Blog post - 14 May 2014 14:45

Don’t build your brand on rented land

I ran a workshop as part of #Next14 to mark the start of Berlin Web week. As usual, the room was packed with a mix of big brand CMOs, web entrepreneurs, agency superstars and eagle eye investors. The topic I was covering: Marketing & Communications Reinvented. And the reason this particular workshop merits a mention? Because for 1 company it could result in a marketing strategy change of €7 million.

During the 90 minutes we covered topics that a modern marketing communicator needs to deal with, including:

Managing strategic, organizational and tactical change
Building a team for digital, mobile and social success
Building your own audience and the importance of a brand newsroom in your tech and promotional mix.

However, it was the exercise on the importance of owned and earned media which led to the €7million change.

My thinking is prompted by changes at two leading global purchasers of marketing services. Proctor & Gamble and Unilever have announced significant restructuring in their marketing organisation. Jon Moeller, CFO at P&G, recently commented in corporate speak,

“We continue to drive marketing effectiveness and productivity through an optimized media mix with more digital, mobile, search and social presence, improved message clarity and greater non-advertising marketing efficiency”.

The great work done by Rebecca Lieb and Jeremiah Owyang on the Converged Media also influenced my hypothesis: if brands want to succeed in the digital, mobile and social age they will need to put more resources into owned and earned media and reduce the decades (or even centuries) old practice of relying on paid media to get results.

“Don’t build your brand on rented land” is what you will hear me saying to anyone that will listen over the coming weeks and months.

Anyway, the challenge set to the group of 60 was:

1. Breakdown current marketing budget into owned, earned and paid media
2. Map the budget breakdown they want in two years
3. Identify which activities to Eliminate, Reduce, Raise and Create.

It was a really active group with lots of conversation and as a facilitator I could feel the brain cells being put to work in this challenging task.

The big gamble is what people are comfortable to share publicly when it’s time for open feedback. I got a pleasant surprise. Of the 5 people asked to feedback to the group, all seemed convinced with my argument and said they would switch more of their resources - both human and financial - into owned and earned media.

A couple of participants represented a brand whose current total marketing budget was €35million and 92% of it is spent on paid media. My first reaction was “boy I bet your PR and Communications folks feel like the poor relations in your organisation” which was met with a knowing smile by the CMO. When they mapped their future scenario two years from now, they were aiming to shift to a mix where 75% (€26.2m) is spent on paid media - that’s a €7m win for owned and earned media in that organisation.

Current breakdown of marketing spend	Projected marketing spend in 2016

I have no idea if they will make their target in the time limit. But one thing I do know is that if this type of thinking is going on in organisations with marketing budgets in excess of €35m then a huge change in talent skill set, tactics and agency support is needed to support this evolution.

So a €7m strategic change at a large brand’s marketing department is one thing, but perhaps the most rewarding moment was when 2 start up entrepreneurs approached me after the workshop to say:

“We didn’t think it was possible to make it without huge paid advertising budgets but we are now going back to create lots of valuable owned content around our users pain points and start to build our own audience on our own platform.”

Now that was music to my ears, it’s really meaningful to be part of a startup survival story.

Anyway it’s a useful exercise for all to do. Go away and put some numbers of your paid, owned and earned resource allocation.

You may be surprised what type of thinking and opportunities that uncovers and for those of you that identify a change worth more than €7m let me know – I would be fascinated to follow your journey too.