Jim Louderback

September 10, 2011

Your Next Marketing Mashup–Paid Earned and Owned Media

paid earned ownedPaid, earned and owned media (POE, OPE, OEP): It’s become the mantra for marketing these days. Any company worth its salt is figuring out how to optimize for each of these categories, as a way to drive awareness, consideration and purchase.

There’s just one small problem — each is mostly being looked at as a silo. Sure, messaging in one silo will reinforce and amplify those in the other two, but in many cases a hybrid model can often lead to far superior results.

For example, expert endorsements from a trusted source — whether a friend, show host, expert or product reviewer — can really move the needle for a brand. Billions of dollars are spent on in-house and agency PR and corporate communications to influence experts and key influencers, along with building armies of loyal supporters and brand ambassadors. The subsequent "earned" media can be very effective. But on the downside, companies can’t control the message, which can lead to unfortunate results (see "Dell Hell," "United Breaks Guitars," etc.)

Even more money gets spent on advertising campaigns. Paid media can deliver great results as well — but there’s always the John Wanamaker problem: It’s impossible to figure out which half is wasted.

And many companies have found great success by creating their own content, through microsites, Facebook pages, whitepapers, company magazines and branded entertainment. Here, factual information works best, because most brand managers simply aren’t great storytellers — and that’s why most branded content sinks with nary a peep (see "Lost in America," TLC’s Routan and too many more to count). It’s great to own your content — and your relationship with your customers — but if it’s not relevant it just won’t work.

Hybrids of paid/earned, paid/owned and earned/owned have a long history of success across a wide variety of media. Celebrity spokespeople trade on their notoriety to help push products and services in a paid/earned hybrid, for example, while magazine advertorials that are barely indistinguishable from the content straddle the line between earned and owned (albeit in a sleazy sort of "gotcha sucka" way).

But when it comes to emerging video and social marketing, we’re just scratching the surface of hybrid models — and some of the early results have been less than successful. The aforementioned "Lost in America" series featured wildly popular YouTube star iJustine, but barely moved the needle, while paid celebrity tweets, like the proverbial tree falling in the forest, seem to make no sound at all.

However, the paid/earned model can drive tremendous results in the online video and social space if it’s done correctly. Here at Revision3, we’ve seen great success using our show hosts to introduce a wide range of brands and services to our young male audience, and there are many other successful partnerships as well, including Lancome with Michelle Phan and Kraft Foods with Paula Deen and Soleil Moon Fry. Even the old Spice Guy was a hybrid-based success — using paid advertising on the Super Bowl that drove incredible earned success on YouTube and elsewhere. (Sales, of course, is another matter.)

But as we’ve seen with paid tweets, it’s not as easy as just marrying up a web celebrity with a brand. We’ve been doing this for six years, and we’ve taken a lot of lumps, and learned a lot on the way. In many ways, the path to success requires understanding that the medium is still the message.

For example, when working with a real person, branding messages need to be done carefully and in context. As we saw with iJustine, taking someone out of their context — in this case, the personal transparency of a regular video blog — just doesn’t work. Transparency of message is also essential — don’t be like those magazine inserts and try to fool today’s media savvy audience. Not only will they see through the deceit, they’ll hate you for it and tell all their followers too. Don’t forget to get buy-in from your "person" as well, because if they don’t believe, they probably won’t be able to convince their friends and fans to buy. Finally, an understanding of how people really use the medium of choice, whether it’s Facebook, web video, twitter or Tumblr is also essential. The right message told in the wrong way will not have much effect.

Working with a trusted and capable partner offers the fastest and best path to success — but given that I’m CEO of Revision3, you’d probably expect me to say that. We’re not the only game in town though — EQAL and DECA are behind the Kraft successes, ad agency Weiden & Kennedy pulled off the Old Spice coup, and a number of other mostly new companies are providing clear trailblazing success here. The important first step, though, is to stop thinking of earned, paid and owned as separate initiatives, and begin to think creatively about how you might integrate them together.

March 4, 2009

Video is the Killer App, say Media, Tech CEOs

Filed under: Commentary — Tags: , , , , , , , , , , — Jim @ 10:25 am

image Over the last two weeks, I was lucky enough to speak at, and be a fly on the wall at, two investor conferences. The first, from Goldman Sachs, focused on technology and the Internet, the second, from Deutsche Bank, was geared towards media and telecommunications.

During these conferences, CEOs or CFOs from the major companies present their strategy and describe their business models for mostly large institutional investors. Thus it’s a fascinating way to take the temperature of an industry – and business in general – by pulling together themes across many different presentations. I sat through 20 of these, featuring such notables as Cisco’s John Chambers, Time Warner’s Jeff Bewkes, and Bob Iger from Disney. Over the next six blog posts – one per day – I’ll be pulling together some of the themes, and major trends I saw during these meeting.

