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Unpicking the paid-owned equation

News, 11 November 2016

LONDON/NEW YORK: There are clear relationships between share of brand sales in categories and share of paid advertising, according to a study which also highlights a link to the share of owned platform interaction.

Writing in the current issue of Admap, Rob Jayson, global lead for branded applications at Publicis Media, outlined the results of research which observed the relationship between paid and owned digital media and sales from 2010 to 2015 across 802 brands in the US market, representing 56 categories within 15 industries.

And he reported there was evidence that increasing spend/share in paid and owned digital media had an effect on sales, "but the ideal balance of spend in both is dependent on the category type and the brand position with category."

For categories with a strong footprint in both paid media and digital owned media sites, or categories that have a longer customer buying cycle, owned media effectiveness was more highly correlated to sales changes.

So, in industries such as telecommunications, restaurants, retail, automotive and financial services, paid and digital owned media were found to be equally effective. But in industries such as consumer packaged goods and apparel and accessories, digital owned media seemed to be less correlated to sales growth.

Jayson also observed diminishing returns in both paid and owned media effectiveness, but added that paid media reached the point of diminishing return faster than owned media.

"We then find the size of media effectiveness often varies when the leading brand changes the media investment strategy," he added, while stressing this was a correlation and that sales changes could depend on many other factors within a given category.

Mobile and social were found to be important in industries such as restaurants, telecoms, travel and financial services. And more detailed analysis suggested that "brand engagement with brand content on social sites is linked to overall sales growth".

Overall, Jayson said there was a synergistic effect between paid media and owned media and, depending on the category and a brand's relative sales position in that category, he claimed to be able to "predict the effects of increased share of paid advertising vs. increased or decreased share of owned platform interactions".

Data sourced from Admap