Skip to main content

The Digital Dilemma, Paid vs. Earned Media


In real life you cannot buy trust, you need to earn it. The digital society is no different. Web authority comes through consistently delivering value that’s true to your story and to customers’ needs. This is how your site gets links and followers. You just cannot buy your way into an organic ranking on the first page of Google search results. You need to earn it. In America post-financial crisis, people are looking for brands that are kind, friendly and generally social responsible. They respect brands that serve their communities. That is the real deal. They reject brands that are trying to buy their trust only through advertising. Businesses need to align their marketing dollars with customers’ values. They need to shift their digital approach from buying to earning. This means less “online advertising” (e.g., display banners/SEM) and more partnerships, community outreach and great content.

Small businesses know that the key to success is not advertising. It is consistently delivering a good product or service worth talking about it. My favorite restaurant in Park Slope, Al Di La, has never advertised. However, it is always full. It doesn’t even take reservations. The restaurant just delivers amazing Italian food with great service, day in and day out. Everyone in the neighborhood knows it.

If we look at the numbers, earned media already accounts for 500 billion influence impressions compared with two trillion online ad impressions, according to Forrester. Earned media impressions are likely to continue growing as global Internet penetration increases and consumer digital habits evolve. This means that earned media is likely to outnumber paid media in the near future.

In terms of effectiveness, earned media carries more weight since it’s more credible. You cannot buy peoples’ opinions. Up to 92% of consumers trust word of mouth recommendations, but only 24% trust online ads. A recommendation from a trusted friend conveying a relevant message is up to 50 times more likely to trigger a purchase compared with another recommendation.1 This is why the display of friends’ pics on “Like” is becoming the new trust currency (see my recent post below for more detail).

No wonder the response rate on display advertising has been steadily declining over time. For 2008, average click-through in the United States was 0.10% for banners [DoubleClick, Benchmark Report, 2009] a tiny fraction of the 3% average in the 1990s. Consumers tend to mentally block display advertising according to a 2003 Wharton study.2 Can you remember the last banner you saw? I certainly can’t.

Businesses need to rethink their digital approach. They need to better align marketing dollars with customers’ values and online behavior. This doesn’t mean that online advertising is dead. It just needs to be reformed. And by the way, earned media is not free. It requires just as many -- or more -- resources and staff time.


1. Why Earned Media Optimization Belongs in your digital Marketing Toolbox along with sEO and Ad Optimization,” nils Morkulnes, Beyond digital, April 2, 2010
2. Dreze and F.X. Hussherr, “Internet Advertising: Is Anybody Watching?” Journal of Interactive Marketing, (17:4), 2003

Comments

  1. Interesting assessment. How can traditional media play a supporting role in building trust? Can a company ignore spending on SEM and create an integrated campaign based only on WOM? Guess the right mix differs for each company
    fm Malhotra

    ReplyDelete

Post a Comment

Popular posts from this blog

The Curse of Advertising Resources

With more platforms, more products and more content who are trying to reach a disengaged audience, it is becoming harder and harder for brands to stand out. Conventional practices are no longer working. People don't watch TV as much as they used to, so they don't see commercials.  They don't click on banner ads. They don't pay attention to billboards ads. And they don't trust brands' messages. Part of the problem is that we are too dependent on traditional ad resources, which limits the realm of our creativity. To thrive in this new environment, we, ironically, need the freedom of a tight brief: what can you do with no budget for mass media?  Or limited marketing communications dollars?  To make a comparison, traditional advertising is a lot like countries and economies that rely on oil. This reliance handicaps innovation. Countries with a vast amount of natural resources tend to have (1) less economic growth and (2) worse development rates than other countrie…

The Irrational Power of Nudge Brands

Nudge brands are brands built on interactions, not attitudes. They are mostly defined by experiences, not TV campaigns. They are designed around people's inconsistencies and errors, not for machines. They are simple, not complex. They like to break things into small chunks that are less daunting than big tasks. They focus on changing behavior, not generating awareness and interest. The Paris metro system card is a nudge brand. It is designed against human errors. You can use the card in any direction. IKEA is a nudge brand. It uses the power of personal investment. The more involved people are in creating something, the better they feel about the end product. Ryanair is a nudge brand. It chunks the whole purchase process. They lock you in with a low 'seat price' first to get a mental commitment. Then, they start to add the extra charges in bite-sized 'chunks.' Hare Krishna is a nudge brand. It is built on the reciprocity rule by giving away daisies. People should …

The Irrational Challenger

Today, irrational is the new normal. People want products and services that break conventions and defy social norms. They have expectations that don't fit the traditional business model and feel irrational. However, they are very real and have created an irrational economy with irrational challengers. To thrive in this new playing field, business needs to be human, irrational. Think about it. Having a concierge to run our weekly errands for $99 month. Alfred. Ordering a healthy and delicious meal ready-to-eat under 7 minutes delivered at your door the next day. Hungryroot. Booking unlimited blowout appointments at salons in Manhattan for just $99 a month. Vive. (A typical blowout cost $40 to $90 inNew York City.) Renting a room on a month-to-month basis without going through the traditional methods of verifying applicants (e.g., two years of tax returns as proof of income).