The publication last month of the book Content Rules has again highlighted the growing importance of content marketing. I’m not sure content actually rules just yet—B2B firms on average spend about 25% of their marketing budgets on content marketing (data here). But there are three forces inexorably pushing it that way—at the expense of traditional advertising. Online for instance, we have almost complete control over the content we choose to digest. Also, social media have put word of mouth on steroids —an ad doesn’t have much of a chance if 40 out of 50 people already say the product sucks. Accordingly, since banner ads were first introduced in 1995, click-though rates have fallen from around 5% to about 0.2% today (data here).
So how far can content yet go in displacing traditional advertising? I think that Chris Anderson of TED has put his finger on why content will keep on displacing advertising for a while yet. Chris has run some numbers on the value, to advertisers, of an hour of Mr. Average’s time. Online, it’s about a dime an hour of which Google takes around 4 cents. This compares with about 25 cents per hour on TV. As Chris points out, having become used to a medium over which we have almost total control, we are loathe to cede it to advertisers. Their latest innovation, Chris notes, is to stick a 30 second ad in front of the video clip you choose to watch, thereby getting your attention, but upsetting you too. Not perhaps, a model for success.
So the only way for marketers to get our attention without irritating us and to begin to realize the returns they get —by the hour—from other media, is to create content we’ll value. For B2C, this might be videos or games, of which there are already thousands that have gone viral. For B2B, the determinants of value are different, but we know what they are. Top of the list is giving new insights on a complex (and relevant) problem or opportunity. As marketers continue to trend toward content, advertising as we know it will become ever less valuable, and ever less will be spent on it.
But will it go away altogether? I’d love to say yes; watching Microsoft advertise Windows 7 Mobile during the Golden Globes was a good example for me. Who cares what Microsoft has to say (or project) about their phone when there are a thousand (content-rich) reviews on the internet? I thought the ads were pure annoyance.
But my guess is that brand and image ads are not going away altogether. We don’t have time to read a review every time we want a soft drink, so Coke will carry on imprinting their brand, with all its happy associations, on our minds. With any luck, Microsoft will stop trying.