There are two types of Online Marketing:
- One that gets you immediate, steady, clearly measurable & controllable results. But it’s not self-sufficient, it takes a steady flow of funds and as soon as you stop throwing money at it, the results stop almost instantaneously.
- The other, in contrast, starts showing results months after you begin your efforts and takes up to one year until it becomes profitable. But here’s the thing: it keeps growing! And growing. And growing.
Leads generation comparison over time: Online Advertising vs. Content Marketing
I’m talking, of course, about Paid Advertising and Content Marketing. For years I’ve advocated that Content Marketing, if done right, is much more efficient than Paid Advertising in the long-run. Unfortunately, it’s also less “tangible”, its results are somewhat harder to track, it requires a lot of flexibility from online marketers as they need to juggle with channels (and people) they don’t have total control over. So yes, even as 2018 comes to an end, a lot of people are still frowning at the words “Content Marketing” — more often than not, simply writing a couple of blog posts each month and considering it sufficient. Well, this article is for you, naysayer. With hard data and clear numbers, I hope that by the time you reach the end, you’ll see Content Marketing for what it is: something that could become your most profitable Marketing Channel.
So what is Content Marketing, anyway?
It’s the creation and sharing of material (articles, flyers, images, videos, catalogs) that doesn’t explicitly promote your brand but is designed to create interest in it. Now look, the gist of Content Marketing is simple: find out what your audience wants, likes, needs, values, appreciates — and create content based on that.
The implementation is much more complex — but not at all complicated. Like any decent marketer, you know how important it is to know your audience. So, much of the aforementioned complexity you’ve probably already researched: who, what, where, how, when. You already know your audience, what they want from your business, where you can find them and how and when they should be best approached. You just need to do more research on your audience’s more niche interests, find something related to your business. An example of Content Marketing would be a hair salon writing on their Social Media page about the “8 Great Home-Made Remedies For Damaged Hair” or a health retreat increasing awareness about the importance of donating blood or healthy eating. They’re not directly promoting their products or services, but the branding is there (it should always be there) and they’re positioning themselves as experts in their fields or simply taking the moral high-ground — it builds trust in their companies. So by tackling subjects of interest for their audience, complementary to their own goals, they’re generating interest in their own companies.
A quick look at Online Advertising
Let’s talk a bit about Paid Advertising, see how it evolved over the years.
Online Advertising in general, and SEM in particular, are vast subjects on their own and can’t be summarized in a single blog post (or a single book, for that matter). But like any other Marketing effort, it comes down to the numbers and Search Engine Marketing has some very specific numbers we need to track: cost per click, click through rate and ROI.
Yahoo’s IPO in ’96 set the stage for Search Engines to take over the Online Advertising world. They did. SEM was such a great tool that people from all over the connected world flocked to this new, highly customizable and easily controllable Marketing Channel that yielded immediate results. In 2001, Google’s revenue from Ads was $0.07 billion. In 2011, some 96% of Google’s entire revenue came from Ads. In 2017, Google’s revenue from Ads was $95.38 billion. This is great for Google, but not so great for us, the marketers. So many people using Search Engine Marketing means a lot of competition for the keywords we need to target — and that means higher costs per click. The increase is considerable. Couple that with the CTR values and we get a lower efficiency for Paid Online Advertising overall. To sustain income we need to compensate by working harder — which, of course, means more money thrown for temporary improvements.
Don’t get me wrong, Paid Online Advertising is still very profitable (if done right) and it’s still one of the best lead generating channels that you can maintain. In fact, for some business models or types of campaigns, it’s still the most efficient Marketing Channel.
That said, it’s clear that Online Advertising will involve more and more work, done by even better-trained people, at increasing costs. Its efficiency is decreasing. So I’m asking: is there a better way?
The onslaught of advertising messages is so overwhelming that consumers are recoiling, building a form of “attention immunity” against ads.
A quick look at SEO
I can almost hear some of you:
“Why bother with all that? Content Marketing sounds like a lot of work and Online Advertising sounds like a lot of money! Isn’t good old-fashioned, tried and proven SEO the way to go?”
