Paid And Earned Media: An Unlikely Marriage

It’s clear by now that groundswell technologies, especially social media, are disrupting the advertising world. You can’t read a major marketing magazine or Web site without at least one headline talking about how social is changing the world. Yet, we still find there are many people in the interactive marketing industry on two extremes: those who think social is just another channel in the advertising mix and those who think social media will full on replace advertising.

The reality is that both sides are wrong. On one hand, advertising has done a poor job of incorporating social media. For instance, why was the idea of Old Spice actually responding to the audience through social media such a big deal? Considering all of the hype over the past couple of years, you’d think this was something every TV campaign included (for the record, I completely agree with Augie Ray’s assessment that the campaign was a great use of social media). On the other hand, there are still many social media “experts” who believe that paid media has no role in social media marketing. This is also wrong.

In fact, paid and earned media can have a very close relationship and should be leveraged together (along with owned media) for the best results. Here are some ways in which paid and earned media can work together:

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Help Us Benchmark "Social Maturity"

We recently embarked on a Forrester-wide research project to benchmark the use of social technologies across enterprise organizations. Why is this important? Well, as you may know, we cover social technologies from a wide range of perspectives — from roles in marketing to IT to technology professionals. We find each of these roles differs in its general “social maturity” and that most companies are experiencing pockets of success, but few, if any, are successfully implementing it across the board. In fact, full maturity in this space could take years, but there are clear differences in how some ahead-of-the-curve companies are using social technologies for business results. In fact, at this point it has been clearly established by many people (including us many times over) that social technologies as transformative tools that are changing the way companies do business. So we’re not talking as much about the opportunity social presents, but rather we are trying to determine the current reality of practitioners. It’s also clear that many companies have made tremendous strides in planning and organizing for the use of social technologies. However, the one question we consistently get is: “where is my organization compared to others in the use of social media?” We want to benchmark these companies to see if we can answer questions like:

  • How do you define “social maturity” and why is it important to get there?
  • Which companies are ahead of the curve in implementing social technologies for both external use (i.e., for customers/consumers) and/or internal use (i.e., for employees/partners)?
  • What have been the biggest drivers of success?
  • What are the biggest challenges?
  • What steps do most organizations need to take and why?

Here’s how you can help:

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What Role Should Agencies Play In Social Media Marketing?

With social media getting so much attention in the industry, it's not surprising that there's been a massive land grab by agencies of all shapes and sizes. Agencies recognize the tranformative nature of social technologies and with nearly $1 billion in social media budgets already forecasted for 2010, it's no surprise that agencies are trying to get a jump on the expertise. This creates a lot of confusion for interactive marketers. So much so that a few agency folks actually got together recently to write a joint blog post to point out how they differ ("co-opetition"). Yet each type of agency comes at social media with a distinct strong suit. For instance:

  • PR agencies tend to be stronger in working with earned media -- specifically working with influentials.
  • Interactive agencies tend to be better at building out owned media (like communities and social net pages), have expertise in technology, and understand things like the relationship between social media and search marketing.
  • Traditional creative agencies and media planning/buying agencies tend to focus on how social media fits into paid media campaigns (i.e., advertising) because, well, that's been the focus of their business for the last century.
  • Other new agencies like WOM specialists and even a new set of social agencies (e.g., Powered, Converseon, Digital Influence Group) are popping up, but they're still mostly nascent and don't dominate the space.

 

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Defining The "Digital Agency"

This week AdAge released their annual Agency Report.  In it they once again ranked the top “digital agencies” in the US.  This is a valuable report to many marketers (and to Forrester, as we often use it to report agency revenue in our Wave report).  I tip my cap to the AdAge team as I know first hand how hard it is to compile this type of information. However, the list itself also reflects how the agency world is changing. For instance, while stalwarts like Razorfish and Digitas top the list, there are many unconventional names throughout the list such as Meredith, IBM, Acxiom, GSI and Acquity Group. It includes traditional agencies such as Ogilvy, Goodby & Silverstein and DraftFCB and beyond that it even includes contest company ePrize and GroupM’s search division. And while this list has always had a mix of players, the emergence of these firms as “digital agencies” continues to show how the old agency walls are fading and how agencies and marketing services firms are entering a “Great Race” for relevance as they see opportunities to enter the interactive/digital market.

