This budget allocation brings Asia-Pacific more in line with the rest of the world, where on average marketers plan to allocate 47 per cent of their money to paid, 25 per cent to earned and 29 per cent to owned.
The report, Paid, Owned and Earned: Precision Touchpoint Planning for Real-time ROI was based on a survey of 48 senior brand managers around the region in late 2012 by Campaign Asia-Pacific Intelligence and data derived from Zenith Optimedia's Touchpoints ROI tracker.
Until now, paid has held the lion's share of the marketing budget in Asia-Pacific, but this more even split of resources indicates a gradual shift toward a reduction in paid media in favour of owned and earned.
The marketers surveyed are divided on the importance paid and earned media will retain over the next three years, with opinions equally in favour of paid and of earned as "the most important". However, the majority agreed that owned was the second most important.
Overall, among marketers in Asia-Pacific, growth in allocation of budgets to owned media will be largely driven by those currently spending the least in this area. The number of marketers now investing 10 per cent or less of overall marketing spend is expected to drop from 31 per cent in 2012 to 27 per cent in 2013 and 19 per cent by 2015.
Likewise, with earned media, the survey found that in 2012, 40 per cent of marketers surveyed identified themselves as being in this low-spending group (less than 10 per cent) on earned media, but only 19 per cent expected they would still be in this group by 2015. By this time, 46 per cent of marketers expect to be spending between 11 per cent and 30 per cent of their total budget on earned media, and 31 per cent think they will be investing between 31 per cent and 50 per cent on earned.
The survey also found that marketers from different sectors placed differing priorities on the relative importance of paid, owned and earned.
Sandra Puno, director of communications and marketing service at Nestlé Philippines, said that while paid, traditional advertising is still vital to food brands, consumers are seeking out brands’ own media when they have questions, and are talking to each other—online and offline—about what they buy and eat and how they feel about it. This is at a time when taste preferences are fast evolving and fragmenting, and the number of product options is ever-rising.
“The digital space has opened people’s eyes to a whole range of options and benefits and not just in food," Puno said in the report. "And yes, there are indications of their willingness to try new products and brands. We see a lot more influence coming from word of mouth and from endorsements of people they find credible. This is evident in the digital space. It’s not uncommon for people to post a query on Facebook rather than go online and search. Likewise, the desire to be the influencer is very much in vogue.”
Alcohol brands are among those most at home in the digital world, particularly in social media, where nights out are planned—and remembered in the morning. Rene de Monchy is head of marketing with Asia-Pacific Breweries (Singapore) and in the report said that earned and social media is becoming a key influence on how consumers arrange their get-togethers.
“With access to more brands and labels, consumers are definitely being spoilt for choice,” said de Monchy. “The core challenge for us as marketers, then, is how to motivate a consumer to choose a Heineken over other international premium brands. In the case of Heineken, it stands for more than a beer, but a social currency which consumers use to socially badge amongst their peers.”
The company is increasingly focusing its attention—and investment—on owned media that generates earned conversation. “The value proposition of our owned assets is that the brand seeks to be culturally relevant to our fans across all of our digital assets and provide them with content that they are genuinely interested about,” he added.
In the automotive sector, brands tend to reach consumers via owned and earned media more than brands in other categories and work through online touchpoints more than the regional average across all categories.
In contrast, telecommunications operators focus primarily on paid media (mostly offline) as, "people get to know about the products primarily through TV; that hasn’t changed for the past three decades, though the internet is driving the new way for people to find out—mainly through search and social media," explained Bunny Aguilar, Globe Telecom’s head of communication channels in the Philippines in the report.
While earned media is highly influential for telco brands, it's used more to complain than to praise, she added. "They only talk about it when there’s a problem. If we’ve met their expectations, they say nothing.”
Beauty brands too get significantly more of their exposure to Asian consumers through paid media than the average for all brands in the region, with owned and earned accounting for roughly half each of the remaining consumer touchpoints in the category.
The report concludes that there is no magic number to be arrived at for the proportion of marketing budgets that should be allocated to paid, owned or earned media. "Optimising the mix depends on brand, market, audience and campaign objectives, and it needs constant updating and reviewing based on a live feed of results and consumer research," advised the study.
However the trend towards a media mix that places more emphasis on owned and earned is well underway.
The full report can be downloaded here.
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