An interesting shift is happening in the marketing and advertising world. More and more businesses are moving marketing dollars to support their content marketing efforts. As this is happening, businesses are looking for ways to find funds. Much of that budget is coming directly from traditional advertising and marketing channels. In many cases, this is because it’s no longer as effective in producing results.
Content marketing budgets are increasing because it is proving to be an effective method of building traffic, leads and business. Plus, it’s lowering the cost of lead generation. Look at the Google Trends graph below. You can see the trending decline in traditional advertising and the uptake in content marketing.
Content marketing is here to stay. Isn’t it time you learned more about it and how to incorporate this into your overall marketing strategy? Yes, it’s time and you should be asking now is: “What should my budget be for content marketing in 2016?
Why the Traditional Advertising Game Has Changed
Traditional marketing is typically a one-way communication directed toward a ‘target audience.’
When measured, traditional marketing relies on a cost per thousand persons reached (CPM) While it’s easy to measure the cost of traditional advertising, it’s much more difficult to measure its success. There is definitely a correlation between increased sales, but in terms of measurement or effectiveness, nothing beats digital marketing for the ability to drill down in the data and see what is driving consumer interaction and sales.
If you look at recent data points about traditional media, it shouldn’t be a hard decision to move a portion of your current budgets to something that will build your business over time. Forrester Research reveals that 87% of respondents to their survey say TV advertising has become less effective in the past 2 years.
Not only is TV advertising losing its effectiveness, it’s losing viewers. US pay-TV subscriptions are dropping. And where are those eyeballs going? Online. Look at the graphic here from MofettNathanson showing the dramatic drop in pay TV growth. Younger viewers have shifted from watching TV to watching their favorite shows on their devices such as laptops, iPads and even their smartphones, often without commercials.
One of the reasons for this decline is traditional advertisers are assaulting their potential customers with ads. This interruption marketing, a term coined by Seth Godin, is everywhere. We are interrupted with ads on TV, radio, newspapers, billboards, buses, bus benches even ads on buildings.
Just how many messages are we seeing each day? President of the Marketing Firm Yankelovich, Jay Walker-Smith said we’ve gone from being exposed to about 500 ads a day back in the 1970’s to as many as 5,000 a day today. If you do the math, it’s 500 X 365 = 1,825,000.
There is a huge amount of clutter out there, with each ad vying for the attention of the consumer. The consumer is filtering out most of these messages and the ones that break through…are annoying. It’s amazing that our brain’s spam filter can take this much daily volume.
“It seems like the goal of most marketers and advertisers nowadays is to cover every blank space with some kind of brand logo or a promotion or an advertisement,” Walker-Smith said. I agree with Walker-Smith. I was reminded of a recent flight where even my tray table was covered with ads.
As we move towards understanding content marketing’s importance in our 2016 budgets, we have to shift our perspective: rather than interrupting them, marketers should meet the consumer on their terms and help them solve their problems and answer their questions about their products and services.
Marketing Online Will Save You Money
The IAB SVP of Research, Sherrill Mane was quoted saying, “While it’s true TV and online advertising aren’t entirely interchangeable, the IAB learned that strategically moving your dollars to digital increased reach without increasing spend. Part of the increase is simple arithmetic; as reach increased, CPMs went down. The TV-only CPM is $11.17; [when you move] 5 percent [to digital], it goes to $10.82. At 15 percent, it goes to $10.19,”.
While the example Mane uses is focused on post roll video advertising, there is further evidence that the cost per lead drops when using content marketing. HubSpot, a popular marketing automation platform, produces a State of Inbound survey annually. In their 2014 survey, they found the average cost per lead for a B2B company is far less for inbound (content marketing) vs. outbound (traditional). Also, adopting an inbound strategy doubles average website conversion rates, from 6% to 12%.
Ask yourself: What a 12% conversion rate would do to my bottom line?
Advantages of Content Marketing vs. Traditional Advertising
I love the way; Ryan Johnson from ImaginePub.com puts it. The difference is like a one-night stand vs. a relationship. Clearly once a traditional campaign ends, it stops working for you, while content marketing continues to build trust and confidence – key components of a long lasting relationship.
Look at it this way:
- Content is a business asset.
Once published, your content becomes evergreen and starts its shelf-life which can last for years. On the other hand, once an advertising campaign ends, well…it ends.
- Content can be shared.
I’ve never shared a TV ad but I have shared many blog posts, social media posts, online videos and many other pieces of online content. Think about how many interesting articles you’ve read just because you saw them on Facebook or LinkedIn or your preferred social media channel.
- Content can be tailored to a specific audience.
Rather than a one-message-fits-all or a general audience, content marketing can be tailored to your specific audience and the format and channel in which they access information. For example, a TV commercial may reach a fairly narrow audience like men 25-50, while your content can reach that same group and parse out individual nuisances, targeting them much more effectively. Your content can also be tailored to specific parts of your sales funnel.
- Content can be consumed 24/7.
You have to wait for a commercial to air again if you miss a detail while watching. With content marketing, you can reread, watch again, share and engage with the content.
- Content reinforces traditional marketing messaging.
