The shift to earned and owned media isn't cyclical – it's structural.
That's the call from Starcom MediaVest which has released its SMG Media Futures 2015 report, outlining the shift from paid media gaining pace this year.
According to the report, the continuing shift from paid to owned and earned is starting to hit publisher sentiment with media executives forecasting 1.3% growth this year. This is compared with advertisers, who have forecast 2.7% growth.
Paid media consists of traditional above-the-line advertising while owned constitues owned assets such as brand websites while earned is made up of organic and social shares.
“For the last three years, we’ve seen modest ad spend predictions from both advertisers and media execs, which has aligned with actual industry spend figures,” Starcom MediaVest Group CEO Chris Nolan said.
“Rather than this being cyclical, it now appears to be a structural change as the impact of dollars shifting from paid to owned media starts to hit.”
With the shift in full-swing, Starcom said the relationship between agencies and brands would be in for a shift with brands seeking to do more in-house.
“The challenge for marketers is working out how much they are able to do in-house versus engaging agency partners to manage for them,” Nolan said.
“We are starting to see brands establishing in-house data and technology capabilities, such as DMPs and more recently programmatic buying capabilities, which will change the role agencies play for marketers.”
“There's always been a small section of brands that want to do things in house. It's up to them to decide whether it's appropriate to do that or use a specialist to do that,” Nolan said.
“In most cases, establishing programmatic in-house for example is very costly to do, and there's a danger that it becomes disconnected with everything else they're doing, so it's not integrated into the overall marketing plan, it's separate to that.”
He said media agencies needed to constantly evolve to offer solutions across the spectrum, or brands would take their business in-house.
“There could be any number of reasons a brand would take its business in-house,” Nolan said. “Our challenge as an agency is to be across it all so we can offer solutions in the one place.”
The shift to more brands doing more in-house comes as paid media will continue to make up the bulk of raw media spend. However, the increase in owned and earned media is forecast to be almost 3.5 times that of the increase in total paid media.
Central to the shift to owned and earned are better metrics for measuring return on investment, and an increase in effectiveness.
“The technology to allow contextually relevant, tailored marketing to the individual is here and marketers are faced with the task of making it happen,” Nolan said.
Meanwhile, increased consumer acceptance of location tracking means hyper-local push marketing though mobile phones will be in vogue.
“Increased consumer acceptance to allow location tracking and push notifications to mobiles enables advertisers to influence decisions near the point of purchase. This is an important shift in a space that has traditionally been owned by retailers and in-store promotions,” Nolan said.
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