In the times of increased awareness and integrated communication across channels, it is crucial to understand correlation between the advertising spend and the PR that surrounds your brand. This report sheds new light on the impact of earned and paid media on the effectiveness of paid advertising.
White Paper
The Newfound Impact of PR
on Advertising
The Leader in integrated Media Intelligence SolutionsThe Newfound Impact of PR on Advertising
By:Gary GettoVice President Integrated Media IntelligenceVMS
Twenty years ago when AT&T's advertising models failed to explain sales results, breakthrough research showed thatnegative news coverage cancelled out the bene?ts of paid ads, and positive news coverage already had a positiveimpact on sales, so paid advertising was less bene?cial in generating incremental volume.
Those ?ndings were used to demonstrate how PR could move the needle on sales, but as we operated in ouradvertising and PR silos, a more important ?nding may have been overlooked.
As we begin to integrate our communications across channels and between paid and earned media, we arebeginning to understand the interrelationships between all our client-facing e?orts. News/editorial is proving to notonly have a direct impact on outcomes, but perhaps more importantly, we are beginning to see its impact on thee?ectiveness of paid advertising. There are three key insights from looking at earned media and paid media atthe same time:
1. Both earned media and paid media correlate with outcomes, but earned media tends to correlate moreclosely. A great deal of work has been done on the link between media coverage and outcomes by the1IPR Commission on Measurement. Their two white papers are a valuable read.
2. Consistency of messaging among all communications reaching your customers and stakeholders is critical.
3. Earned media has a signi?cant impact on the e?ectiveness and ability of paid advertising creative to delivera message.
The Leader in integrated Media Intelligence SolutionsConsider Taco Bell. First the company has to close stores because of E. coli related illnesses stemming fromcontaminated produce used in their restaurants. Then, millions of people choose to eat elsewhere after seeingYouTubefootage of rats jumping around one of their stores in Manhattan. David Letterman's nightly reminder of the rat-festnight after night continued to dissuade consumers from visiting their local outlet. If the e?ectiveness of thecompany's advertising creative prior to these problems was measured, likely it would have found them to be averagein e?ectiveness, with an index of 100.
But these same ads are far less compelling then they normally would be, as viewers have di?culty synchronizing thead message with the negative news coverage. In reality, the e?ectiveness index of the advertisements was likelyaround 20. In this example, $40 million in paid spending that previously was generating $40 million of impact is nowgenerating only $8 million in impact. If these ?gures are entered into a market mix model, it will predict the drop incustomer count and revenues that the company actually experienced.
The impact that earned media has on reducing or improving the e?ectiveness of paid advertising can be greaterthan the direct impact of earned media itself.
The Leader in integrated Media Intelligence SolutionsConsistent messaging is another key insight and is of equal importance.
Oil companies that are re-positioning themselves as energy companies, especially those touting their investments inclean alternatives like solar or wind power, are good subjects for case study. These companies are spending millionsof dollars on paid ads. But while those ads are running, news coverage paints them as environmental villains whoplace pro?t over social responsibility and refuse to spend a few dollars to keep oil from leaking in the wilderness. Theirpaid advertising investment is likely wasted and their share price lags behind their peers.
While these are extreme cases chosen to make a point, more subtle changes still make a big di?erence incommunications e?ectiveness. I encourage everyone reading this to begin looking at your communications from thecustomers'/stakeholders' perspective. To maximize your return on investment (ROI), it's imperative that the messagebeing delivered and received, whether via paid or unpaid media, is consistent. Integration of editorial and paidadvertising e?orts, thereby removing communications activities from traditional silos, will pay dividends.
A new solution to manage the performance of your integrated communications is available from VMS. VantageT is abreakthrough solution to integrate earned med... [download for more]
