Why Agencies Should Abandon Advertising and Invest in Owned Media
By Dan Curran
The downward spiral of traditional advertising’s effectiveness started nearly two decades ago, when marketers simply cut and pasted print ads onto their digital properties.
Today, a clever ad is no longer enough to stir up consumer interest in a brand. It’s become clear that companies desperately need to rethink their marketing strategies, focusing on owned content instead of advertising.
Consider the pitiful state of online ads. More than half of consumers feel ads are insulting to their intelligence, according to research by HubSpot and AdBlock Plus. Another 63% feel most of these ads don’t look professional. If that doesn’t convince you of the futility of online advertising, maybe this will: Just 7% of consumers find them compelling. Online ads are not just hard to like — they’re deceptive, unimaginative, inefficient, and ineffective.
Medium’s recent abandonment of paid ads should put an exclamation point on the general consensus of online advertising’s ineffectiveness. Unfortunately, many enterprising agencies continue to waste money, time, and effort on traditional marketing pathways.
The Cost Vs. Benefit of Online Advertising
Instead of pontificating on how ineffective online ads can be, I’d rather paint a much brighter picture — one where agencies transform into newsrooms and evolve toward a more journalistic ethos.
In my opinion, smart brands should run from antiquated paid solutions and embrace owned media. Blue ocean opportunities abound for any agency that focuses on what consumers desire: advice, information, stories, and sometimes entertainment. It’s no longer about talking at consumers but rather to them.
This shift represents a much more efficient use of funds. In 2015 alone, eMarketer found that display ads cost companies $4.6 billion in invalid traffic. Another $1.1 billion was lost to malvertising, in which attack code is hidden in legitimate online advertising to spread a virus or spyware.
Not to mention that a continued devotion to paid media wastes much more than money. It also drains agencies of precious time and resources as they scramble to understand each new technology, constantly pivot as media platforms change algorithms without notice, and scramble to justify ambiguity to tight-fisted brands.
My company recently worked with a large brand that was so disillusioned with the ambiguity tied up in paid media that it elected to pull its entire seven-figure marketing budget, discount its product, and instead sink money into channel partnerships and slotting fees.
This product wasn’t new to the market. It was an iconic staple of homes everywhere, and it had a proud advertising heritage. But its ads, both online and offline, were no longer generating any measurable value, so the brand pulled the cord. A modest owned media initiative was put into place and, after 12 months, proved to exceed the ROI of the paid efforts at 25% the investment.
Sadly, paid media’s lack of results hasn’t precluded the majority of agencies from fighting to keep spending and efforts status quo. These agencies are simply stuck in a bygone era, and will either have to catch up (and fast) or will risk being left behind entirely.
Nothing Ventured, Nothing Gained: 3 Reasons to Focus on Owned Media
A shift in mindset from the value of paid advertising to the value of owned content can be a challenge for many brands. Content creation has its own set of trappings, and you may have the impulse to spit out as much content as possible to see what sticks.
Like paid advertising, owned media requires a strategy for the content to effectively reach and engage an audience. But once you do the legwork to understand the needs of your customers, produce the content they want, and earn their trust, the gains are inevitable.
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