Welcome to our ongoing series, “Master Marketing in the High-Pressure World of Investor-Backed Firms – AIMCLEAR’s Definitive Guide.” Over several years, AIMCLEAR has honed an invaluable subspecialty, focused on growing brands beholden to investors. Whether venture capital plays, angel investors, or those amid strategic M&A, AIMCLEAR is uniquely positioned to support the specific needs of internal client stakeholders, as well as the often confusing (and seemingly conflicting) objectives of VCs/investors. Today’s installment focuses on understanding challenges inherent when marketing investor-backed companies. We plan seven more posts to follow in coming weeks.
Investor-backed companies almost universally prioritize quick returns and rapid growth. In this post we’ll share in-depth exploration of complexities and challenges confronting marketing professionals working with investor-backed companies. We’ll also explore key themes, each crucial for understanding the dynamic balance between marketing strategy and investor expectations.
When marketing strategies don’t align with investor expectations, a disconnect forms, which results in deeply dissatisfied investors. Marketers of all levels often field the brunt of blowback. Fast, seemingly inexplicable pivots prevent marketers from executing long-term strategies and brand building, leading to disjointed results. Ultimately, such businesses can suffer reduced funding, increased pressure, even more unrealistic KPIs, and potentially strained relationships with stakeholders – often to the detriment of the company’s growth goals.
Strategic Myopia and Brand Underinvestment
Investor-backed companies often prioritize rapid returns and sometimes unrealistic growth targets. This short-term focus can lead to a detrimental shortcut of critical brand development and content strategies. Ironically, while robust branding is essential to long-term conversion goals, even mid-term branding investments are often neglected due to pressure for immediate results. Companies failing to invest in brand through market research, consumer insights, and comprehensive efforts risk confusing potential customers and undermining market position. AIMCLEAR CMO Amanda Farley explains:
“It’s pure paradox that today’s branding efforts are crucial for tomorrow’s affordable conversions, a concept frequently ignored by investor-backed firms.”
We often encounter a disconnect between budget allocations and expected outcomes. Investor-backed companies frequently demand exponential growth without any proportional increase in budget, or worse, with a reduced budget. Amanda adds:
“Achieving efficiencies and scaling marketing efforts take time, and initial investments might show higher costs per conversion before efficiencies kick in.”
Content-Backed PR: Overlooked Pillars
Strategic public relations (PR) as a foundational element should not be sacrificed. Often viewed as a mid or long-term strategy, well executed quick-hit PR can yield dynamic short-term wins. The caveat is that PR only works when a brand’s story is real, compelling, intrigues consumers, solves information gaps, creates demand, and is sufficient to drive new customers toward conversion.
Content can be a huge attribute to PR campaigns. When contacting media, the integrated marketing team’s PR lead can refer to compelling content as a resource during the pitch. The same content or next-funnel-step content is a logical destination for prospects activated by interviews, conference appearances, influencer recommendations, television news appearances, press conferences, and other valuable touches that professional PR can generate.
Investors tend to think that having achieved XXX,XXX,XXX conversions at a CPA of $Y, they can order +ZZ% simply by scaling the media spend +ZZ%. In many cases, this thinking is faulty. Once a brand has successfully sold to a high percentage of lower cost prospects who are:
- Familiar with the brand (brand search, affinity, etc.)
- Actively in-market for the product and/or services the brand markets
- Already enrolled in a reorder program, essentially a subscription to recurring sales if applicable,
additional conversions often become more expensive. New customers need to be nurtured. Nurturing variables include combinations of brand awareness, funnels, content, education, empowerment, removing barriers, etc. Well-placed PR can earn a branding halo which drives prospects deep into the funnel much earlier in the process as well as codify top of funnel performance marketing with street credibility. AIMCLEAR Founder Marty Weintraub summarizes:
“Easy, inexpensive conversions come first and scaling usually results in increased CPAs until a brand achieves significant market recognition – at which time customer acquisition costs may again decrease.”
Power Tips:
- PR does require serious data professionals to track reach, virility, word of mouth, frequency, and impressions through to immediate and longer-term ROI.
- PR and content together can build long-term credibility and boost metrics across the board – from search visibility to conversion rates.
- Integrating PR with paid advertising campaigns can amplify effectiveness. All these benefits require a willingness to invest, potentially knowing there likely won’t be any instant returns.
