The internet’s unprecedented reach and its ability to influence decisions have thrust the monetization of digital content to the forefront of corporate strategies. “With the rapid development of the industry and tools … and successfully traversing revenue opportunities tactically and tactfully, clearly the opportunity to earn is now more accessible and lucrative than ever,” wrote Anthony Svirskis, the CEO of TRIBE, in Fortune in May. The company is a “marketplace connecting brands and agencies with social media influencers.”
Accordingly, the opportunities to make money from content have never been greater. “Publishers have more than one choice when it comes to monetizing their content and advertisers have the capability to measure their value,” wrote Laura Andersen, a marketing affiliate at Shopify, an online all-in-one commerce platform, in her blog. “There are so many ways to take advantage of that to advance the interests of the content creator, advertiser, and customer.”
Creation equals monetization
Content monetization is the flipside of content marketing, and they are indispensable to one another. Mastering the burgeoning field of content monetization is a fundamental pathway to success for businesses seeking to capitalize on the new age of digital advertising.
“Brands are hungry to understand ways in which they can work with content creators, but it’s not always a clear path to success for either party,” said Andersen. She stressed that no strategy fits all. Content monetization has different models, and each has its benefits and drawbacks.
“Content monetization gives publishers the freedom they need to build their businesses, grow and compete in a saturated marketplace,” according to CodeFuel, a monetization solutions platform. “Since content marketing is becoming more competitive; publishers, websites, and creators need to stay ahead of the curve. This means creating both quality and quantity. And unless you are earning money from the content you create, you won’t be able to do that.”
Content monetization is typically the only means of generating income for many websites, blogs, and social media accounts, according to CodeFuel. However, it has mushroomed to include companies seeking to produce their digital content to grow brand exposure and boost revenues.
Content marketing 2.0
Other forms of content monetization exist as “companies from the most unexpected industries start to look a lot like media companies,” according to a study by Vision Critical, a customer insights solution provider.
Snack food giant Mondelez recently launched a monetization initiative. “The idea is to create a new revenue stream by producing TV shows, online videos, and other types of content that can be sold to other companies. The initiative will help Mondelez — a firm with a vast portfolio of household brands including Oreo and Toblerone — generate additional revenue by producing content that’s commercially viable,” the Vision Critical study stated.
PepsiCo recently invested in a state-of-the-art content studio in Manhattan to develop materials that mention and promote its brands. “The goal is to behave like a Hollywood studio,” Brad Jakeman, president of PepsiCo’s global beverage group, told Ad Age magazine.
The studio will work with companies such as online service provider AOL, a part of Verizon Media, to produce scripted series, music, and other content. L’Oreal and Canadian restaurant chain Cara recently launched similar initiatives with “promising early results,” according to Vision Critical.
While branded content is not new, the rise of social media and blogs has propelled it into the marketing mainstream, as experts advised brands to “think like publishers.” A diverse array of businesses and multinationals now acknowledge that high-quality content not only attracts a greater target audience, but it also presents more actionable revenue opportunities.
“As marketers become proficient in creating quality content, the use of content from marketing and word-of-mouth evolves to revenue generation,” according to Vision Critical. For example, Red Bull was an early adopter of corporate content monetization with the 2007 launch of its Red Bulletin men’s lifestyle magazine. Today, the magazine’s circulation is 2.3 million in 10 countries, with 550,000 paid subscribers.
Diversity of models
One of the foremost content monetization methods is influencer marketing, where brands pay for posts on social media. Other performance models are built on commissions, where content publishers are paid a percentage of sales based on metrics such as email signups, subscriptions, or app downloads, said Andersen of Shopify.
News sites, blogs, and journals use a variety of methods besides offering free content. They include paywalls, subscriptions, donations, and metered access — where content is available until a user reaches a certain threshold, such as the number of articles or videos viewed, or the amount of time spent on the site.
The Telegraph allows unsubscribed users to view only the beginning of an article. The Guardian permits access to all written content with a highly visible footnote at the end of each soliciting donations to keep the site free. Wikipedia uses a model similar to The Guardian’s, and The Economist offers several subscription packages as options.
Applications and other non-written digital content models might use micro-transactions (piecemeal access to digital content, such as pay-to-play or pay-to-own), freemiums (free versions), affiliates (commissions for promoting other brands) and licensing (selling content for use or syndication).
