THE BLOG

How to Define and Use Paid, Owned and Earned Media

01/21/2014 06:01 pm ET | Updated Mar 23, 2014
  • John Lusk Founder of Rivet & Sway, Author of The MouseDriver Chronicles

When you're a strong marketer, you obsess about data. You can spend hours in Google Analytics (or another BI/Data platform) and Excel analyzing graphs, charts, correlations, growth rates, bounces, etc. And from what I've observed, most marketers will typically focus on channel results. That is, they'll look at data from the perspective of a particular channel, be it Organic Search, Referral, Traffic, a single Paid campaign, facebook, etc. And that's not a bad way of looking at things. It's what I did for a long time.

When I worked at Microsoft, the agencies that executed against all of our marketing campaigns would always talk about Paid, Owned, and Earned media and how we needed to be 'investing' in all of the channels or order to optimize traffic and customer growth. At the time, I didn't have a deep understanding of the different media channels so I pretty much ignored what the agencies said. Now that I spend a good chunk of time just looking at and analyzing data, I have a much better appreciation of Paid, Owned and Earned media [POEM], how to define it and what it actually means.

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Essentially, POEM are all necessary and all work together to form the basis of a marketing strategy that's meant to drive traffic and customer growth. I view Paid media as spending money to leverage somebody else's channel. For example, spending money on Google Adwords, facebook advertising, or any type of retargeting/remarketing falls into the Paid bucket. Earned media is when other people talk about you so much that they influence others to find out more about you. PR, word-of-mouth, 'viral' campaigns, etc. all fall into the Earned bucket. And Owned media are the channels that you actually control. You don't have to necessarily pay for these channels because you've created and control them. A website, blog, email list, social media channel, etc. all fall into the Owned bucket. [note: nothing is technically free, so when I say 'pay' I'm not necessarily referring to resource costs]

In order to be effective, a marketer needs to know how all of these media channels play together, the level of influence each has across the lifecycle of a customer (aka the funnel), and the ultimate cost of investing in each of these channel. My general thoughts on these different channels:

Paid: Use wisely and always be testing. If you can find a cost effective paid channel (i.e. profitable or break-even contribution margin) spend up as quickly as you can and take advantage of that 'find'. Otherwise, use this channel with caution and use it primarily to fuel your funnel, identify funnel leaks and find new customers. And if warranted, use it to promote phenomenal content.

Earned: It's essentially Word-of-Mouth. Most marketers resort to paying for earned media via big investments in PR. I suggest spending more time and energy on delivering such ad amazing customer experience that your customers are actually serving as giant mouthpieces for your company. Awareness of your company will spread faster and will be more authentic coming from customers than it will from the media (in most cases).

Owned: The channels that you build, nurture and optimize are an extension of your brand. These are the channels that need to be growing over time and the one that should be warranting increased investment over time. Owned channels are used to execute campaigns, to promote great content and to create more word of mouth and engagement (thus fueling the Earned channel). Owned channels can take time to gain traction. So be patient...with a sense of urgency of course.

As a % of overall traffic, a company hitting on all marketing cylinders, over time, should see a decrease in Paid and an increase in Earned and Owned. It's not to say that you won't see spikes in these channels at any given moment in time. It's just to say that generally, you want more of your traffic and more of your customers being driven by Earned and Owned media. It's more authentic, converts at a higher rate, typically represents higher lifetime value, and most importantly, it's usually much cheaper (lower cost-per-acquisition).

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I'd love to know how others are viewing their different marketing channels. Are you using Paid, Owned and Earned or something different?

This post originally appeared on John Lusk's Blog here.