The difference between paid, owned and earned media – 5 viewpoints

A definition of paid, earned and owned media

With the rise in importance of social media and online PR, we’re seeing more companies change their method of budgeting, reporting and investing in media to reflect the types of sites where audiences spend their time online. The trend is towards a review of investments in the 3 main media buckets of earned, shared and paid which each give opportunities to influence customers. None of these media types are new, but what is new is the increasing prominence given to owned and earned media while paid media has always dominated in the past.

It’s a positive move since it poses questions about how best to measure the returns from social media and set the investment at the right level.

Since these terms are increasingly being used, but it’s unclear on the definitions, this post gives a compilation of alternative definitions for paid, earned and owned media ending with my summary.

Altimeter report: Paid + Owned + Earned = Converged media

This new 2012 report from Rebecca Lieb and Jeremiah Owyang has the simplest definition of paid, owned and earned of all that feature in this post:

I’ve embedded the full report which is useful for it’s examples and advice on how to change marketing in companies so that they can take advantage of converged media.

Brian Solis – Social media brandsphere

Arguably less useful than the others, this 2011 infographic defines the terms – adding Promoted (i.e. a variant of Paid) and Shared collaboration (e.g. Dell Ideastorm or Starbuck’s MyStarbuckidea.

Forrester – Defining Earned, Owned and Paid Media

This summary is from a 2009 blog post Defining Earned, Owned and Paid Media is good for it’s clarity.

Forrester also have this more detailed definition of paid, owned and earned media

David Armano – Paid and owned media process

Armanio of the Logic and Emotion blog is EVP Global Innovation and integration and Edelman digital. I like this approach since it adds ideas on process for earned media.

My Summary

My take from June 2011 on the intersection between these new channels, now included in my books is a simple visualisation.

The main types of media are:

1. Paid media. Simple. Paid or bought media are media where there is investment to pay for visitors, reach or conversions through search, display ad networks or affiliate marketing. Offline traditional media like print and TV advertising and direct mail remain important accounting for the majority of paid media spend.

2. Earned media. Traditionally, earned media has been the name given to publicity generated through PR invested in targeting influencers to increase awareness about a brand. Of course, it’s still an investment. Earned media also includes word-of-mouth that can be stimulated through viral and social media marketing and includes conversations in social networks, blogs and other communities. It’s useful to think of earned media as developed through different types of partners such as publishers, bloggers and other influencers including customer advocates. Think of earned media as different forms of conversations occurring both online and offline.

3. Owned media. This is media owned by the brand. Online this includes a company’s own websites, blogs, mobile apps or their social presence on Facebook, Linked In or Twitter. Offline owned media may include brochures or retails stores.

It’s useful to think of a company’s own presence as media in the sense that they are an alternative investment to other media and they offer opportunities to promote products using similar ad or editorial formats to other media. It emphasises the need for all organisations to become multi-channel publishers.

You can see on the diagram above that there is overlap between the three different types of media. It is important to note this since achieving this overlap requires integration of campaigns, resources and infrastructure. Content on a content hub or site can be broken down (atomised) and shared between into other media types through widgets powered by APIs such as the Facebook API.

Note that some such as Dave Fleet and David Armano identify company owned social media as a separate channel from owned media, but social media cuts across all three.

Thanks to the others who have helped set out the way today’s media looks and can be exploited, these are their recommended posts:

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  • Dawn

    Would a brand’s own affiliate programme (CAP or rev share) fall under paid or owned media? If it does it has its own site and does sales and marketing on behalf of the brand?

    • http://www.smartinsights.com/about-dave-chaffey/ Dave Chaffey

      Hi Dawn, if it’s the brands own affiliate programme on own sites, then it will be owned.

      It’s a sound strategy to create owned intermediary sites if they can be resourced right. I remember Amazon purchased photo site DP review which will now refer traffic and has own ad revenue presumably. So this is an example of an owned affiliate programme: http://www.dpreview.com/news/0705/07051402amazonacquiresdpreview.asp.

  • Dawn

    sorry that’s meant to be *CPA (not CAP) :)

  • http://www.greenwisebusiness.co.uk Stephen Bateman

    Thanks for sharing this.

    The distinctions provide a useful framework for thinking about the balance of media.

