Branded Content: Growth for Marketers and Media Companies

Branded Content: Growth for Marketers and Media Companies

          
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Branded Content: Growth for Marketers and Media Companies

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    It’s been a tool for marketers since at least the nineteenth century, but the twenty-first century may be when branded content comes into its own.

    Powerful trends are undermining traditional marketing approaches and changing the longtime partnership between marketers and media companies. The media audience is becoming ever more fragmented. Consumer trust in advertising is
    low. Digital and mobile innovations inject multiple new touch points between brands and consumers. Each industry is presented with a distinct set of challenges. While marketers look for new ways to engage with consumers, media companies need to replace lost revenue streams. Branded content is a big part of the answer for both.

    But what is branded content today? There are almost as many definitions as there are examples. Ours is simply as follows: content that carries a consumer benefit, serves the brand, and is presented in an environment that consumers find authentic. The power of branded content is that it offers marketers the opportunity to build or deepen consumer relationships, and it provides media companies with new sources of revenue by helping brands achieve their objectives. Our research shows that consumers are very receptive. Not only do they want more interaction with brands, they both like and trust content created by brands and delivered on both brand and third-party platforms. The stronger a brand’s position with consumers, the stronger the positive reaction. Media company involvement further fortifies the impact.

    There are conditions, of course. The content must provide a consumer benefit, and it must fit the environment in which it appears in a way that feels authentic to consumers. Numerous brands are already meeting these requirements—and more than a few are raising the bar—which is one reason why branded content is a big market that’s growing fast. We expect spending to increase by about 20 percent a year in the US, from about $10 billion in 2014 to $25 billion in 2019. Almost 70 percent of marketers say they will spend more on branded content this year than last.

    As in many other young, fast-growing markets, a fragmented ecosystem is just starting to take root, with multiple players at each step of the value chain competing to serve the needs of both marketers and media companies. Consolidation will come and professionalism will increase. It’s too soon to pick winners and losers, but for marketers, it is not too early to choose partners and build relationships that will help brands play for the long term. For media companies, now is the right time to identify new businesses that could be sources of growth.

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