Today’s will focus on media, and video on the Internet, and how the companies I listened to are adapting, reacting and growing in this area.

John Chambers from Cisco kicked off the Goldman Sachs meeting, and he was very bullish on Internet video, calling it the “killer app” for his business – and also noted that this is only the first or second time in his 20 year career he’s seen anything this pervasive and this “killer”. The more video gets consumed on the Internet, the better for Cisco.

So what does Internet video content look like? If you’re a big media company, and own big brands, it looks a lot like what you’re already doing. At Viacom, according to CEO Phillipe Dauman, “we have developed our digital activities in conjunction with our brands and shows. They are profitable but very linked with our core activities.” At CBS, it’s about expanding the viewing experience. “Online is not just regurgitated TV, it is about enhancing the experience on-air”, explained CEO Les Moonves.

But what do you do if you lack your own brands? Soon to be ex-CFO Blake Jorgensen talked about the Yahoo’s multi-pronged approach of both partnering with existing brands and building their own in house. With “Sports Minute”, the company built a low cost daily streamed update, and then married it to Dunkin Donuts, who wanted to reach young men in the morning. He also highlighted the relative success of Tech Ticker, which was launched in partnership with Scott Trade – and who recently re-upped.

There was some disagreement about how we’ll be watching all this video content. Intel CEO Paul Ottelini is more focused on the big screen TV, but noted that “Surfing the web from your couch is something that no one likes.” That’s why Intel is working with Yahoo to build a widget channel that doesn’t replace the TV experience, but instead augments it with targeted information and ads.” Disney CEO Bob Iger countered with the results of an in-house survey that showed that 80% of millenials see their notebook PC as chiefly an entertainment device, but noted that even 64% of boomers see the PC as a platform for fun. “The computer is a very, very important place to entertain people”, he explained. “If we don’t occupy space on that platform, others will and we will be marginalized.”

Not everyone agreed that online video was a sensible business right now. Over at Discovery Networks, “digital right now is not a big business for us, last year it produced $55M in revenue”, said CFO Brad Singer. The company plans on continuing to invest at its current level; “You won’t see us making significant acquisitions or putting money to work in that area, we have the critical mass (now) to get things done.”

Iger at Disney, also, isn’t convinced. “I’m more of a pessimist in that area”, he said, while explaining the failure of the company’s recent digital studio, Stage 9. “The ability to monetize original content on the Internet is still somewhat in question.” Going forward, Disney will limit its online video investment to Disney-related content, rather than broader efforts.

Is anyone making money on Internet video? According to Patrick Pichette at Google, they aren’t, at least not yet – despite developing “four or five different ways to monetize the property.” Still, Google seems happy with YouTube’s progress. “The world runs on Youtube today, it has legitimacy.” Now, says Patrick, the focus is on figuring out monetization .

Nor is Disney. We’re “slightly behind where we thought we’d be in terms of revenue generation, said Iger. “ We still believe the Disney presence and ESPN presence in new tech is important and we have to make some investment before we deliver real value.:

CBS, though, is making “a little bit” of money, according to Moonves. He sees better profitability ahead, promising that “ultimately the margins will be terrific.”

But what about cannibalizing broadcast and cable viewership by putting shows online? So far it’s not happening, at least at CBS. “we have seen it is not cannibalistic (so far), but the worst fear for a broadcaster is if 50% watch (CSI) online, and we’re not getting paid the same dollars.” But doesn’t think that will happen, noting that today “even the biggest fan of a hit TV series only watches 2 out of 4 episodes”. With DVR and the Internet “we’re looking at it as not cannibalistic, but additive.” A multi-outlet world is good for CBS. “Our goal is to produce a great piece of content, get paid by the network, get paid in syndication, get paid in DVD, get paid through the community, through t-shirts… to produce one property and get paid a hundred times.”

Dauman at Viacom agrees. “”I think if it is done right, it is additive. With the Hills, we have so much online content, we really built out the loyalty of the fans of the show.. it is a good way to build loyalty, and help people discover it and watch it on air.”

Ad agencies see big potential in online video. Sir Martin Sorrell, head of WPP, said ”all the growth in our company is coming in two areas. One is emerging markets, the other is new media.” Interpublic CEO Michael Roth agreed; “digital is the key to growth. It must be at the center of our thinking, and all the programs we create.”

But too many times, the large media companies implied that they were giving new media way to retain old media advertisers, a practice called “merchandising”. Viacom’s Dauman sees it as an “integrated marketing opportunity for advertisers, so that an advertisement can be on Nick, Nick.com, our casual gaming activities”, to “reinforce the relationships with key marketers.” Others seemed to imply that as well, which only devalues new media in the minds of large marketers.

Stop back tomorrow for a look at what the CEOs think of streaming cable channels on the Internet.  And comment below (finally, comments turned on!)

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