Why Centralized Marketing Matters For Private Equity

A lot of the collective marketing dollars spent across a private equity portfolio go to waste.

Finally, we say something that everyone probably agrees with.

The point we hope to make here, why not waste less – and improve marketing performance at the same time. Reducing costs and driving revenue will have a positive impact on EBITDA – the impact on exit valuations being obvious.

How?

Private equity firms can reduce the overall marketing spend across their portfolio by creating a centralized resource that optimizes economies and advises on strategy.

Let’s face it, when it comes to marketing, portfolio companies tend to run fairly autonomously. Why? There are countless moments a day when the collective buying power of a portfolio is not leveraged, digital and print buys being a great example. Creative templates for one company may work for another - events, SEO, PR, technology, the list of potential economies is long. Again a centralized body should be exploring these cost saving opportunities continuously. The benefits are real and immediate.

The internal marketing acumen of portfolio companies also varies. This presents another enormous opportunity. Why not have a very experience marketing strategist “check-in” on each of your portfolio companies on a monthly basis? Yes, some portfolio companies have internal people that are hugely talented, however, those people are not looking at the overall portfolio holistically. They can’t see the big picture, how all the pieces are working together. Those that don’t have internal expertise typically can’t afford an “A” list marketer, and more often than not they don’t need one, but that doesn’t mean they can’t benefit from strategic guidance.

Marketing talent is also often duplicated across a private equity firm’s portfolio. There is the very real chance a centralized marketing resource could lower personnel costs as well.

Marketing should not be viewed as a cost center. It is a service that can significantly impact the bottom line. Isn’t it time to be more strategic?

July 2019Kyle Dunn