If content marketing is so wonderful, then why is the largest company that is best known for selling, using and advocating the practice losing more than $40m every year? More on that in a bit.
The Content Marketing Institute recently published an article entitled “How to Stop Acting Like a Marketer and Start Acting Like a Publisher”. In the piece, Marcia Riefer Johnston highlights Intel’s digital magazine iQ because, in her description of the publication as an example, “today’s savvy content marketers are at least eyeing if not yet adopting the business model established by media organisations”.
There is just one problem: brands and publishers are two entirely different types of businesses.
The non-examples of Intel and soap operas
2012 was when iQ began, but Intel was founded in 1968. The company became very successful in the 1990s by supplying hardware to the PC industry and then in the 2000s and today by focusing on microarchitecture, acquisitions, mobile processors, wearable fashions and self-driving cars.
And how did the company grow so much in the original days of Pearl Jam and JNCO jeans? Through the multimillion-dollar Intel Inside ad campaign. Today, Intel is trying for similar success with the new tagline of Amazing Experiences Outside.
Advocates of content marketing also routinely point to soap operas – which were broadcast in the US first on radio and then later on television – as historical examples that prove the practice’s validity. The early sponsors and producers were soap manufacturers such as Procter & Gamble, Colgate-Palmolive, and Lever Brothers.
Soap operas began with The Goldbergs in 1929, but P&G was founded in 1837. In 1882, the company spent a then-huge budget of $11,000 to advertise Ivory in print magazines. A few decades later, P&G added radio advertising before making soap operas. (Through a spokesperson, Intel chief marketing officer Steven Fund declined to comment for this column.)
Intel and P&G built their brands first through advertising long before doing “content marketing”. At best, content marketing is a minor supplement to advertising campaigns, a very small percentage of a marketing budget, and not a tactic to pursue from the beginning. At worst, it is a complete waste of money.
Focusing on "content" is not profitable
HubSpot, as readers may recall, is the company that declared more than 15 years ago that advertising was dead and that practices such as so-called inbound marketing and content marketing were the future. The model that HubSpot has advocated – because its software can be used in the process – is to publish and promote blogs all over the internet to get website traffic and then convert the visitors into sales leads.
Now, maybe I am missing something, but I have a hard time taking seriously the marketing advice of a company that has not had an annual profit since at least 2011 and has lost more than $45m every year since 2014 using the very tactic that it advocates:
Further, HubSpot wrote this in its 2014 annual report: “We believe that customer acquisition cost, or CAC, is an indicator of the efficiency of our sales and marketing programs in acquiring new customers.”
Louis Gudema of Revenue & Associates in Boston looked at HubSpot’s public financials last year and estimated that the customer acquisition cost skyrocketed from $7,000 in 2011 to $16,000 in 2016. (In successful companies, that number usually falls over time.) Gudema also wrote that HubSpot has not reported the CAC since 2014.
I contacted HubSpot for comment on whether Gudema’s report is accurate and, if not, what the CACs were for the years in question as well as what any increase might mean for the effectiveness of inbound marketing and content marketing over the long term.
HubSpot PR manager Ellie Botelho said, in full, the following: “HubSpot became non-GAAP operating income positive in Q1 of 2017, and achieved the same in Q2 and Q3 of last year as well. We do not publicly disclose our customer acquisition cost.” (The company is expected to release 2017 Q4 earnings next week.)
I then asked Botelho why, since HubSpot is a public company, it will not publicly disclose its annual CACs anymore. Her reply, in full: “We won't be commenting further.”
HubSpot has always insisted that the company advocates for “radical transparency.” So, I will ask an open question: will company executives actually be transparent and release the CACs, or are they full of it?
Brands will never be informational outlets
Here is just a small sample of what I did in my first career as a reporter and then the editor at newspapers in Boston before I went into marketing.
Arguing with copyeditors over which noun or adjective is the most neutral and accurate to use in a sentence. Spending three hours going through files at City Hall. Arguing with the publisher because he was downplaying a scoop that would reflect badly on an advertiser – and then winning the argument. Getting mugged for cigarettes while reporting in a bad part of the Fenway neighborhood. Meeting with a source while he was out shopping for new shoes at Filene's Basement because that was what he told his boss he was going to do over lunch. Spending a Friday night at a bar in the South End to see if I would witness any rumoured prostitution. Giving someone a secret camera to take pictures inside a government building.
How many “brand journalists” do that? How many “content creators” do that? As a quote attributed to George Orwell goes, “Journalism is printing what someone else does not want printed – everything else is public relations.”
In journalism, there is a sacred division between the news and advertising departments. At brands and software companies, the content team is part of the marketing department.
