WPP Analytics & Chief Data Scientist WPP AUNZ
The rise and fall of owned asset marketing
Unless businesses evolve how they deploy their owned marketing assets, they will no longer see the returns they have come to expect.
The rise of owned assets.
One of the most disruptive changes to the media and advertising industries since the turn of the century has been the rise of owned asset marketing.
Prior to this, organizations looking to build awareness, interest, consideration and loyalty had little choice other than to use paid advertising to reach prospective customers at scale.
The internet fundamentally changed this. E-mail marketing enabled organizations to push messages and offers to their customers en masse without incurring any media costs. Websites (and later apps) allowed businesses to showcase the benefits of their products and services in an owned-media environment that was interactive and always-on.
Owned asset marketing didn’t begin with eDMs and websites. Shop windows and product packaging were used for promotional and branding purposes long before the birth of the internet. But as the web enabled organizations to communicate with customers at scale, with personalized messaging, it fundamentally redefined the role of owned assets in the marketing mix.
The internet spawned two other groundbreaking communication channels, online search and social media. Whilst eDMs and websites enabled organizations to communicate effectively with their existing customers and those already interested in learning more about their wares, online search and social allowed companies to cast the net wider. Search engine optimization enabled businesses to steer people conducting category-level searches to their websites, even amongst prospective customers with no brand awareness. Through social platforms, businesses could “earn” reach by creating shareable content.
Curating digital content and harnessing marketing technologies to deploy campaigns through owned assets is far from cost free. However, for most of the last two decades, businesses have been able to exploit owned channels to drive trial and purchase weights in a highly cost-effective manner, largely because these channels could all be harnessed without incurring any media costs. It is, therefore, not surprising that many companies with direct-to-consumer business models have invested heavily in developing their marketing technology and customer experience stacks.
When something’s too good to last, it probably won’t.
The golden age of owned asset marketing is all but over.
During the last five years, Google and Facebook, the dominant search engine and social media platform respectively, have become clinical about clipping the ticket.
For businesses looking to drive visitation to their sites through online search, organic traffic has been almost entirely crowded out for non-branded search terms, whilst the price for securing traffic through paid listings has soared under Google’s biddable cost per click model. Even branded searches now predominantly result in clicks on paid links, due to Google changing the page layout of its search engine to feature paid listings more prominently, relegating organic listings lower down the page (often below the fold).
A few years ago, businesses could secure mass reach in social environments through creating shareable content. With few exceptions, only sponsored business posts now achieve reach at scale. Like Google, Facebook is squeezing out the “free media lunch”.
Electronic mail is also losing its luster. In Australia and New Zealand, less than one in every three eDMs is opened. Whilst this reflects widespread disengagement with the medium, open rates in the UK and the US are even lower. Australian consumers are becoming increasingly selective about what they open, and therefore open rates are likely to fall further.
The marginalization of eDMs is being exacerbated by technology changes, the most significant of which has been the introduction of dual inboxes in some e-mail platforms. Since 2015, Microsoft and Google (Gmail) have progressively rolled these out across their stacks, relegating eDMs (along with spam and other generally unwanted material) to non-priority inboxes. More than half of adults who use these providers’ platforms rarely or never open non-priority inbox folders. They no longer see the title of most eDMs, let alone the content within them.
What to do?
The following areas are critical for businesses looking to drive returns from owned assets moving forwards.
1. Redefine the objectives of owned asset marketing:
Investing in owned assets is no longer a substitute for paid advertising. Focus owned asset marketing on lower funnel and customer experience tasks, specifically driving conversion and purchase frequency.
2. De-silo operational management:
Splitting out the management of owned assets worked on the way up, when these assets could be used to drive prospecting and build trial, as well as perform lower funnel tasks. With the potency of owned assets waning at many stages of the customer journey, owned channels need to be managed under an holistic strategic framework.
3. Implement an audience-first targeting strategy:
An audience-first digital targeting strategy starts with segmenting customers based on their eDM open rate history. Focus e-mail marketing on driving frequency amongst customers with high open rates (at no media cost). Onboard e-mail avoiders (as a custom audience) into relevant digital buying platforms so that they can be re-engaged using paid social and display. Overlay any other customer-based segmentation with eDM open rate data so that paid digital investment can be focused on audiences that can’t be influenced for free.
4. Orientate you owned asset ecosystem around your website:
Design your owned-asset ecosystem with your website (or app) at its center. Avoid structuring social pages and other assets reliant on 3rd parties to act as substitutes for your website. eDM open rates are falling, corporate social pages are beholden to social platforms, and search-oriented business listings are reliant on Google. Third party touch-points are likely to become even more marginalized in future as providers seek to increase their commercial extraction rates, so minimize reliance on these.
Businesses that evolve how their owned assets are managed and deployed can continue to unlock growth, but time is running out for those that don’t.