Max Bowie: Thinking About Retail? Think Hard About Your Brand
On Oscars night, I quipped that Hugh Jackman’s only hope of winning best actor was to change his name to Daniel Day-Lewis—then I spent the rest of the night hoping he wouldn’t find out and send Les Misérables co-star Russell Crowe around to beat me up (or worse, sing). But the truth is that bringing together venerable brand names like Day-Lewis and Steven Spielberg on a movie about iconic US president Abraham Lincoln virtually guarantees Oscar success.
Associating with the right brand can bring rewards—hence the saying that no one ever got fired for buying IBM. So for market data and technology vendors, picking the right brand is crucial when trying to establish oneself against the IBMs of the world among clients who don’t like to take risks.
The 1980s start-up Innovative Market Systems soon realized the value of adopting the name of its big-personality founder, Michael Bloomberg. Some firms spend a lot of money on research to find the correct branding. Others, like West Highland Support Services CEO Steve Roe, name their company after something memorable—Roe’s favorite breed of dog—although this also ensures the company is never overly tied to any one individual.
Brand Value
Name recognition doesn’t just apply to companies, but also the “brand value” of individual execs. When low-latency event data provider Selerity recently raised $3 million in funding, it wasn’t so much the amount that raised eyebrows as who it came from—former Thomson Reuters CEO Tom Glocer, former Thomson Financial CEO Sharon Rowlands, and Tradeweb founder and CEO Lee Olesky, among others.
One reason this is so important now is that data and technology providers are targeting solutions at an increasingly retail-focused base of investors and advisors. Without the ability to conduct bake-offs in a lab, this base relies on trusted brands that reach them through word-of-mouth or retail marketing—such as Super Bowl ads, where companies pay millions of dollars for a 30-second slot, in the hope of emulating Victoria’s Secret, whose 1999 Super Bowl commercial reportedly generated 1 million website hits in an hour.
When Selerity recently raised $3 million, it wasn’t so much the amount that raised eyebrows as who it came from—former Thomson Reuters CEO Tom Glocer, former Thomson Financial CEO Sharon Rowlands, and Tradeweb founder and CEO Lee Olesky.
One vendor that would have loved Super Bowl airtime is AlphaTrade, a small vendor of market data displays that struck sponsorship deals with various sports organizations, two of which sued for non-payment. AlphaTrade filed for Chapter 11 bankruptcy protection in 2011, and has since liquidated, selling its website and client list to Canadian exchange TMX Group, demonstrating that the retail brokers, financial advisors and active traders targeted by AlphaTrade are now the subject of much activity from vendors who realize that an audience of institutional users in the hundreds of thousands, with an install base dominated by a handful of providers, pales against an audience of millions of potential consumers and the professionals who serve them. And with staff cuts still in force across the financial industry, the big money may no longer be in selling tools to banks, but in bringing them to a wider audience in the name of democratizing trading.
While these products may not rival Bloomberg or Thomson Reuters terminals, they have more in common with screens used on trading floors than with the antiquated models used to attract retail traders. To attract flow, give traders tools and ideas that encourage them to trade, says Kevin Ashby, chairman of UK-based startup analytics provider Rising Sum, which is targeting end-users from investors to advisors and small hedge funds by seeking to strike distribution agreements with brokers.
But how long can current commercial models for market data be sustained if the industry’s focus shifts to consumers who lack thousands of dollars to spend per month? Pro rata, it costs retail investors much more to trade than institutions, which discourages them from using certain quantitative or technical trading strategies. Until this inequality is addressed, attempts to diversify vendors’ revenues by targeting data and tools at a higher volume of lower-paying customers will meet limited success—something that no amount of brand name recognition can fix.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
This Week: IPC extends Google Cloud partnership, BlackRock/AIA, DTCC and more
A summary of the latest financial technology news.
Waters Wavelength Podcast: Deutsche Bank’s Boon-Hiong Chan
Boon-Hiong Chan from Deutsche Bank joins the podcast to talk about blockchain interoperability.
SocGen pushes data, analytics use cases for SG Markets
The bank is letting a handful of clients experiment with its proprietary data and models to inform their research.
Ace high or busted flush? Digital Asset’s mixed fortunes mirror DLT adversity
The vendor hoped to remodel post-trade using blockchain technology—and it still might—but its bumpy progress raises questions over the future of DLT in finance.
AI could cut time for money laundering checks by 99%
Leading crypto exchange rolling out large language model for enhanced due diligence checks.
Standard Chartered keeps faith with quantum experimentation
The bank is aiming to future-proof itself with the ability to adopt new technology at an early stage.
Waters Wrap: CME, Google and the pursuit of ultra-low-latency trading
CME Group and Google have announced Aurora, Illinois, as the location for the exchange’s new co-location facility. Anthony explains why this is more than just the next phase of the two companies’ originally announced project.
This Week: Genesis/Interop.io; S&P Global; Finos/OS-Climate and more
A summary of the latest financial technology news.