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The Impact of Owned vs. Paid media April 2017

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The Medill IMC Spiegel Research Center at Northwestern University in partnership with Publicis Media conducted a study on the influence of Paid vs. Owned media on sales. The study looked at media and earnings data for 800 brands across 50 categories. This was a presentation given at the Advertising Research Foundation’s 2017 conference.

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The Impact of Owned vs. Paid media April 2017

  1. 1. Digital owned media effects and its synergy with paid media on brand sales Rob Jayson Global lead, Apps development Publicis Media www.linkedin.com/in/robdjayson #ARFannual17 Martin Paul Block Professor, Integrated Marketing Communications NorthWestern University mp-block@northwestern.edu
  2. 2. John Philip Jones linked share of market to share of paid media spend in 1990 Source: John Philip Jones HBR 1990
  3. 3. OUR QUESTION: Have digital owned platforms impacted this? • Does owned media traffic volume to brand websites and/or branded social brand sites have a different relationship to share of sales? • And does that share impact the share of paid media?
  4. 4. OUR FINDINGS: Yes, Prof. Jones. It does • Changing the effects of paid media • Impacting categories differently.
  5. 5. Methodology • The study observed the relationship between paid and owned media and sales across 802 brands in the US market • 56 categories (i.e., Credit Cards) within 15 industries (i.e., Financial Services) from 2010 to 2015. • Brand sales data are from Bloomberg, Euromonitor, 10k and 10Q annual reports. • Brands’ online and offline media spending is the metric of paid media input and is collected from Kantar and Pathmatics. • Owned media input metrics are the unique visitors (UV) to brands’ desktop and mobile sites from comScore. • The other owned media input metrics are fans’ acquisition and interactions on their social media sites (Facebook, Twitter, YouTube and Instagram) and are collected from Publicis Media’s SocialTools.
  6. 6. Share of paid media (SOV) declines relative to growth in share of market 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 SOV SOM All Brands All Categories All Brands SOV Poly. (All Brands SOV) As expected the paid media results we found echoed JPJ original findings Source: NWU/PM study; comScore; PM Social Tools
  7. 7. But share of owned media customer traffic continues to grow as market share grows 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 SOO SOV SOM All Brands All Categories All Brands SOV All Brands SOO Poly. (All Brands SOV) Poly. (All Brands SOO) Share of customer traffic to owned brand sites is a much more linear growth to market share growth Source: NWU/PM study; comScore; PM Social Tools
  8. 8. Does this pattern hold for rising and falling share of market brands? • Sub-divided brands by their 5 year compound sales growth rate • Rising brands – 5 year CAGR grew by > +3% • Static brands – less than 3% variance in CAGR • Declining brands – CAGR fell by < -3% • Key metrics • PAID MEDIA: Share of voice within the brands category • OWNED MEDIA: Share of traffic to brands web, mobile & social sites within the brands category
  9. 9. Rising brands grow share of paid media and owned traffic as category market share rises 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 SOO SOV SOM Rising Brands > 3% CAGR last 5 years Rising Brands SOV Rising Brands SOO Poly. (Rising Brands SOV) Poly. (Rising Brands SOO) Rising brands include all categories – CPG, Retail, Luxury, Auto, Entertainment, etc Brands with increasing share of market have invested equally in their paid media share of voice AND their owned media share of customer traffic Source: NWU/PM study; comScore; PM Social Tools
  10. 10. But declining brands lower their share of owned traffic faster than paid media share 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 SOO SOV SOM Declining Brands < -3% CAGR last 5 years Declining Brands SOV Declining Brands SOO Poly. (Declining Brands SOV) Poly. (Declining Brands SOO) Declining brands include all categories – CPG, Retail, Luxury, Auto, Entertainment, etc Brands with declining share of market have lost their their owned media share of customer traffic faster than their paid media share of voice Source: NWU/PM study; comScore; PM Social Tools
  11. 11. -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 SOO-SOM Share Owned over Share of Ad Spend Declining Brands > -3% CAGR last 5 years Rising Brands SOO-SOV Linear (Rising Brands SOO-SOV) Rising brands increase their share of paid and owned at the SAME rate. Declining brands favor share of paid over their share of owned -0.5 -0.4 -0.3 -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 SOOoverSOV Share Owned over Share of Ad Spend Rising Brands > 3% CAGR last 5 years Rising Brands SOO-SOV Linear (Rising Brands SOO-SOV) HIGHER SHARE OF OWNED HIGHER SHARE OF PAID Source: NWU/PM study; comScore; PM Social Tools Rising brands Falling brands
