Lesson #354: Owned, Paid and Earned Media Channels

 

Effective marketers know the "trinity" of a good media strategy is effectively communicating your story across the intersection of three distinct media channels: owned media, paid media and earned media.  This post will demystify these channels for you, to ensure you are effectively marketing across all three.

Owned Media

Owned media is exactly what it sounds like, properties that you own and entirely control. That includes assets like your website, mobile apps and email database.  That includes ways of communicating to your customers through those assets, like website design, ad creatives, email marketing and SMS text based marketing.  And, lastly, it includes data analytics, reporting and conversion rate optimization tools that help you glean actionable insights from your owned media activities.

Paid Media

Paid media is buying your way into getting discovered.  For most startups, that includes things like paid search ads (e.g., Google, Microsoft), paid social ads (e.g., Facebook, Instagram, LinkedIn, TikTok, Pinterest, Twitter), paid shopping listings (e.g., Google, Amazon, Walmart) and display advertising across various sites or programmatic advertising networks across the Internet. This too requires disciplined tracking and reporting tools, and can assess campaign performance/conversions and properly attribute cross channel marketing touchpoints to a specific customer.

Earned Media

Earned media is taking actions, other than paid advertising, that result in getting your business promoted on third party websites.  This includes things like search engine optimization for organic traffic, press releases that get picked up by other publishers, content marketing on your blog that gets indexed by search engines, affiliate marketing and social media communications or influencer marketing that get shared virally through the social networks.  Again, supported by any required tracking and reporting tools for measurement and optimization.

An Integrated Holistic Approach Spans All Three Media Channels

If you are simply sending your messaging through one of the above three channels, you are leaving a lot of potential growth opportunities off the table. It is important for each campaign you are managing that you include a strategy and budget for all three of the above channels, as the real marketing magic happens when they are running concurrently across all three channels.  You want to make sure wherever your target users are engaging, that your message is showing up loud and clear.  That includes on your sites, marketplaces, news articles, search engines, social media or wherever else customers may be looking for inspiration prior to purchasing products.

How to Manage This

Larger companies typically have departments of people that do each of these stand alone tasks required. But in smaller businesses, they don't have that luxury.  So, they often have to rely on agencies that can assist them with each of the above needs.  Some companies engage specific agencies for each point solution (e.g., an SEO agency to assist with organic search traffic growth). Some companies engage one agency that can function across all channels, and do all of the above through one service.  

It is harder to find a good "Jack of all Trades" that can do each of these services well, in one agency.  But, they are out there.  So, if you can find them, that is the preferred path, as they can provide many advantages for you.  They can enable consistent goal setting and messaging across all channels.  They can also better help you with cross channel attribution measurement, by centrally managing all channels in one agency.

But, in all cases, it is critical you lay out your clear key performance indicators of success, and measure them religiously. That could be setting lower funnel goals like leads, conversions or sales.  Or it could be setting upper funnel goals like brand awareness, brand intent or customer database growth.  Figure out what KPI is most important for your business and goals, and make sure all people doing the work, internally or externally, are measuring each of the above campaigns, across all channels, against the agreed upon KPI metrics.

Closing Comments

Hopefully, to many of you, you are already doing a lot of this in your current marketing efforts.  But, for those of you that are not, effectively managing each of these three channels is pretty much "table stakes" today, for setting up a winning marketing campaign.  Good luck!!

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] What Matters Most? Product or Proof-of-Concept?

I was recently interviewed by ASBN, an online "television network" serving the small business community, about what is more important to investors, the product or the proof-of-concept you are getting around that product.  As you will learn, most investors are flexible on products, and it is more important that the "proof is in the pudding".  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in crafting your investor pitches.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Generative AI is Revolutionizing Marketing

Contrary to prevailing storytelling that it just arrived in the waning months of 2022, artificial intelligence has been around for decades. I won't bore you with the entire history (though it's summarized well in this article); suffice it to say that it has played a significant role in the marketing industry for decades, including in predictive analytics used in many advertising platforms. But what has recently caught fire is the use of generative AI in marketing creatives, largely because the technologies are more accessible and easier to use than ever before. Though this perhaps goes without saying at this point, the industry is at an inflection point, and businesses better learn what is going on in this space, or they will be left behind.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] Consider a 'Copycat' Strategy for Your Next Startup

I was recently interviewed by ASBN, an online "television network" serving the small business community, about how "copycatting" the successful business strategies of others may be a profitable way to grow your next startup.  As you will learn, piggybacking on the research and proven success of others, can help you materially preserve your precious startup capital and realize outsized returns with "proven winner" ideas.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in ideating your next startup.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #353: Staffing Your Finance Department as You Scale

I was recently introduced to Tim DeBone a finance and accounting expert with The Bagchi Group, a business consultancy group in Morrisville, NC.  He had some interesting suggestions about how best to staff your finance and accounting function within your company, and how that changes over time as the the company scales.  He was kind enough to assist me in writing this how-to lesson and sharing it with our Red Rocket Blog readers. 

Introduction

As tech companies grow and evolve, the company's finance/accounting requirements and challenges change along with the skills needed to successfully complete them.  Because of that, your first finance hire may not always have the right skillset for when the company is 10 times the size, as an example. And, you may need to augment that team with fractional strategic level help.  To address the variability in the work and the time required to complete, many high-growth companies use outsourced bookkeepers and fractional CFOs during their early years, until they can better afford full-time talent of their own.  In this article we discuss the appropriate resources a CEO can engage to ensure the finance suite is properly managed, along each stage of the company's growth, and whether that talent should be outsourced or internally staffed.