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Marketers Must Lead Agency Change

Today we released the report "The Future Of Agency Relationships" covered in AdAge today, in which we set out on a journey to answer the question: what is the role of agencies in the new marketing landscape?  After over 50 in-depth interviews with marketing leaders, interactive marketers, procurement teams, agency leaders and industry organizations, one conclusion has become very evident - marketers must lead agency change. Virtually everyone we interviewed recognized that marketing is experiencing drastic changes, with interactive and digital technologies beginning to replace mass media as the foundation of marketing. At Forrester we call this the "Adaptive Marketing era" and it requires marketers to take a more flexible and always on approach to marketing due to the two-way communication that is now visible between consumers and companies. While most agencies are taking at least some steps to reinvent themselves, they can only go as far as their clients allow. And while many marketers are demanding agency change one moment, they’re still asking where their 30 second spot is the next. Marketers won’t see real change in the agency landscape until they begin to apply a new set of criteria to their agency partners.

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Agencies Enter Into a "Great Race" For Relevance

 

Agencies appeared in the mid 19th century as retailers and manufacturers recognized they could communicate with the masses through the explosion of newspapers during the Industrial Revolution. From that point on, agencies adapted to changes in mass media (e.g. TV, radio), society and business. That is, until the rise of the Internet at the end of the 20th Century. At that point, most traditional agencies (whether creative, PR, full service or other) were slow to adopt interactive skills which opened the door for a new kind of interactive agency that would work with a new kind of marketer focused specifically on the digital space.

 

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Defining Earned, Owned And Paid Media

The terms "earned, owned and paid (aka bought) media" have become very popular in the interactive marketing space today. In fact, taken together they can be applied as a simple way for interactive marketers to categorize and ultimately prioritize all of the media options they have today. Nokia was an early pioneer in this space (see Dan Goodall's posts on the subject). They now categorize all of their global interactive media as earned, owned or bought. Many agencies, including R/GA, Critical Mass, Sapient and Isobar (my former employer) also use the model to help develop digital strategies. On top of that, many industry leaders such as Pete Blackshaw, Fred Wilson and David Armano have written about the subject.

Yet as popular as these themes have become, they're often loosely applied across the industry and essentially no one is speaking the same language. Therefore we just published research defining each type of media and providing interactive marketers with prescriptive advice on how to best apply them. Here's a summary of how we defined each type of online media and their roles:

Earned owned paid charat

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The Future of Agencies: What Do You Think?


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Pizza Hut Embraces The New Marketing Reality (Live from Forrester Consumer Forum)

by Sean Corcoran

I'm here and live blogging from the Forrester 2009 Consumer Forum in Chicago. Bob Kraut, VP of Communications for Pizza Hut, is presenting how the brand used an innovative approach to digital marketing to adapt to a new and challenging consumer landscape.

Pizza Hut has been hit fairly hard in this economy as people cut back on much of their sit down dining in the recession. They also are fighting the same uphill battle as other marketers - the reality that consumers' media habits have been fragmented and reaching them in an engaging and effective way with scale is very difficult and very costly. In response to these realities, Pizza Hut had to be innovative in how they leveraged digital tools to reach and enable their consumers. They developed a four step strategy that included a lower priced menu items, more variety in the menu, more convenient and fulfilling customer access and finally to become part of the conversation online.

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The End Of Marketer-Blogger Relationships?

By Sean Corcoran

The FTC made it official today.The proposal to update the guidelines governing endorsements and testimonials were approved and are now essentially the law. The bottom line is that anytime a blogger or any other endorser receives "material connections" from a company (e.g. cash payment, product samples, etc.) that a reader "would not expect" then that blogger must disclose the relationship. If the blogger does no disclose, then the blogger or even the company could be held liable - which could mean a hefty fine. And keep in mind the FTC doesn't care if you're paying a blogger in cash or simply sending free product, either way it is a "material connection."

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