  12. 12. Snapple Pom Wonderful Naked Juice Ocean Spray Simply Orange Juice Floridas Natural Motts Sunsweet -0.2 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.1 SOOoverSOV Share Owned over Share of Ad Spend Juice - Rising/Static Brands Juice Rising Brands SOO-SOV Linear (Juice Rising Brands SOO-SOV) Tropicana Capri Sun Minute Maid Welchs V8D o… Sunny D Juicy Juice -0.2 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 SOO-SOM Share Owned over Share of Ad Spend Juice - Declining Brands Juice Declining Brands SOO-SOV Linear (Juice Declining Brands SOO-SOV) This trend of declining brands favoring paid over owned holds true for CPG categories (Juice) Source: NWU/PM study; comScore; PM Social Tools HIGHER SHARE OF OWNED HIGHER SHARE OF PAID Rising brands Falling brands
  13. 13. Bank Of America JPMorgan Chase Wells Fargo Capital One Ally Bank Charles Schwab PNCTD US Bank BMO Harris Bank -0.2 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0 0.02 0.04 0.06 0.08 0.1 0.12 0.14 0.16 0.18 0.2 SOOoverSOV Share Owned over Share of Ad Spend RetailBanks - Rising Brands Bank Rising Brands SOO-SOV Linear (Bank Rising Brands SOO-SOV) Citi Fifth Third Regions Santander Citizens Suntrust HSBC Bank USA BBVA Compass Bank -0.2 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 SOO-SOM Share Owned over Share of Ad Spend RetailBanks - Static/Declining Brands Bank S&D Brands SOO-SOV Linear (Bank S&D Brands SOO-SOV) And retail categories with e-commerce (Retail Banks) Source: NWU/PM study; comScore; PM Social Tools HIGHER SHARE OF OWNED HIGHER SHARE OF PAID Rising brands Falling brands
  14. 14. Chick-Fil-A Restaurant Dairy Queen Restaurant Hardees Restaurant In-N-Out Burger Restaurant Panda Express Restaurant Popeyes Fried Chicken Restaurant Sonic Restaurant Taco Bell Restaurant -0.2 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 SOOoverSOV Share Owned over Share of Ad Spend QSR - Rising Brands QSR Rising Brands SOO-SOV Linear (QSR Rising Brands SOO-SOV) Arbys Restaurant Burger King Restaurant KFC Restaurant McDonalds Restaurant Pizza Hut Restaurant Subway Restaurant Wendys Restaurant -0.2 -0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 SOO-SOM Share Owned over Share of Ad Spend QSR - Static/Declining Brands QSR S&D Brands SOO-SOV Linear (QSR S&D Brands SOO-SOV) And with mixed categories (QSR) Source: NWU/PM study; comScore; PM Social Tools HIGHER SHARE OF OWNED HIGHER SHARE OF PAID Rising brands Falling brands
  15. 15. The media and subsequent engagement demands refined metrics Traffic Sub metric Traffic platform metrics Owned Traffic metric Owned Traffic Brand Websites Desktop site traffic Mobile site traffic Brand Social Pages Total Fans Total Interactions (likes, shares, retweets)
  16. 16. Under performing brands consistently under delivered on two metrics 1. Lower % of total web site traffic achieved via mobile 2. Higher ratio of total total fans per interaction on social Tier % 2015 total web traffic via mobile 2015 Total social fans per interaction Tier 1 & 2 (> -3% CAGR) 58% 2,800 Tier 3 (< - 3% CAGR) 49% 3,677 Source: NWU/PM study; comScore; PM Social Tools Despite significant variations by category and platform we have found this consistent pattern to be suggestive of an important consideration for brands
  17. 17. When looked at by category the under delivering brands fall short in owned in different ways – Retail Banks Source: NWU/PM study; comScore; PM Social Tools Retail Banking Category % 2015 total web traffic via mobile 2015 Total social fans per interaction Tier 1 & 2 (> -3% CAGR) 47% 511 Tier 3 (< - 3% CAGR) 38% 435
  18. 18. QSR Category % 2015 total web traffic via mobile 2015 Total social fans per interaction Tier 1 & 2 (> -3% CAGR) 67% 432 Tier 3 (< - 3% CAGR) 69% 887 When looked at by category the under delivering brands fall short in owned in different ways – QSR
  19. 19. Maintaining share of owned at the same rate as share of paid is a trait of growth brands • Brands that have lost share over the last 5 years have delivered a higher share of paid media spending than owned media traffic • As well as total owned share we created two sub-metrics in owned • % of website traffic that was mobile • Number of total fans acquired per content interaction on social • Declining brands overall underperformed on both sub-metrics • How they underperformed depended on the category
  20. 20. We like this start and there’s work to be done • Which owned media delivers best? • In combination with paid? • Which owned media engagement delivers best? • What drivers explain category differences best? • And more. . . .
  21. 21. To Learn More: http://spiegel.medill.northwestern.edu/paid-vs-owned-media/ • Animated overview of study • Interactive tool comparing Paid and Owned media across six different representative categories. How does YOUR brand compare?

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