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Case studies in ETF and mutual fund promotion

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Read the transcript and Q&A below:

Do you ever wonder what other firms are doing – and are those strategies working? See what our panelists had to say. 

Teresa Nilsen, President & Chief Operating Officer, Hennessy Advisors, Inc.
Noah Hamman, Founder & CEO, AdvisorShares
Melissa Murphy, EVP, Partner, SunStar Strategic  | moderator

Transcript and Q&A

It is my pleasure to welcome our panelists Terry Nilsen, president and chief operating officer of Hennessy Advisors, and Noah Hamman, founder and CEO of Advisor shares. Thank you both for being with us.

Noah Hamman:
Thank you for having us.

Melissa Murphy:
Just for the attendees that may not be familiar, it would be great to receive, to hear a quick overview of your firm and your role. Terry, why don’t you kick us off?

Terry Nilsen:
Sure. Well, thank you Kathryn, and Melissa, and the whole team at SunStar for having us and for presenting this. I know that everyone listening in will appreciate it, and we do really appreciate you guys. My name’s Terry Nilsen. I’m the president and chief operating officer of Hennessey Advisors. We are based just north of San Francisco in California. And we run about 4.1 billion and 16 mutual funds, equity, and some really nice core-specific funds. And we’ve been doing this for quite a while.

My role as president, I’m not marketing officer but I do sort of always want to be the marketing officer, which reports to me. So thank you so much for having us and I really look forward to today’s discussion.

Melissa Murphy:        
Thank you, Terry. And Noah?

Noah Hamman:         
I’m Noah Hamman with AdvisorShares. We have 21 actively-managed exchange traded funds, just over 2.2 billion in assets under management. I’m the founder and CEO, but it’s a small shop, so you know, everyone does a little bit everything, but I’m mostly involved in the product development and the marketing side of things.

Melissa Murphy:        
Great. Great. Well, with that in mind, I think it’s a wonderful dynamic to have the ETF and the mutual part fun perspective of this discussion especially when it pertains to sort of boutique end of the spectrum within the industry. So I think that this is going to be a really robust and exciting discussion. Why don’t we start with that 30,000 foot view. Terry, take us through your just sort of overarching marketing strategy. And as part of that kind of discussion if you can address sales integration in the context of your overall strategy. I think that would be really helpful to our attendees.

Terry Nilsen:              
Sure. So we started really tiny also. We’re still only twenty people. And we started with no clients, no assets, no heat, no air conditioning. We were pretty small. No revenue. And when we launched our first fund, we really realized that it’s not just about the fund, or being a student of the mutual fund industry, and a student of the mutual fund for your shareholders. And in order to do that, you have to be unique. You have to have a story to tell.

And then we started out with formula-based funds. Over the years, we have of course evolved and done a lot of acquisitions. We grow organically and by acquisition. We’ve done ten acquisitions, free assets of over thirty funds, and looking to partner with all of our sub advisors going forward. So we’ve developed into this three- pronged approach for marketing. We use traditional sales and marketing, really good national sales distribution, and PR.

So that three-pronged approach has really done well for us. It allows us to tell our stories the right way. We have about 130 media hits a year, and have averaged out about the last ten years in our relationship with SunStar. And it’s because our PMs and our founder Neil Hennessey really have an amazing rapport. And it really has to do a lot with using those things integrated. You know, we use a lot of our media hits as third party sort of credibility on our website and in our e-mail marketing, and it really has become its own engine. And that has helped us to develop sort of this sales – marketing before cell so that we are really all telling the same story including with promoting our fantastic portfolio managers.

Melissa Murphy:        
Great. Thank you. And Noah, your approach?

Noah Hamman:         
So for us from a marketing perspective, it’s, you know, really focusing on the things that we can control. And part of the challenge of being an active shop, you know, from a marketing perspective, you can’t control things like performance, and you can’t control things like what’s going on in the market at any given time. So for us, the focus really is on two areas.

One is social, which I know was new and growing and developing, and incredibly challenging to do under a FINRA environment. But we’ve been aggressive with that since our inception. And then the others dynamic content, being much more aggressive about, you know, controlling our own destiny, leveraging media relations, leveraging our own portfolio managers, and getting beyond just the traditional, you know, quarterly manager commentary and fact sheets. But, you know, videos and things like that to drive engagement with people.

