You may have heard the terms “earned media”, “owned media”, and “paid media” used to bundle groups of marketing channels together. We are huge fans of talking about your marketing strategy in this way for several reasons. We bullet those specific reasons at the end of the post if you’d like to skip down, but first we need to cover the definition of each.
What is paid media?
Paid media is usually the largest grouping of marketing channels as all of the following could be considered paid media:
- Paid Search
- Paid Social
- Programmatic Display & Video
- Affiliate Marketing
- Offline Advertising (TV, Radio, Billboards etc.)
- Paid Influencers
The definition of Paid media is just how it sounds – any channel where you are paying to reach people via advertising. The main reason we typically want to group all paid channels together is because there is a specific methodology around setting a budget, managing to a budget, and adjusting campaigns to hit “cost per” goals (like cost per acquisition or cost per lead). Each paid media platform however can go very deep and have it’s own nuances. For example you can make a career out of knowing how to manage only the Google Ads platform by itself.
Additionally, an important distinction (and benefit) of paid media is that although you do have to pay to reach people – this gives you control to scale up or scale down that reach based on your budget. This level of control is much harder to achiever with earned media.
What is earned media?
The typical channels that fall into earned media are:
- Organic Social
- Organic Search (SEO)
- Word of mouth / referral
- Influencers (who post for product instead of cash)
The definition of Earned media is also how it sounds – you aren’t paying for exposure, but instead you are earning it – either via the platform algorithms or people spreading the word. Everyone wants earned media because it’s essentially free (outside of headcount costs) but it is harder to get and takes time. Because of the fact that earned media impressions are basically free, it is essential to invest in these channels so you can blend down your overall acquisition costs across marketing (this is super important so we will expand on this below where we do the math). Unlike paid media, there are pretty different skills sets for most of the channels within earned media, but the one commonality is that it revolves around content. For example, a PR expert will have more of a communications skill set whereas an SEO expert may be more of a technical person, however they both rely on brand stories and content generation.
What is owned media?
Putting core product stuff aside (like your website and app) owned media channels include:
- Push Notifications
- Direct Mail
Owned media channels are defined by the fact that you “own” the medium used to communicate with your customers. The beauty of owned media is that you are not subject to an algorithm or any 3rd party if you have something you want to say to your customers. As you scale your customer database, these mediums can be incredibly cheap and powerful. In fact, most ecommerce companies generate about 20-30% of their total revenue just from email marketing and the cost of sending it is minimal.
A main difference between owned media and paid/earned media is that owned media is derivative of the other two – and it happens further down the funnel. For example, in order to collect an email address you have to get that person to come to your site or app and that will happen via paid or earned media. You also have to earn your customers trust in order to get them to opt into one of your owned channels (and they can opt out at any time) so you can’t abuse your ability to communicate with them. The skill set for owned media channels is largely the same in terms of strategy – its essentially CRM, but there are a few nuances within each channel that do require specific expertise.
Why it makes sense to organize around paid, earned, and owned media
We like structuring the strategy and org this way because you have to find balance between these 3 types of marketing channels in order to run a financially viable marketing operation. For example, if you only focus on paid media, your cost per acquisition will be high. If you only work on earned channels, your growth will be slower. However, if you manage all 3 in tandem you should be able to control your CPA numbers while increasing scale much faster.
For example, let’s say you scale up your facebook spend, but launch a referral program to drive more word of mouth, bringing in customers cheaply. Or you broaden your keywords on adwords to capture a larger audience but you accelerate your SEO efforts to balance out that loss in efficiency with new, free search traffic. There are many examples of this and you have to tinker and test which combinations of marketing channels make sense for you, but ultimately it will be some combination of all 3 channel types that will make things fall into place and let you scale more quickly.
Beyond managing your acquisition costs in a financially sustainable way, there are also organizational structure advantages to focusing on these 3 groups of channels. Let’s just look at the list of marketing specialties: seo, paid social, paid search, affiliate, organic social, influencers, pr, email, direct mail, tv, out of home… and many more! You have to create some structure within your marketing org to drive alignment across all of these functions. We go into much greater detail on how to structure a marketing org in this post, but essentially we feel that there are common threads through each of the 3 channel types that warrant having the same person or team managing it.