Content convergence & cannibalism: how the media ecosystem is eating itself [insight]
I’m not sure who first said it, but it’s now more true than ever for media companies: content is king. In a world where display advertising budgets have been comprehensively gobbled up by Google and Facebook, and at the same time where the distribution of content has been throttled by the same two (along with Twitter and Snapchat), the rest of the media world has been left feeding off the remaining scraps of media budgets, whilst at the same time being beholden to Google-book for much of their audience growth. In 2017 Facebook and Google will account for 50% of all digital media budgets - an estimated $106 billion.
Now distribution is very much under the control of the few, the rest of the media ecosystem (media owners, media buying companies, creative, social and PR agencies) is left trying to differentiate itself by the only thing it has remaining control of - content. But as battle for media dollars starts to focus around content, the media world is starting to uncover a myriad of challenges linked to running businesses whose main commercial engines are content-driven.
Challenge 1: lunch-eating
Now that ‘native’ or ‘branded content’ or whatever you’d like to call it has become a core pillar to media owners', media agencies’ and creative / PR agencies' commercial engines, we now see all media players eating other’s lunch. The question of where content naturally sits amongst these different players isn’t clear to most brand managers. Arguably media owners and PR / Social agencies are best at the more tactical (hygiene) type of content, and creative / media agencies best at the bigger branded (hero) content. Although I’m not sure everyone would agree with this position.
Challenge 2: defining content and business baggage
Brand content is generally broken into two buckets: ‘hygiene content', the everyday quick and dirty content that is shared day-to-day across social channels, and ‘hero content’ which are more one-off bigger budget pieces of content linked to specific brand activations. Good examples of the two of these are:
Hygiene Content example (e.g. Oreo Cookie Superbowl tweet)
Hero Content (e.g. Mercedes Catch from Rubber Republic)
Hero content is where the bigger budgets sit, and much of the creative glory, and therefore where everyone aspires to position themselves. However, the ability to deliver quality hero content is difficult, and many businesses - like media owners who are used to producing high-volumes of content - struggle to deliver hero content for clients as it’s not naturally in their wheel-house, even though they have a pedigree in content production.
Not all content is the same, and not all organisations have the ability to deliver both hygiene and hero content together - as they’re very different beasts.
Challenge 3: the commoditisation of content
With the rise in importance of social media, and the need to feed social channels with a steady stream of content, content has definitely become more commoditised - especially at the hygiene content level.
That said, hero content is still very much a differentiated product, with bigger budgets fuelling creativity and the quality production values to create stand-out content.
Challenge 4: making money from content
Competition in a market-place naturally puts pressure on pricing, meaning that making money from content production is becoming evermore difficult. Forging strong relationships with clients is an important part of keeping content production profitable, as you’re not having to constantly pitch for new work - and when it comes to high-end creative, pitching is an expensive business and where a lot of resource and profit can be drained.
A smaller number of clients where you have a deep / ongoing relationship is much better than having a high number of one-off clients.
As media owners, creative and media agencies battle it out for content budgets the inevitable end-point is consolidation, with media owners buying creative agencies, creative agencies buying media owners and media agencies buying a bit of everything (!). And this is already happening, with Gary Vaynerchuk’s Vayner Media recently buying PureWow and in a more left-field move Accenture buying Karmarama.
Title image from Rubber Republic's Hackett Williams Martini video