Another 22 percent of respondents said they find social media “a little scary but (are) starting to use it a little” in a survey that otherwise found many firms gearing up to do marketing and brand-building in the months ahead. A surprisingly high 59 percent said they don’t use social media at all—20 percent said they don’t use it but “would like to,” 21 percent said they don’t use it and “don’t see the value,” and 18 percent said they don’t use it because it is “inconsistent with our culture.”
Still, the survey found that use of social media has grown over the last three years. ”Social media can be an effective tool for private equity firms to project their brand,” the survey report said. ”Firms are increasingly using LinkedIn and Twitter as news distribution channels in addition to the wire services and direct media outreach.” The most popular social media outlet for respondents was LinkedIn (about 50 percent use), followed by Twitter and Facebook at about 20 percent each.
All told 290 professionals filled out the survey in June 2013, a mix of executives at private equity general partners (146), service providers (64) investment banks and intermediaries (50), funds of funds (eight) and limited partners (seven). The survey was jointly sponsored by BackBay Communications, a provider of branding, marketing and public relations services, and PitchBook Data Inc, a provider of research on the buyout and venture capital markets.
While social media might not be the hottest choice of channel, respondents said they are hungry to get word out about their products and services. More than half (56 percent) said they plan to spend more on marketing materials and websites over the next 12 months. Just under half (44 percent) said they planned to spend more on investor relations and about a third (34 percent) said they planned to spend more on public relations. (Respondents could pick more than one answer.)
What are the most important “operational” elements in building a strong brand for private equity firms? By far the most popular response, at about 80 percent: “achieving consistently strong portfolio company performance/returns.” (Again, respondents could pick more than one answer.) That was followed by “building a cohesive firm culture” (about 60 percent); ”having investment discipline” (just under 60 percent); and “avoiding major portfolio company blowups” (about 50 percent). “Hiring the best and brightest” came in at just under 40 percent.
Other highlights from the survey:
- As to the most important audiences for brand-building, more than 80 percent picked limited partners and about the same percentage picked CEOs of target companies (respondents could pick more than one answer).
- More than 60 percent of respondents said that speaking at conferences was the “best” brand-building method for private equity firms, while about the same percentage picked “personal meetings.” (Respondents could pick more than one answer.) About half chose websites, while a slightly smaller percentage picked news releases. Media interviews and marketing materials were also popular responses.