The Future of Social Media in Asset Management

The Future of Social Media in Asset Management & Insurance Jesse Mark, Senior Research Analyst Ignites Distribution Research September 17, 2013

What is Ignites Distribution Research? 2

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Agenda • Why is Social Media Gaining Importance? • Social Strategy in the Asset Management Industry • Best Practices From Our Industry – – – Blogs Twitter Linked. In You. Tube Facebook • Measuring Results • The Future of Social Media… 4

Why Social Media is Gaining Importance 5

Shifting from Controlled Communication to Uncontrolled Communication Advisors and investors can share opinions about the brand whether the brand likes it or not 6

Firms No Longer Own Their Brands • Customers don’t need to rely on the firm to get information to make purchasing decisions • Cluetrain Manifesto (1999): “There are no secrets. The networked market knows more than companies do about their own products… and they tell everybody…” • Brand is determined by what customers and prospects say it is, not what you say it is 7

United Airlines: Learning The Hard Way 1. United Airlines passenger Dave Carroll had his Taylor guitar destroyed by the airline's baggage 2. United repeatedly declined to reimburse him for the damage 3. Carroll writes now-famous song mocking United customer service Result: 13. 3 million views $180 mill loss in UAL shares 8

Opting Out is Not a Long-Term Option • Clients will talk about your firm whether you are on social media or not • Conversations cannot be controlled, only joined • Brand advocates will defend your firm and help support the firm’s products BRAND ADVOCATES COME TO THE RESCUE AND DEFEND THE FIRM (VANGUARD) 9

The Sales Cycle Has Changed • Advisors are doing research before talking to wholesalers • Firms need to provide content to aid decision-making early on in the sales process 10

Trust Matters in Our Industry • Performance-related attributes are table stakes • They alone do not build trust Source: CFA Institute & Edelman, Investor Trust Survey 2013 11

Social Provides Platform to Build Trust 12

Advisors Use Social Media • Almost 90% of financial professionals have at least one social profile • Some 61% report using social media weekly (40% several times a week) • Two-fifths of FAs believe social media has value for their business • One-fifth of FAs have already seen tangible results from social 13

Firms Need to Be Where Advisors Are… Source: American Century Social Media Report 2013 14

…But Need to Determine Opportunity Source: American Century Social Media Report 2013 15

Help Advisors Do What They Do 16

Broker Dealers Slowly Embracing Social June 2011: Commonwealth becomes first B/D to offer FAs FINRA compliant solution December 2011: Raymond James offers FAs ability to post on Linked. In, Facebook, Twitter June 2012: Morgan Stanley expands access to Twitter & Linked. In 17

FAs Have Formal Social Policies, But Not Necessarily Compliant Processes 18

Social Strategy in the Asset Management Industry 19

Social Media Isn’t A Top Priority… • Social isn’t top of mind for most marketing executives • Many firms lack dedicated social media talent • Senior management buy-in (and budget) are often lacking to make social media successful Source: Ignites Distribution Research survey 20

Usually, Social Is De-Emphasized 21

Top Marketing Priorities for 2014 • Increasing brand awareness is the top cited priority 22

But Social is Aligned With Top Marketing Strategy Items for 2014 • Social media can help reach five of the top priorities 23

Many Firms Not Skilled in Digital/Social • In 2013, 70% of marketing budgets spent on print • Firms more adept at traditional work than digital work • Top firms are investing heavily in digital hiring and training 24

What Asset Managers & Insurers Are Doing on Social Media 25

Best Practices & Trends Blogs 26

What Asset Managers Do With Blogs 27

A Human Face In Front of the Brand PICTURE THE AUTHOR & DESCRIBE HIS OR HER BIO (OPPENHEIMERFUNDS) 28

Writing for the Web 1 INFORMAL AND CASUAL STYLE FREQUENT USE OF IMAGES AND CHARTS (RUSSELL INVESTMENTS) 29

Help Advisors Find What They Want 1 2 UTILIZE (CLOCKWISE): 1. TAGS 2. CATEGORIES 3. SEARCH FUNCTIONALITY 3 30

Social Can Help Advisors Find Info, Too 1 2 UTILIZE: 1. MOST DISCUSSED/ VIEWED 2. HIGHEST RATED 31

Sparking Conversations and Debate 1 VANGUARD’S BLOG REGULARLY GETS A FEW DOZEN COMMENTS & QUESTIONS PER POST BLOG AUTHORS RESPOND TO COMMENTS WHEN NECESSARY 1 32

Best Practices & Trends Twitter 33

What Asset Managers Do On Twitter 34

Identify Contributors to Personalize the Brand 1 2 TWITTER BRAND PAGES 1. NATIXIS 2. VANGUARD 3. ISHARES 3 35

Social Media Isn’t All About You: Putnam Content Mix Strategy Putnam content • Thought leadership • Product updates • Practice management expertise • Market commentary • Sports marketing • Company news 40% 60% Source: NICSA, 2012 Expo News you can use • Industry trends • Broad economic trends • Practice-related technology updates • Latest from respected sources • Retirement and saving trends • Humor! 36

(Targeted) Content is King 1 2 1 & 2: VANGUARD PROVIDES SEPARATE TWITTER CHANNELS FOR INVESTOR AND FA 3 3: RUSSELL CLEARLY INDICATES THE INTENDED AUDIENCE ON A SINGLE FIRM WIDE TWITTER FEED 37

