Providing the Right Information at the Right Time

Providing the Right Information at the Right Time

As a content marketer, you sometimes need to cast a wide net. When writing copy for your company’s website, for example, you’ll be working under the assumption that almost anyone could be a potential customer. And you’ll write your web copy based on that assumption.

At the same time, you realize that not every product is right for every customer, especially when you’re selling financial products. With some campaigns, you know you’ll need to target the right customer with the right information at the right time. And that’s where contextual marketing comes in.

Contextual marketing 2.0

In a nutshell, contextual marketing is a form of personalized marketing that allows you to target specific (current or potential) customers based on how they behave and what they search for online. You know what this looks like. You Google “best boots for Canadian winters” and search through the results. A few minutes later, you log onto Facebook and the ads all seem to be for winter boots.

With the ever-increasing move toward mobile, contextual marketing can go one step further to target the right customer with right information at the right time AND in the right place. You search for winter boots on your mobile, and you start receiving ads for the best deals on boots at stores within a couple of kilometres of where you are at that moment. You might even get a coupon to put toward your purchase, texted right to your phone.

With the ever-increasing move toward mobile, contextual marketing can go one step further to target the right customer with right information at the right time AND in the right place.

Finish Line

Targeted ads are a good example of contextual marketing, but they may not fit with what many content marketers do. So, what does this type of marketing look like within the context of a broader content marketing campaign?

Let’s look at the example of sports retailer Finish Line. The company created a direct-email campaign to announce a big sale at its stores. The announcement included a countdown clock that told customers how much longer the sale would last based on when they opened the email. Every time a customer opened the email, the countdown clock would update itself, making customers aware of the time-sensitive nature of the sale and creating a sense of urgency.

Finish Line also used its customers’ location data and stock information from each store to enhance the sale announcement. In addition to a countdown clock, customers could see a map to the nearest Finish Line location and up-to-date inventory of everything available at that particular store.

The company even took into account what would happen if the email was opened after the sale ended by providing an alternate message of great deals still available at their stores.

Contextual marketing for finance

Some financial services firms are already using contextual marketing with great success. One large retail bank, for example, tracks when a customer uses his or her credit card to make a purchase. The bank then sends the customer information on how to save money on similar purchases next time. One large retail bank, for example, tracks when a customer uses his or her credit card to make a purchase. The bank then sends the customer information on how to save money on similar purchases next time.

By using location data, the bank could also choose to guide customers to the best deals on complementary products. For example, if the customer just bought a new printer, they could be guided toward the best deals on paper or ink refills. The tie-in here is that the bank is giving customers information that will help them successfully manage their credit card debt.

A note of caution: Contextual marketing could feel invasive to some customers. There are plenty of people who use the word “creepy” to describe those Facebook ads that seem to know exactly where they’ve been, when and with whom.

The examples we’ve given here, with Finish Line and the large retail bank, weren’t overly invasive and were well received by customers. But if you plan to use what could be seen as very private personal data to create tailored content, consider allowing customers to opt-in to your marketing program first. And avoid using sensitive information that has become public but that a customer may not want you to have, such as news of a recent divorce.

Yes, it can be a challenge to create tailored information that doesn’t cross a line, but for those who get it right, the payoff is often significant.

Andrew Broadhead
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Andrew Broadhead is Communications Manager at Ext. Marketing Inc., where he creates content that helps financial services firms engage their customers and prospects. Andrew’ ... Click for full bio

Sizing up Strategic Beta

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.[2] 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[2]. 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:

  1. 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.
  2. 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.
  3. 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] Morningstar.

[2] Morningstar.
J.P. Morgan Asset Management
Empowering Better Decisions
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See how ETFs differ from other investment vehicles, learn how to evaluate them, and discover how ETFs can be used effectively to achieve a diversity of investment strategies. ... Click for full bio