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Marketers & Stock Traders are more similar than you think

The Tribe
August 17, 2021

What comes to mind when you think of marketers? Is it Don Draper from Mad Men? Or do you think of marketing greats like Seth Godin and Gary Vee?What about when you think of stock traders? Maybe you think of Bobby Axelrod, Warren Buffet or Jim Simmons. Although, these days you may think it's just guys on r/WallStreetBets trading stonks until they go to the moon.No matter where your mind goes, I would bet that you have 2 very different ideas for marketers and stock traders… and I couldn’t really blame you. On the surface, the two don’t really seem related. However, as someone that enjoys both marketing and stock trading, and actively does both, I believe they are more similar than they seem. So, let's start breaking this down…

1. Charts & Data

Charts, the hallmark of any good trader (and bad ones too). Even if you’ve never traded before, you’ve probably seen them, and they were probably the first thing that came to mind when you thought of stock traders, and rightfully so.More broadly, these charts are part of ‘technical analysis,’ which involves evaluating investments and identifying trading opportunities in price trends. Ultimately, it comes down to taking advantage of market data, and utilizing that to try and make informed bets.

Now you may be thinking, “How is this related to anything in marketing?”Marketing has become increasingly data-driven over the last few decades, mainly from the growth of online channels that provide more data than ever before. Much like a trader doing technical analysis, digital marketers are constantly gathering data, identifying trends, and making bets that will hopefully win big.Data-driven marketing is all about using customer data to predict the needs, desires and future behaviors of your target market. The insights gained from marketing analysis help to develop personalized marketing strategies for the highest possible return on investment (ROI).

As a digital marketer, it is our responsibility to access as many data sources as possible in order to have the most comprehensive outlook for a business or brand. Whether that be Google, Facebook, TikTok, Twitter or your website, there is data everywhere, and that keeps us looking at charts just as much as traders do.

2. Great Marketers and Traders see the opportunities before everyone else

So… we’ve established that marketers and traders spend a lot of their time gathering and analyzing data. But if we assume most do that, what makes some successful while others fail?That's where another similarity comes into play: foresight.While foresight is important in any business, it is particularly important for success in both marketing and trading. That's one of the many reasons data analysis is so important in both roles.In the case of trading, making the correct call before the rest of the crowd is what separates the decent traders from the great ones. Warren Buffet, one of the most renowned traders of all time, is affectionately called by many the ‘Oracle of Omaha.’Keyword there… ‘Oracle’

In the world of marketing things are not much different. Marketing is largely about meeting the consumer where they are and addressing their needs and wants in the best way possible. However, it works out way better for a marketer to be there ahead of time, understanding what consumers may want before they even get there.One of the greatest examples of this is Steve Jobs, who, if you didn’t already know, was a marketer. In the 70s, Jobs figured out where technology could be heading and, more importantly, what consumers would need for technology to get there. He understood that it wasn't so much about the technology itself as it was about the way people would interact with it, and how that interaction should make them feel. This foresight not only led to the emergence of Apple in the marketplace, but also eventually led to the invention of the iPhone, which revolutionized the world as we know it.

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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