It used to be a simple equation. Media organisations provided content in the form of newspapers, magazines, TV and radio shows, and brands plugged themselves with advertising and PR. It was a complementary relationship.
The media entertained and informed, and advertisers picked up the tab.
Today it's a very different story. Brand-funded content is everywhere. We consume it offline in the form of customer magazines and advertorial supplements, and online through games, apps, websites and e-zines.
Arguably, it is in the online world where branded content has come into its own. Consumers who are notoriously reluctant to click through from even the most lovingly produced banner ad can nonetheless be seduced by an addictive game or magazine.
And while the whole point of branded content is that it should entertain, inform or educate, rather than simply sell products, brands can easily add a click-through element to allow further interaction or facilitate a purchase.
Spending on branded content appears to be holding up in the face of recession. According to the Association of Publishing Agencies, 63% of marketers maintained spend on branded content in 2011, despite an overall fall in their budgets. What's more, one in five is increasing spend on content next year.
The term covers a wide spectrum. At one end we have apps such as flight checkers, store locators, or promotional games that are essentially sales and CRM tools, rather than true content.
At the other, there are the good deeds in a wicked world that offer pure content with no apparent sales, such as The Michelin Guide. But most branded content lies somewhere in between. A supermarket magazine informs and entertains, but it also promotes products.
The trick is to strike the right balance. Get it right and you have an opportunity to win new customers and retain old ones. Oversell and you turn your audience off. The question is, how do you strike the right note at a time when the success of marketing spend is often judged by click-through rates and ROI?
Keith Grainger, Redwood
Redwood chief executive Keith Grainger has witnessed the evolution of branded content. When he started in the publishing industry, the name of the game was customer magazines.
Today, content is distributed across a broad range of formats, such as e-zines, apps, websites and, increasingly, video. "One of the things that has surprised me is the amount of video work we do," he says. "We produce about 200 videos a year, and have our own studio."
As Grainger sees it, the various formats available present a real opportunity to provide a richer experience than would have been possible in a traditional magazine format. He cites video as a case in point: "In a digital format you can have video embedded in the editorial."
The formats may be changing, but the principles underlying successful branded content remain much the same. Grainger says Redwood's writers are journalists rather than copywriters, and its video producers focus on educational and documentary styles, rather than those of ad production.
"We are in the marketing business, but we come at it from an editorial perspective," he says. That's important, because the bias is towards content that is relevant to the customer, rather than a sales pitch.
The core principles are static, but the landscape is ever-changing. "Two years ago, the biggest demand was for e-zines. Now we see the market moving towards content for tablet computers," Grainger says. And as the audience moves, content providers have to be prepared to tell compelling stories across a range of media.
In some cases, those stories will be going out to a diverse audience. "Customer magazines were largely distributed to existing customers," Grainger says. Web magazines, on the other hand, can be accessed by everyone.
However, Grainger doesn't mean segmenting the audience into existing clients and newcomers. "We maintain a consistent tone of voice that reflects the brand's values." he says. "For Volvo and Land Rover, the content we produce is relevant both to existing and potential customers."
Matt Simpson, Zone
Zone's editorial director, Matt Simpson, says the inexorable migration of consumers from traditional to digital media has put content creation at the heart of the marketing agenda.
"Consumers are spending time accessing media outside the control of brand managers," he explains. Or, to put it another way, consumers are having conversations with each other on Facebook, Twitter and blogs – places that present definite challenges in terms of delivering a conventional advertising message.
So one of the key challenges facing branded content creators is to identify appropriate and effective channels of distribution. "The first thing you have to do is understand your consumers. You have to know what they are talking about and where they are talking," says Simpson. "It's only then that you can join the conversation."
Reaching the target consumer can be tricky. The principle of digital content creation is to match content to the customer profile.
Put simply, it is about establishing whether your audience is best served by a game, editorial or video and deciding how to deliver that material. All well and good, but with so much content available online, simply building a website or creating a new app won't necessarily deliver the people you want to reach.
There are various strategies that can be used. "In some cases, you do it through the writers," says Simpson. "We produce a football site for BT and have well-known writers. They bring in their own readers."
But in many cases, Zone turns to "influencers" – the bloggers and other prominent people within online communities who will share information and make recommendations. He cites a recycling campaign for Coca-Cola in which bloggers were brought in to assess the content.
Success in the branded content arena is measurable to the nth degree. "You're really looking at engagement. How far the content travels and how many people it reaches and how many people share it," says Simpson.
There is, of course, another measure. Unlike, say, printed customer magazines, digital branded content will often have a call to action, and click-through rates may be a key metric.
However, while Simpson stresses the importance of calls to action, he notes that sales/ROI should not overshadow the content. "To be successful, you need a team of writers and creative people who can make something that is compelling," he says.
Kevin Bird, Gaydar
Kevin Bird, chief commercial officer at Q Soft Consulting, owner of radio station Gaydar, argues that branded content is a win-win – the brand reaps the benefits of engaging with a target audience that may be turned off by conventional advertising and the audience gain because they get something special.
"Consumers are intelligent. They know when content is branded and will accept it if it offers them something they value," he says.
Gaydar has introduced sponsored slots as an alternative to advertising. "An example would be LoveFilm," says Bird. "They do a Film Minute on our breakfast programme." This is content that offers exposure to the brand while entertaining the audience.
Meanwhile, Gaydar produces its own branded content for its website. And, as Bird explains, it plays an important role in building the station's audience and boosting the advertising revenue of the site itself. It includes interviews, music reviews and articles – all aimed at the Gaydar audience.
"It's hard to get people to go to a radio station website, but by providing content that is relevant we increase traffic and ultimately that has an impact on revenue," says Bird.
He sees participation as important. In a radio context, listeners can call in and comment on the content provided by brands. Online, web users can comment on the articles and reviews. Bird stresses that content of this type needs constant attention: "It has to be up-to-the-minute. Much of it will be thrown away after a few days."
Branded content can deliver sales or simply connect with consumers. The trick is to ensure that both parties get something out of it.
Keith Grainger is CEO of publishing house Redwood, which was set up in 1984 to produce a customer magazine for Marks & Spencer and has expanded into digital formats.
Matt Simpson is editorial director of branded content producer Zone, overseeing 25 writers and editors.
Kevin Bird is chief commercial officer at Q Soft Consulting, owner of Gaydar, the commercial radio station aimed at the gay community.
Smart thinking Branded content
- Branded content is being increasingly used by brands to offer more than ads
- Most brands have a decent story to tell if they look hard enough
- Online is the most versatile channel for branded content
- Publishing houses no longer have a monopoly on compelling content
- LoveFilm, BT and Coca-Cola are investing heavily in this area
Caebook: How M&S has boosted sales through branded online content
Having pioneered retail customer magazines back in 1984, Marks & Spencer is continuing to innovate. Working with video agency Adjust Your Set, the retailer has extended its audiovisual content through the launch of M&S TV, a service that combines traditional catwalk-style clothing videos with a more editorial approach.
"Catwalk videos worked quite well, but we wanted to bring the M&S story to life," says Adjust Your Set chief executive Chris Gorell Barnes. The agency has employed a feature/documentary style that includes items on the retailer's environmental initiative Plan A alongside makeover features, advice on food and buyer's guides.
"We know customers visit our site in search of inspiration – and through M&S TV we provide exactly that," says Simon Wood, head of online operations at M&S. "The compelling content means customers spend longer browsing, and the 'Click to Buy' function makes it easy for them to buy what they see on screen."
The service has improved sales. Since launching M&S TV, the retailer has achieved a 30% upturn in sales. This reflects a high click-through rate (16%) from product videos to catalogue.