The total spend on branded content rebounded significantly in 2011 to the highest level ever – $1,914,000 per company – according to the 2011 “Spending Study” conducted by the Custom Content Council in partnership with ContentWise. The biggest driver of growth from 2010 to 2011 was in publication budgets, which increased by 68%.
According to the study, 26% of the overall marketing spend was allocated to branded content and 30% of respondents felt their branded content budgets would rise again in 2012. Respondents were most bullish on growth in electronic content (39%), other forms (37%), and the smallest in print (16%). Further cementing growth in 2012, 16% of marketers reported that their companies are shifting aggressively from traditional marketing into branded content.
The number one reason for using branded content remains the same: educate customers. Retention was the second leading reason. Though it made some modest gains, up-selling customers was ranked as a low priority, indicating that in the minds of marketers branded content is viewed as a long-term investment rather than transactional.
“This spending study caps a year of cautious, but steady growth in the custom content market,” said Lori Rosen, Executive Director, Custom Content Council. “There is no question that branded content has emerged as a leading driver for marketers of all sizes. This spending study shows growth points across a number of major factors – from outsourcing to higher budget allocations.”
The Custom Content Council Spending Study also found:
Branded Content vs. Other Marketing Mediums
72% of marketers think branded content is more effective than advertising in a magazine; 62% say it is more effective than advertising on TV; 69% say it is superior to both direct mail and public relations.
At 54%, personnel spending takes the largest percentage of budget funds.
The average spending for print content is $482,000 on personnel (48%), $341,000 on production (34%), and $181,000 on distribution (18%).
The average spending for electronic content is $275,000 on personnel (61%), $113,000 on production/programming (25%), and $63,000 on distribution (14%).
For all companies (those who did and did not outsource), the average total branded content spend on outsourcing was $324,000—the highest amount ever recorded.
The average spend among those companies that did outsource (thus excluding those who did not outsource), was $783,000 versus a previous high of $885,646 in 2009.
The use of services of external agencies (such as custom publishers, PR/marketing firms, design firms, video production companies, or interactive agencies) to handle some aspect of branded content initiatives remains consistent at around 50%.
Outsourcing was more prevalent among print forms (51%) of branded content, than it was among electronic (31%) or other forms (35%). Of all the branded content initiatives, 39% involved external agencies.