by Luis Miguel Ochoa Comments (10)

Marketing: The Most “Creative” Investment Banking Exit Opportunity?

Marketing vs. Corporate FinanceMarketing?!!

Probably not the first department that springs to mind when you think of “investment banking exit opportunities.”

But if you’ve ever dreamed of becoming Don Draper and continuing to hone your Level 99 Excel skills at the same time, it might be right up your alley.

In the 1960s, marketing actually resembled Mad Men: a bunch of “creatives” coming up with magazine and TV ads for clients, and then drinking martinis at work while having an affair or three.

Today, though, marketing is ruled by numbers – and in the digital realm, spreadsheets are king.

And as traditional finance opportunities have become less appealing over time, former bankers and consultants have been hopping on the marketing train and using their analytical skills and creativity to make a mark.

Marketing gets overlooked because it’s seen as “less sexy” than alternatives like corporate finance, corporate development, and business development.

But that’s a huge mistake since it’s arguably more of a front-office role than some of those – and a more creative one as well.

Here’s how you can become Don Draper:

Marketing 101: What Is It? And Who Gets In?

Q: Before we get started with the martinis, can you explain what “marketing” actually means?

A: In an academic sense, it is how a company goes about (1) Choosing which customers to serve, and (2) Getting, keeping and growing them by delivering superior customer value (Source: The Wharton School at the University of Pennsylvania).

The pitch books you create in investment banking and all the “relationship development” work that Managing Directors do are considered “marketing”; even advising a client on a deal could be considered marketing if that client might come back for more deals in the future.

Classes on marketing cover topics like brand strategy (product positioning), probability models (predicting behavior, forecasting sales from new products, analyzing media usage, etc.), and creativity (where ideas come from – remind customers of something familiar, but also something new enough to grab their attention).

Advertising and sales are both subsets of marketing: advertising is used to generate interest and leads in the first place, while sales is for “closing the deal” and requires more personal interaction with prospects.

Q: So what do you actually do if you “work in marketing”?

A: You could be doing anything from market research to setting up advertising campaigns to closing deals yourself – but here are a few examples of typical work streams:

  • Customer Insight: Understanding who the customer is, what their concerns and priorities are, and why they drive revenue growth. We’re most interested in efforts that “move the needle” and make a material impact on the company’s financial statements (read: will investors care whether we pursue this area or not?).
  • Market Analysis: Measuring a market’s potential and evaluating whether it makes sense to become a competitor there.
  • Digital Media: What outlets and channels does a company use to keep in touch with its customer base? For instance, a luxury brand may host contests for users who frequently showcase their favorite items online.

Q: So what is the hierarchy in the group like?

A: It’s company-dependent, but the head of the marketing group at a normal company is almost always a Vice President (VP).

This “VP” has a lot more power than a VP in investment banking because there are fewer people with the same title at the company.

Below the VP, you might have three Director-level professionals, and then about five junior professionals below them with names like “Manager” and “Account Planner.”

These are really rough estimates, as the group composition depends on the company’s size and industry focus.

After about five years of experience, you might become a Manager, and then after that getting promoted to Director or VP is highly dependent on your performance.

It’s almost like sales & trading: if you perform well, you might move up the ranks rapidly, but if not… you won’t.

Working at an agency is also much different from working in-house, but here we’re focusing on in-house corporate roles.

Q: So why would a former banker or consultant want to get into this area?

Isn’t it for marketing majors?

A: A long time ago, yes, you saw a lot of marketing majors with relevant work experience getting in.

But that has shifted over time, and now there are more and more former bankers and consultants vying for these roles.

Part of that is supply and demand: there are more IB professionals than there are open spots in corporate finance, corporate development, corporate strategy, business development, and PE/HF roles.

The other factor is that the skills you develop in banking – financial modeling, valuation, and pitch book writing – are very relevant to marketing roles.

You’ll still be creating “pitch books” to close deals or win new clients, and you’ll still be creating a model to evaluate how well a new product or ad campaign might perform.

You could say that an investment banking skill set adds rigor to the field of marketing.

And there’s another big benefit: marketing is arguably more “front-office” since everything you do is customer-facing.

By contrast, even if you become a CFO on the corporate finance side, it’s still more of a support role focused on internal operations.

The Hard Line on Soft Skills: Let’s Talk Recruiting

Q: So let’s say that you’re interested in the work – how would you start recruiting for these roles?

A: First, pick an area of marketing that interests you. Second, pick the right industry and start networking with professionals there.

Third, think about how you’d spin your current resume and experience into sounding suitable for marketing roles, and how you’d answer interview questions on those topics.

To figure out an area of marketing that suits you, start by reading a few Harvard Business School case studies:

Once you’ve read through those materials, you can figure out if you’re most interested in customer segmentation, financial analysis of campaigns, or branding and “idea generation.”

Q: And then step 2?

A: You need to understand that some industries have better marketing roles than others.

A sector usually requires more marketing expertise when there are:

  • Lots of substitutes.
  • Many competitors.
  • Low marginal costs, coupled with high fixed costs: this means the product is commoditized and the unique selling points require more explanation.