News outlets report for the public interest and run third-party ads alongside the articles. Brands and tech companies publish material to sell more of their own products. Take the recent excellent expose by the Financial Times of the alleged sleazefest at the Presidents Club. Only a news outlet would invest the time and resources in such an investigation and report. “Brand journalism” is a ludicrous concept.
At media companies, the media is the product. That is journalism. At brands and software companies, media is used to sell a product. That is advertising. Brands will never be effective and neutral publishers because they are two entirely different models.
Brands sell toothpaste, mustard and beer. Sure, they can publish whatever they wish on company platforms, but they will rarely produce anything that is critical of toothpaste, mustard or beer. Brands will never be neutral and fair because their main goal is to sell a product rather than media.
“Content” is merely feel-good fluff that brands and tech companies use to publish something alongside which they can promote their own products. No brand will ever produce the reporting of Bob Woodward or Harold Evans.
Why content does not work
I used to follow dozens of marketing blogs religiously. Every day, I spent a lot of time going through my Feedly. I stopped. It became redundant and a waste of time.
Here is a random screenshot of my erstwhile feed:
Five steps to infographic greatness? Grumpy Cat won $700k in a lawsuit? Six lessons for PR pros from the rising popularity of mobile games? Six tips to take the perfect headshot? Four ways to push your team out of their comfort zone? Why simple language is vital to your content marketing? 30 years later, speech writing still matters?
There is a word for all of that: crap. These companies need to take a lesson from the principle of quality versus quantity and shut up. It is little wonder that Marsha Lindsay of BrandWorks University said at EffWeek last year that there is a “content crisis” because output per brand per channel is up 35% per year but engagement is down 17%. Most “content” fails at being anything useful or interesting.
When journalists sit in story meetings, they talk about what information they have uncovered, what sources have said and what breaking news is occurring. When I have sat in brand journalism or content meetings, they talk about producing listicles and discuss which headlines get the most "engagement". In other words, they are vomiting "content" all over the internet.
But as Jason Koebler wrote at Vice, “Journalism that is engineered to be viral, to be liked or picked by an algorithm is not journalism, it’s marketing.”
Content writers rehash the same topics and devise clickbait over and over again. In essence, they are imitation reporters doing imitation journalism – er, “brand journalism”. Marketing creates a content calendar based on the department’s goals and aims to publish something, anything, to fill those holes. (Just look at Jeff Sauer’s recent 90-day challenge.)
No brand journalism will invest in data analysis, deep investigative pieces and layers of editors – in other words, what real news outlets do. Take a look at how many companies publish “studies” that consist of little more than whoever elected to take an online poll – they are not professional surveys and are not taken seriously because they do not include a representative sample and calculate the margin of error. (Doing that costs time and money.)
When content does work
As I said in a keynote address in Tel Aviv in December, if your “content” is not marketing collateral that specifically relates to one of the tactics of the promotion mix – advertising, direct response, PR, or SEO – then it is a waste of time and money. I have seen this personally in numerous jobs and roles in the past.
Dollar Shave Club’s famous first YouTube video was an advertisement. Red Bull’s space jump was a publicity stunt. When so-called “content marketing” works, it is through the use of traditional marcomms tactics under the guise of that new buzzword. The only blog posts that are effective are those that involve goals that relate to tactics such as aiming to rank for an organic Google search, announcing a new product feature, or being part of a publicity stunt. A company blog is simply another channel that can be used for a specific tactic.
“Content isn't a marketing tactic – it's an integral part of all marketing tactics,” Trevor Klein, content manager at SEO software company Moz, said when I asked for his thoughts on this issue. That company’s growth over the years, in my estimation, has been a result, in part, of creating informational material that is actually useful.
“Without content, you don't have emails, blog posts, pitch decks, or ads for PPC,” Klein continued. “Without content, you don't have anything to optimise for search engines, nor do you even have a site in the first place. We need to stop thinking of it as a separable area for investment. You don't trade your email spend for content spend – you simply invest in content in order to make your email spend worthwhile.”
When you have to shoot, shoot. Don't talk. When you have to sell, sell. Don’t continuously put out a bunch of unoriginal and needless fluff every single day, hoping to squeeze some leads and sales from readers once in a while.
To hearken back to Johnston’s CMI article, how do you lose millions of dollars per year? By acting like a publisher and not like a marketer. How do you build a brand? By acting like a marketer and not like a publisher.
The Promotion Fix is an exclusive biweekly column for The Drum contributed by global marketing and technology keynote speaker Samuel Scott, a former journalist, consultant, and director of marketing in the high-tech industry. Follow him on Twitter and Facebook. Scott is based out of Tel Aviv, Israel.