As in any industry, your brand can be your greatest asset. But keeping a brand strong, and protecting it against the impact of external market forces (as well as, often, your own mistakes) can be as tough a job as growing the brand in the first place.
No doubt brand protection was a big factor in index provider FTSE’s decision to introduce a new reporting policy for clients to report usage of the vendor’s index data, which now requires direct relationships between the end-user and FTSE, even if the end-user accesses the data via a third-party. By implementing direct relationships, FTSE protects itself against disintermediation, and sets the stage for the ability to up-sell, cross-sell, and be more proactive about chasing down lost revenues as a result of under-reporting.
Sometimes building a brand requires companies to step outside of their comfort zone into adjacent areas, such as Kinetix Trading Solutions, a smaller developer of trading platforms, which has released a new version of a pre-trade compliance tool that captures data from different databases within a firm to ensure compliance with new regulations. Because the tool is designed to work with any number of incumbent trading platforms, it doesn’t directly contribute to sales of Kinetix’s own systems, but by association contributes to the vendor’s brand recognition, which over time should bring customers back to its other solutions.
Likewise, Chicago-based data vendor Barchart recently struck a deal for its data to appear on some unconventional screens—specifically, TV screens in office building elevators powered by Captivate Network, which supplies almost 10,000 such screens, reaching an estimated five million viewers.
Under the deal, Barchart’s data on stock prices and indexes, as well as a montage of statistics on the biggest gainers and losers, will be displayed on the screens alongside Captivate’s regular programming of news and advertisements, accompanied by Barchart’s branding and logo.
Mark Haraburda, managing director of sales and business development at Barchart, says the Captivate deal is a B2B play, rather than targeting individuals.
“The brand awareness from this is huge. In these office buildings, it will be people like our clients and competitors who are looking at our logo,” Haraburda says.
But like any asset, the value of your brand can go down as well as up—especially when it’s linked to any kind of snafu, such as Nasdaq’s forced trading halt two weeks ago following the failure of the SIP that distributes the UTP consolidated feed. Nasdaq ate a big slice of humble pie in its post-mortem of the incident, but also rightly blamed NYSE Arca—which sent erroneous quotes and connection messages amounting to 26 times the normal amount of per-port activity for the SIP, ultimately making it the culprit for the SIP failure. In promising to implement design changes to prevent a repeat failure, while also laying the blame elsewhere, Nasdaq emerges with its brand largely intact.
But the risks caused by technical or administrative failures aren’t just reputational risks that can be indirectly costly; they can also have direct costs associated with any failures—for example, if an end-user firm is found to be not in compliance with an exchange or vendor’s data usage policies, it may well be handed a hefty fine by the data source. Reducing this potential risk is one of the reasons why managed infrastructure provider Options has developed its own reporting tool. However, the vendor doesn’t plan to market the tool beyond its own hosted infrastructure requirements, so you won’t be able to use it to report your FTSE data usage. But that’s all part of Options’ plan—to focus on being the best in providing hosted services, not about being a broader software supplier. And to that extent, once again, it’s all about the brand.
Anthony and James take a look at the interdealer broker space and quickly hit on whether or not bitcoin ETFs are to come in the near future.Subscribe to Weekly Wrap emails