Gun Johnson’s essay in The Digital Metrics Field Guide, pointed out the need to identify the effects of paid, owned and earned media individually and how they interact. New research from Marketing Science Institute (MSI) does just that, making important contributions to our understanding and valuable recommendations for strategy. It complements research reported in the Field Guide, especially regarding earned media.
The research looked at two types of goods, what economists call “search goods” and “experience goods.” A search good is easily evaluated before purchase. An experience good is a product or service that is hard to judge in advance, but is evaluated more easily after it is consumed or used. And they looked at familiar and unfamiliar brands within each type.
Here’s what they found:
Earned Media: Overall, their findings confirm the importance of earned media – impressions that come about from people sharing or commenting. Earned media brings greater efficiency for all brands – whether it is a search good or experience good, but the authors point out that it most helpful for familiar brands.
Owned media – the communications channels and messages that brands control – becomes a credible source for consumers to decrease the unpredictable nature of experience goods and unfamiliar brands.
Paid Media: A familiar brand in a search category is the least risky choice for consumers and paid media can provide enough information to evaluate the quality.
Their findings also provide insights into the potential benefits of synergy in different online advertising mediums. Within-online synergy is significantly higher than cross-channel synergy for familiar brands in their data, which may mean that high and favorable awareness has already been created in traditional media for well-known brands.
- Paid media is most effective when consumers perceive little risk in their decision.
- Owned media is important for risky purchases. Brand managers for experience goods should ensure their websites provide quality information in order to decrease the consumers’ perceived risk for these types of goods.
- Brand managers of unfamiliar brands should use both offline and online marketing to build strong brand associations in consumers’ minds. Cross-channel synergy is key.
- Managers of familiar brands can generate more synergy by investing in different online mediums. They leverage the existing brand equity to get high bang for their buck in online media.