One of the most common pieces of advice to new investors is to “diversify your portfolio.” Essentially, this means investing in a wide range of different asset classes and getting exposure to many different markets at once. This way, you improve your resistance to risk and volatility, you minimize your potential losses in the wake of a catastrophe, and you may even increase your lifelong returns.
This approach can also be beneficial for your marketing strategies, especially as an emerging business.
What Does It Mean to Diversify Your Marketing Strategies?
Let’s start by reviewing some of the ways that you can diversify your marketing strategies.
- High-level tactics. It’s possible to use a mix of different high-level approaches. For example, do you want to win over customers with temporary but explosive, high-profile campaigns? Or would you rather put out a sustained, consistent stream of branding materials? Do you favor traditional marketing or more novel guerrilla marketing tactics? Well-diversified marketing portfolios use a mix of different tactics.
- Channels. One of the more obvious routes to diversification is to use a mix of different marketing channels and platforms. You can incorporate a number of complementary and differentiated strategies, such as search engine optimization (SEO), PPC advertising, podcasting, printed ads, and even billboards and radio ads. Additionally, you can invest in different platforms within those channels. For example, in the realm of PPC advertising, you can work with alternative ad networks outside of the traditional “Facebook and Google” continuum to reach more people and potentially see better results. This is the approach common to “multi-channel” or “omnichannel” marketers.
- Target audiences. Some brands have a focused, uncompromised target demographic. Most brands have multiple audiences, or are somewhat flexible in the people to whom they appeal. If you’re willing to bend your target audience slightly, or if you have multiple target audiences to work with initially, it’s advantageous to broaden the scope of your targeting as a form of diversification.
- Style of messaging. What is your overall style, and what kind of messaging do you want to include in your ads? You might have clear, consistent brand standards in place, but even within those constraints, you may have the flexibility to change up your messaging style. For example, you can include ads with simple, minimalistic, straightforward lists of benefits, and ads with more colorful, descriptive copy. You might even be able to include both in the same ad at times.
- Budget and investments. You also need to think about how you’re spending money. Do you want to invest in these tactics as aggressively as possible, reaching more people in a burst of activity? Or is this more of a marathon, requiring you to minimize your investments and commit to a long-term, steady engagement? It may be helpful to have many types of strategic investments available.
The Benefits of Diversification
Diversifying your marketing portfolio, if it can be called that, has many benefits for your brand:
- Broader appeal. For starters, you’ll win broader reach and appeal. Today, the internet is practically ubiquitous – but that doesn’t mean everybody uses the internet. There are still segments of the population that don’t spend much time online, so if you exclusively invest in digital marketing tactics, you’re never going to reach them. Investing in a wide range of different channels, and targeting multiple audiences will help you reach more people total – and get through to segments that might otherwise be lost.
- Higher awareness. It’s also possible to build more brand awareness through these diverse tactics. Studies show that repeated exposure to a brand leads to much higher familiarity and trust; that’s why so many ads rely on their repetitiveness to create effective messaging. If you’re dominating many channels at once, your customers will become more familiar with your brand much faster – and you might earn a better reputation as a result.
- Better customer relationships. You can also make the argument that more diversified marketing approaches can lead to better customer relationships. You’re able to reach more people in a wider range of different ways and onboard them more successfully as well.
- Steadier returns. Marketing channels don’t experience the same boom-bust cycles as, say, the real estate market, but you’re still going to experience seemingly random ups and downs with different channels. If you’re exclusively invested in one channel and it suffers a major decline, your entire branding efforts could be in jeopardy. If, instead, your marketing budget is spread out across a variety of channels, a major blow to any single channel won’t impact your overall results by much.
- More information. Getting exposure to different channels opens your potential to receive more varied and thorough information about your target audiences – and possibly about your competitors. Studying how your demographics behave across multiple channels allows you to kind of triangulate your perception of your average customer persona – and challenge biases and preconceived notions that might have been holding you back. This assumes that you’re tracking your marketing data well across all channels you’re currently utilizing.
- Competitive protection. Competition can be a threat in the marketing world; if a competitor is too aggressive in your channel of choice, it could drive up prices, force you to suffer losses, or even compel you to withdraw entirely. If your marketing portfolio is sufficiently diversified, however, a new competitor isn’t as big of an inconvenience; you can simply rebalance and move on.
The Case Against Diversification
The benefits of marketing diversification are impressive, but there’s also a case to be made against diversification. In some ways, marketing is a game of minimization and maximization. You’ll want to minimize your spending and effort in areas that don’t favor your brand and maximize your spending in effort in areas that do. Over time, that will maximize your ROI by reducing expenses and improving returns.
This approach practically necessitates cutting inferior strategies in favor of superior ones. For example, let’s say you’re making a lot of money from SEO; its ROI is higher than any of your other strategies and in terms of sheer impact, nothing else even comes close. You’re currently spending $5,000 per month on your SEO strategy, while spending $2,000 on social media ads and another $1,000 on printed advertising.
If SEO is your top performer by far, and there are no unique benefits to be found in the other areas, why shouldn’t you just pool together all $8,000 and spend it all on SEO, while cutting the other channels off completely? Wouldn’t you end up seeing a return that’s, overall, much higher?
Narrowing the scope of your marketing work also gives you an opportunity to specialize. If your top marketing experts are juggling many different strategies simultaneously, they automatically become generalists. If, instead, they focus exclusively on one or two categories, they’ll develop skills in those areas much faster – and have much stronger long-term potential.
Obviously, the real world is typically much more nuanced than this example would suggest. Suffice it to say, the case for diversification isn’t always clear and straightforward.
Tips for Using Marketing Strategy Diversification
If you want to get more out of your diversified marketing strategies, follow these important tips:
- Work with experts when possible. The better your team, the better your execution will be, regardless of which tactics are currently in your arsenal. Try to hire the best people possible in a variety of different disciplines, or work with marketing agencies to see better results.
- Feel free to specialize. While diversification is important, it’s also important to specialize in the areas most valuable to your business – and lean heavily toward them. Find the balance for your own business.
- Make decisions objectively. Rely on data and objective observations to make your decisions – not whims or intuitions.
- Rebalance periodically. Take the time to rebalance your marketing portfolio regularly, just as you would an investment portfolio.
There are countless ways to approach marketing and advertising, especially in today’s world of strategic and technological complexity. If you’re only using one strategy, or one group of strategies, you’ll be artificially limiting your potential. Use diversification to reach more people and see better results for your brand.
Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!