The Future of Marketing Automation
Written by: Olivia Carroll
It might not be a surprise to hear that 90% of marketers report using marketing automation for large-volume email campaigns, according to a study by Gleanster reports.
Marketing automation software effortlessly accomplishes menial tasks like scheduling emails and social media for your business. It can save you time, energy, and even generate organic leads. It organizes and distributes your content for you – what’s not to love?
In addition, there is clear evidence that marketing automation can grow your company substantially:
“63% of companies that are outgrowing their competitors use marketing automation.” –The Lenskold Group “2013 Lead Generation Marketing Effectiveness Study” (2013)
But consumers want more personalization, and they are quickly learning how to spot mass content.
Jerry Jao from Forbes believes that soon, that will no longer be the case. Jao believes that automation’s strength lies in its ability to handle massive quantities of channel management and that consumers crave authenticity and personalization in the content they receive from these channels.
Because of this, Jao foresees the rise of active marketing tools with the ability to create individualistic and creative campaigns from real-time data-driven insights. This would allow the marketer to take a step back from lifecycle management and allow the automation to do it for them.
Moosa Hemani tends to agree. Hemani believes that marketing automation tools will need to be continuously readjusted to address client’s primary needs. This will result in machine learning, capable of making predictive choices based on previous data rather that operating off of rules.
Another prediction is that marketing automation will soon accommodate account-based marketing strategies. B2B marketers experienced a 171% increase in ACV when using ABM strategies like selecting target accounts, defining budgets and outlining team structures. This growth is expected to continue to evolve with the advent of artificial intelligence in ABM.
According to the GetResponse, this new automation will be heavily reliant on customer loyalty and crack below the surface with content. Marketing automation programs in the coming year will need to support loyalty programs that go beyond “buy two, get one free.” The savvy consumers of 2017 are expecting something more relevant and significant to them.
In addition, social media will become even more interactive with features like the ability to click on items and make in-app purchases. As GetResponse states, “The best marketing automation software will provide native integrations with all major networks and add interaction data directly to customer profiles — perhaps even as a factor in lead scoring. That’s a lot more useful than a long list of likes.”
Keeping up with these marketing automation trends will keep you on target with your goals and strategies. Marketing automation is here to stay. The more you know about these trends, the more you can ride the wave of growth.
Sizing up Strategic Beta
Interest in strategic beta ETFs is rising. A few simple guidelines can help investors pick from among the often-bewildering number of options.
The number of strategic beta ETFs has grown at 20% a year, consistently in good markets and bad, since the year 2000. With good reason: Strategic beta ETFs offer a more thoughtful passive option than cap-weighted indexes—and they can do so with a more transparent process and lower fees than actively managed funds.
Bright future, dim past
All well and good, but how should investors assess any particular strategic beta ETF? Close to 40% of these funds have been in operation for less than three years. This lack of an established track record can make it hard to validate their claims. ETF sponsors may try to make up for that shortcoming with back testing, running simulations of holdings they might have had against actual past market performance, but that has its limitations:
Back testing doesn’t always account for fees, liquidity or transaction costs.
Back tests are “selection biased”—that is, back testers have a tendency (conscious or not) to engineer positive outcomes. Live outcomes are therefore likely to be inferior.
Too great a focus on recent history can lead to “driving in the rearview mirror.” While an index or ETF may solve the problems of yesterday well, an investor’s focus should instead be on solving the potential problems of tomorrow.
Three steps to an informed judgment
Because the indexes tracked by strategic beta ETFs are by design somewhat exotic, effective assessment of them calls for some digging:
- Investors first have to understand who the index designer and asset manager are (they may not be the same people). They should have a clearly expressed investment philosophy and the expertise to enact it in practice.
- The properties of the portfolio should reflect the investment philosophy. Not only does the transparency of ETFs allows examination of the holdings to ensure that this is the case, it also measures such as active share relative to a cap-weighted benchmark or turnover can indicate whether an ETF is performing as designed.
- Performance can also be used to confirm that an index is doing its job. While short-term results shouldn’t be given too much sway, the index designer should be able to explain when and why an index will perform and when it might not.
One key aspect of performance shared with traditional passive management is tracking error. Like earlier cap-weighted index tracking funds, strategic beta ETFs should have minimal tracking error to their own indexes. Beware, though, the tracking error to the benchmark can be large and dynamic, it is by this differentiation that strategic beta adds value.
Made to measure
Strategic beta does not defy analysis, despite its novelty. Indeed, it has a lasting advantage over standard active manager due diligence. Strategic beta, after all, is rules-based. What an investor sees in straightforward, well thought-out index composition rules is what the investor will get. In that sense, strategic beta is relatively immune to the personnel changes, style drift and index hugging that can challenge actively managed mutual funds.
Learn more about ETF due diligence here.
This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purpose. Any examples used are generic, hypothetical and for illustration purposes only. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, legal, tax and other professional advisors that take into account all of the particular facts and circumstances of an investor’s own situation.
Opinions and statements of market trends that are based on current market conditions constitute our judgment and are subject to change without notice. These views described may not be suitable for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations. Past performance is no guarantee of future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. ETF shares are bought and sold throughout the day on an exchange at market price (not NAV) through a brokerage account, and are not individually redeemed from the fund. Shares may only be redeemed directly from a fund by Authorized Participants, in very large creation/redemption units. For all products, brokerage commissions will reduce returns.
J.P. Morgan Asset Management is the marketing name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. J.P. Morgan Exchange-Traded Funds are distributed by SEI Investments Distribution Co, One Freedom Valley Dr., Oaks, PA 19456, which is not affiliated with JPMorgan Chase & Co. or any of its affiliates.
For additional disclosure
For a longer discussion, please see our recent publication Strategic Beta’s due diligence dilemma (J.P. Morgan, April 2017).
- 1 of 1396