Melissa Murphy:        
Great. Great. So yeah, let’s talk a little bit more, you know, the next level down and about these different tactics. You know, I think you need to mention some of the things that you’re doing, but can you give it more of like a broader scope beyond this central focus tactics to, you know, sort of all the other things that you might be doing that you think, I mean, that quite frankly are working. Noah, can you continue along that path.

Terry Nilsen:              
Sure. You know what we try to do is look at other industries and try to come up with the things that people like and enjoy, and see where we can adopt that, you know, in the financial services model or an asset management model really. Right? And so, you know, we always describe ourselves a somewhat similar to iTunes, and I think Terry kind of mentioned this as well in terms of working with underlying sub advisors. We do as well and have our own proprietary products.

But trying to create a platform and a brand under the AdvisorShares’ name where people can come and select different managers, different strategies, different styles, and use them in a sense to build their own, you know, investment portfolio playlist. Right? And you can add music and remove music to it. And so trying to take that approach from a business model perspective, unique managers, unique stories, and very different. In some instances, long funds and short funds.

And then the other part is really, you know, think about the Netflix model, right, and the way people consume content and video these days. For us, it’s just is simply trying to kind of follow that model, keep creating content, whether it’s our own original content or leveraging our underlying sub advisors. Make it available. Let people watch it when they want to watch it, not on your schedule but on their schedule. Make it consumable, and make it consistent, and hopefully make it interesting. And those are two of the important things that really drive what we do.

Melissa Murphy:        
Great. And Terry, [crosstalk].

Terry Nilsen:              
Yeah. So I’ve been a little bit more traditional because of course we are more mutual funds. And I think that there is going to be the sort of movement. A lot of what you’re talking about and a lot of what we continually do, I think that’s gonna merge more from the ETF and mutual fund world. I think we’re really looking to participate with that. We’re very interested in perhaps launching ETFs, or partnering, or looking to acquire because that is sort of our history and our tradition.

But what we do is because a lot of digital engagement, you know, direct to some of our great partners in the broker dealer world, and trying to also evolve what you’re saying, become more approachable. Make your content more approachable. Even via FINRA. You want it digestible in a world where there’s so much out there that they’re digesting. Right? And money is important. People’s investments are important. And trying to keep that strength too and that cohesiveness between the financial services world and this consumable digital world.

And that’s what we’re really about. We really want to get our message in the right folks’ hands, and that’s going to be tricky for all of us going forward. We’re a little more traditional. We’re going really toward advisors and toward the broker dealer, you know, independent broker dealers, investment professionals. But they want to have more approachable content to talk to their clients about. So we’re really trying to do a lot more of that. Some of that’s driven from our sales guys. You know, what are they hearing? What are they understanding?

And we want to be nimble enough to digest that and turn it around, and really good approachable content on every platform, whether that’s going towards social media, and like you said, tricky with FINRA, or even in is something like this where you’re really making sure that your audience feels like they can make your content approachable, that they want to listen.

Melissa Murphy:        
Right. Right. Really great point, Terry. So, Noah, it’s no secret that they’re still sort of trend in product proliferation within the ETF business. Can you describe for us a successful ETF launch from a marketing perspective?

Terry Nilsen:              
Well, probably our most recent, you know, is in a bit of a niche category, but it’s in the cannabis investing space. Right? So an emerging area where something that is, you know, historically illegal, and still illegal on an federal level but legal on a state level. But obviously growing out of that, I would argue in some way, it’s no different than how an Airbnb or an Uber had to kind of navigate into the marketplace. Right? A lot of what they did didn’t fit with the hotel licensing or taxing medallion rules.

So you see that happening in the cannabis space today, though there’s an interesting dynamic when you think about the medical aspects of it. It’s hard to invest in the space. Our ability to build a product and make it easy for people to access it, this sort of growing trend, growing theme, and active being an important part of it because not every company is gonna make it when you’re in these early emerging whatever industries, right? Similar to sort of Internet in the in the eighties and early nineties.

