What is the future of branded content?
Branded content – native advertising, paid-for content, advertorial, creative solutions, call it what you will – has been around for over a century. Contently point to Theodore MacManus’s famous story on “The Penalty of Leadership” for Cadillac in 1915 as one of the early examples of the art. But there is no denying that there has been a recent rush to exploit the form, as media companies have sought to diversify their revenues and fight back against declining revenues from traditional advertising.
Now, pretty much every large digital or print publisher has their creative solutions team beavering away and finding synergies between their audiences and client brands. Many have launched their own in-house content agencies, following the lead of Guardian Labs and the New York Times’ T Brand Studio. In recent times, Yahoo launched their Storytellers brand, Shortlist Media created Family, and Conde Nast launched Stories. This adds to a bewildering array of offerings from Time Inc, Huffington Post, the BBC, Bloomberg, the FT, WSJ, and on and on.
For publishers the main advantage is that branded or sponsored content is a bespoke format that gets them off the treadmill of ever-falling CPMs and endemic display advertising issues; that, and that a good branded content campaign can net high six-figure fees. For the brands it provides a new way to reach and engage with audiences who are increasingly ad-blind and savvy. As a result, it is predicted that the global spend on content marketing will top $400bn by 2021 – double the spend of a couple of years ago.
The trend follows the growth of the publishing agency model, which for the last twenty years has been one of the rare bright spots in the media sector. Publishing agencies have traditionally produced stand-alone publications (such as River Publishing’s WeightWatchers magazine or John Brown’s John Lewis Edition) which had the aim of gilding the image of the client in the long term. But with the spread of content marketing, these businesses have themselves taken on more and more campaign-led work for their clients. This has been given recognition in the changing face of the industry body: the Association of Publishing Agencies became the Content Marketing Association back in 2012.
Despite the positive signs, though, the rapid growth in the number of providers to the market might be worrying for established players. One of the leading US players, T Brand Studio, saw a slight fall in demand in the NYT’s recent results, and many of the larger UK publishing agencies are struggling for growth.
The threat has been exacerbated by another trend: clients doing it for themselves. The WeightWatchers magazine has been trounced in recent years by Slimming World‘s title, which is produced in house, and ASOS has long produced its own magazine and content campaigns. Dollar Shave Club’s magazine Mel has received a glowing write-up on Fast Company (though Rafat Ali has voiced doubts).
This may be less of a problem for media owners with their own agencies: clients of Yahoo and Shortlist are buying into the means of distribution as much as their creative abilities. But in an increasingly disintermediated world, brands are by-passing the media companies and going straight to platforms. Statista reports that Lego’s own YouTube channel got almost 8 BILLION views in June this year, while Red Bull got 2.2bn. (Interestingly, most of the brands in that top 10 are aimed at children or young adults: brand-savvy non-consumers who will soon become brand-savvy adults who will by-pass most media owners.) For comparison, Lego.com had 17 million visitors last month, and its magazines a combined UK distribution of 350,000. Red Bull’s website was visited by 10m, and its Red Bulletin magazine had 150,000 recipients. If you were the marketing director of those brands, where would your focus be?
So is the future of branded content – particularly for the ‘super-brands’ – something else entirely? Fan fiction writ large, perhaps. Unbanned: The Legend of AJ1 is a documentary not funded by, but given tacit approval from, Nike. Similarly, Manchester City: All or Nothing is an eight-part Amazon series which the famous football club did not directly fund but over which they had clear editorial control. After all, the hugely successful Lego movies, which have been partly responsible for the success of their YouTube channels and brand influence, originated in fan-made short films. It may be one possible future: but with Tubular Labs tracking over 200,000 branded content campaigns in the US on Facebook and YouTube alone, there are going to be some successes, and many more failures.
Two things seem clear: one, branded content is only going to get bigger in the short term; and two, media companies and content agencies who are relying on it to grow revenue will have to become much more effective in evolving and selling their expertise in order to ensure they do not miss out on the gold rush.
Martin Tripp
Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work across the media, information, technology, communications and entertainment sectors, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.