In a recent shareholder report, Morgan Stanley reported a profit rise of 20% for the third quarter of 2018. This news led to a rise to their stock, which has struggled in the past year due to uncertainties in the market.
While this is typically only of interest to the finance-inclined reader, I found it to be intriguing from a marketing perspective. Namely, that companies, through these types of public reports, are essentially marketing their reputation to Wall Street and their shareholders. Company’s put a lot of thought into how they announce their financial performance, pitch future strategies, and justify investments to shareholders. While these types of reports often focus on numbers, there is a fair amount of spin involved as well.
For example, in the same article about Morgan Stanley, it was pointed out that the company has been buying up their own outstanding shares. By reducing the overall shares on the market, their reporting Earnings Per Share (an important metric of financial health in a company) would rise. This move might have certain managerial or financial reasons, but it is also clearly a marketing move to improve the reputation of the stock to the market.
The stock market is highly sensitive to fear and hysteria. Investors are only human, and they are subject to emotions that can influence their investment decisions. One need only look at the housing market collapse a decade ago to see an example of how optimism can lead to unsubstantiated investments and fear can collapse the market.
Due to this, a company needs to be able to both achieve the financial goals they need AND market those financials and their overall corporate vision so as to effectively win over the support of their shareholders and encourage increased investment in the firm. Failure to do this can make a company lose share value in spite of good “on paper” performance.
This is just another example of how marketing is integrated in every part of our society. Recognizing this can help to expand and improve our thinking as marketers, businesses, and as people.