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The Content Marketing Revolution

Content marketing is hot but how does it compare as a business?



Matt Kinsman By Matt Kinsman
04/07/2011

Each year the publishing world seems to become enamored with a new strategy that will redefine the industry. In 2011, that's marketing services. Last month, Penton Media bought Washington, DC-based EyeTraffic Media, an online marketing firm, and in April is expected to announce a company-wide shift toward marketing services.

"If you look at Outsell, they say 60 percent of a marketer's internal spend is going to their Web site and that it's the biggest pain point," says Penton senior vice president of marketing services Kim Paulsen. "We want to help companies do a much better job of utilizing their Web sites with great content and understanding social media. Companies all say they need a Facebook page or a Twitter feed, but they're not sure what to do with it."

Under the umbrella of marketing services comes "content marketing," which really isn't much different from custom publishing, it just sounds sexier (and more dotcom-friendly). "If you look at branded and custom content, it's all the same," says Joe Pulizzi, founder of content marketing specialists Junta42. "We decided to go with ‘content marketing' because brands didn't get 'custom publishing'---they automatically thought book publishing or print. The idea is that marketers need to be publishers today. When you talk to a brand now, they get it right away."

While print still dominates the custom market ($24 billion was spent on print production and distribution in 2010, compared to $3.6 billion spent on other forms of content according to a new report from the Custom Content Council and ContentWise), three big factors are driving the content marketing boom today--social media, search engine optimization and lead generation. "You need unique content for any of those three to work well," says Pulizzi.

WATT Publishing sees dollars go to three particular areas online: ROI Integrated Marketing Programs ("After three long years of evangelizing measuring programs, we're seeing traction," says director of e-strategy and marketing Jeff Miller); virtual events; and custom programs/content creative that includes social networking and video. "We are providing a variety of new services including ‘ghost blogging' and producing content intended to boost SEO," Miller told FOLIO.

A New Business Model

But while publishers may have offered successful custom publishing services in the past, content marketing as a business can be radically different from traditional publishing, from the client relationship to pricing and sales cycles (which can last three to 18 months).

"What I've seen happen is when a traditional publisher tries to do custom content, it often falls apart because the sales-time is much longer" says Mike Winkleman, president of custom publisher Leverage Media. "Conventional publishers haven't figured out the compensation piece either. The rep says, ‘It's 16 pages. Shouldn't it all be advertising? Shouldn't it be paid on that basis?'"

Pulizzi agrees. "The mentality is different," he adds. "You're still working with publishers who ask, why wasn't this a 6x ad program? I would imagine that people like that are still out there. But the economics are important. If you sell a $50,000 custom project, you're probably making $20,000, and then you have to factor in commission. You have to look at the structure."

Economics are also different. "The margins with marketing services are slightly lower than traditional publishing," Penton vice president of custom solutions Scott Bieda told FOLIO: last year. "But, it's always going to be an up and down business-something like SEO services will be extremely profitable because it's billing people for time and putting them on a monthly retainer. Some of the other services-like video-may not be as profitable but are still good businesses. They're still healthy but at a slightly lower margin than traditional publishing because the costs are much higher. But slightly lower than traditional media is still a great margin."

Cam Bishop has worked both sides of the aisle as CEO of dedicated publisher Ascend Media, then acquiring Ascend's custom and events groups (which generated in the "mid-teen millions" at time of purchase in 2009) to create Ascend Integrated Media.

"I refer to us as a long form creative agency," he says. "We do not own any brands so our interests are totally aligned with our clients. That fact is absolutely critical to understand in contrast to a publisher who is trying to provide marketing services. This is a different business and a very different mindset from publishing."

While content marketing may sound like a safe bet to advertising-dependent publishers, it's not, according to Bishop. "In fact, I think publishers are starting to recognize that this custom content business is very different and can be expensive to launch with a pretty high risk of failure rate," he adds. "In the last two weeks, I have been approached by two traditional publishers to possibly partner with them to provide marketing services for them."

Integrated Service or Separate Division?

While publishers are taking a variety of different approaches to custom content, the smart ones are treating it as a separate group.

"You have to put real services behind it," says Pulizzi. "You can leverage existing resources at first to get started but you have to have a separate account executive similar to an agency model and a separate team that can focus on the brand."

PC World and Macworld have launched a separate group called Content Works with separate editorial and sales teams (services run the gamut from white papers and articles to videos and live events).

Hanley Wood actually has two different groups dedicated to marketing services, including Hanley Wood Custom Solutions--focused on customers who are also advertisers--and Hanley Wood Marketing, which handles non-endemic clients.

Last fall, UBM launched an integrated marketing services company called DeusM, which leverages "business social media" as its primary offering, creating specialized, proprietary communities for sponsors, which can also take advantage of broader social networks like Facebook, Twitter and LinkedIn. UBM has leveraged that approach to launch communities in Internet Evolution (sponsored by IBM), Enterprise Efficiency (sponsored by Dell) and EBN, which has multiple sponsors.

Consumer publishers such as Hearst and Meredith are heavily involved in content marketing as well. Hearst's iCrossing (the digital marketing agency Hearst bought for $325 million last year), offers the Content Lab, an initiative that brings together brands (such as Coca-Cola and Toyota), media companies and agencies to discuss producing multi-platform content. iCrossing is also launching the Live Media Studio, a physical organization that will execute programs developed in the Content Lab.

"Bought, earned and owned are mechanics for how content is actually deployed, distributed and experienced," says Adam Lavelle, chief strategy officer at iCrossing. "Building connected brands is really the driving theme and we do that in bought, earned and owned media. Content fuels all of that."

A Hyper-Competitive Market

Publishers will find themselves dueling with agencies as well as other publishers to land this business. "In 2007, this wasn't on anybody's radar at the agencies," says Pulizzi. "Now there is hardly an agency that doesn't have this as a core driver. I've never seen it as competitive as it is now and it's only going to get worse."

So publishers, get your story ready. "Marketers won't give you three seconds for your sales pitch but they'll give you 30 minutes for a good story," says Pulizzi. "You don't need to convince marketing execs that they need to do this anymore, they're asking how we do it, how we staff for it and how do we measure it."

Matt Kinsman By Matt Kinsman
04/07/2011







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