But we launched that product middle of last year. US company-focused. Had to take some unique steps including getting an opinion letter for our registration statement, which is not a normal process in filing on registration. But, thankfully, you know, as a small shop, it you know caught fire, very social media-driven even to the point where people were creating hashtags out of the investment theme, this MSO gang that started to proliferate on Twitter. So when you see things like that happened really organically, right, we didn’t drive that, but you’re sort of hitting on a need and hitting on a demand.

And so all it seemed to work well, and you know, fast-forward to today, the fund is now below a billion, but we raised a billion dollars pretty quickly. In fact, most of it came over the course of two months in the beginning of this year. So definitely very successful, but a long, you know, road ahead I think with that product. But a great opportunity where an idea, the speed of social media, the ease of accessibility in an exchange traded fund, you can buy it on Robin Hood, you can buy it on Fidelity, and Schwab, and following all those places on day one, created the opportunity to have a nice launch.

Melissa Murphy:        
Great. And, you know, Noah, just to kind of stick with that and kind of, I don’t know, take it back to yesterday’s ETF panel, which focused a lot about for bringing products to market. And, you know, one of the panelists Sonja, she suggested that, you know, a key element to success is really sort of like anticipating or sort of determining demand. Was that part of your process or was that part of the launch process when you look at sort of what products you think will have, you know, be _____ in a marketplace?

Noah Hamman:         
You try to. You know, determining demand is tough. We’ve done that plenty of times with investment strategies. And, you know, what people are interested in and what they’ll buy are often two different things. And so, you know, honestly approach with this was just sort of seeing the opportunity coming, right, and then trying to be the first at it, which we really weren’t, but were able to sort of leapfrog with some unique aspects of the product and the strategy.

We knew there was some underlying interests. Right? You could almost follow social trends and see what people are talking about, and then just sort of capturing that. So I would say it was about demand or assessing the demand, but it was just about, you know, eyes open, seeing where the opportunities are, and creating something interesting and unique that could leverage our expertise.

Melissa Murphy:        
Great. Great. And, Terry, you know, you mentioned earlier, looking at, I don’t know, getting feedback and talking to sales and sort of integrating that into, you know, the marketing strategy, and looking at what the adviser wants, and maybe even what the adviser’s client has said and having this, you know, accessibility and I don’t know, content that people can relate to. Do you feel like it’s most successful if sales is feeding marketing or marketing is feeding sales, or does it have to be the sort of like continual dynamic?

Terry Nilsen:              
I think it has to be a really continual dynamic especially in traditional asset management. I think that, you know, we don’t have the benefit of sort of the go to launch for the hot product that people are talking about. You know, we’re still we’re still broadly distributed by a lot of traditional asset management. I think when you talk about sales and marketing in that dynamic, you know, if you if you can have a sales team that’s willing to say, “Gosh, you guys, these advisers talk about this, or this firm really likes this.”

And a really good example I love that Noah did, you know, the cannabis example is great because it’s such a case study. For us, it was Japan. You know, we have two Japan-only products that were very, very small when we took over that relationship and kept that sub adviser. And these subadvisors were actually located in Japan. They’re an amazing active manager. So successful. But that story, you know, a lot of people, deflation, aging workforce. You know, Japan is no longer the second largest economy in the world. All these hurdles.

We just kept telling the same story over and over again. That had a lot to do with the push and pull between sales and marketing. You know, marketing looking for unique ideas and ways to position Japan, and our subadvisors, and our sales folks willing to have that conversation and continue to have it. And those funds when we first got them were about 50 million, and they’re a billion. And that’s through a lot of, you know, blocking and tackling, but also a lot of just great content and delivery based on the dynamic of our sales and our marketing team.

Now throughout that time, we also developed a really neat CRM with great consultants that help us really customize that. When we went from just grabbing that and throwing out 100,000 e-mails to everybody on discovery list to really doing a ton of segmentation, a lot of owner versus prospect, scoring, SEO sales automation. All those things that you hear all the time, and it is a big outlay of money and time and commitment. But our team did that with, you know, our folks at corporate development, and our marketing team and our sales team.

