what we consider as the most targeted advertising customized at the LP level. 

The previous eras of high inflation during the 1970s and 1980s were considered a golden age for advertising. Audiences became eager to receive new messaging, and brands became more creative to promote their quality credentials. Only that the Alternatives industry then didn't get to partake in it due to restrictions around advertising (plus, investors weren’t quite ready for marketing either); gold was the runaway winner of the decade. 

The building blocks are now in place for Alternative investment managers to participate in this new golden age. With today’s inflationary environment, combined with the promise of multi-channel marketing to LPs, and the expansion of targeting + lead-generation, now presents great opportunity for solidifying value propositions and strategies.