There is a new trend emerging, called Content Marketing, that is blending the lines between online publishers, brands, and eCommerce companies. The general idea is that people who sell things (namely brands and ecommerce companies) need to produce more than just advertising to get people to pay attention to their products. Instead of banner ads and videos, they are producing sponsored stories, advertorials, and paid content. This trend is gaining steam because brands need specialized content to broadcast and share over social media.
One example of how this works: Net-A-Porte, a large eCommerce site, recently recruited a senior editorial team from Conde Nast to build an in-house magazine. Net-A-Porte had two motivations. First, Google’s new algorithm emphasizes original content, so they were looking for a major boost in SEO. Second, they have over 800,000 followers on Facebook and needed a way to activate these users, so by delivering advertising in a story format they can move users from Facebook to other pages they control. One of my portfolio companies, Ceros, incidentally specializes in the underlying technology that allows the creation of digital marketing collateral that is used for this purpose.
I am particularly interested in how this experiment plays out because retailers like Net-A-Porte are paying a significant premium for writers and editors. And the business model is more profitable too – every visitor to Net-A-Porte’s eCommerce site is worth about $0.50, whereas every visitor on Conde Nast is only worth a few pennies. If the world continues to move in this direction many publishers will face a crisis where they are forced to rethink the advertising model in lieu of a commerce-oriented approach.