News that the Paris, Brussels and Amsterdam stock exchanges are to merge will have raised few eyebrows in UK marketing departments. Their attention may have been recently turned towards what is happening on the stock markets, rather than the institutions themselves. In any case, the launch of a merged continental stock exchange under the name Euronext is not, on the face of it, a marketing story. Or is it?
“There was a time when things just were”. Public institutions, utilities, financial markets, and the like, were defined by their functional and physical characteristics what they did and where they were. Deregulation, globalisation, the development of virtual economies and increasing competition across all spheres of life mean this is no longer the case.
At first glance, branding and the financial markets do not have a lot in common. When you look around the financial world, however, you find a surprising number of brands: Dow, FTSE, Easdaq and Nasdaq, to name but four.
Of these, Nasdaq has been the most energetic in terms of self promotion, and its impending arrival in Europe is often cited as a factor behind changes to European stock markets.
In recent years, Nasdaq has maintained a high-profile across the US and Europe designed to make it known to investors and potential member companies alike. In the US alone, Nasdaq last year spent $14m (£8.8m) above the line. Most recently, the company invested a reported $37m (£23m) in a giant electronic billboard site in New York’s Times Square.
Both the London Stock Exchange and Deutsche BÃÂ¶rse – its German equivalent – recently announced plans to demutualise – a move which offers them enhanced commercial freedom. Following its members’ decision to merge, Euronext has been quick to position itself as the “first European Bourse” through full-page ads in the business and financial press.
Of course, a brand name in itself – however well groomed – is not sufficient to convince investors, or companies seeking to place their shares, of the market’s true worth. For the latter, as the BBC Online journalist Orla Ryan pointed out in a recent article, factors such as cost, valuation, local and international placement and investor profiles are fundamental.
Nevertheless, a stock market’s ability to “package” its offer as a credible and attractive brand will increase in importance as competition between exchanges grows. The launch of Euronext – which, interestingly, brings with it the possibility of its own stock exchange listing on itself – could be the precursor to a marketing battle the likes of which the sector has never seen.
John Shannon is president of Grey International