November 21, 2009

Marketers poured more money into branded content in 2009 than ever before, according to a study released today by the Custom Publishing Council (CPC). The annual study, conducted in partnership with ContentWise, a leading newsletter covering branded content, showed that total spending on branded content was over $1.8 million per company, with 51% spent on print publications, 27% on Internet media and 22% on categories such as video or audio, which were measured for the first time this year. Even allowing for the addition of new categories, 2009 spending was double that of 2008 and the highest amount since the CPC began conducting the survey in 2003.

“Due to rising demand, branded content has proliferated in recent years, expanding beyond its traditional roots of print publications and the Internet. The study shows substantial growth in our industry sector,” explained Lori Rosen, Executive Director, CPC. “Perhaps even more importantly, 78% of respondents reported that branded content is more effective than advertising.”

Highlighted Study Results:

Effectiveness of Branded Content

Branded content initiatives are considered by marketers as more effective than other leading forms of advertising and marketing. Seventy percent said it was more effective than television advertising; 61% said it was more effective than direct mail and 57% said more effective than public relations.

Educating Customers is Number One Reason for Using Branded Content

According to 54% of the companies surveyed, the primary reason for branded content initiatives was to educate customers. This was followed by customer retention (25%) and brand loyalty (21%). Up-selling was at the bottom of the list, indicating that corporate marketers are looking for long-term returns rather than a stimulus for short-term transactions.

Spending as Part of the Media Mix

Of the average overall marketing, advertising and communications budgets, branded content accounted for 32% of funds. This is the greatest ever proportion of overall funds dedicated to branded content. The previous high was in 2007, with 27%.

How Budget Funds are Spent

Of the average budget of $916,000 for print publications, $403,000 was spent on personnel, $339,000 on production and $174,000 on distribution.

The average Internet content budget was $491,000. $270,000 was spent on personnel, $83,000 on production, $59,000 on distribution and $79,000 on programming.

Outsourcing Branded Content

The use of external agency services (custom publisher, design firm or video production company, for example) to handle some aspect of branded content initiatives matched an all-time high from 2005, with 54% of companies reporting that they outsourced some portion of their branded content.

Among companies that outsource, the average spend on branded content was a whopping $886,000. The previous record high was $316,000 in 2006. When extracting nontraditional forms of branded content from this equation, the total outsourcing spend was $650,000, 105% higher than previous records.

Budget Projections

The survey showed that 24% expected spending to increase in 2010; 20% expect it to decrease and 56% say it will stay the same. Print publishing is expecting to decline, while other forms such as digital are expected to increase.

“With all this positive news, we are leaving branded content marketers with a great holiday present this year, promising revenue growth in 2010,” noted Rosen.

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