Role Descriptions

Before we dig in, here is a brief description of the roles discussed in this article below, so you can better understand what we are going to be talking about here:

• CFO – Senior Finance Person with normally 15+ years of finance/accounting experience
• Can come from a finance background with roles that are analysis heavy
• Their accounting background is normally deep in their industry of focus, but weaker outside that industry
• Can also come from an accounting background with roles that were focused on preparing financial statements
• Their analysis background is not as strong, but they may have taken roles in the past to improve this skillset
• Bookkeeper – transactionally focused employee that runs payroll, collects invoices, and pays bills
• Does not require any formal finance or tax background
• Accountant – a certified professional with an educational background in accounting, able to perform all the duties of the bookkeeper
• The accountant is senior to the bookkeeper with a better understanding of GAAP principles and why accounting entries need to happen
• Will partner with CPA firm on financial reviews and audits

• CPA Firm – Outside accounting experts that partner with businesses on tax issues and review of financial statements, including financial audits, if needed.
• They can also help identify small business and R&D tax credits to reduce tax liabilities

At Formation (Pre Revenue)

At the start, the CEO can manage the core finance functions. Software systems are now sophisticated enough that non-finance professionals can manage early-stage payroll, collections, and payments. Depending on the growth path or complexity of the business model, the CEO may want to engage a fractional CFO to help create the forecast and cash planning. But until the company has significant revenue or outside investors, the CEO can complete most activities. We would recommend that the company engage an outside accounting firm at formation to help with annual tax preparation. Even without the need for a financial review or audit, this resource prepares annual tax filings and significantly reduces tax risk for the company. 

Pre-Seed Stage (Generating Some Minimal Revenue) 

Once the company has revenue and non-founder employees, they should engage an outsourced bookkeeper to take over the back-end transactional work. This involves running payroll, collecting from customers, and paying vendors. While these are straightforward tasks, the CEO hesitates to outsource them and their time is better spent guiding development or aiding sales. At this stage, a fractional CFO can help on a project-to-project basis, but the company will not have enough work for the CFO to require a preset amount of help each week. The CFO can improve metric tracking, evaluate back-office processes to prepare for growth, and help prepare the business for a seed raise. The CFO helps the fundraise by preparing employee and customer documents for investor diligence, ensuring the management team understands their growth metrics and benchmarks, and creating forecasts showing how investor funds will grow the business.

Seed Stage ($250K-$1MM in Revenue)

After raising a seed round, the investors may strongly suggest that the company employ a fractional or full-time CFO to manage the finances and strategic planning. The CFO will introduce budget vs actual analysis, scenario planning, and project out the cap table. Dilution calculations become more complex as the company hires more employees and brings in outside resources, especially when those new funds are SAFEs or Convertible Notes. The company may also switch from cash accounting to accrual (or GAAP compliant) accounting at this stage. Accrual accounting may be outside the skillset of the original bookkeeper so upgrading that role to a part time accountant may be required. Depending on how fast the company scales, that part time accountant may become a full time hire before the Series A fundraise is completed. That accountant, along with the CFO, will partner with the CPA firm to prepare annual tax returns and any financial reviews or audits.

Series A Stage ($1MM-$5MM in Revenue)

Once the company has raised a Series A, the CFO will be spending 8-10 hours weekly on the business. In addition to the previous work around strategic planning, the CFO will be building and training the back-office team, introducing additional risk mitigation processes, partnering with the CEO on tracking company performance, and partnering with the CPA firm on tax issues. The company will be growing quickly with increasing complexity across all back-office functions, referred to as General and Administrative (G&A) on most financial statements. The CFO will be managing and training the HR, Recruiting, Finance, Accounting, and Facility planning teams to enable the company to support the company’s growth. At this stage, a full-time junior level hire is required, either heavier on accounting or finance depending on the business model and the CFO’s background. With the expansion of the employee base and revenue base from additional growth, the CFO will need to identify and mitigate potential risks before they happen. Those risks can involve employees, security, legal, tax, or financial issues. Key Performance Indicators (KPIs) become essential as current investors, and future investors, will need to understand how the company performs versus targets and industry benchmarks. The CFO should also be measuring forward-looking metrics to anticipate whether the plan is succeeding or failing compared to pre-set plans and budgets which have been prepared by the CFO. 

Late Series A or Series B Stage ($5MM-$10MM in Revenue)

If a company continues to grow and hit their metrics after the Series A fundraise, the workload will require a full-time CFO to join the team. The amount of effort required to help the next fundraise process, run the G&A team, and support the CEO will be too much for a fractional resource. Hiring this role before starting the Series B fundraising process allows time for the new CFO to learn the business and can assist with the fund raise. The fractional CFO should have the processes in place to enable a smooth transition, along with highlighting which areas need improvement to scale the business. Two full-time finance/accounting employees should be able to manage the business at the Series B start, but the company may want to expand the HR/Recruiting function at this time to include a full-time employee. 

Hopefully, you now have a better understanding of how best to staff your finance and accounting needs as your business scales.  Thanks again, Tim DeBone, for your help with this post.  If any of you need additional help around your finance team strategies, Tim is happy to help you answer any of your questions.  Feel free to reach out to Tim at (704) 907-5866 or tim@bagchigroup.com.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] Calculating Addressable Market Size vs. Industry Size

I was recently interviewed by ASBN, an online "television network" serving the small business community, about how to calculating your total addressable market size, as opposed to your total industry size.  As you will learn, your total addressable market size, which investors care most about, is a lot smaller than the industry overall.  I thought this video turned out great, and I wanted to share it with all of you, to see if it can be helpful to you in sizing your market.  I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.