Acquiring Customers - Conclusion

Pros and Cons of Paid/Owned/Earned Media

At the beginning, you were asked what you thought might be the biggest challenges associated with paid, owned, and earned media, as well as the purposes which each might be most suited for. Now that you’ve learned more about these categories of media, let’s revisit these questions again. What do you think are the advantages and disadvantages of each?

Describe one idea briefly in each cell below. 

You are now familiar with all three of the major customer acquisition methods, paid, owned, and earned media. Each method has distinct characteristics, as well as advantages and drawbacks.

Paid media has several advantages. You have control over the content, you can get greater reach and scale, and you can target better. It is also easily measurable, and it often has immediate short-term impact. However, it is increasingly becoming expensive as more and more brands use digital channels. In addition, brand messages that come through paid media are generally less credible for consumers.

With owned media, you have even more control over the content. Owned media is also a good way to build your brand and strengthen your relationship with customers, and is generally cheaper than paid media. However, owned media requires dedicated personnel to constantly update content. It can be time-consuming, and consumers may be skeptical about any content coming from the company.

Earned media is the most credible form of media for consumers since it is endorsed by other consumers, and it's free. However, brands have almost no control over earned media, which can create crises for brands if a few vocal customers become very critical. It is also hard to measure the effectiveness of earned media.

As you consider paid, owned, and earned media, it is also imperative to recognize the synergy between these three categories. You can and should harness these synergies as part of your customer acquisition strategy.

Here are some of the areas of synergy that we have already explored. For example, content created for owned media can be used to promote paid social posts. Paid media and earned media can also have synergy. Consumer reviews and endorsements in earned media can be leveraged in paid media to amplify reach and authenticity. OOFOS has leveraged this in its mOOvers campaign. In some cases, influencers who initially choose to promote a brand on their own, without compensation, may be recruited and paid by brands to generate greater awareness and credibility.

Owned and earned can also have synergy. For example, creative social media posts on brand accounts can go viral without paying anyone to promote them. You should also consider leveraging synergies across all three customer acquisition methods. The TikTok campaign from e.l.f. we explored earlier is a great example of building an integrated media strategy.

Another example of paid, owned, and earned synergy is the 2017 launch of the Impossible Burger, a vegan meat substitute product created by U.S.-based Impossible Foods. This burger quickly became famous for bleeding, despite being completely plant-based. When the Impossible Burger was launched, the company started its marketing campaign by creating a press release, that is, owned media, for industry journalists. These journalists became intrigued by the idea of a fake meat product that bleeds and started writing about it with catchy headlines in their own publications, generating earned media. Finally, the company used paid media to promote their press releases and the news articles.

These examples demonstrate that leveraging synergies between paid, owned, and earned media allows you to build a cohesive and integrated marketing plan.

Paid/Owned/Earned Synergy

Maggie Malek will explain how no one aspect of your digital media campaign stands alone. Focusing too heavily on any one aspect of your marketing plan can lead to other aspects going awry. Maggie recommends thinking about your campaigns more holistically by leveraging media synergies.

So one of the things that we've seen in the digital marketing and marketing ecosystem in the last fifteen years is because digital is moving so fast and because we know that the platforms have not always kept consumers' data safe, and they maybe have not used it in the right ways, consumers have lost trust in brands.

So one of the things that we've really focused on over the last five years is working with key opinion leaders and influencers to help tell brand stories. So what we'll do on social specifically is, instead of just doing a paid ad from Amazon Beauty, we will do an influencer piece of content where they're talking about how Amazon Beauty is the best place to go for your beauty news. They have all of the products that you need. And, oh, by the way, they have great specials.

So then when it comes to the paid media side, instead of just putting up an Amazon Beauty logo and blasting it out there, we actually amplify that influencer piece of content. We make sure to target people who are interested in beauty, and then it's an actual human building trust up about Amazon Beauty instead of the brand just putting their content out there.

And what we've seen over the past six years since we've really started studying this—I would say late 2018 is when we really started doing most of the A/B testing—is you can see, when you do a branded piece of content in paid social, the cost per click or the cost per acquisition may fall in with benchmarks for the industry. But when you do a paid influencer piece of content and amplify that in social, you might double your cost per acquisition or really make your click-through rate much higher.

So that's how we use paid social, and it's really more helping consumers build trust in brands. If a brand has $1 to spend, are their fundamentals in place? If they are, and they've got the website, and that's great, then, yes, let's go into the debate about, should we use paid, or should we use organic?

And oftentimes, as we're mapping that journey, one of the things that we emphasize a lot is organic and paid are not standalone tactics. You can do millions of dollars of paid media, but if someone Googles your brand and the only thing that comes up are horribly negative reviews or empty social channels, your balance is off.

So often, what we'll do is we'll say, OK, here is what we need to do from a paid side, and then we need to make sure that all of the channels we manage are also up and running to meet the paid need.

Kate Laliberte: As we look at the funnel, paid search is at the conversion point. So once people have learned about us, they've started to engage about us. They want to make the purchase. They're going to go search for OOFOS shoes or OOFOS recovery sandals. So we invest a lot of money into paid search to make sure we're at the top of the search results.

