Common Sense on Mutual Funds: Fully Updated 10th Anniversary Edition

Chapter 16. On Marketing: The Message Is the Medium

In 1967, a New Age writer named Marshall McLuhan wrote a book entitled The Medium Is the Massage. His point was that, in the hectic pace of modern life, the lightninglike speed of communications over the airwaves had come to control the very messages that were sent. What we were witnessing on television, on entertainment and news programming alike, was a far cry from what we had read in books and newspapers. In the news media, for example, the balanced reportage, rich in detail, that had been a hallmark of the best newspapers gave way to superficial 30-second sound bites on the events of the day. Now, three decades after the publication of the McLuhan book, the Internet has become a whole new medium of receiving and processing information, and the speed and reach of communications have been increasing at an exponential rate. McLuhan was ahead of his time, and his observations seem even more profound today.

In discussing the role of marketing in the mutual fund industry, I'm going to take two liberties with Mr. McLuhan's title, reversing the order and changing "Massage" to "Message." Doing so gives me a fitting subtitle for this chapter: "The Message Is the Medium." For in this industry, marketing is now in the driver's seat. What the industry offers to investors now shapes what funds actually provide and the cost at which they provide it. Using an old, uncomplimentary business expression: "We used to be a business that sells what ...