Member profile: Z Squared Media on why advertising is a luxury for brands but content is about survival
Sept. 12, 2012 – Last week, Content Marketing Institute (CMI), operated by ABM member and recent Inc. 500 inductee, Z Squared Media, wrapped up the 2012 edition of its annual Content Marketing World event in Columbus, Ohio. The show was attended by approximately 1,000 marketing and PR professionals from around the world, up from 600 last year.
Through events like Content Marketing World, daily news and its magazine Chief Content Officer, CMI educates marketers and publishers alike on a topic many companies know of, but might not know much about: content marketing. ABM talked with Joe Pulizzi, founder of Z Squared Media, on the industry, the role of media companies and the biggest takeaway from last week’s event.
ABM: Tell me about the move from being a content marketing matchmaker (Junta 42) to an industry educator (Content Marketing Institute). What spurred the transformation?
Pulizzi: In 2007 we launched Junta42 as sort of a marketplace for content marketing so that brands who were looking for content marketing services could be matched up with agencies that provided that content service. That worked fairly well; we matched up over 1,000 projects in a two-and-a-half-year period. We were getting a lot of interest but the business model, frankly, didn't work as well as we expected it to. And over that time we were getting all kinds of requests from brands that needed more education, more in-house training. I think in hindsight we were too early to the game with that model. We just evolved Junta42 into what is now the Content Marketing Institute (CMI). Everything is education first. Even though content marketing has been around for 100-plus years, education is not nearly where it needs to be, and most companies are still in the beginning stages of trying to figure this whole thing out.
ABM: Why do you think content marketing is so hot right now?
Pulizzi: If brands want and need to have a direct relationship with their customers, then they need to create really amazing, valuable, relative content to build those relationships. The salesperson for most brands is coming in at the later stages of the buying process because consumers are getting all the information on their own. So how are they going to get that information? They are searching for it, they are looking for it on social media, they are talking to their friends about it, and the only way a brand can really get involved is to create amazing content. In the past, there were all types of barriers to entry to make that happen. Now, [brands] can communicate directly with customers if they have really important information to share.
Traditional advertising isn't going away, but I would say it's a luxury to have right now. Content is a survival mechanism. If I'm looking at the buying cycle, from awareness at the top all the way down to when I'm trying to create brand subscribers or loyal, passionate followers, you need content at every step of the process. What we are seeing is marketing departments starting to look and run like publishing departments. They are competitors, but they are partners. It's really odd today to see that the majority of content being created is not being created by media companies. It's being created by brands. That's a huge change.
ABM: What do you think is the role of media companies?
Pulizzi: I think the media model has changed. You are looking at more partnerships. You have a decision to make if you are a media company. It could be 'I'm not getting into content marketing at all -- forget it. I'm just going to offer traditional display and advertising services.' That's fine but you have to remember it's one of the smallest parts of a marketing budget today. Thirty-one percent of the marketing budget today is spent on content creation and distribution [according to a CMI study]. That's where the money is and that's where more of the money is going. According to our latest research, 54 percent of brands are spending more on content marketing over the next 12 months. So there's already a big budget, and you've got a growing budget.
At the same time, all of the traditional advertisers that you have been catering to are setting up their own content initiatives. There are opportunities to help train them, partner with them, do content activities that leverage both the brand and the media company at the same time, work on joint projects. You can do outsourcing content for hire, you can create content marketing services, which is being created by nearly every media company out there. But I think a lot of media companies aren't taking it as seriously as they should. It's a business model decision that's really tough for a lot of media companies to make because it's a real change.
ABM: What's your take on publishers launching marketing services?
Pulizzi: I think it makes perfect sense. We do it ourselves. Even though now we consider ourselves more of a media and educational company, a good portion of our revenues come from our consulting services and in-house training. The problem that we are seeing is [b-to-b companies] are not taking it seriously enough. It's kind of like they are just adding it on as another product. Where media companies have a benefit is that they know how to create valuable content already, but [content marketing] is more like an agency model. So, as a media company you are not only competing with brands, you are competing with agencies as well -- everyone is going after the same pile of money. It's about figuring out where you can be the leading expert.
The opportunity for media companies is that they really understand how to tell effective stories, and most brands aren't very good with that. So if you can help those companies and create marketing services that help brands tell better stories, that's where I think a lot of the revenue opportunities are.
ABM: You just wrapped up Content Marketing World last week. What were the biggest takeaways?
Pulizzi: Two, three, five years ago, most brands were trying to figure out if this was something they should even focus on. Now, for the most part, it's not even a question. They know that they have to because if they want to drive search engine optimization, social media or online lead generation, they have to have compelling storytelling, and it's not easy -- media companies know that. That's the biggest takeaway that I've had: this is a serious business. The acknowledgement that yes, we are sort of setting ourselves up like media companies.
This is just at the beginning stages. Even though this is a very, very old industry, it's an immature industry. And we're starting to see a whole bunch of new [executive] titles. We just held our Content Marketing Awards and of the 15 finalists, more than half of them had content titles that didn't exist in the last 12 months. You have a whole new group of marketing professionals that are content marketing experts.
ABM: What is the future for content marketing?
Pulizzi: I would look at a company like Red Bull Media as sort of the case study for where most organizations are going. This is not my line, but I use it all the time: Red Bull is a media company that just happens to sell energy drinks. They are probably one of the most efficient media companies out there. They have print media. They have electronic media. They have their own record company. They have their own film company.
Procter & Gamble has been doing this for a very long time. Now you are seeing a lot of b-to-b companies -- if you look at the marketing automation companies like Marketo and Eloqua this is all they do. This is how they market their services: through great content. Ultimately it's going to be hard to see the difference between a media company and a non-media company. So the best content, executed the right way, will rise to the top.
What you're going to see over the next couple of years is some amazing case studies and testimonials from brands that are really getting this right. If you look at American Express Open Forum, they do a mass amount of content, they do a lot of community involvement and they get more new people signing up for credit cards through American Express Open Forum (for Open cards) than anything else they are doing, than all the advertising they are doing.
Pulizzi: It is incredibly difficult to manage the content marketing process in healthcare because of the regulations. There's so much fear with healthcare marketers as to what they can say, they can't say. They have to run it through legal. It's very hard to get a piece of content out in the healthcare industry. Most of the questions we were getting were about healthcare, so healthcare is our first vertical. B-to-B industrial, like Caterpillar and John Deere, is also a little bit different, a little bit less mature on the online side, so there's a potential there. On the Asia/Pacific side there was just a huge opportunity. They are a little behind on content marketing, there's still a lot of paid media, but they are making the transformation.
ABM: Any advice to members?
Pulizzi: If you're going to look at content marketing services, you have to get serious about it and don'’t look at it as an add-on. It's more important than that. You have to figure out a strategy that makes sense with your current properties. All marketing service providers are getting into this area. Traditional advertising agencies are getting into it, pure custom publishers, content strategists, social media agencies, search agencies, everyone is going after this pot of gold called content, and they are trying to figure out how to monetize it.
By Elizabeth A. Reid