Custom content: More effective than advertising and on the rise

2009 was not a banner year for the media industry, but there were a few bright spots.  Social media was a major story and became a key player almost overnight.  There is not a marketer alive who is not thinking about social media in some manner for their brand. Social media provides some important tools such as interactivity and the ability to broadcast a message for free to a community of people.  However, the more significant trend of 2009 is the continued growth of content marketing and how it is eating into traditional advertising. 

The reason why is not really surprising.  Content marketing takes advantage of permission based marketing to build relationships with customers and prospects while advertising depends on interrupting people while they are consuming unrelated content.   Thanks to advances in technology, brands are able to create and distribute branded content at a higher level than ever before.  The Custom Publishing Council and ContentWise recently released a study of major US companies to quantify this phenomenon.  Here are some of the highlights:

• Total spending on branded content was over $1.8 million per company, with 51% spent on print publications, 27% on Internet media and 22% on categories such as video or audio.
• 78% of respondents said that branded content initiatives are more effective than other leading forms of advertising and marketing. Seventy percent said it was more effective than television advertising; 61% said it was more effective than direct mail and 57% said more effective than public relations.
• According to 54% of the companies surveyed, the primary reason for branded content initiatives was to educate customers. This was followed by customer retention (25%) and brand loyalty (21%). Up-selling was at the bottom of the list, indicating that corporate marketers are looking for long-term returns rather than a stimulus for short-term transactions.
• The use of external agency services (custom publisher, design firm or video production company, for example) to handle some aspect of branded content initiatives matched an all-time high from 2005, with 54% of companies reporting that they outsourced some portion of their branded content.
• Among companies that outsource, the average spend on branded content was a whopping $886,000. The previous record high was $316,000 in 2006. When extracting nontraditional forms of branded content from this equation, the total outsourcing spend was $650,000, 105% higher than previous records.
• The survey showed that 24% expected spending to increase in 2010; 20% expect it to decrease and 56% say it will stay the same.  Print publishing is expecting to decline, while other forms such as digital are expected to increase.

Another study conducted by Junta42 states that 60% of marketers will increase their spending on content initiatives.  The study also shows that social media and mobile apps with be important channels for branded content.  It all ties back to measurability and ROI.  When you create your own content and environment you increase the ability to measure and get positive results.  And, as we slowly come out of a recession, all that matters are results and profitability.  Branding initiatives are fun and nice to have, but unless they can demonstrate a clear return they won’t help your company’s bottom line or valuation.