It's 2017 but content is still a fledgling concept for some advertisers and marketers.
Fair: content has to be one of the vaguest words in the English language.
Content can literally be anything, of any kind of quantity, for anyone. It also tends to get categorized under several different labels, in which the words "advertising" and "marketing" are used interchangeably. Whoa.
But fret not. The content industry is continuing to mature.
Here are a few points to know in very simple terms.
1. It's worth a sh*t ton of money.
2. Brands are acting like media properties and media properties are acting like brands.
3. It's continually growing at a crazy high rate and producing results across all segments.
Wondering where you fit into this ecosystem? Read what Kunal Gupta, CEO of Polar, had to say on LinkedIn.
Digital advertising is growing at a rate of 14% globally from $194 billion in 2016 to $372 billion by 2021. Content advertising itself is growing at an impressive rate of 32%, and expected to reach $50 billion in digital by 2021, starting from $12.8 billion last year.
What will your share be? Where do you fit in?
These days, digital content advertising is spend allocated to marketing and advertising programs based on content tied to upper-funnel brand objectives. These objectives include awareness, perception, consideration and preference versus performance advertising programs tied to lower-funnel objectives like intention, action and conversion.
Content advertising will grow from 6.6% in 2016 to 13.7% of the digital ad market by 2021. Publishers have the potential to grow their standing in this ecosystem, but they can’t be laggards. They need to act now if they want a piece of the pie today and years down the line.
Making sense of a crowded ecosystem
The content advertising ecosystem is complex, with hundreds – if not thousands – of companies offering a wide variety of solutions to marketers. So how does a marketer spend in digital to execute content advertising programs?
There are three segments; while the below image is representative of some of the companies in each segment, this is clearly not all of the companies.
Social and Video Platforms
Facebook, YouTube, SnapChat and others have become a key distribution channel for today’s content-led advertising programs, with advertisers able to easily access massive scale with deep targeting capabilities on most platforms.
Social and Video Platforms will grow at a 30% rate from $7.3 billion in 2016 to $27.2 billion in 2021.
Teads, ShareThrough, Outbrain and literally hundreds of other companies are aggregating ad inventory (supply) across the web and offering it at “wholesale rates” to advertisers to promote content. More attention is paid to price versus quality; there is often a lack of transparency on where an advertiser’s content will actually run.
This segment will grow from $1.4 billion in 2016 to $3.6 billion over the next 5 years, with each sub-segment growing at different rates which is further explained below.
BuzzFeed, AOL, Conde Nast, Hearst, News Corp, and Gannett are just some of the publishers providing advertisers with a variety of content solutions, with quality content and trusted audiences as the key benefits. Premium publishers also add credibility to the content creation and experience which in turn lets advertisers attract audiences they may not be able to on their own.
This segment will grow the fastest from $4.1 billion in 2016 to $20 billion by 2021.
$50 billion is up for grabs in the content advertising industry
The content advertising market size will pass $50 billion by 2021, growing at a healthy rate of 32% year-over-year. 54% of the market will go to Social and Video Platforms, 7% to Ad Networks and Exchanges, 39% to Premium Publishers.
The estimates here focus on the portion of global digital advertising spend by marketers to execute content driven programs, or brand based budgets. All three segments of the industry generate digital advertising revenue from performance driven programs like search, social, traditional display, and video advertising, though often with lower-funnel marketing objectives. This revenue is not part of the content advertising industry, and as a result, not part of these estimates.
Nor do these estimates include when Premium Publishers spend a portion of their budget with Social and Video Platforms or Ad Networks and Exchanges, increasing reach for their direct-sold content advertising programs. From a marketer’s spend perspective, it has already been allocated.
Marketers have options to execute content advertising programs
There are many options available to marketers on who to work with when executing their content advertising programs in digital. The question returns to their objectives and values – what are they?Social and Video Platforms provide massive reach with the ability to target audiences, and provide more value as marketers can reach who they want to with more confidence. This explains why this segment has enjoyed healthy growth rates overall across all digital ad segments.
Ad Networks and Exchanges provide scale and reach to marketers. However, there are increasing questions about the quality, value and return-on-investment provided back to marketers. The scale is affordable and generally more cost-efficient than any other means to execute content advertising programs.
Premium Publishers are trusted sources for quality audiences and quality content. The major challenge they face is how to scale their reach while not losing quality and value; a fate which befell networks and exchanges in display, video and other digital ad categories.
Ad Networks and Exchanges growth behind market rate
Content advertising revenue in digital for Ad Networks and Exchanges will grow at a 20% rate from $1.4 billion to $3.6 billion, compared with the overall market growth rate of 32%. The relative market-share for Ad Networks and Exchanges is shrinking from 11% to 7% as the overall market grows. This segment is most impacted by industry challenges such audience quality, risk of fraud and bot traffic and increased business model pressure.
Within this segment, there are three subcategories:
- Content Networks: Outbrain, Taboola and others are securing dedicated real-estate through content recommendation widgets on publisher sites to promote advertiser content, with users clicking out to an advertiser’s destination. This is the largest category of this segment and will grow 15% over the next 5 years.
- In-Feed Native and Video Networks: Teads, Sharethrough, Nativo and others are securing in-feed inventory across publisher sites to promote advertiser content, with users often (but not always) consuming the content within the publisher’s site. This category is also growing at 15% over the next 5 years, as much of their business will start to overlap and blend into the Programmatic Native-Display category.
- Programmatic Native-Display: Google, AppNexus, TripleLift and others are evolving their programmatic display stack to support in-feed native formats to funnel more demand, often with a user clicking off a publisher’s site to an advertiser’s destination. This category is the smallest today but also growing the fastest, at a rate of 40% year-over-year.
There is clearly a collision happening within the Ad Networks and Exchanges segment of the content advertising industry. All three subcategories are heading towards each other and eventually fighting for scraps, with marketers increasingly looking for greater transparency about the quality of audience and content experience provided.
Publishers can choose a path with exponential growth
As evidenced by these trend numbers, audiences are flocking to premium content based advertising whether it be from Social and Video Platforms or Premium Publishers. While programmatic options will see incremental revenue growth in the next few years, they don’t possess the same exponential growth potential that content marketing from Premium Publishers offers, nor the same quality engagement levels marketers are coming to expect from branded content.
Publishers must explore all options when making business decisions which affect them today and 5 years from today. However, shoring up their Premium Branded Content business seems to be a path for scale; not just scale for reach, but scale for revenue.
*This article was originally published on LinkedIn Pulse, by Kunal Gupta.