Marketers Search For Paid, Earned, Owned Balance
As marketing channels continue to blur, companies will have to institutionalize more dramatic change in their cross-media strategies.
As CMOs grapple with a post-digital age, they face a wide array of media equations designed to land more customers and create better marketing efficiencies. One of the most prominent among them is PEO: paid, earned, and owned media. PEO is part of most every marketing approach these days. But marketers’ ability to strike the right balance among the media triumvirate is tricky and ever-evolving.
The PEO model, which is a function of integrated marketing, provides a framework for brand managers for how to best blend advertising (paid media), PR (earned media), and original and predominately digital content (owned), cascading continuously via companies’ websites, social platforms, and other marketing channels.
When PEO started to be uttered in the same breath in the mid-to-late 2000s, earned and owned captured a good deal of marketing buzz because the social media platforms brands had quickly come to rely on to get their messages out were pure content plays.
Indeed, marketing and PR teams could populate their marketing and social channels with tons of branded content—at little to no cost—and possibly generate some earned media as a result of the content getting picked up by relevant media outlets and/online influencers.
But as social channels, such as Facebook and Twitter, morphed into “pay-for-play” platforms, the PEO calculus changed, too.
“One of the big reasons for the confusion with PEO is you often have one component in ascendance and another decreasing,” said David Berkowitz, who was most recently CMO of MRY, part of Publicis Groupe’s Starcom MediaVest Group (SMG). “Right now ‘PEO’ is more like uppercase ‘P,’ lowercase ‘e,’ and lowercase ‘o.” [PEO is] increasingly driven by the media model, whereas when PEO started it was driven by the creative. Earned and owned media are still important, but right now paid is in the driver’s seat.”
Marketers should keep their eyes peeled on Facebook’s other digital properties to gauge how long it takes for the social media giant to shift to a paid-media model altogether, Berkowitz told CMO.com.
“You can almost use Facebook as a ‘PEO Index,’” he added. “Facebook News Feed skews almost entirely toward paid, with some earned and little owned. Instagram is moving in that direction. WhatsApp is still open-ended as it has the least brand integration. Facebook Messenger now is all about owned and earned with no paid media, and Oculus is all owned as well, with little earned and no paid.”
While paid may be in the lead for now, owned and earned media most likely will catch up—not necessarily in terms of budgeting but mind share, according to Denise Leo, VP, integrated media and advertising at software giant SAP. “We’re getting better at integration,” she told CMO.com.
Leo stressed that marketers need to be more holistic in order to harness PEO for the greater good. “The mindset of the marketer is to go right to paid,” she said. “Marketers have to start to think about all the content we have on our websites, communities, and social platforms and how to wrap paid around those channels.”
For example, to plug its Sapphire NOW ASUG annual conference in May, SAP heavily populated its Twitter channel with content related to the conference before, during, and after the event. SAP rolled out a dedicated ad campaign promoting the event, which, in turn, aligned with social messaging via Twitter and other channels.
“The focus right now is how do we measure across all channels and generate the data to figure out the impact across those channels?” Leo said. “What is elusive is a combined measurement across paid, owned, and earned.”
For CMOs looking for more seamless PEO programming, half the battle may be their ability to break down business silos and push content via a consolidated budget. Easier said than done, of course. But as marketing channels continue to blur, companies will have to institutionalize more dramatic change in their cross-media strategies.
Take Western Union. The financial services and communications company promotes a “matrix environment” for its paid, earned, and owned channels, said Nick Cerise, CMO of Western Union Business Solutions. “We allocate funds at the execution-level and don’t make a discrepancy among advertising, PR, and digital content,” he said.
Western Union’s marketing efforts to get the word out about “WU Edge,” a new digital platform enabling small and midsize enterprises (SMEs) to trade internationally, featured paid, earned, and owned elements.
The platform was introduced at Money 20/20, Europe’s largest fin-tech event, in April, along with a press conference featuring several of Western Union’s top business managers discussing the product’s benefits.