Everyone had to get on board. I had to turn off sales guys old, “I’m using Outlook,” and said you’re going to use this program so that we could integrate and be more dynamic and then be able to be more nimble. Because even in traditional asset management, you want that story in the hands of your owners in your prospects quickly, and you want them to talk about it. You want them to feel comfortable about it.

I mean Japan is such a great story. We were talking about the other day with our sales team, you know, right now they’re going for green because it’s going to be the most, you know, eco-friendly Olympics. Of course, there’s no one there. But the gold medals are made of recycled cell phones. So there’s all these great stories. And a lot of companies pivot to that great story, and our portfolio managers sell it, and then we are able to tell it to our team.

So that’s, I think that’s a great question, but I do think it’s a commitment all of your team, your technology, your sales, and your marketing to say, “We’re in this together. Let’s pivot. Let’s be quick, and let’s be smart about how we deliver.” And I think that’s where we’ve been very successful and we use our PR, too, because if we can get our RPMs to do a really nice interview or a really nice TD Ameritrade piece, and get that onto our websites or onto our digital editions, it just supplies even more. It supports the great content that we we’ve gotten, and supporting their portfolio management style. So that’s really important.

Melissa Murphy:        
Great. Thank you, Terry. And Noah, how do you approach CRM at AdvisorShares?

Noah Hamman:         
So for us, especially as a smaller business, it’s important. As simple as we can make the process for what we do and integrate things, the better. So, you know, whether you register on the website and it comes, for us, straight into Salesforce. Kicks in a task for an investment consultant who’s also connected into Salesforce to follow up, whether it’s, you know, delivering content through Salesforce and seeing, you know, who’s clicked on things, and who’s engaged on things.

And even for us at least, trying to take it to that next level, we can start to get to the point where we can develop, you know, more dynamic content. So in an e-mail, you’re getting the things that you’re really interested, especially with so many products in our line-up, but still, you know, cross-selling and presenting new ideas to really customize it for the user’s experience, you know, it’s important. CRM, integrating those tools and technologies, your website to CRM, to what you’re delivering in content, and trying to connect all those, and then plugging the analytics to it all to see where you’re getting traction.

And overlay that with assets, which at the end of the day is, you know, absolutely the most important for us. It’s important to do it certainly as a small firm, but you know, for more and more people, it’s critical.

Melissa Murphy:        
Right. Right. I know we had a question submitted before, a couple weeks ago, that I think is really interesting. And I feel like AdvisorShares is sort of cutting edge on this or at least very clever. What’s the importance of an ETF’s name and ticker?

Noah Hamman:         
It’s really important. You know most people don’t refer to an ETF by its name. They refer to it by its ticker. So the ticker selection is definitely, you know, very important. And you’ve seen with other firms, I mean I think that was even an potential lawsuit at one time between two firms. I think it was State Street maybe PowerShares at the time over tickers. Like it’s really important from an asset management perspective and a branding perspective. So, you know, very important. And the ticker, again, far more than the name.

Melissa Murphy:        
And like YOLO, how do you – [laughter] – like do you brainstorm as a team?

Noah Hamman:         
We did. We did. It was actually an internal process. We talked about it, you know, again as a small firm trying to make your way coming up with an idea, right, of what to do from a ticker symbol perspective which isn’t exactly a ticker symbol that follows because that’s our global cannabis strategy. And it’s interesting, too, when we made the decision internally, we definitely questioned it, you know, was it sort of too silly, you know, too goofy, too whatever. Went with it. Right?

As a small business, you can, you know, take more risks like that. I think, overall, very well received and got us a lot of you know recognition and attention, but there was still, you know, five-ten percent element where you could kind of see the feedback on social media where some people, who are especially are, you know, very engaged in the cannabis category from a medical perspective felt like maybe it was too silly and too light relative to the category. And it’s, you know, finding a balance.

Our consistent response was, you know, thank you for the feedback and we certainly understand how you feel. It’s just a ticker symbol and it’s just a marketing tool for an investment strategy that certainly has a broader purpose, but it’s not meant to, you know, say anything about the industry, and it’s meant everything for marketing. So, you know, you had to deal with that a little bit, but in hindsight for us, I think, it really worked. It got us a lot of attention, you know, we saw an uptick in the assets certainly for that product.