There are a lot Marketing Agencies that still rely heavily on technical Marketing — everything gets done with the sole purpose of ranking higher in search engines, even blog posts get written to abide by the cold, technical laws of search engines ranking algorithms (keyword density, etc). And that’s great — until a visitor actually lands on your page. An article written with SEO in mind will never keep the user as engaged as an article written… well, for the user. On the other hand, it doesn’t matter if you’ve written a great article if no one finds it, right? But is SEO still the way to be found?
These kinds of efforts really do bring in faster results, justifying pay faster and putting smiles on bosses’ faces, but I think that’s a big mistake. It has been for years and it’s quickly growing into an even bigger problem. Things have already changed a lot over the past years — every search algorithm update becoming less about the Search Engine itself and more about what the user wants.
With the heavy implementation of AI and Machine Learning into more and more of our daily services and with Google leading the charge, pioneering it for the rest of the world (they already use it in most of their products, from Gmail to Photos), it will be a few short years until on-page SEO will be gone. At least as we know it today. Search Engine Optimization will be replaced by User Content Optimization, and SEO will be nothing more than a simple “is my site working properly?” checklist.
And that brings us to off-page SEO — backlinks. And here too, AI is already wreaking havoc. Old techniques are experiencing an abrupt decrease in efficiency, thanks to the accelerated implementation of AI into their search algorithms. Backlinks have to be “more” organic than even, “more” natural, real, coming from actual, valuable content, enjoyed and shared by the user.
We’re living in a period of transition, moving away from all the things created for the Search Engine, toward content created for the user. This shift is already happening. And with the void created by the decreased importance of conventional, on-page SEO, Content Marketing is stepping up in a big way, ignited by the rising need for quality off-page SEO. But there’s a lot more to Content Marketing than that.
93% of B2B content marketers report their organization is extremely/very committed to content marketing
Content Marketing Emerged Organically
And that’s important. It was definitely pushed forward by the decline in efficiency of Online Advertising and the changes to SEO and search algorithms. But it was already there, ready to jump in. It’s not called Web 2.0 for nothing.
Marketing is about a lot of things. But, perhaps most importantly, it’s about making the lives of everyone in the sales department easier by generating (preferably high-quality) leads. For a very long time, marketing tackled this with brand awareness — putting our companies, products and services on everyone’s lips with all sorts of advertising formats. From people shouting their services in markets, to print, radio and TV, moving to more modern marketing channels like email and online advertising — what do all of these formats have in common? They’re disruptive. Whether you’re strolling along for a nice walk or enjoying a movie, your experience is disrupted with an ad. The same is true for the online medium — you’re browsing your favorite website and you get a big banner trying to sell you something that’s not relevant for you there and then (or even worse, you get an audio ad or an auto-play video ad).
This is intrusive and it’s been going on for long enough, people seem to think. Studies show just how displeased users are with this kind of advertising. Back in 2011, two companies (AdKeeper and WPP’s 24/7 Real Media) commissioned a study about CTR in 2010. Here’s what they found:
61 percent don’t want to be distracted: “Online banner ads take me away from my current website, or from what I am doing.”
58 percent say online banner ads are not that relevant to them.
57 percent are wary of opening something they’ll wish they hadn’t.
57 percent are afraid of receiving spam from advertisers.
55 percent are worried about getting a virus.
54 percent don’t trust most online banner ads they see.
46 percent worry that pop-ups will take over their screen.
43 percent say online banner ads don’t seem interesting or engaging.
31 percent only want to click ads when they’re in the mood or interested in looking at them.
31 percent are worried that their Internet behavior will be tracked.
Since then, thanks in no small part to research like this, marketers increased their efforts, worked harder and managed to bring the CTR to just under 1.2% in 2016. But the numbers above are providing great context: these are the real people we’re trying to advertise to and these are the real effects our chosen delivery methods have on them.
You might think: “We need to do better!”
We already did. We adopted the emerging idea of Content Marketing.
There’s this great article published on oracle.com, a case study pitting Paid Advertising against Content Marketing over a period of two years. If you haven’t read it, you should. I’m going to be referencing a lot of their findings in the next section. Kudos to those guys for a great experiment!
The study looks at over 50 companies with various revenues (from under $100 million to over $1 billion), from different industries (tech, retail, services, financial, manufacturing and consumer goods).