Showcase Traditional Support Channels CLIENTS AND PROSPECTS HAVE QUESTIONS AND WANT TO KNOW WHERE TO GET ANSWERS PICTURED: T. ROWE PRICE & FRANKLIN 38

But Clients Will Ask Questions When & Where They Want To • 88% of people said they would be less likely to purchase from a company that ignored their questions on social media 1 2 CLIENTS AND PROSPECTS ASK BRANDS QUESTIONS AND EXPECT ANSWERS (EVEN IN HIGHLY REGULATED INDUSTRIES) Source: e. Marketer, Inc. survey (2012) 39

Best Practices & Trends You. Tube 40

What Asset Managers Do On You. Tube 41

Moving Beyond “Talking Heads” IVY FUNDS OFFERS CLIPS FROM AN INVESTMENT TRIP TO VARIOUS CHINESE COMPANIES (IVY FUNDS) 42

Facilitating Client Education OVER 70% OF ADVISORS SHARE ONLINE MATERIALS WITH CLIENTS PICTURED: ISHARES 43

Best Practices & Trends Linked. In 44

What Asset Managers Do On Linked. In 45

“Influencers” Command More Attention • In October 2012 Linked. In launched the Influencer program – Allows selected “thought leaders” to share original content directly with Linked. In users 46

Sponsored Groups Targeting Advisors • Putnam creates library of tips to help advisors with technology, apps, mobile devices, and Social Media 47

Linked. In Groups Can Support Other Areas Like Practice Management 48

Best Practices & Trends Facebook 49

What Asset Managers Do On Facebook 50

Appoint Community Managers • Community managers plan content, moderate discussions, monitor activity, and engage with the social community • Community managers are the face of the firm’s social media presence (e. g. Bonnie & Ben at Vanguard) 51

Schedule Live Q&A Sessions to Increase Transparency 1 1. A REAL Q&A SESSION FROM MAY 2013 WITH JOE DAVIS AT VANGUARD 2 3 52

Measuring Results: What Metrics to Look At? 53

Why Measuring ROI Is Important… • Greatest challenges to social media participation are getting budget and buy-in from senior management • Social media isn’t free – – Technology & compliance costs Social media advertising Outsourced designs/ creative costs Marketing, e-Business, Communications, Compliance Salaries • C-Suite wants to know how well the organization’s objectives are being met 54

But It’s Not That Easy… 55

Are You Measuring the Right Things? • Key performance indicators (KPIs) should be identified and measured • Best KPIs link directly to raising revenue, lowering costs, and increasing client satisfaction. 56

How i. Shares/Black. Rock Measure Results… • Stats from one blog post repurposed on 5 platforms in 9/2011 Source: NICSA Presentation by Eileen Loustau (2012) 57

…Quantify the Value of “Earned Media” • ACE Approach (used by American Marketing Association) – Awareness: $ x # of impressions – Consideration: $$ x # of click-throughs – Engagement: $$$$ x # of comments, shares, likes, etc. • ROI = Total media spend that would provide equivalent results – i. Shares: $6. 8 million in earned media in 2011 – i. Shares & Blackrock: $12. 4 million in earned media in 2012 – i. Shares & Blackrock: ~$18 million in earned media in 2013 58

The Future of Social Media… 59

Where We’ve Come From… Late 80 s/Early 90 s – Business email introduced Feb 1995 – First mutual fund homepage built 2008 – Early adopters created branded pages on social media 2009 – Early adopters started engaging with customers and prospects 60

The Future of Social Media in Asset Management & Insurance “Digital-first” content process Newsroom mentality Sales team Enablement Targeted engagement Crowd-sourcing 61

Traditional Content Process Not Optimized For Social Media Idea Whitepaper PDF Sent by Mail & email PDF Posted on Social Media 62

Leading Firms Are Embracing Digital Content Creation Process Idea Social Discussions Validate Idea Content Created Simultaneously in Various Media Content Shared on Appropriate Platform 63

Embracing the “Newsroom Mentality” • The growth of brand-sponsored content will continue to rise • Content creation and dissemination now need to be one of the firm’s core competencies ISHARES BLOGS ARE SYNDICATED ON SEEKINGALPHA, THE AP, AND MANY OTHER SITES JOHN HANCOCK CREATES CONTENT FORBES 64

Targeted Engagement on Social Sites • Facebook Custom Targeting – Target their Sponsored Story or ad to a specific set of users (e. g. all FAs in the CRM) • Linked. In Targeted Updates – Share status updates with specific followers or audiences (e. g. Morgan Stanley FAs) 65

Empowering Client Facing Professionals • Putnam provides roughly three to five pieces of pre-approved content weekly • Posts by wholesaler produce an average 3, 500 impressions, 10 clicks, and like/comment • Website traffic referred by Linked. In has already doubled 66

Crowd Sourced Thought Leadership • • Validate importance of specific topics Decrease the cost of content development Tap into collective wisdom of community Build trust and Increase customer loyalty 67

Crowd Sourced Tech Solutions • Receive customer input and feedback early in the process • Tap into collective wisdom of community • Build trust and increase customer loyalty 68

Please Connect on Linked. In & Twitter Jesse Mark, Ignites Distribution Research jmark@money-media. com 212 -542 -1206 69