Digital owned media effects and its synergy with paid media on brand sales

John Philip Jones linked share of market to share of spend in 1990

Source: John Philip Jones HBR 1990

Has the establishment of digital owned platforms impacted this analysis?

• Does the volume traffic to brand websites and/or social brand sites allow brands to deviate from the JPJ formula?

Methodology• The study observed the relationship between paid and owned media and

sales across 802 brands in the US market• 56 categories (i.e., Credit Cards) within 15 industries (i.e., Financial Services) from

2010 to 2015. • Brand sales data are from Bloomberg, Euromonitor, 10k and 10Q annual reports. • Brands’ online and offline media spending is the metric of paid media input and

is collected from Kantar and Pathmatics. • Owned media input metrics are the unique visitors (UV) to brands’ desktop and

mobile sites from comScore. • The other owned media input metrics are fans’ acquisition and interactions on

their social media sites (Facebook, Twitter, YouTube and Instagram) and are collected from Publicis Media’s SocialTools.

Share of paid media (SOV) declines relative to growth in share of market

As expected the results we found echoed JPJ original

findings

Source: NWU/PM study; comScore; PM Social Tools

But share of owned media customer traffic continues to grow as market share grows

Share of customer traffic to owned brand sites is a much

more linear growth to market share growth

Source: NWU/PM study; comScore; PM Social Tools

Do brands with rising sales share act differently to brands with falling sales share?• Sub-divided brands by their 5 year compound sales growth rate• Rising brands – 5 year CAGR grew by > +3%• Static brands – less than 3% variance in CAGR• Declining brands – CAGR fell by < -3%

• Key metrics• PAID MEDIA: Share of voice within the brands category• OWNED MEDIA: Share of traffic to brands web, mobile & social sites within

the brands category

Rising brands grow share of paid media and owned traffic as category market share rises

Rising brands include all categories – CPG, Retail, Luxury, Auto, Entertainment, etc

Brands with increasing share of market have invested equally in their paid media share of voice AND their owned media share

of customer traffic

Source: NWU/PM study; comScore; PM Social Tools

But declining brands lose share of owned traffic faster than paid media share

Declining brands include all categories – CPG, Retail, Luxury, Auto, Entertainment, etc

Brands with declining share of market have invested more in

their paid media share of voice than their owned media share

of customer traffic

Source: NWU/PM study; comScore; PM Social Tools

Comparing the segments shows that brands with falling share have an imbalance to paid media

HIGHER SHARE OF OWNED

HIGHER SHARE OF

PAID

HIGHER SHARE OF OWNED

HIGHER SHARE OF

PAID

Source: NWU/PM study; comScore; PM Social Tools

Within categories we see the same behaviorfor non-ecom categories: Fruit Juice

HIGHER SHARE OF OWNED

HIGHER SHARE OF

PAID

Source: NWU/PM study; comScore; PM Social Tools

And with categories with a strong ecom element: Retail Banks

HIGHER SHARE OF OWNED

HIGHER SHARE OF

PAID

Source: NWU/PM study; comScore; PM Social Tools

And with mixed categories: QSR

HIGHER SHARE OF OWNED

HIGHER SHARE OF

PAID

Source: NWU/PM study; comScore; PM Social Tools

We conclude share of owned traffic is an important metric in all categories• But like share of ad spend, there are several sub-metrics that make up

the share of owned that we have considered in the study

Owned Traffic

Brand WebSites

Brand SocialPages

Desktop Site Traffic

Total Fans (FB, TW, YT!, Inst)

Mobile Site Traffic

Total Interactions (Likes, Shares, Retweets, etc)

Sub-metric

Two metrics which Tier 3 brands consistently underdelivered1. Lower % of total web site traffic achieved via mobile2. Higher ratio of total total fans per interaction on social

Tier % 2015 total web traffic via mobile

2015 Total social fans per

interactionTier 1 & 2 (> -3% CAGR) 58% 2,800

Tier 3 (< - 3% CAGR) 49% 3,677

Source: NWU/PM study; comScore; PM Social Tools

Despite significant variations by category and platform we have found this consistent pattern to be suggestive of an important consideration for brands

Social and Web sub-metrics become category specific: Retail Banks

Source: NWU/PM study; comScore; PM Social Tools

Retail Banking Category

% 2015 total web traffic via mobile

2015 Total social fans per

interaction

Tier 1 & 2 (> -3% CAGR) 47% 511

Tier 3 (< - 3% CAGR) 38% 435

Social and Web sub-metrics become category specific: QSR

QSR Category % 2015 total web traffic via mobile

2015 Total social fans per

interactionTier 1 & 2 (> -3% CAGR) 67% 432

Tier 3 (< - 3% CAGR) 69% 887