Where SEO comes in is the higher we can get our organic rankings to the top of the page, they're going to fall right underneath those paid listing ads. So the more that we can end up in the organic search results, we can potentially start to pull back a little bit from the paid search listings.

We don't necessarily have to spend as much money to be at the absolute top on certain terms because we know organically, we're going to be the first position on page one of Google. So people looking will still they'll see the ads, but they will still have visibility to our position in position number one.

So that's how they can start to work together. And again, it's focusing on which terms do we really want to focus on. There could be instances where we want the ad—the top spot in the ad, and we want the top organic spot because those are the most important terms.

But in other areas, we can potentially start to peel back our spend and paid search and invest it elsewhere because organic is picking up the efforts.

Here is Kate Laliberte again with some final thoughts on customer acquisition. She argues that no customer acquisition strategy is complete unless it takes all three categories of media—paid, owned, and earned—into account within the context of the company’s goals and strategy. She also stresses the importance of constantly evaluating your approach and changing course whenever results indicate that doing so is necessary.

I think when we think about the customer acquisition strategy, you do have to look at every channel that's available to you. You have to look at paid. You have to look at owned. And you have to look at earned media.

What you need to determine is which of those channels are giving you the highest return, so where are you getting the best return on investment, or the highest return on your ad spend, but which channels are also producing the most relevant customers and the customers with the highest lifetime value.

And it's never going to be one channel that you're investing in. It's investing across the board. As we've talked about, there are channels that align with different parts of the funnel. So if you want to reach customers, you need to be going out and doing things like linear TV. As you start to engage and talk to those customers, it's more paid social, paid search. As they're going to conversion, it's definitely paid search, Google Shopping.

So it's really just trying to understand the best investment for your dollars, the return you're getting. And you have to be flexible. You have to test. You also have to be willing to move dollars within your marketing plan to fund the things that are really working well, and maybe take some funds away from the things that you're not seeing the output on.

It doesn't mean you can't go back to them. You might just need to change your strategy, change the audience you're targeting, before you start to put dollars back into it. So you just kind of have to track everything, have a broad plan, and just track results to see what's most effective for you.

You’ve become quite familiar with OOFOS. Now, we will ask you to holistically evaluate its customer acquisition approach based on what you’ve learned.

Across paid, owned, and earned media, what do you think the OOFOS team is doing especially well? What about its approach particularly struck you? Conversely, what concerns you, if anything? If a strength (or concern) exists in an area of synergy (e.g. between paid media and owned media), please add your notes in the column marked “Synergy."

Describe one idea per cell.

You learned about two essential complements to paid media, owned and earned media, both of which have become very powerful with the advent of digital and social media technologies. Let's take a moment to review the key advantages for each.

Owned media refers to all the media properties that a company owns and controls, such as websites, blogs, marketing emails, and social media accounts. Marketers need to consider how consumers find these channels through tactics such as SEO, as well as how to create and manage the content that they produce. Because brands own these channels, they have a high degree of control over the content. This level of control allows companies to build brands by telling a more complete story about the brand, its origin, and what it stands for.

Owned media is used at every stage of the funnel and is often paired with paid and earned media, for example, when a brand pays to promote its own social media posts, or when its posts go viral, generating earned media.

Earned media is the publicity that consumers organically generate about your brand. In the digital context, earned media consists of user-generated content on social media sites such as posts, shares, and likes. Independent rating or review websites and publicity from news websites also fall under this category.

There are several unique advantages of earned media. First, earned media is generally inexpensive. In fact, aside from the resources a company may and should invest in listening, participating, leveraging, managing, and measuring it, it is free. Hence, its name. Second, consumers trust independent viewpoints of brands more than the messages from companies. As long as the conversation remains positive, this can generate greater brand awareness, increase traffic to websites or offline stores, deeper customer engagement, and stronger relationships with customers.

But earned media has its challenges. Because brands cannot exercise direct control over the conversations that consumers have about them, there is a potential for these conversations to turn negative, to the detriment of brands. Therefore, companies should be prepared to manage potential crisis from such events. It can also be quite challenging to measure the effectiveness of earned media, because it's difficult to translate social media interactions, such as likes, comments, and reviews into sales.

Finally, influencers also play an increasingly important role in digital marketing. They occupy a space that blurs the lines between paid and earned media. They are paid by brands to promote their products, but they generally have much greater control over how they convey the brand's message to their followers. Influencers can be used at various stages of the funnel. The top-tier influencers have great reach and are good for creating brand awareness. The mid-tier influencers are useful for engaging consumers and improving brand considerations. Micro-influencers are generally more effective in conversion at the lower stage of the funnel, because of their deep relationship with their followers.

You are now familiar with the three primary avenues for acquiring customers. Each has its own distinctive advantages and its unique role to play in your overall strategy. But acquiring customers is only part of the story. You also want to make sure that these customers keep coming back to buy from you in the future. In the next module, we will turn to this topic and discuss how you can effectively retain and engage the customers you already have.

We’ve now finished exploring how brands can acquire customers. But what happens after a customer makes it all the way through the marketing funnel to conversion?

Companies can’t only rely on customer acquisition to generate revenue; over time, the marginal customer acquisition cost (CAC) will become very high.

That’s why marketers must also consider engaging and retaining existing customers as part of their strategy. We will turn to this topic in the next set of articles.