And then we followed on with the MSOS ETF, which is sort of more traditional, you know, it all worked really well for us, I think.

Melissa Murphy:        
Great. Great. Let’s redirect. Terry, so we’ve talked over the years, you know, about the difference between Hennessy, the work that we do with the business and financial press, and you know, in other types of content. And we’ve of course seen the evolution of the media. There’s fewer publications, fewer journalists. And so with especially I would say the adviser red category of media, you know, sort of like the best way in is through the sponsored content route. Can you talk with me a little bit about what Hennessy has done over the years with sponsored content, any results you might have had, or maybe if you haven’t done as much, why?

Terry Nilsen:              
Yeah, I think that’s a really good point. I think that you know we have sort of shied away from sponsored content because we’re so small. It’s just such a big number, and we really have pivoted towards, you know, relying on SunStar and our other contacts to really build our brand via media. And, again, like I said, we’ve averaged about 130 minutes media hits over the last years. And so you’re gonna hear our name every couple of days somewhere. And that does make a difference.                                   

I also think that it helps with a lot with retention because in the adviser world, you know, there are fewer publications, and maybe fewer reporters. There’s still a lot of credibility that goes on with being in those traditional places. And I think that if you are going to have some retention and have some credibility long-term, it is important for PMs to be in those traditional areas. But I have been really impressed with the pivot that Sunstar has done in the last year for us, especially via 2020, and expanding the quality of the level at even some of the firms.

Like I said, TB Ameritrade is one that we’ve been using a lot, and we’ve been getting some good feedback there. And we customize a lot of our content for the users that we have. Morgan Stanley, vs, etcetera. I think that having a good content partner helps a lot, and I think we utilize that media on those zones. It is really something that you can’t just start and think, “Oh, it’s gonna be great next week in _____.” It’s not a flash in the pan thing for that traditional sign. I also think it can leverage over to a lot of what Noah is talking about sort of fast social media climb.

I think, like I said before, I think there’s going to be a more hybrid approach as we go forward, a lot of what Noah is doing and a lot of what we’re doing combined. I think you’re gonna still need some of the traditional banks to promote and be able to not promote but really to be able to distribute your product over time. And I think that we are just starting to look at sponsored content in a different way, more as a digital campaign that as necessarily just a media campaign. Because that’s what’s merging is where people are getting their information. It is a lot more about LinkedIn and Reddit, and those places, right? But how do you obtain those assets?

And so that’s the niche. I’m sure, Noah, you guys are thinking about that every day. How do you then retain this momentum. Because if it’s just momentum train, you know, we’ve all been there. But, you know, you’ve gotta have some kind of combination of both. So we’re looking at a little, you know, putting our toe in there. I think one of the things that we look at is the ROI of that, and what that really means, but that’s a big combination of our whole process.

I think when you look at the media and what we’ve done over the years instead of sponsored content, it kind of equates to about – in 2020 for about 3.5 million of what we would have had to pay to get on those places. You know, that’s a great leverage for a small firm, but it is a big commitment of all our PMs and our content folks in FINRA, and getting all those things in the right places. And we’re just dipping our toes in sponsored stuff on LinkedIn, and so far, we’re getting some great feedback. And that will grow as we grow into that side of the business, and hopefully we can do with a partner in the future in the ETF space, too. So retention is a big part of it, I think.

Melissa Murphy:        
And, Noah, could you address that from your perspective, and then also just you can whittle down a little bit, say, you know, tell us really specifically within social where you are and where you’re seeing the most sort of engagement and interest.

Noah Hamman:         
Sure. So we’re somewhat similar to what Terry just described, you know, historically have not been, you know, sort of big fans of sponsored content or traditional advertising in traditional media locations. You know, we’ve always been a part of, you know, I would say historically, we distributed through the broker dealer platforms and through financial engagement. We still do today. And then we would focus in on events, conferences, and things like that.

And we’ve gone through a weird transition, you know, over the course of the year. We’ve always been aggressive in terms of social media and what we can do in the past versus what we can do today, and continuing to expand that. But really sort of coming out of this Covid environment, you know, we’re sort of coming to a conclusion on a handful of things. Right? Never been a fan of sponsored content. Won’t be probably tomorrow. But even these things with conferences, you know, where there’s so many of them, and you know, you’re writing checks for each one of them, and it feels like sometimes you’re spinning your wheels a little bit.

