By Dave Pasternack
June 27, 2013
Whether you’re tasked with online marketing for a small business or a giant brand, your objective is to build online equity. Such equity can last for a short period of time - perhaps just a week, a few months - or over a much longer time horizon. Deciding which kind of equity you want to build, and how long this equity should last, will determine how your online budgetary decisions will be made
One key decision that must be made is how much of one’s online budget one should devote to paid - or unpaid media channels. This decision closely parallels that made by a person seeking to rent - or buy real property.
Why Rent Media?
Paid media in the online world isn’t actually “bought” in the way that offline property is bought: such media is actually “rented.” When you pay Google, Bing, or Yahoo to display your banner ads or search listings, you are effectively “renting” this real estate from these online “landlords.” In the real world, when you stop paying rent you get an eviction notice. When marketers stop paying Google, their listings become invisible, and most people will instantly forget that they ever existed.
Some marketers function along very short time lines. Renting media makes sense if you have a lot of money to spend, have short-term visibility goals, and don’t care much about what happens a month - or perhaps even a week — from now. For example, the latest action movie franchise release’s only KPI is a strong opening weekend. It makes sense to rent as much online space as you can, exhaust the budget, and go home.
For achieving mass visibility (or as much mass visibility as this fragmented online world allows), nothing beats paid media. The other great thing about paid media is convenience. You can come and go as you please, rent something basic now, and maybe upgrade to something fancier later if budget allows. Unfortunately, you are not building any long term online equity (although you’re making online media sellers very happy).
For marketers seeking to build online equity over a longer term horizon, it makes sense to invest in “ownable” assets along with “rentable” ones. “Ownable” assets in the online context mean the value of one’s website, one’s presence on social media channels, and general online brand equity established and maintained over time. The benefits that one acquires from these activities - including SEO, content marketing, and social media visibility activities - are permanent. If one continually works to develop one’s online properties, the value of one’s online presence will inevitably appreciate over time, even though ROI cannot be measured as easily as it can with paid media.
The problem with “ownable” media is both that it’s expensive to get started. Achieving top Google organic rankings can take many months - sometimes years. And any such assets that are developed need to be maintained. In the same way that a homeowner is responsible for reach into her own pocket to keep the property in good repair, the online business must invest in one’s online assets. In the age of social media “keeping the lights on” can be costly. Today, it is typical to find small and medium-sized businesses maintaining multiple online points of presence, which can include a site, a Facebook area, a Twitter feed, a blog, and perhaps even outposts on PInterest, Instagram, etc. While it’s possible to automate some of the content grunt work, it’s also clear that you need humans - smart, social ones - in the loop, writing articles, responding to customers, building healthy link networks, and otherwise improving the online property.
Renting To Own
Some marketers have no problem pursuing a strategy in which online ubiquity, acquired by “renting” online media, is followed by instant oblivion. Others will seek a more balanced approach, because that they know that building a new brand, or maintaining the equity of an established one online, takes time, effort, and a sustained, albeit low-key effort.
Ultimately, the “rent” vs. “buy” decision is neither binary nor exclusive. A balanced online marketing strategy will engage both paid and unpaid channels at the same time, with each informing and improving the performance of the other. Over time and with proper funding, the value of one’s online property will improve, and this will serve the overarching goal - to build market share and therefore profitability - of any firm doing business online.
Dave Pasternack, with Kevin Lee, in 1996 co-founded Didit, a privately held industry pioneer in search engine marketing and digital marketing. Prior to this, he launched the United States Information Corp., which became one of the largest electronic U.S. publishers of federal government bidding and contract information. His first company, Logicsoft, was founded in 1980. Contact Pasternack at [email protected].