Technological Infrastructure & Data Utilization
A recurring theme of an investor-driven brand is the inability of many VC-backed companies to establish a solid technological infrastructure for tracking and analyzing marketing effectiveness. Installing tools like Salesforce or HubSpot is insufficient without proper configuration, management, and user accountability as safeguards. Without those in place, it is much more difficult to gather powerful data insights.
The constant evolution of privacy policies and tracking technologies exacerbate this challenge, making it harder for companies to justify or implement comprehensive tracking systems. This deficiency hampers the ability to demonstrate marketing ROI, especially when internal processes and data management are misaligned.
AIMCLEAR often includes Data as a Service (DaaS) scope in our agreements, having encouraged new clients to solidify foundational tracking prior to running ads and other aspects of integrated campaigns.
Power Tip: Start with tracking infrastructure. Sure, it’s an investment. In our experience, those demonstrating this added diligence will more than make up for the startup cost with deeper campaigns, elevated by serious, professional attribution.
Rapid Pivots and Organizational Instability: Investor-backed environments commonly fail due to disruptive and frequent strategic pivots. Priorities seem to change overnight. Rapid shifts often result in false starts where substantial resources are invested in initiatives that are abandoned before they have a chance to yield results. In the advertising world, failure to provide time for yesterday’s efforts to yield fruit can mean campaigns never get out of machine learning in Google, Facebook, and other channels. Such volatility wastes resources and demoralizes marketing teams. The side effects include a failure to yield useful data, and an undermining of what could have been long-term viability.
Machine learning can optimize targeting and campaign performance over time. However, it often requires a lot of waiting (and patience) – traits that are often antithetical to the venture cap mindset! High segmentation wildcards such as seasonal demand, the economy, and other factors are real obstacles to navigate – sometimes requiring days or weeks for campaigns to get out of learning mode. Investor-backed companies often lack the patience for any learning periods, expecting immediate results that are unrealistic given the technology’s constraints.
Power Tips:
- Use an external marketing agency as a vessel of corporate marketing data knowledge. AIMCLEAR is often retained during brand client regime changes.
- Whenever possible, avoid the pure waste of premature campaign abandonment. We find it ironic that VCs totally fixate on short term returns while seeming so open to radical waste.
- Amanda emphasizes the importance of maintaining a robust historical record to aid new team members and ensure continuity.
- Marty suggests that agencies must serve as invaluable repositories of corporate memory to survive transitions and continue delivering value despite the turbulence.
Interpersonal Effectiveness & Relationship Building
Above all, Amanda advises marketers to leave emotions at the door (other than their inherent strong desire for successes of course):
“Don’t get sucked into the whirlpool of investor-backed client dynamics due to the highly predictable volatility and timelines of these relationships. At the same time, never underestimate the importance of building strong personal relationships, as these often lead to future opportunities and long-term professional networks.”
Marty concurs:
“The key to success lies in consistently delivering value, maintaining professionalism, and ensuring that every interaction strengthens client trust and our agency’s reputation.”
Navigating the realities of investor-backed companies requires a delicate balance of strategic foresight, technological acumen, and adaptive resilience. Marketing professionals must be prepared to manage short-term pressures while advocating for the long-term investments necessary for sustainable success. By understanding and addressing these multifaceted challenges, marketers can better align their efforts with the unique demands of investor-backed environments.
Putting all the key points in one easy list:
- Establish a solid technological infrastructure for tracking and analyzing marketing effectiveness. Invest in comprehensive tracking systems to demonstrate marketing ROI and manage data effectively.
- Align marketing strategies with investor expectations to avoid disconnect and dissatisfaction among investors.
- Ensure budget allocations match expected outcomes, recognizing the need for initial investments to achieve efficiencies.
- Balance short-term pressures with advocating for the long-term investments necessary for sustainable success.
- Manage rapid strategic pivots to prevent resource waste and ensure campaigns have time to yield results.
- Don’t disregard strategic brand development and content strategies to achieve short, mid, and long-term conversion goals for attaining scale while maintaining a reasonable cost.
- Leverage strategic public relations and supporting content to achieve short-term wins, support long-term branding, and nurture new customers through improved brand awareness and education surrounding themes that matter greatly to customers.
- Integrate PR with paid advertising campaigns to amplify effectiveness and boost overall metrics.
- Use an external marketing agency as repository of corporate marketing data during brand client regime changes.
- Maintain a robust historical record to aid new team members and ensure continuity.
- Build strong personal relationships with investor-backed clients.
Watch for the next article in our series, which will take a deep dive into handling wholesale HR changes, including C-Suite/leaders at investor backed brands.