    Also, the trackback to Forrester et al is great.

    However , I’ve been researching the shift in marketing comms and the growing importance of earned media to uncover whatever I can and that’s how I came across an article co-authored by David Edelman for McKinsey Quarterly in which the authors add two other “circles” or types of digital media: “sold” and “hijacked”.

    I was wondering whether or not you think these two are useful additions or whether they are already covered in the three existing types of media?

    Here is the link to the McKinsey paper http://bit.ly/nJBEVI

    I’d be interested to hear your thoughts

    • http://www.smartinsights.com/about-dave-chaffey/ Dave Chaffey

      Hi Stephen, that’s interesting thanks.

      I’ve taken a look and don’t think they are so useful, but it depends on your perspective.

      If you’re a marketer thinking – how do I increase Reach, Awareness and Familiarity of my brand then Paid+Earned+Owned covers it nicely – I like the simplicity – the others are just distractions.

      If you’re a business manager thinking how do I increase my revenue per visit then the Sold is useful. I know Amazon does this, but when others do it I do wonder whether they have looked at the impact on conversion rates and brand favourability. Even for Amazon ad revenue is a very small proportion of total revenue.

      Hijacked is a separate an issue for reputation management – it doesn’t answer the marketers question above. Yes, it needs to be managed, but this comes from a PR persons perspective.

      Still, thanks for flagging this up – I had seen these and discounted them – maybe I can add a footnote to my diagram in the next edition of my book.

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  • http://www.socialjumpstart.com/ Social Jumpstart

    Dave – great overview and summary of the different studies – used your article as a point of reference on the Facebook False Click story that is breaking. Thanks and I will look forward to digging further into smart insights!

  • http://soccialjumpstart.com/ Social Jumpstart
  • http://www.facebook.com/martin.macpherson.927 Martin Macpherson

    this is a great piece dave – thanks for sharing!

    • http://www.smartinsights.com/ Dave Chaffey

      Thanks for your thanks Martin + Social Jumpstart. Took a while to compile, but I think it needs definition since POE is bandied around a lot these days.

      Had a discussion on Twitter recently on their value – are they actually actionable, do companies report in this way? For me, the value is to prompt companies to question are they investing sufficient in OE compared to P. Do they have the tracking+attribution in place to prove the value of OE?

      Dave

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  • http://twitter.com/markpiening Mark Piening

    Dave, this is another great thread. POE discussions are a mess – mostly because we keep forcing legacy models to understand them and communicate value. But what is we weren’t handcuffed to the past?

    For the last few years I’ve been discussing with partners and clients that there is something much greater than just POE. We agree that we need to look at all of the budgets that drive digital preferences, and how they move people’s passions and therefore markets. Personally. When we step back to study, we see there are really FIVE methods (and buckets of spend) that matter:

    P: Paid Media (measured media)
    O: Owned Media (measured media)
    E: Earned Media (measured media)
    T: Trade/Shopper (Sales)
    S: Sponsorships (unmeasured media)

    In Austin and around the world a group of us have started what we (only half jokingly) call the Digital POETS Society. It’s a group of people with expertise in each of these areas, looking to foster and fuse these investments together for stronger and tighter personalization and performance with and for clients and our companies.

    I would love to hear your thoughts on how you and your readers see these budgets and communications channels working together in the future. After all, communications is an art and not just a science.

    Carpe Diem!

    http://www.imdb.com/title/tt0097165/quotes

    • http://www.smartinsights.com/ Dave Chaffey

      Thanks for your thoughtful contribution Mark,

      With POE in it’s infancy, for me it’s little more than a simple prompt to marketers who think in terms of paid media only to think at the investment now needed across POE.
      Its weakness is that it doesn’t lend itself to creating quantifiable budgets forecasts or evaluation based on the POE mix across multiple touchpoints.
      All the best for your POETS. I’d love to see a guest post from you expanding on your ideas for evaluation across POE.
      Dave

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  • Mark Croker

    Really useful and interesting post Dave, thanks!

    Would SERPs appear in the POE model? If so I’m assuming under Earned?

    • http://www.smartinsights.com/ Dave Chaffey

      Hi Mark, thanks, SEO for visibility in SERPS are owned activity by site, but also dependent on earned through PR / outreach activities.

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