A €7million Win for Owned and Earned Media
It’s not everyday you prompt an organisation into a €7 million strategic change. Yesterday could have been one of those days so I wanted to tell that story. On Monday, I ran a workshop as part of #Next14 to mark the kick off of Berlin Web week. As usual at these events the room was full of a mix of big brand CMOs, web entrepreneurs, agency superstars and eagle eye investors. The topic I was covering was Marketing & Communications Reinvented and the reason this particular workshop merits a mention in this blog is it could for one company result in a marketing strategy change of €7 million.
During the 90 minute workshop we covered some of my favourite topics that todays marketer and communicator needs to come to terms with. Everything from managing change both strategically, organizationaly and tactically, building a team for digital, mobile and social success, building your own audience, the importance of a eight second visual and copy led value proposition and of course with my Mynewsdesk hat on the importance of including a brand newsroom in your technological and promotional mix.
However it was the exercise I carried out on the importance of owned and earned media which led to the €8million change. My thinking on this is prompted by the changes at two of the worlds leading purchasers of marketing services (Proctor & Gamble and Unilever) who have announced significant restructuring in their marketing organisations. As Proctor & Gamble’s Chief Financial Officer Jon Moeller recently commented in corporate speak,
We continue to drive marketing effectiveness and productivity through an optimized media mix with more digital, mobile, search and social presence, improved message clarity and greater non-advertising marketing efficiency. We expect marketing spending to come in below prior-year levels due to productivity movements in marketing and advertising costs
My thinking is also influenced by the great work done by Rebecca Lieb and Jeremiah Owyang on the Converged Media my hypothesis is that if brands want to succeed in the digital, mobile and social age they will need to put more resources into owned and earned media and reduce the decades or even centuries old practice of relying on paid media to get results. “Don’t build your brand on rented land” is what you will hear me saying to anyone that will listen over the coming weeks and months.
Anyway the task I set the group of around 60 people was map where they are today in terms of their marketing budget across owned, earned and paid media and where they wanted to get to in two years, taking into consideration all the changes in media consumption, social media monetisation necessities for those recently IPO’d social networks and the rise in content and marketing automation technologies. Coupled with that I challenged the group, in Blue Ocean Strategy speak to identify which activities they would Eliminate, Reduce, Raise and Create.
It was a really active group with lots of conversations being sparked and as a workshop facilitator I could feel the brain cells being put to work in this challenging task. However always the big gamble with these things is what people will share publicly when the time for open feedback comes around. This is where I got my surprise. Of the 5 individuals I asked to feedback to the larger group all seemed to have been convinced with my argument and said they would in various ways switch more of their resources both human and financial into owned and earned media. However two participants stood out. They represented a big brand whose total marketing budget today was €35million with 92% (€32.2m) being spent on paid media, 5% (€1.75m) being spent on owned media and only 3% (€1m) being spent on earned media. My first reaction to that statement was “boy I bet your PR and Communications folks feel like the poor relations in your organisation” which was met with a knowing smile by the CMO feeding back. However to my surprise when they mapped their future scenario two years from now they painted a very different picture. They were aiming to move to a mix which would see only 75% (€26.2m) spent on paid media, 20% (€7m) spent on owned media and 5% (€1.75m) spent on earned media. That’s an €7m win for owned and earned media in that organisation.
I am not going to name the brand on this blog but just want to publicly thank them for their openness in their thinking and information sharing during that workshop. I also have no idea if they will make their target in the time limit set. But one thing I do know is that if this type of thinking is going on in organisations with marketing budgets in excess of €35m then a huge change in terms of talent skill set, tactics and agency support will need to continue to evolve over the coming years to meet this demand of todays marketers.
So a €7m strategic change at a large brand’s marketing department is one thing but for me perhaps the most rewarding thing was the two start up entrepreneurs that approached me after the workshop and thanked me for the insight they gained during that 90 mins. “We didn’t think it was possible to make it without huge paid advertising budgets but we are now going back to create lots of valuable owned content around our users pain points and start to build our own audience on our own platform.” Now that was music to my ears, much more meaningful to be part of a startup survival story than a corporate reallocation of resources story however big the numbers. Anyway it’s a useful exercise for all to do. Go away and put some numbers of your paid, owned and earned resource allocation. You may be surprised what type of thinking and opportunities that uncovers and for those of you that identify a change worth more that €7m let me know – I would be fascinated to follow your journey too.