The Profession Says It's Marketing

There is a moment on every index rebalancing day when an IR officer somewhere checks the provisional constituent list, sees the company's name where it was not before, and feels a flush of satisfaction that has nothing to do with anything they said to anyone. A passive fund tracking the benchmark is now obliged to buy the stock. Not because the equity story moved someone. Because the market cap crossed a line and the volatility sat below a threshold, and a rules engine at an index provider did the rest. No analyst was persuaded. No meeting was taken. The buyer does not know the CEO's name and does not need to.

This is, increasingly, where the marginal share gets bought. And it is a problem for an essay I wrote, because that essay said investor relations is not really marketing.

So let me put my own essay on the stand.

1The position we took

Essay 11 of the Bedrock Papers, IR Is Not Really Marketing (And the Difference Matters), made a confident claim. Its subtitle was the whole argument compressed: "Stock is not a product, investors are not customers, and the vocabulary the IR profession has been using for forty years has been doing work most practitioners haven't noticed."

The essay did not say marketing vocabulary is harmless and overused. It said the vocabulary is constitutive: calling IR "marketing" imports an operational kit (product, customer, campaign, conversion) that bends the function toward managing perception rather than transferring information. And it argued that the kit attracts the wrong holders.

The shareholders a company actually wants, concentrated and long-duration and narrative-aligned, are "not the audience the marketing framing optimises for. The framing produces communications that systematically repel them."

That is a strong claim, and I stand close enough to it that I want to test whether it survives the best argument against it. The verdict notation on this essay is "hold." Holds have to be earned, not asserted, so here is the case I have to beat.

2The counter-case, steelmanned

The first thing to concede is whose canon this is. The essay treated the marketing frame as something the profession does by inheritance, a vocabulary that "settled the question before the meeting started." That undersells it. The marketing frame is not an accident of language the profession drifted into. It is the instruction the profession's own reference document gives, deliberately, in its most current edition, for the most analytically defensible of reasons.

The NIRI Body of Knowledge, second edition, does not merely call IR a kind of sales. It builds out a working model the Bedrock essay skipped: the stock-as-product marketing framework. The model reframes the company's stock as a product for passive investors, and it does something the cross-disciplinary critique does not. It tells you what to optimise. Not differentiation (the thing traditional IR sells, the reasons this company is unlike its peers) but characteristics matching: market cap, sector, growth-versus-value profile, and volatility. Down to the tactical: optimise earnings releases for machine readability, write the company boilerplate so that an algorithm parsing for investment characteristics finds what it is looking for.

Read that again, because it is the hinge of the whole rebuttal. The canon is not saying "market harder." It is saying the marginal buyer is increasingly not a person at all, and you market to the buyer you actually have.

The framework's own logic is uncomfortable for my essay because it is honest about its premise. As the canon puts it, "the cornerstone of good marketing is delivering a product the target market wants. Increasingly, money managers want beta, the average; not alpha, the outperformer." Beta is the larger and growing pool, and the slope is steep. As late as 2001, over ninety percent of institutional assets were actively managed; by 2024, the preponderance of investable institutional assets were passively run, and at the seven largest managers roughly seventy percent of assets track models. A function that ignores that pool to court alpha-seeking stock-pickers is optimising for a shrinking audience and calling it discipline.

The beta-versus-alpha paradigm sharpens the point with a worked example that should bother any IR officer who believes the story is what moves the stock. Where stock pickers want returns that beat the benchmark, passive money wants stocks that reflect the benchmark. The NIRI text walks through two stocks: Stock B outperformed Stock A despite weaker financial results, because Stock B's market cap was seven times larger and its volatility half as much, which made it far more likely to be included in passive baskets tracking the index. The better business lost to the better-characteristic'd stock.

Nobody persuaded anyone. The flow followed the rules engine.

If you run IR at a listed company, this is the point where the Bedrock essay's neat dichotomy, marketing-framed call versus information-transfer-framed call, starts to feel beside the point. The passive bid does not attend the call. It does not read the deck. It reads the market cap and the volatility and the boilerplate, in that order, and most of that has nothing to do with honesty versus spin. The real question is whether you have managed the stock's measurable characteristics so the machines can find it. That is marketing in the most literal sense the word has ever had: you have a product, it has features, and you are arranging the features so the demand finds them.

And the steelman does not stop at passive flow. The Bedrock essay's deeper claim was that perception and tone are a kind of distortion that buys the wrong holders. The literature says perception and tone move price at constant information, which means tone is not noise layered on top of the signal. It is part of what the market prices. The noise-trader material is direct about this: these are investors "subject to systematic bias" whose "investment decisions may be influenced by noise as well as news." Tan et al. (2014) show their "judgments are positively affected by disclosure tone (optimistic language), even when information content is held constant" — most strongly where the disclosure is hard to read and the reader unsophisticated. Hold the facts fixed, change the tone, and for that audience the valuation moves. That is the mechanism marketing has always traded on, and it is operative in equity markets whether or not the IR profession likes the word for it.