It’s extremely difficult to get your message across to your audience in 15, 30 or 60 second sound bites through interruption marketing. You can use content for detailed and in-depth communication with your audience. And, you’ll be doing it on their terms, when they’re ready.
How much should I allocate for my content marketing budget?
Another way to ask this is: How much does content marketing cost? That’s actually a tough question to answer. It’s like asking how much will it cost to paint my house? To answer the question, we need more information.
- What kind of business are you?
- How long is your sales cycle?
- Is it easy or difficult to explain your product or services?
- What is your average sale?
- Are you brand new and trying to gain traction?
- Are you an established brand and just starting a content marketing program?
- How much are you currently spending on advertising and marketing?
- What percent of your gross revenue are you spending on advertising?
- Do you have internal resources that can write your content and develop your graphics and video?
- How will this impact your overall marketing plan?
- How much risk will this create?
- What is your definition of success?
- What content types will you publish at what frequency?
The Content Marketing Institute (CMI) asked this question in their recent Content Marketing Trends survey:
“Approximately what percentage of your organization’s total marketing budget (not including staff) is spent on content marketing?”
The average is 25%. CMI also found a correlation with content marketing effectiveness the more a company spent on content marketing.
Content.ly also fielded a study, The State of Content Marketing Heading Into 2015 that found 24.46% of respondents are spending 25% of their budgets on content marketing.
What to Build Into your Content Marketing Budget
You must budget for content creation as well as promotion and distribution. You can produce really awesome content but it will do you no good if no one ever sees it. As you get started in content marketing, the last place most consumers will see your content is on your own website. Have a plan to allocate promotional dollars to platforms like LinkedIn, Facebook, Slideshare, and others.
You might also want to create a budget based on the content types and frequency of publication, rather than taking a percent of your overall revenue. Here’s a list of things you might consider pricing out as you create your budget. Determine the costs if you produce these internally versus hiring a content marketing agency:
- Content audit – what content do you already have and what gaps can you fill?
- Strategy – what are your goals and who do you want to reach?
- SEO – do you have the know-how to optimize your site and published content?
- Blog Posts – what will your average length and frequency be?
- Video Posts – will you produce these internally or outsource?
- Infographics – do you have a design staff that can do these?
- Free Guides – do you have internal resources for creating these?
- Case Studies – do you have the data and testimonials for these?
- Landing Pages – can you create/test/optimize these?
- Promotion – how will you bring an audience to your content?
- Distribution – where will you distribute your content to grow your audience?
- Email – will your nurture your leads with content?
- Social Media – what channels are appropriate for your business?
- Management – how will you or who will manage this all?
4 Benefits of Establishing a Content Marketing Budget:
- Gives you a starting point to index against
Establishing a budget allows you to do the math on the cost of a lead. This baseline will show how the cost of a lead is reduced over time. It’s a great stat to share with management to reinforce or even expand your budget.
As you monitor the results of your program you can make adjustments based on successes or failures so you’re not just producing content for content’s sake. There are many unknowns as you get started and you’ll want to tweak and make adjustments based on your wins and what content is resonating with your audience.
- Helps you better manage the costs of the program
Knowing your budget and prioritizing the spend will help you be more successful. You can allocate your funds based on the list above and your strategy will inform your frequency and format types.
- Once the budget is established, it’s harder to quit
One of the biggest mistakes a company can make is to quit content marketing too early. Having an established budget as a line item makes it more difficult to stop. Make sure you are spending wisely and this budget will grow over time based on your positive results.
- Justify resource allocation or hiring
Creating content requires a variety of skills and capabilities. Your staff is probably already very busy and giving them new or more work is most likely not the best answer. You will need to consider hiring additional staff, or you might compare internal impact and cost vs. advantages of engaging a content marketing agency. Having an established budget can help you justify and allocate dollars to hiring additional resources.
Create or Add to your Content Marketing Budget
Before you start moving dollars from your traditional budget or adding to your current budget, make sure you understand why you’re doing it.
The effectiveness of content marketing is enhanced when it’s deployed alongside a strategy using promotion and distribution. Promoting and distributing your content helps amplify its value and helps you reach a broader audience than just publishing on your website alone.
Consider using traditional media to direct users to your content as well. Traditional media is effective when used in conjunction with your online efforts and it can help you quickly expand your audience.
Brian Clark from Copy Blogger explains it like this:
“2015 will continue a trend that has caught steam this year, which is mixing paid media with owned media to accelerate content distribution. The best ‘native’ advertising helps build an audience into a long-term business asset, and that’s a goal worth spending on in conjunction with owned content creation.” via Kapost
If you don’t have an established budget for content marketing, you should create one. If you’ve already started down this path, you should consider ramping up the budget to higher levels.
As I mentioned above, you might need to move dollars from traditional marketing to your content marketing program. The caveat here is don’t ditch anything if it’s working. There is no reason to move money from your radio budget if radio is working for you. You might just need to increase your overall budget to accommodate content marketing.
Most importantly: you do need a separate budget for your content marketing efforts. Many companies are currently in their budgeting cycle for 2016, so now’s a good time to add or shift dollars. For those of you who still need to convince management of the need, show them this post and learn more on how to convince them at How to Convince Your Boss.com.
For more data and background you can read some of the posts I did to put this article together.