The campaign included digital ad buys featuring a call to action to download a report associated with the new product. The banner ads also carried links to a landing page offering “owned” content related to WU Edge, such as case studies and blogs.
“Budget is important, but the starting point is what are we looking to achieve and how do we tie each channel together to achieve those goals?” Cerise said. “PEO can be an organizational challenge and a partner challenge from a standpoint of how your organization works with agencies to enable that the PEO channels work together. If you don’t get those two things right, you’re going to fail.”
Making sure your PR and/or ad agencies are on board with your PEO strategy is all well and good. However, in order to prevent PEO plans from becoming simply glorified ad campaigns, companies must cultivate legitimate and sustained content marketing strategies. On that front, corporate inertia seems to be winning out.
For example, in 2015, 35% of B2B marketers had a documented content strategy, 48% had a verbal-only strategy, and 14% had no strategy, according to “B2B Content Marketing 2016 Benchmarks, Budgets, Trends–North America.”
The study, which was jointly released by the Content Marketing Institute (CMI) and MarketingProfs, took the pulse of 1,521 respondents. It revealed that 73% of the respondents plan to produce more content this year than in 2015. However, 55% of the respondents said that it is unclear within their organizations what an effective or successful content marketing program looks like.
“Owned media is the hardest to get right” within PEO, said Robert Rose, chief strategy officer for CMI and contributing senior analyst at Digital Clarity Group, in an interview with CMO.com. “It’s just plainly a different investment model than many businesses are used to dealing with. Marketing is thought of as the ‘land of campaigns’—short-term investments in creative sprints that feed a funnel. Owned-media’ investments are about long-term operational strategies that build increasing value over time.”
Another way to boost your PEO effort is to measure each channel vertically but show the C-suite the results horizontally, meaning how the channels contributed cumulatively to the overall marketing ROI, according to Tom Stein, chairman and chief client officer at Stein IAS, whose clients include Western Union Business Solutions and Merck Animal Health.
“You have to work harder to distinguish your content and your point of view, and you need to do that in a PEO context in order to dominate your market in a fragmented environment,” Stein told CMO.com.
He stressed that market convergence—fast accelerating across the marketing landscape—also is helping to thread PEO efforts and make them more financially viable. “You have this concept of convergence: channel convergence, technology convergence, and resource convergence,” he said. “All of that enables PEO to reach new levels, in terms of efficiency, measurement, and attribution.”
Whether it’s taking a more holistic approach to marketing spending or projecting how new revenue streams on social channels will impact paid media budgeting, it’s crucial that CMOs regularly communicate about PEO opportunities with their PR and advertising brethren.
“As long as the PEO channels are talking to one another, that could lead to integrated communications,” said Craig Coffey, U.S. marketing communications manager at Lincoln Electric, a global manufacturer of welding products.
For example, last March Lincoln Electric rolled out a marketing campaign for its new discounted Power MIG 210 MP, a multipurpose welder that reaches a broad audience, including consumers.
Because of the short-term nature of the offer, the brand’s promotional efforts were primarily social media and digital display advertising, as well as ads on Lincoln Electric’s website. The company reinforced the message with prominent banner ads on its home age and a dedicated landing page for the promotion.
While the bulk of the campaign outlay was paid media, most of the returns stemmed from earned media. “From a spend standpoint, it was 80% paid, 10% earned, and 10% owned,” Coffey told CMO.com. “But from a conversion standpoint, it was almost the inverse: 81% earned, 12% owned, and 8% paid.”
Lincoln Electric’s returns from the Power MIG marketing campaign suggest that while paid media command the most dollars, brands can’t afford to give earned and owned media efforts short shrift.
“Those hoping to leverage an earned audience or owned content that haven’t made those investments over the last five to 10 years will find they have a lot of ground to make up,” Coffey said. “Those organizations will find themselves turning to paid media because it’s the only reliable arrow in their quiver, despite the cost.”