Most marketers are concerned about getting as many eyeballs on their brand, growing traffic to their website and seeing at least a modest return on their marketing investment – if they can track it. Too often, they look at their marketing as an expense. What if you could turn your marketing into one of your company’s biggest assets? What if you owned the audience instead of renting it?
Are you renting your audience?
We all know traditional media is a marketing expense that’s very hard to measure. You’re basically renting the print space, TV commercial or the radio spot and putting it in front of someone else’s audience. When you quit paying, the ads disappear, and so does your branding and lead flow.
Digital advertising is very similar. You’re renting the space on someone else’s website, hoping to get a click-thru to your website. Again, when you quit paying, you are “evicted” from those websites, and sent back to square one.
Organic marketing can come in many forms: search results, social media mentions, likes and followers, links from content, and so on. Many of you may be wondering how this fits into the “renting” category. Didn’t you earn that traffic? Isn’t it free? Well, yes and no.
You certainly did earn it, as it takes a lot of effort to get organic traffic to your website. But it certainly isn’t free. You spent real time and money to receive that traffic. And guess what? When that traffic does hit your amazing website, more than 95% will quickly bounce away, many never to return. That feels rented to me.
Definition of an owned audience
An audience can be defined as anyone who has engaged with your organization in almost any fashion. Ideally, the engagement leads to an individual providing some personal information about themselves such as their name, business email address, job title and company name – that’s an owned audience. However, it might start with something as simple as a visit to your website or following you on Twitter. Below is our view of an audience hierarchy:
The goal is to use marketing tools and techniques to turn that initial engagement into a true asset for your company. Building your own audience can be achieved through many channels, both paid and organic. Channels like traditional media, digital advertising, publishing your own content, organic search results, social media marketing, webinars, and industry events.
How your owned audience becomes your company’s most valued asset
As mentioned above, most of your marketing money is spent on renting an audience – sometimes for just a second or two. However, if you can turn that investment into your own audience, you’re well on your way to building a significant asset for your organization. In fact, according to a Salesforce and LinkedIn study, the average B2B company has a database of 50,000 individuals and spends an average of $150 to acquire a single email address. This means the email database (the owned audience) alone is worth $7.5 million, likely making it the largest asset under a marketer’s control, and possibly the company’s largest asset.
Want to build even more value for that asset? There are primarily two ways to accomplish this:
- Drive revenue from your owned audience.
- Get actual revenue for renting your audience.
Driving revenue from your owned audience means quality lead nurture. An Econsultancy study found that 66 percent of marketers have rated email marketing ROI as “excellent or good”. Consider sending an email to your subscribers every time you publish a new blog post, video, eBook or host a webinar, etc. Better yet, reach out to them with unique promotions, offers, new service or products, insights and so on.
Renting your audience might come in the form of sponsorships or ads within the content going out to your audience. The more specialized or unique your audience is, the more value you can get for accessing that audience. For example, do you have one of the largest databases of people interesting in heavy equipment? You can charge a premium for a heavy equipment rental company to access that audience. To be fair, this might require a different sales effort than you are currently set up for, but the rewards may make it worth adding a “sponsorship sales position.”
Putting a value on your owned audience
Trying to determine the value of your owned audience can get complicated as demonstrated in this outstanding article on CMI, by Robert Rose. However, for this post (and for our agency and clients) we will keep it as simple as possible.
As mentioned earlier, determining a value can be boiled down to the revenue your owned audience produces for you. Again, keeping it simple, there are primarily two ways to derive revenue from your subscribers:
- Selling your products or services to your audience.
- Charge others for access to your audience.
The first option requires the right tools and some pretty accurate measurement. Basically, you need to measure the value of the products or services the average subscriber buys from you over a set period of time. Many use the Lifetime Value (LTV) of the customer for this metric. If you know that, and you know you have X number of active subscribers, you can determine the average LTV per subscriber.
Another way is to measure how much revenue each of your outreach methods generates each time you use one. Again, a simple example would be sending personalized emails out with an offer. At the end of the campaign, you should be able to determine how much was sold and divide that by the number of subscribers you sent. This will give you the average revenue per subscriber, per outreach.
The second valuation method is based on how much revenue you can generate via sponsorships, ads, or affiliate fees to reach your audience. If you have an audience of 40,000 and you can charge 4 sponsors $2000 each to be in your monthly newsletter, each subscriber is worth $2.40 per year (4 X $2000 X 12 months = $96,000 divided by 40,000 subscribers). Depending on what your accountant tells you, you might be able to value a subscriber with a multiple assuming you can continue to market to them for years into the future.
Combine those two methods and you can arrive at a reasonable value of your owned audience.
Where does traditional media fit in?
If you’re spending money on traditional media such as radio, print, TV, and gasp, direct mail, I sincerely hope you have a call to action leading the reader or viewer to a specific landing page on your website where you can turn “their” audience into “your” audience. Based on our data, odds are you do not. You should look into changing that (self-promotion: we can help, ask us how).
The Bottom Line…
I just read a great line from Luke Ford, who said, “In business, if you don’t own the audience, you better own the patent.” And that my friends, is the bottom line. Thanks for reading!
Build Your Own Audience, Then Leverage It For Revenue Growth
A midsize B2C company came to Vertical Measures looking to build their own audience and was able to increase their conversion rate by 712% percent.