You know, for us, we look at as a firm coming out of Covid, and have, you know, more than doubled our size without going to a single conference. It really makes you question, you know, the investment that you put into those things. And similar to what Terry said, you know, where we have I guess you call sponsored content it is in social ads. And so we’ve been most aggressive on Twitter which is what where we find the most you know financial engagement, but some of it is just a function of our size. We need to be more aggressive with Facebook ads and with LinkedIn ads as well.

And I think in part the answer maybe, Terry, to your question in terms of you know once you have that sponsored content there, or you know, ads really, you know, how do you stay engaged with them. Right? Because especially for us in ETF space. We have very little data on who our clients are. But what I think that you do is that you have to have that component of your own original and dynamic content. So if I get an ad that comes across, you know, your attention on, let’s call it LinkedIn, and it peaks your interest enough that you click on it and you click through if I’ve got you, but I’m not following up with original and our own stuff in that same thread where you like to consume some of that content, I’ll lose you. Right?

I won’t help you get to that making that decision, or once you’ve made that decision, it might be more cyclical and you might you know leave later for something else that looks more interesting that caught their eye. So for us it’s really changed our mindset, you know, social sponsored content where one of the nice things about the digital platforms is you can control it by product, by spend, and you can do it, you know, minute-by-minute Quite frankly, though, it’s not a good use of your time.

And so for us right now, and we do for example just a daily streaming show we call the alpha noon, or 15 minutes. Check in. We’ll talk about a few things. We’ll answer your questions and kind of move on from there. And if we can get in the replay, you know, we try to, but sometimes the things that you say live don’t always work from a replay perspective. But we push them down four primary channels: YouTube streaming, Twitter of course, Twitter/Periscope, I guess. We just now finally got LinkedIn. So for those of you looking at LinkedIn, it’s an application process and it took us a while to get on live streaming for LinkedIn. And Facebook. Right?

So Twitter, Facebook, LinkedIn, and YouTube are our four primary channels. We haven’t gone as far as to look at, you know, Instagram or TikTok yet, but maybe we should at some point. It does seem like there is a –

Melissa Murphy:        
I would love to see you do a TikTok, Noah. [Crosstalk] I’m just thinking I’m in. Where’s – sign me up. [Laughter] I’m ready. Let’s go.

Noah Hamman:         
Well, and that’s been the interesting dynamic for the two cannabis strategies that have really kind of launched over this timeframe is for the most part, that’s retail money. You know, we have very few platform approvals. We have the RIA platforms, but even RIAs are still, you know, looking at that space. They sort of mentally put it, you know, in the crypto category. Right? But some advisers are really into it of course, but the vast majority of the, you know, between the two products, we have roughly 1.3 billion in them, 80 percent is retail.

So you know, again the mindset is probably stay away from conferences, still embrace financial advisors, but there’s a lot of opportunity going direct to retail, and you control the relationship a little bit more because that’s becoming more challenging. I’m competing with Schwab ETF space. So if I can find my own way and still participate on their platform, it’s the best opportunity for us.

Melissa Murphy:        
Oh, really creative. So what – Terry, are you still with us?

Terry Nilsen:              
I’m here. I’m here. [Crosstalk] I know. Sorry.

Melissa Murphy:        
Before we turn it over to the Q&A, and I see that there has been some questions submitted, let’s talk about ROI. How do you decide what’s been successful, I mean is just are we bigger in AUM or is it, you know, what other ways do you look at, you know, assessing the value of your marketing?

Terry Nilsen:              
So I can answer that quickly. I think like I mentioned, the advertising part of it versus PR. But there’s more than that. Right? I think one of the things that Noah really hit on that we talk about so much is this evolving customer journey. You click. Where do we take you? Where do we take you? Where do we take you? To you have to invest in that technology. You have to invest in it all the time. You have to be willing to involve it constantly.

