Migrating from paid to made media : XM-Asia

Traditional marketers typically spend 60 per cent on bought and 20 per cent on both owned and earned media, according to McKinsey & Company.

However, in a user-centric digital world investing the majority of marketing spend in a chiefly passive channel (bought media) doesn’t make sense. 

Whilst bought media still has a role to play, it has little inherent value compared to meaningful content like films or music, or a useful application such as Google Maps.

Rather than periodic moments of engagement the real opportunity for brands is to grow communities of advocates who then organically recruit new customers. As Fred Reichheld portentously outlined in the pre-Facebook dark ages of 2003 the most important question for a brand to ask its customers is ‘How likely would you be to recommend this product to a friend?’

The next step is to allocate more spend into nurturing advocacy (earned media) via more content and utility (owned media), swaying the balance to 60 per cent spend on earned media, 30 per cent on owned and 10 per cent on bought.

Simply put, consumers don’t trust brochures or other brand authored bought media from banners to search adverts when it comes to making their purchase decisions. What they do trust more is the opinion of other consumers with first-hand experiences.

According to Nielsen, 59 per cent of users worldwide do not trust online bought media and the global click through rate for banner advertising has declined from 0.12 per cent in 2007 to 0.08 per in 2010 (Mediamind).

With the right tracking tools, owned and earned media can be tracked directly to sales. According to an article on Fast Company, Dell have been able to credit a substantial investment in owned media, from blogs to content and media partnerships plus approximately 50 in-house social media experts, with US$3 million in revenue.

Brands need to rely less on interruptive messages (bought media) and more on nurturing valuable consumer community and advocacy (owned and earned media). A one off campaign or token social media presence isn’t enough  - if consumers are constantly switched on then brands need to be too.

Growing valuable earned media poses two challenges – having something interesting to say all the time and having the infrastructure in place to make this possible. Brands need to start with investing in a digital platform as a foundation to attract and grow relationships from content co-creators who in turn provide a credible distribution network to generate brand advocacy. The real opportunity for brands is to get their customers to recruit new customers.

What is needed to develop a platform?

• Enable the brand to bring meaning to people’s lives through a brand property or a consumer insight. For Coca-Cola it is ‘happiness’, for BMW it is ‘joy’, and Nike discovered that runners have an unhealthy passion for data.
• Invest in content for the conversation. Populate a digital platform with owned media that can be shared and discussed.
• Invest in conversations with communities. Build your own community like American Express Open Forum or turn to social networks like Starbucks with over 21 million members on Facebook. Develop relationships and co-create content with relevant influential niche community websites and bloggers.

Don’t over plan but make sure you keep things on the straight and narrow with the following checklist:

• Agree on business goals i.e. what the brand is looking to achieve by building a community
• Used a phased approach so your move to more owned and earned media is flexible and scalable as you might not always have access to the necessary resources and technology.
• Invest in tracking and analytics tools so you can respond to customer needs and track potentially brand damaging comments.
• Invest in people who know what they are doing. Digital tools are no substitute for real people listening and conversing with other real people, but make sure you invest in the right people.

Digital communication is mass communication. It’s no longer a digital strategy. It’s a consumer strategy that lives digitally.