For Content Marketing they take into consideration one small piece of content per weekday (blog post, podcast, short video, media announcement) and one big piece of content per month (infographic, white paper, eBook), mixed in-house and freelancing efforts. This data is analyzed and separated for two budgets, for medium-sized and large companies.
For mid-sized companies, the monthly Content Marketing costs look like this:
- Personnel: $6,667 for a Managing Editor
- Content: $1,290 for blog post costs and $2500 for premium content costs
- Tools: $1,500 for software and hosting
- That’s a total of $11,957
For large companies, the monthly Content Marketing costs are divided as follows:
- Personnel: $8,333 for a Managing Editor and $16,667 for a Chief Content Officer
- Content: $1,720 for blog post costs and $3,500 for premium content costs
- Tools: $2,500 for software and hosting
- That’s a total of $32,720
It’s obvious from the list above that the highest costs in Content Marketing are with the people involved in its creation. Mid-sized companies pay their Managing Editors around $80,000 per year, while large companies pay, on average, $100,000 per year for the same position. Large companies also employ the services of a Chief Content Officer for another $200,000 per year. As I mentioned at the beginning of this article, Content Marketing takes a few months to start showing results — so we can view the personnel expenses during this period as a one-time, up-front payment to get things started.
But once the analysis is done, the plan is ironed-out and the staff starts creating content — the benefits start showing. First, there’s an increase in quality traffic. Of course, depending on the strategy and content, the numbers vary.
Content Marketing is about leveraging your audience — companies starting this effort from scratch have to build up the audience, so a slow start is to be expected.
But after 24 months from inception, with a minimal conversion rate of 2%, those efforts translate to 4,172 leads for the mid-sized budget and 13,569 leads for the larger budget.
The reverse of the chart above is the decrease of the cost per lead. From almost $25,000 per lead, to less than $2,500 after about 8 months. In fact, there’s an 80% decrease in the first 5 months alone.
So… High up-front costs. No or very low short-term results. Months of research and planning. Steady, high-quality growth. A custom-tailored audience. That about sums up Content Marketing.
For the paid search analysis, the study identifies campaigns that generate the same number of leads as the content-driven efforts.
With a 4% conversion rate, roughly 100,800 clicks are needed to reach the 4,100 leads generated by the mid-budget Content Marketing efforts and 337,200 clicks are needed to reach the 13,500 leads generated by the larger budget. We need to take into account the cost per click. Again, this varies greatly, depending on the targeted niche, but Google’s traffic estimator tool helps us get a decent idea. With prices ranging from less than $1 to more than $20 and taking into account search volumes, an average cost of $4.22 is calculated.
So, to reach the same number of leads as our Content Marketing effort, we need:
- $425,376 for the mid-sized company
- $1,422,984 for the large company
Adding the extra costs of SEM consulting for a period of 24 months, we reach a cost per lead of $109 and $108 respectively. By comparison, after 24 months, the cost per lead for Content Marketing is $75 and $64 respectively. That’s 31% less for the mid-sized company and 41% less for the large company. And after the 24 months period shown in our graphs, Content Marketing continues to grow while Paid Advertising stays the same.
Through Content Marketing, we’re no longer buying exposure from media outlets, basically paying rent for their audiences. We’re becoming the media by building our own, trusty audiences, slowly, over time. And within these audiences, our advertising campaigns start from a position of trust.
Around the 19th month mark, the number of leads generated surpasses that of Online Advertising for the same amount of money. After 3 years, the research suggests, Content Marketing generates 31 leads per $1,000, while SEM remains constant with it 9 leads generated.
Of course, Marketing is a complex process and should always be a mix of channels. Marketers must always stay informed and ready to jump on new (or old) opportunities — fluctuations in CPC costs, shifting traffic patterns, offline media opportunities, ever-changing consumer trends (and many more) play a part in how we choose our channels.
Right now, as 2018 comes to an end, Content Marketing should certainly be supported by (the still very profitable) Paid Search (SEM & Social). But as the online medium evolves, as search algorithms continue following this user-first trend, content will become crucial. And, as you’ve seen, it takes time to build it up. Why not start now?