Trust your partners. Grow that. Get engaged do it yourself so you can see what your customer journey is like. Is playful enough? Is it interesting enough? Is it fun enough? I mean because that’s becoming, even for the traditional asset manager. People want light engagement that gets them to the right answer. And you have to have performance. You to have a good story. You have to be honest, and you have to have good integrity.

But if you can’t take them on the right journey, and not is a big, you know, it’s like having two more employees, the amount of money you need to put into the right kind of technology for that full engagement. I mean I that’s what I really believe, and I think that I’ve made a huge commitment to that. As president of the company, I think that’s something I will always believe in as this technology to support every single person in the firm, but especially those at that level. And I think that’s really important.

Melissa Murphy:        
[Crosstalk] ROI, Noah?

Terry Nilsen:              
So it’s hard for us. Right? So put aside marketing and the social things that we’ve been talking about, just the traditional business model right of having a product and being on platforms and knowing who’s a client and who isn’t, in the ETF space, incredibly challenging. And you see sort of every year, there’s more and more data opportunities. And we have access to things like 13 F filings, but it’s not, you know, what you’re used to in the mutual fund industry by any means.

So we start off, ROI challenge. So when you add in where you’re spending marketing and where you’re doing those things, it’s still tough to put, you know, a real dollar value on it. So a little bit of what you just described, Melissa, we’re very top line focused. We’ll do two things. Right? We’re sort of setting budgets, right, and trying to know what we can put to work, but then we make that decision from there. Right?

Terry just said, you know, if the story isn’t working in the current environment and our performance isn’t there, you know, you don’t want to spend the same amount that you’re spending on something else that really is taking off and getting that attention. So the ability to dial up and dial down the spend on the advertiser, the sponsored content is incredibly important.

But it’s still hard for me to pin it back to, well, I raised this amount of money. So it is, you know, it’s topline growth on the asset side, and then it’s topline assessment in terms of what we’re gonna spend on that budget and where we’re gonna spend it.

Melissa Murphy:        
Great. Great. So we do have some questions. Thank you to our attendees for submitting some questions. There’s a lot of interest in social. [Laughter] So we’ll stay there here now. And, Noah, specific to you, how did you use social media for your last ETF launch? Can you give a little detail as far as sort of an overarching approach?

Noah Hamman:         
Sure. If it’s okay, I might go back even further, almost to our inception. I mean when we started the company a little over ten years ago, even then, I mean social was around, and we knew we wanted to be a part of it. But it was so limited as to what we can do. So in the early days, we would have an Advisorshare’s Twitter account, and we would post things, but they were never about products, never about buying an investment. And it always sort of thought leadership, things, again, that are away from the thinner aspect.

We always had a storage and retention system for it, and we had internal, you know, I’ll call it SCCRI compliance overseeing it versus broker deal FINRA overseeing it because we wouldn’t put any product content in there. And so then two things, I think, for us happened over time. One, we actually found that people don’t engage as much in a brand. You know, certainly if you’re a huge brand, they do. But for us, and especially when you’re smaller, like people don’t know who they’re talking to. Right? You lose that social element of social media.

So creating an account for me to be able to engage with people, you know, we started to see a lot more traction, and a lot more engagement, and a lot more questions. So that’s something I would definitely point out to people to think about in their social media approach. And then really, you know, a credit to FINRA, as things have loosened up in terms of their guidelines, you know, now we’ve got good policies and procedures in place that if, you know, you look at our AdvisorShares account, you’ll see we are talking about product and we are putting it through our broker dealer compliance process.

Now the environment we work in right now, it’s twofold. The dynamic social media content is compliance approved, but not filed with FINRA. If I’ve got obviously sponsored content or ads, compliance approved and is filed with FINRA, and so you treat those things, you know, obviously two different ways. But you can see over time, due to FINRA, you know, updating their guidelines and policies and procedures, we’ve been much more aggressive in terms of discussing product in social content, and then the things that we’re doing with live streaming and things like for that for live engagements. So that’s really for us how it’s transitioned over time.

Melissa Murphy:        
Great. Great. So Terry, what is the most effective and least effective marketing tactic you’ve ever implemented? [Laughter]  

Terry Nilsen:              
Oh my gosh. Okay.

