It's Time to Ditch the Paid/Earned/ Shared/Owned Model of Ad Tech

Ad-Tech Models Have Distracted Marketers from Unifying the User Experience

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Before the great ad-tech boom, the advertising model was straightforward -- if not simple. The "four Ps" dominated the modern marketing machine, with "promotion" being universally understood as paid media and sales promotions. End of story.

Then digital happened and the old model collapsed in a heap of bytes and algorithms and platforms. As marketers struggled to make sense of it all, technologists filled the void, creating architectures organized into ever fragmenting tech segments.

This is the origin of the paid/earned/owned (PEO) model. In just a few years, it took off, morphing into the expanded PESO model we know today.

Its popularity was fueled by automation's promises of unlocking customer engagement while reducing costs including, hopefully, paid media costs.

As promises go, this was a doozy that alas, turned out to be false. Worse, it distracted us from the harsh reality that PESO is stuffed with tech, but shallow in creating recognizable outcomes around customer conversion.

So let's deconstruct the PESO automation-driven, cost-efficient, agile marketing machine promise with a peek under the pretty charts.

Debunking the PEO/PESO myth

The most lethal arrow to aim at PESO's heart is squashing any illusion that PESO will ever result in a cost reduction for marketers. That is just untrue as we analyze the "owned" and "earned" components of the model.

"Owned" assets are assets the brands have most control over -- websites, company generated content, corporate and employee social networks. These require lots of complex technologies and processes like traffic verification platforms, dynamic content recommendation engines, data mining platforms and inbound marketing platforms, to name just a few. Mega-marketing automation platforms are supposed to integrate the functions but seem ill-equipped so far to organize most of this.

Moving onto the "earned" part of the model, its tech cacophony includes influencer platforms, sentiment tracking platforms, internal/external social engagement platforms, cross-channel content creation platforms and data. Lots and lots and lots of data.

But we're not out of the "cost" woods yet because platforms evolve, adding new functions and features designed to knock competitors out. Now, new cost headaches present themselves around whether to consolidate platforms or stay put with fragmented vendors. Cost implications are significant either way.

The harsh cost reality

Net, net -- once you take into account hard costs, labor costs and uncertainty/risk costs, it shouldn't surprise you to see unpredictable cost spikes of 45%-plus some years and 15%-plus increases other years.

Does customer engagement improve that fast? Probably not now. Possibly never.

So if the reality is that no matter what (including a well-oiled PESO engine), marketing costs will go up, can the increases ever be justified?

The answer is yes, but only by focusing on the real prize -- the real unifying principle of ad tech.

The unifying principle of ad tech -- control the user experience (CUE)

As an industry, we've always taken our cue (pun intended) from customers, striving to engage and nurture them with welcome experiences. This has not changed.

What has changed is our huge leap of understanding about what customers want and how they want to engage with brands. Translating this into a marketing model is tough, requiring masterful process integration between the tech and human aspects of marketing.

The CUE model is a practical roadmap, helping marketers unify fragmented tech into productive processes that lead to unambiguous outcomes.

1. New audience generation: This is about getting net new audiences into the brand funnel as efficiently as possible. Functionally this includes SEM, programmatic media, content development platforms, PR, social and paid media.

2. Inbound audience management: These activities are geared toward optimizing a user experience once they start interacting with your brand. Examples of activities include inbound marketing automation, web content personalization, email marketing and corporate social responsibility programs.

3. Audience conversion: This is the "show me the money" part of the equation. Key components here are A/B testing platforms, sales automation, lead qualification/generation, remarketing and resource allocation modeling.

Ditching PESO should be easy because it deepened the confusion already pervasive in the industry. Clinging to a vision of a deep, evidence-based content marketing model where the user's experience is the only important unifying principle isn't easy, but it's the only prize worth fighting for.

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