Marketing and communication professionals overcome a variety of new challenges with each passing year in order to successfully capture their audience’s attention, keep up with the latest digital marketing trends, and drive more sales. Likewise, private equity professionals also face a unique set of challenges when it comes to securing capital, economic forecasting and sourcing new deals.
This makes preparing for a new year all the more challenging, as private equity marketers must consider how emerging trends in marketing and communication intersect with those in the finance and investment communities. The reality is that if you’re not proactively facing these challenges, your firm will have no choice but to be purely reactive—which is far from effective or strategic.
Ensure your brand strategy is prepared to face these private equity marketing challenges in 2024:
1. Data Privacy Regulations
As a wave of data privacy regulations continues to undulate into 2024, private equity marketers must stay informed of when these laws will take effect, mitigate the consequences of reduced data quality, and implement transparent consent management processes to ensure compliance.
Consumer privacy laws, such as California’s Delete Act, limit the extent to which marketers can deploy hyper-targeted ads and collect and store user data. A notable consequence of these new regulations—which have not yet reached their full extent—is that private equity marketers may face increased competition for digital ads. With restrictions on the ability to use certain data to precisely target a narrow audience, more advertisers will be forced to bid on broader groups, making ad targeting less effective while driving up the cost.
One shift you may consider making to account for this is pivoting to contextual targeting, which is an advertising technique that places ads on webpages that are relevant to the content of the ad. For example, if you’re targeting founders, your ad may be placed on a webpage about securing funding for business growth. Contextual targeting campaigns may use categories, keywords or semantics to determine where your ad is a good fit.
Furthermore, private equity marketers must be extra vigilant with their firm’s brand strategy and reputation in light of new data privacy regulations being introduced. If you shape marketing campaigns around bad user data, you’re at risk of sending irrelevant, poorly timed or repetitive messages, which wastes your budget and erodes your brand image. Developing transparent consent management processes is also an ongoing challenge that should be a collaborative effort between the marketing and legal departments to avoid costly penalties.
2. Increased Competition for Deals & Investments
In line with previous years, competition among private equity firms continues to increase. According to Accenture, there are 3x the number of private equity firms since 2010, and 50% of the leaders surveyed say deals are more complex than just five years ago.
Meanwhile, the pool of investable companies has stagnated, intensifying the competition for favorable deals among private equity dealmakers. Because of this, private equity marketers face the challenge of differentiating their firms to stand out in the eyes of investors and potential portfolio companies.
Unlike in previous decades when a personal relationship-driven approach had determined private equity success, it’s now critical to have an in-depth understanding of your audience and develop a pervasive brand presence that shares a compelling narrative about your firm.
At a minimum, your marketing and investor relations strategies must include the following:
- Frequently updated, easy-to-navigate website that accurately tells your firm’s story and communicates its key differentiators.
- Content marketing strategy that leverages several types of content, such as video, blogs, case studies, emails, infographics and reports, to encourage your audience to engage with your brand.
- Strong industry and community ties, including affiliation with associations, conferences, philanthropic causes and publications.
- Social media outreach by both your brand and the firm’s executives.
- Robust information on your firm’s investment philosophy and values, including environmental, social and governance (ESG) and diversity, equity and inclusion (DEI).
Your marketing and investor relations strategies give founders and investors the insight they need to determine if they’d like to partner with you, making it a key opportunity to capture more market share than your competitors in 2024.
3. Evolving Investor Expectations
Investors are no longer interested in profits alone when considering a partnership. The expectations of today’s contemporary investors are increasingly dynamic, demanding more detail from private equity firms seeking investments. A key challenge for private equity marketers in 2024 is to continue to evolve communication around the ESG aspects of their portfolio by expanding their performance reports beyond traditional financial metrics.
A 2022 survey found that 81% of institutional investors in the U.S. plan to increase their allocations to ESG-focused companies over the next two years, demonstrating the importance of shifting your firm’s communication strategy to meet increasingly sophisticated investor expectations. As such, your investor relations strategy should articulate:
- Why your firm is optimally positioned to unlock investor value;
- How a sustained investor commitment will transform the value of your portfolio companies;
- The impact that your firm has on the environment and what it’s doing to mitigate that impact;
- Your firm’s values, philanthropic affiliations and its impact on the communities in which it operates;
- The actions your firm has taken to improve the lives of its employees, partners and community members; and
- Information about your firm’s governance practices, employee diversity (especially at the leadership level), and evidence of fair and balanced decision-making processes.
Typically, private equity firms present this information within a comprehensive ESG report, which they can provide to potential investors upon request.
4. Always Be Ready to Pivot
In today’s unpredictable economy and business landscape, the most successful private equity marketing strategies are those that are highly flexible and resilient. Flexible strategies are those run by marketing leaders who are capable of:
- Pivoting to different tactics when needed, such as the transition some companies made from traditional and event marketing to digital marketing during the peak of the pandemic;
- Adjusting the firm’s messaging to respond to current events or capitalize on trends, as appropriate; and
- Personalizing your marketing campaigns to accommodate different types of founders and investors, as well as target new leads.
The resilience of your marketing strategy depends on the strength of your brand, the consistency of its messaging, and its ability to withstand market disruptions such as new regulations, economic turbulence and societal trends. Typically, brands with well-established content marketing, PR and investor relations strategies fare better during unforeseen challenges than those with a minimal online presence.
If one piece of advice could summarize how private equity marketers can overcome the challenges they’ll undoubtedly face in 2024, it’s this: Anticipate change, understand your audience, and over-communicate so that investors and partners can always find the information they’re looking for.
Especially in marketing, change is the only constant. Despite new regulations limiting how data is collected and used, marketers will always find innovative ways to collect as much data as possible within the established parameters and leverage it to drive ROI. As investor expectations evolve, the marketing community will rise to the occasion, discovering new ways to communicate business value.
Finally, the more you communicate your firm’s values, share recent news and establish audience touchpoints, the more opportunities people have to connect with your brand and understand what sets it apart. No matter what 2024 brings, relying on a strong brand strategy and anticipating these challenges in private equity will set your firm on the right track for a profitable year.