Platforms such as YouTube attach ads to popular content that generate income from complex algorithms based on metrics such as views, likes, and subscriptions. The video behemoth recently said it would provide four times as much information on monetization and update its policy every two months, wrote contributor Geoff Weiss on TubeFilter, which curates online videos.
Instagram — where contributors rely on indirect revenue from branded content and merchandise sales — “is rolling out new ways for creators to make money directly from their content on Instagram Live and IGTV,” wrote Todd Spangler in the May issue of Variety magazine.
Next month, users will be able to purchase “badges” during Instagram Live videos to support their favorite creators. Badges will cost 99 cents, $1.99, and $4.99. During the initial test period, Instagram will share all of that revenue with content producers, according to Spangler.
Mirroring YouTube’s model, Instagram will also begin running ads on IGTV, the platform’s long-form video arm, with at least 55 percent of advertising revenue shared with creators. Brands that plan to run IGTV ads include Sephora, Puma, and Ikea.
Marketing to monetization
Content monetization has become so instrumental it is forcing multinationals that once focused exclusively on producing marketing content for product promotion to shift to content that boosts both marketing and income.
Companies worldwide are beginning to ramp up content monetization to generate more revenue, address growing dissatisfaction with traditional advertising agencies, and foster better and more lasting customer relationships and experiences.
Laura Henderson, global head of content and media monetization at Mondelez, believes “fragmentation of audiences has resulted in higher advertising costs.” That causes more and more businesses to embrace content monetization to offset spending on other marketing activities. Mondelez plans to monetize its content by selling distribution rights, advertising, and brand integrations.
Jakeman of PepsiCo said the “holy grail is to leverage the incredible power of our brands and their equities to essentially fund their own marketing,” adding that some media firms already have approached PepsiCo’s Manhattan content studio.
Mondelez and PepsiCo are among an increasing number of forward-thinking multinationals, starting to realize that content creation is an indispensable prerequisite when content monetization plays a central role. It also is an essential move toward improving meaningful engagement with customers.
“The audience is in the driver’s seat,” Henderson says of the need for high-quality content. Consumers “can skip ads, block ads, and avoid ads in their entirety. Advertising is no longer an assumed part of the content consumption equation.”
In a post-COVID-19 economy, businesses and brands must understand that engaged and loyal users value content that is relevant to their interests, unique, engaging, and targeted.
Those who create content will face the challenge of ever-shorter attention spans. Content providers, therefore, need to understand audience motivations, attitudes, and aspirations. According to Vision Critical, companies must engage with customers on an ongoing basis to deepen their understanding of their target audience.
The New York Times, London-based Financial Times, and other mainstream publications have demonstrated paywalls can be effective. Among the 98 U.S. newspapers with circulations of more than 50,000, the American Press Institute found 77 percent use a digital subscription model.
Content creators are fast becoming the most coveted marketing channel for advertisers to tap into. Authenticity is a significant factor in advertising, especially brands using digital content. “One of the greatest assets of brands working with content creators is the transparency consumers gain from receiving unbiased opinions, reviews, and information about the brand,” according to Andersen. “That practice is put into question when money is in the mix.”
In the interest of transparency, disclosure of partnerships is critical and enforced on most social media platforms, including Instagram and Snapchat. But Andersen and other experts believe that “does not mean the concept of monetization is unethical or inauthentic.” The best content creators are incredibly dedicated and successful at delivering an authentic message, and they are often the ones with which brands seek to partner.
“The challenge with influencer marketing is measuring the return on investment beyond engagement, reach and impressions data,” wrote Svirskis in Forbes. “However, influencer marketing was not designed to be performance marketing, nor should it be viewed only through this lens.” Still, Andersen said that “return on ad spend” is the critical metric that advertisers ultimately look for above all else.
Deciding on the right business model and monetization strategy also is crucial. For one, content monetization is a new business model for many industries, and different companies will be better suited to different models.
“Companies need to leverage customer intelligence and find out which media outlets their target audiences already patronize,” said the report from Vision Critical. “Without a solid understanding of media consumption habits, companies risk collaborating with those that don’t have the right audience.”
Content monetization presents companies with an opportunity to move content marketing from a business expense to a profit-generating machine. Therefore, customer engagement is critical to success in the field of content monetization. The Vision Critical report concludes that “to thrive in this relatively new practice, companies need to get closer to their target audience in order to make important decisions on content, distribution, and business models.”