Paid, Owned, Earned: Maximizing Marketing Returns in a Socially Connected World

Citation

Cuthill, I.D.H. (2013), "Paid, Owned, Earned: Maximizing Marketing Returns in a Socially Connected World", Journal of Product & Brand Management, Vol. 22 No. 2, pp. 193-194. https://doi.org/10.1108/10610421311321068

New internet‐based social media applications are being introduced almost daily by entrepreneurs, some of them still in their teens. These have a high failure rate, but successful ones such as Facebook and Twitter have been widely adopted very quickly. Large consumer marketing companies with much invested in traditional media campaigns have had trouble figuring out which social media are relevant and how to use them to their best advantage. Nick Burcher, currently Head of Social Media and Digital Innovation at ZenithOptimedia, which is part of the Publicis Groupe, has written this book, which is designed to help marketers incorporate interactive media into their media planning.

The author defines the Paid, Owned Earned (PDO) concept as follows:

• Paid Media=Paid Promotional Placements, e.g. display ads

• Owned Media=Promotional Assets, e.g. a website, chat room, or an app

• Earned Media=Brand‐related customer engagement.

The idea is that paid advertising drives traffic to owned media, which generates earned media. The PDO paradigm helps to organize management's thinking about their many marketing communications options. Burcher relates the concept to the various stages of the Shannon‐Weaver (S‐M) model of communication between a message sender and receiver. Today's web‐enabled receivers can create their own content and publish it. When there are many receivers, as can be the case with social media, the feedback loop of the S‐M model takes on a viral aspect so that the relationship between Paid, Owned, and Earned communication is not linear but complex. Complicating it further, receivers can generate content that is not controlled and can be negative as well as positive.

Burcher describes some of the more important of the dizzying array of evolving social media and some of the issues that are associated with them. For example, market research information gathered from web‐based feedback has been criticized as biased and not representative. However, when the medium is connecting with nearly a billion people,as can a popular YouTube posting, and the user information provided by Facebook can be analyzed within minute cohorts, such criticisms become less relevant. In any case, Internet users are more likely to be Early Adopters who are influential in persuading others to buy so it is reasonable to focus attention on them.

He makes the point that owned media are essential to gaining all of the advantages of paid media and that care must be taken to design them to nurture an interactive community in order to get positive feedback. Ingenuity is also called for to design websites and index them so that it is easy for search engines to find them and display them at the top of their lists. Search engine algorithms also take note of the popularity of ads and brand names. Consequently, marketers should be creative and connected to their target audiences as well as technically savvy. This is a tall order which probably explains why so many traditional marketers lack confidence in deploying social media. The spread of viral disease in animals follows a predictable mathematical formula, but this is not the case with propagation of earned media.

Convergence of TV, print, out of home, mobile phone, and internet digital media is happening in many ways apart from new hardware development. For example, the almost ubiquitous deployment of quick response (QR) codes in paid display ads in all kinds of media provides gateways into interactive media. More than 50 percent of SuperBowl 2011 advertisers had QR codes in their TV ads. Twitter Search and Twitter Trending Topics are now used to convert TV viewing into interactive events.

Regarding metrics. Burcher points out that traditional reach and frequency can now be amplified by direct response data such as clicks, click‐through rates, cost per click, and cost per action. Facebook profiles and owned cookie data contain information that can be used to target and re‐target specific audiences. Marketers can now price advertising and target consumers in real time, for example by using algorithms like Google's quality score in conjunction with cost per click in its Adwords algorithm. Search advertising data allows different searchers to be targeted with differently priced ads, dependent on the stage of the purchase process they are in. Similarly, targeted ads can be created quickly with a wide variety of creative executions. Online advertising has been shown to increase recall, awareness and purchase intent of display ads, but it is difficult to measure purchase persuasiveness. The author believes that the value of marketing can be contained in three measures:

1. 1.

   The incremental number of people made aware of the firm's products.

2. 2.

   The number of people who want to buy more of a firm's products.

3. 3.

   The increase in likelihood that a person will buy a firm's products.

(Fine as far as it goes, but like David Ogilvy believed and I continue to believe, the only measure of advertising effectiveness that really matters is incremental sales.)

He suggests that strategic objectives should conform to five criteria: Specific, Measurable, Achievable, Realistic, and Timely which together make up the acronym SMART, and no one will take issue with that.

There is a lot of information about social media conveyed in Burcher's book. The descriptions of the new media and various performance measures are up to date and illustrated with good examples. It is clearly written and easily digestible. He has related the new media to accepted marketing models such as the 1949 Shannon‐Weaver Sender‐Receiver communications model, Roger's Diffusion of innovation model, Reicheld's Net Promoter Score (NPS) metric, with a tip of the cap to Malcom Gladwell's “Tipping point” theory. The book is organized into ten chapters with 23 pages appended of chapter notes containing references to articles for further reading, together with a useful index.

The PDO concept helps to place social media within the context of a media plan. The author ends by saying, “Everything is now joined up, and nothing can work in isolation. It's about paid and owned and earned.” But incorporating social media remains a daunting task for marketers. Burcher's book is helpful, but it emphasizes that there is a lot of social media out there and that it is hard to keep up with new developments. If warning were needed, the author provides a quote by Richad Tobaccowala, “The future does not fit in the containers of the past” (p. 246). He concludes that adaptability to change is the key to survival, a conclusion in accordance with Charles Darwin's theory of evolution and unlikely to be challenged.

This book would make a useful addition to any marketing manager's survival kit. Or a marketing professor's for that matter.