For example, something like highly specialized software (e.g., a program used in a specific area of life insurance to help actuaries calculate mortality rates) wouldn’t be great because there are fewer substitutes and competitors.

On the other hand, retailers always need marketing professionals since many brands are similar and the customer has readily available substitutes.

The sector group you worked in in investment banking also plays a role.

If you’re in the consumer and retail investment banking team, you have a better gauge of customer behavior than someone who only addresses one customer (read: aerospace and defense sector coverage).

The difference is that in IB, you have to know the sector, but in marketing you need to know the customer by going down a level deeper.

Q: And how do you start networking once you have an idea of the sector and the roles you want to pursue?

A: The most natural pool of marketing experts (in the US) is the American Marketing Association (AMA).

It’s similar to how the CFA Institute has chapters around the country (and the world).

You can also look at meetups such as StrategyHack.

Since marketing is becoming more and more data-driven, you’re also likely to meet professionals in this area at any tech or start-up events you can find.

Once you make these initial contacts, the networking process is just like what you do in finance: set up informational interviews, target corporate leadership or internal rotational programs, and speak with everyone in the department you’re going after.

Q: Great. And what about the last part, spinning your experience into sounding relevant to marketing?

A: To answer that, it’s helpful to think about the most common questions in marketing interviews:

  • “We have a marketing campaign with these parameters – should we pursue this campaign?” (read: “What is the Net Present Value?”)
  • “We have a new product. How should we sell it?”
  • “Why you and not someone who is coming in with better or more relevant experience?” (sound familiar?)

So it requires a mix of creativity and logic.

I would recommend reviewing your past pitch books and how MDs in your department won clients – interviewers want to see how you interpret data and create actionable conclusions.

Your message to them should be:

“I’ve worked on all these pitch books and advisory assignments where we had to market and sell a company to potential investors or acquirers – and from doing that, I’ve learned how to isolate the features, advantages, and benefits of other products for use in marketing campaigns. Plus, I’m quantitatively oriented and can run the numbers for new campaigns and strategies and make recommendations that lead to higher revenue.”

You should also take a look at products you use and enjoy and dig into how they’re sold to customers – Brand advertising? Direct marketing? Does the company focus on certain channels?

Then, be ready to critique their strategy and explain what you would do differently.

Teach Me Something Technical: How Spreadsheets Took the Crown from Martinis

Q: Thanks for all those tips.

Going back to my original question in the beginning, can you explain more of the tasks you actually perform in this role?

A: Sure. Work is split into tasks that arrive from other departments (e.g., the corporate finance team wants a summary of how profitable our advertising spending has been) and then tasks from within the department (e.g., which customers are most profitable and what do they all have in common?).

With a task like customer segmentation, you divide the customer base by parameters such as frequency of product use, and then you keep dividing it and looking for useful patterns within different segments.

You might create a persona for each segment (“This is Jack, a 25-year old engineer who uses our food ordering service 5x per week because he doesn’t have time to cook for himself”) and then figure out how you can sell more, or more frequently, to that segment.

Q: Right, but what about the more technical tasks?

You’ve been mentioning how quantitative analysis has become more important over time.

A: Sure. The equivalent to “modeling” is calculating how effective a marketing campaign has been and what its future potential might be.

So you make assumptions for variables like the cost per click, average customer spend by different lead sources (LinkedIn vs. Facebook vs. Google), and then you use those to create P&L-type projections for your marketing efforts.

You might also look at “precedent campaigns” and dig into previous marketing efforts to figure out what worked and what didn’t work.

For example, did one ad perform much better or worse than a similar one, even for the same product or even in the same channel?

How did the product’s image change over time as a result of certain ads, and how did customer spending patterns trend along with that?

Q: It still sounds pretty light-weight in terms of math.

A: Right, but how complicated is investment banking math? It’s just arithmetic… you don’t exactly see bankers coming up with alternate proofs for Fermat’s Last Theorem.

You also see questions and scenarios similar to the ones asked in consulting interviews: Total Addressable Market * Penetration Rate * Turnover (frequency of purchases) = Annual Revenue, for example.

So you need to be comfortable with numbers, but as with IB, rocket-science math is completely unnecessary.

Q: What can you tell us about salaries in this group?

A: Similar to the pay differences in Big 4 and even corporate finance roles, compensation is significantly lower here, which is the major downside of these roles.

You could still earn a six-figure income, but you’d have to be in a more technical or more senior role.

There are two relevant salary surveys here:

According to those figures, you might start out earning between $40K and $60K, and advance to closer to $100K and then move closer to $200K at the VP level and beyond.

However, also note that those figures exclude bonuses, benefits, and stock-based compensation, and SBC in particular can be quite significant at the more senior levels.

The other survey seems to indicate higher figures, with medians of $100K – $125K across the areas shown there.

The bottom line: you’re not going to make IB or PE-level compensation here, but the right roles can still be quite lucrative.

The Suit and Tie is Over: Where to Go After Mastering Marketing

Q: Let’s say you want to move on after working in marketing for a while.

Where can you go after you’ve sipped your final martini?

