MAKING THE BUSINESS CASE FOR INFLUENCER MARKETING PROGRAMS (UNDERSTAND PAID, OWNED AND EARNED MEDIA) Executive Summary This report explores the value of influencer marketing in a paid, owned and earned media environment – highlighting how influencer content can be used to: 1. Amplify the conversation through media placements (paid media) 2. Populate brand sites and Facebook pages (owned media) 3. Drive consumer conversation (earned media) We outline how working with influencers is part of a holistic strategy for optimizing paid, owned and earned media. INFLUENCE The Importance of Trust Social technologies are redefining how organizations approach marketing. In the not too distant past, marketing and advertising (traditional media) were created for a captive audience. People read print advertisements in the mail or their favorite publications. They watched a television commercial that aired during their favorite show. Or, they listened to a radio announcement on their drive to the office. Traditional media was not interactive. The digital landscape has changed rapidly over the past few years. Interactive media and social technologies have forever changed the behavior of consumers. Social technologies allow consumers to engage with brands and to co-create branded experiences – a dramatic shift in the affects of advertising and marketing. This poses business challenges for brands trying to innovate when the only constant is change. Today’s brands have to re-think their relationship with consumers and match their content to consumer needs and trends. They have to interact with their customers, meet their needs in a personalized way and create a positive brand experience. To do so, it is key that companies understand the difference between paid, earned and owned media so they can deliver creative advertising and marketing programs that capture the imagination, serve the needs of the customer and are relevant or interesting enough to be shared. Paid, Owned and Earned Effective marketing is integrated. An integrated strategy includes a mix of traditional, digital and social media. Categorizing and prioritizing that mix requires understanding owned, paid and earned media. Paid Media Paid media typically means advertising. Brands pay to market their controlled message to a specific audience. It can include print advertisements, television commercials, pay-per-click campaigns, sponsorships and more. Brands use paid media to generate awareness, drive consumers to their owned media and convert prospects to customers. Paid media is the most established type of media, and it is extremely scalable. The brand has complete control of the messaging and can execute campaigns to large numbers of people. However, paid media has low credibility with consumers and is becoming less effective over time.1 Owned Media Owned media is defined as content that the brand controls.2 That includes content on websites, blogs and branded social media sites like Facebook, Pinterest and Twitter. Owned media channels market to a captive audience and the brand controls the messaging. The role of owned media is to communicate directly with people that are interested in their products and services. People engage with owned media to investigate products, get information and research their buying decision. In these channels, brands have control of the message and carefully select the content that they want to share with customers. Owned media is essential to having a relationship with consumers, so they can get the information they want directly from the source. The challenge is that people engage with owned media later in the buying cycle and Only 13% of often don’t trust communications that are developed by consumers say they buy products because brands. of their ads, and a mere 6% believe that Earned Media companies generally tell the truth in ads. Earned media is a term that refers to content that is 3 created by others about a brand or product. It includes See the November press coverage in media publications, mentions on 27, 2007, “Consumers websites and references in social media. It can be Love To Hate negative or positive and is often a result of paid media. Advertising” report. Earned media can also include shared media. Shared media is shared interactions between a brand and the community.4 It can include liking a product on Facebook, pinning a product on Pinterest or commenting on a social media channel about a brand. It is the sharing of brand related content with others. People trust content that comes from third-party experts and their personal networks.5 In fact, they often trust that content more than they trust content from advertising or brand websites. Earned or shared media is essential in today’s digital world to gain trust and be top of mind for consumers who are beginning their buying process. However, drawbacks include a lack of control over what is said about a brand, difficulty scaling and it is challenging to measure. It can be argued that earned media is the most powerful type of media because it is so influential. A recommendation from a peer online about a product is impactful because today’s consumers are overloaded with paid and owned media. It is difficult to stand out with banner ads and websites, yet earned media makes a product stand out because it is from a trusted source. What is the goal? With so many media options, it is essential that brands, marketers and advertisers define their goals before deciding on their overall strategy. The ultimate goal for a marketing or advertising campaign is to drive revenue. There are a variety of ways to get to that goal. When deciding how to break up marketing campaigns into paid, owned and earned media segments, it is important to understand your consumers’ buying process. Organizations like Forrester Research and McKinsey have published reports that explain the journey a consumer takes from awareness to purchase. Both outline a process that includes the following steps: o Awareness – when the buyer becomes aware that they have a need o Consideration – when the buyer considers different options for fulfilling that need o Preference – when the buyer deliberates different products that fulfill the need o Purchase – when the buyer purchases their preferred product o Loyalty – when the buyer has a positive response to a product (can lead to customer retention and advocacy) There are a variety of complex factors that can affect the purchasing process. People can be influenced along the way by their own research into a product. Therefore a combination of paid, owned and earned media is best to provide potential consumers with the right message at the right time in their buying process. What is the value of media? Generally speaking, paid media typically addresses the awareness stage of the buying cycle. Television and display ads target a large audience with a generic message to provoke potential buyers to recognize their product and deduce that they have a need. Owned media “Potential consumers comes into play in the purchase stage. Once the need look to their friends has been identified and all other options considered, and influential people the owned media assets are what the buyer uses to online to help them make their final purchase decision. Of course there make their purchasing are examples where paid media can lead directly to a decisions. Jonathan website and a consumer is converted to a customer, but Carson, President of in general, consumers consider more before buying. Online International for the Nielsen Company Potential consumers look to their friends and influential says, “The explosion in people online to help them make their purchasing consumer generated decisions. Jonathan Carson, President of Online media over the last couple of years means International for the Nielsen Company says, “The consumers’ reliance explosion in consumer generated media over the last on word of mouth in couple of years means consumers’ reliance on word the decision-making of mouth in the decision-making process, either from process, either from people they know or online consumers they don’t, has people they know or increased significantly.”7 online consumers they don’t, has increased The value of earned and shared media is that it is trusted significantly.”7 more by consumers. When people write about their own experiences or share compelling content about a brand, it can have a dramatic effect on their readers’ buying decisions. Standard metrics like unique visitors, page views and clicks don’t capture the value of earned and shared media. Since the buying process is increasingly complex, it is essential that companies measure engagement. Forrester defines engagement as the level of involvement, interaction, intimacy and influence that a consumer has over time.8 It is important to understand how consumers feel about a product, how likely they are to share it with their friends and their preferences. Measuring engagement can help determine the value of the media that companies buy. It can be measured by blog post comments, shares, uploads of videos or photos and the sentiment of the consumer. How do influencers fit into a well-balanced media strategy? If brands want to be relevant to consumers, they must approach media as a way to attract, engage and convert prospects. That means engaging consumers where they are interacting with content they care about and trust. Working with influencers is an effective way to create earned and shared media that can feed owned media with trustworthy content. Influencers are defined as people that have influence over other people’s decisions. They have built trust with their audiences by distributing content that resonates with their readers, offers practical advice, entertains or inspires. Brands and advertisers can leverage this trusted relationship to influence people’s buying decisions. They could be journalists that write favorable articles about a brand.