Melissa Murphy:        
Best and worst. [Laughter]

Terry Nilsen:              
That’s crazy. I think way, way back, a long time ago, I mean, we did an ad in AARP, and it was just for direct advertisement. And we had a phenomenal response. Thousands of postcards, and I don’t think we raised very much. [Laughter] And so of course our found Neil Hennessey, “We’re never advertising again.” That’s it. But of course, now, I think that’s very different. I think the most successful ever really is doing our media and coupling that with our content, and doing a lot of digital engagement.

And much as Noah said, FINRA has finally sort of really embraced that we are moving toward social engagement forever, and I think that’s starting to help too. But I do think ours has been really reaching out with good content digitally, and that has been our most successful of all time. And we do, you know, support that with really hand-to-hand sales conversations. And we still do think that it’s such a personal thing, your investments over time, and we are a traditional asset manager, I think that if we can have a conversation with somebody, that’s always gonna be the best way to engage in the end.

So I think our least was just a blanketed one-page advertisement. You’re way more successful if you can keep touching and talking to someone over time. And to get that support by seeing Neil on CNBC or listening to Masa talk about Japan. And then our content and our performance backs it up. If you can check all the boxes, you know, performance products and the people, I think if you can get to that point, you are always going to be successful whether that’s the ETF world for boutique or for us.

We are both, Noah and I, against thousands and thousands of competing products. And how do we do that? You know, you do it right. And I think if he’s doing that and now we’re doing that, your most successful is going to be to get out your content and the best places that you can. But keep it going and keep engaging and keep updating.

Melissa Murphy:        
Great. Thank you, Terry. I think we have time, let’s do one more question. Let’s go back to social with Noah. [Laughter] There’s an attendee here that’s been on social media for a while, but they’re having a hard time gaining followers. What do you suggest? What can they do? Do you have to put more money into it? Do you have to sponsor? Like what’s your advice?

Noah Hamman:         
I mean I started with a lot of racy photos of myself – I’m just kidding. We didn’t do that.

Melissa Murphy:        
Oh my gosh. Do that on TikTok when you do your TikTok.

Noah Hamman:         
[Laughter] It’s definitely challenging. Right? But starts with being sort of authentic and engaging, and getting your thoughts out there. And it takes a while, I think, for people to warm up to you. I will say, you know, there are little things that you can do to help. I love the question of sort of best and worst, you know, things that have worked. But one of the first things that came to mind for me of the things that worked well that I think helped with this whole cannabis theme, as crazy as this might sound, but merch.

You know, we both had our designer [crosstalk], yeah, create this cool, you know, it had a pot leaf of American flag. It was a really cool design. And we just gave away shirts. And I would just, you know, get on social and I would say, “Who wants a shirt?” Right? And randomly pick someone and then send it out. And, you know, they wouldn’t see it if they weren’t following me anyways. But it just starts to get more engagement. People share it.

So I think the more you can share data, if you can be smart. Right? So data. You can be funny. Right? It’s hard to be sort of too controversy or too edgy though. It’s easier when you have a cannabis product to do it. But the merch thing, too, I was surprised like, you know, people love T-shirts or they love a hat. And then the cool thing is when you see them, when you give them something like that, right, and then they post a picture. And then they tag you or cash tag out your ticker symbol, which, you know, with no time to get into, you know, the strategy around cash tagging and hash tagging, and how you use those to draw more followers in.

Be consistent. Be on there, and you will find that you’ll start to get to a point where you’re like, oh my god, I’m spending too much time on social media. But it feels like for us, at least, as a smaller firm, time well spent. I think over time, and we, as a small firm, we have to start to bring more faces and voices into our social media. It can’t just be me all the time. And we try to bring more of our managers onto it. But depending on who you’re talking to, their comfort level, you know, changes. But, you know, all those things I think matter in terms of driving those followers.

Don’t do the thing where you try to buy followers. They won’t stay. It’s like, you know, cyclical assets. Be engaging. Enjoy doing it. If you don’t enjoy doing it, find someone in your firm who loves it, and you know, and let them, within compliance limitations, you know, go crazy on it. And hopefully they’re smart and hopefully they’re funny, and all those things will help.

Melissa Murphy:        
Very, very good advice. Thank you so much, Noah, and Terry as well.