A: Typically, a marketing professional starts off covering a variety of products or services. You could call this “the corporate marketing department.”

After a couple of years in this group, you’ll become more specialized and you might focus on one specific product in the future.

I’ve also seen peers move into international coverage after a few years in broader corporate marketing.

Business school is not too common, as people in marketing tend to want to continue a long-term career in marketing.

People who really want to “leave” join an independent agency (Mad Men-style) to change sectors or gain broader exposure.

It would be tough to move from marketing back into a pure finance role, but you can definitely jump around within the company and move into related areas such as sales, business development, or even corporate finance.

In some ways, you’re an even stronger candidate if you have both investment banking and operational experience.

Q: Any final comments before we close out?

A: Don’t limit yourself when thinking of “exit opportunities” – and don’t assume that your skill set only applies to pure finance roles.

Marketing is a great area to be in, with work that’s more interesting than much of what you do in investment banking.

Just don’t expect quite as many lunchtime martinis as Don Draper.

M&I - Luis

About the Author

Luis Miguel Ochoa has facilitated a variety of strategic initiatives from corporate acquisitions to new market development. He earned his B.A. in economics from Stanford University where he was a member of the varsity fencing team.

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  1. Hi Brian,

    Great article! Have some questions: curious if the reverse of this write-up is also true; that a marketing guy could equally switch to finance? You don’t seem to discuss opportunities in the debt capital markets… I’m pursuing opportunities in a DCM OTC, but wondering how best to fit in (without limiting myself to roles in communications)? With Econs degrees and experience from B2C (FMCG), strategic marketing at a fortune 500 B2B (energy) and startups (energy), how could I tailor my experience and CV? Would really appreciate your thoughts. Thanks.

    1. It’s exceptionally rare for marketers to move into finance. The skill sets are different, qualifications/expectations are different, personalities are different, etc. That is changing a bit with more algorithmic work everywhere, but the cultures are still quite far apart. If you actually want to get into IB with several years of marketing experience, you will probably need an MBA at this stage.

  2. John Snow

    Hi Brian,

    Great article. Kind of an unrelated question, but I completed an internship at a “Merchant Bank” this past spring. When I mention it to people, most of them don’t really understand what the term means. The firm worked on raising capital or debt for companies that could be considered “impact investments” and was compensated through either a blend of an equity stake in the company or a portion of the total funds raised.

    Because of the confusion regarding this term, I was wondering if it would be okay for me to list it as “Investment Banking” instead of “Merchant Banking” on my CV?

    Thanks!

    1. Thanks. I would just add a description of what the firm does, e.g. “Combined Investment Bank and Private Equity Firm” after the name so people can understand it more easily.

      I think as long as you explain it and add two buzzwords people are familiar with afterward, you can still list it as a Merchant Bank.

  3. To add a bit to the comments from a different perspective, I work on the agency side and the work can be quite a bit more rigorous than the Excel-monkey stuff (though that definitely exists at some levels as well). Depending on one’s role, it’s a combination of heavy quantitative lifting (from building statistical segmentation and forecasting models to some machine learning work) and client-facing marketing strategy engagements.

    So, it’s possible –and increasingly viewed as table stakes– to have strong quantitative chops in marketing, at least on the digital side. But that’s really not the benefit I’d emphasize if you’re thinking about working in the field. Again, my experience is limited to agency life, but I’ve found that it’s an extremely meritocratic environment where, even as a junior team member, you’re given lots of responsibility in a client-facing manner. You can have a large impact on changing the way people perceive and interact with some of the biggest brands.

    1. Thanks for adding that. Yeah, it sounds like the client-facing nature of the role is a bigger benefit than getting to use/demonstrate your quantitative skills.

  4. Having recently moved from a corporate development role into a marketing role, I can say that the quantitative rigour you develop in finance related roles is a valued skill that is sought after in marketing. The best part of the job so far I think is being able to combine the analytical side with the creative side; for example, analysing the financials of previous marketing campaigns and using those findings to shape the creative side of the next campaign.

    1. Thanks for adding that. Yeah, I do think the quantitative rigor is quite important, though as someone else pointed out above, the actual amount of analysis you use differs greatly depending on the role.

  5. Hey thanks for the article, but honestly, you’re really overstating how technical from a math/analytics perspective a marketing job is in an industry like FMCG. It’s way way less sophisticated than that. The jobs are really more about “project managing” various campaigns, initiatives, new launches while working closely with various internal and external stakeholders. The fun, brainstorming, analytical stuff is few and far between.

    1. Thanks for adding that, agreed that the job is not necessarily that technical at a large company.

      However, I think it also depends on the nature of the role and where you’re working… for example, the marketing agency I hired for this business actually does a fair bit of technical work with analyzing ad spending, ROI on different ad channels, etc. No, it’s still not as complex as building a Project Finance model that involves 5,000 different contracts, but it is more complex than just project management.

      So if you find the right role and/or work at a place that specializes in digital, the roles can be more technical. And I force my team to brainstorm interesting new ideas quite frequently (though I am admittedly a horrible boss to work for…).

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