There is a sharper version still, and it is structural rather than behavioural. The impression-management hypothesis, from the Laskin handbook, drawing on DeAngelo et al. (2010), describes managers who, having already decided to issue equity because of "a pressing need for new capital," proactively use persuasive communication to inflate the stock price before the issue. The striking conclusion is that the stock price becomes "endogenous (i.e., determined by) rather than exogenous to" the financing decision. The communication is not reporting the value. It is, at least in part, manufacturing the price at which capital gets raised. You can deplore that. You cannot say it is not marketing, and you cannot say it does not work, because the capital gets raised at the higher price.

So the steelman, stated at full strength: the marketing frame is canonical, not inherited by accident. It is the right mental model for the largest and fastest-growing pool of capital, which is passive and prices on characteristics rather than narrative. Tone moves price at constant information, so the persuasion the Bedrock essay wanted to strip out is doing real pricing work. And in the one place where the stakes are highest, raising capital, the communication is endogenous to the price itself. My essay said IR is not really marketing. The profession's own canon, and the empirical literature behind it, says it plainly is.

3The verdict: hold

Here is where the cross-examination earns its keep, because the steelman is strong enough that the honest move is to give it everything it has actually proven and not one inch more.

Start with the concession, because there is a real one. IR is marketing. I will say it in the profession's own vocabulary and not flinch: the stock is a product, the demand-side has a target market, and for the passive pool the right discipline is characteristics management, not storytelling. The Bedrock essay was too quick to treat the marketing frame as a vocabulary that mostly does harm. For beta capital it does no harm at all, because there is no one to mislead. You are not persuading a rules engine. You are formatting your boilerplate so it can read you. That is honest work, and the essay should have said so.

But notice what the canon itself concedes, in the same breath. The same material is explicit that "IR cannot pitch its way into an index fund," because "indexes are intellectual property created by firms that generate revenue from licensing technology. They won't be influenced by a story." This is the rebuttal turning on itself. The strongest version of the marketing case, the passive, beta, characteristics-matching case, is precisely the case where persuasion does nothing. You get into the index by being large enough and calm enough, which is to say by being a particular kind of business, not by saying a particular kind of thing. The marketing here is real, but its only inputs are facts about the company: its size, its volatility, its sector. There is no spin available. There is nothing to distort.

The product's only marketable feature is what is true about it.

That is the seam where my essay's core claim survives. The Bedrock essay's actual target was never the word "marketing." It was the specific failure mode of marketing built on distortion: communications optimised to be compelling rather than to be accurate, which attract holders who price on the compelling rather than the accurate and leave when the compelling fades. The counter-case does not rescue that failure mode. It quietly indicts it. You cannot pitch your way into the index, and you cannot pitch your way into a long-duration holder's conviction either, because both of them, for different reasons, price on the characteristics rather than the pitch.

This is where Kedem closes the loop the Bedrock essay opened. The honest-marketing constraint, from Kedem's Investment Writing Handbook and corroborated across eight other sources, does the work. When performance is poor with no silver lining, the writer should "do what investors expect of leaders: take responsibility and express commitment to improve, backed by action." Honest marketing is marketing built from genuinely compelling facts presented without distortion. The skill is in the finding, not the spinning. And followed all the way through, honest marketing becomes indistinguishable from accurate information transfer. Same artefacts, different label.

So the two halves of the literature are not actually fighting. The canon says: market the stock, because the demand-side is real and increasingly passive and you serve it by managing characteristics. Kedem says: the only durable version of that marketing is the honest one, because distortion buys you holders who price on the distortion. Put them together and you get the position the Bedrock essay was reaching for and slightly overshot. It is marketing. It is marketing of a product whose only durable feature is the truth about the business.

This holds with particular force in our markets. An IDX or Bursa or SGX issuer that decides its IR programme is "marketing" in the unconstrained sense, with produced decks and choreographed calls and tone managed for impact, can move its price in the short run, because the noise-trader mechanism is live in every market and tone moves price at constant information everywhere. But the index inclusion that genuinely re-rates a mid-cap Southeast Asian name does not respond to any of it. MSCI and FTSE Russell will not read your equity story. They will read your free float, your market cap, your liquidity, your investability. For the regional issuer chasing foreign passive flow, which is the real prize and the one most regional boards actually want, the marketing that matters is the unglamorous management of the stock's measurable characteristics, and the storytelling layer is doing far less than the agency invoice implies.

So the header on slide eight survives, but with an edit the Bedrock essay can live with. Marketing the Equity Story to Target Investors was never wrong because it said marketing. It was wrong, when it was wrong, about which word in the phrase was load-bearing. The load is not on "story." It is on the unstated assumption that the story can be better than the company. For the passive pool, the story is irrelevant and only the characteristics speak. For the active long-duration holder, the story has to be true or it does not hold them through a bad quarter. In both cases the same conclusion arrives from opposite directions: market the stock, by all means, but the only feature worth marketing is the one you cannot fake.

The profession says it's marketing. The profession is right. I was wrong to flinch at the word, and right about the one thing that matters in the end: the product has exactly one durable feature, and it is the truth about the business.