Why You Should Spend Less On Advertising and More On Content

If you assume your brand is interesting, you will fail.

A couple months ago, Martin Weigel, the head of planning at Wieden+Kennedy advertising agency, came up with a great presentation on how not to fail with your brand marketing. Martin’s basic point was that most people neither know about nor care much for the brands they buy. He argues that marketers like to think that brand relationships are like human relationships, in that they encompass emotions such as passion, empathy, and love between both parties. In reality, relationships with brands aren’t nearly so grand. Consumers are unlikely to feel as deep of an emotional connection to a brand as they feel for another human being.

Because brands are secondary in our lives, Weigel says that marketers should simply try to overcome indifference rather than strive to develop unwavering enthusiasm for their brands. Marketers need to:

• genuinely be part of what interests people
• have a strong stance on the topics that matter to consumers
• offer them something that they perceive as valuable

Traditional advertising doesn’t strive to achieve all three of the above recommendations given by Weigel. Ads focus on “me” the brand, which is awesome because of reasons x, y, and z. Sure, a very creative and well-crafted ad will get publicity and shares if it alludes to people’s interests, but it neither allows the brand to be an active part of a conversation nor provides something that users go back to every now and then because it helps them in any way. It may grab their attention, but it doesn’t give anything back. As such, traditional advertising often misses that third crucial Weigel recommendation: offering viewers something valuable.

Exceptional content, on the other hand, stands out. It offers users something useful, and this utility is what adds that important third component, perceived value.

In addition, brands can use exceptional content to join consumer conversations. It provides an outlet for businesses to discuss topics outside of their products, making it more likely for their brands to intersect with consumer interests. As a result, this two-way conversation “awakens” that otherwise indifferent audience to the brand.

Still need convincing? Let’s examine some shortcomings of advertising and look at some companies that successfully changed their marketing strategy from advertising to content development. We will conclude with actions you can take right now that will allow your company to reap the benefits of content marketing and decrease the money wasted on advertising.

A Nielsen report from April of last year — Global Trust in Advertising and Brand Messages — shows that only 40% of the global audience trusts ads served in search results, and only one-third trusts online banner ads. Another report from Forrester shows that only 8% of Europeans and 10% of Americans trust ads on websites. Most people dismiss content pushed out to them by brands, choosing instead to view content they find themselves.

“Traditional marketing vehicles are becoming less effective in capturing and engaging the attention of today’s perpetually connected consumer,” the Forrester team writes in its report. The document goes on to say that advertising performs more poorly than branded, value-adding content.

Even the effectiveness of the highly prevalent pay-per-click (PPC) advertising is decreasing, according to research from WebMarketing123. It claims SEO is more than twice as effective when it comes to generating leads compared to PPC and social media. What is more, people choose organic search results over paid ones 94% of the time, according to a report from GroupM UK and Nielsen. The data also suggest that the younger the user, the less likely he or she is to click on a paid ad.

The above facts clearly indicate that the usefulness of PPC for marketers is diminishing, while the effectiveness of SEO remains solid. Thus, brands that produce valuable and relevant content that ranks high in search results are going to grab more market share away from advertisers.

Advertising isn’t proving to perform any better on mobile. With the increased usage of mobile devices to make purchases, brands are jumping on the mobile advertising bandwagon. However, the Digital Marketing Report from IgnitionOne reports that although ad spending on tablets and mobiles jumped over 100% in the US in the first quarter of 2013, the increase has been fueled by a change in spending (from desktops to mobiles) rather than a tangible growth in overall spending. Meanwhile, less than a year ago, the mobile app marketing platform Trademob revealed that as much as 40% of mobile ad clicks are worthless because as many as 18% of them are fraudulent and 22% are accidental.

Clearly, no company would want 40% of their advertising spending to go to waste. Yet, this is exactly what is happening, and it results in a very poor return on investment for many brands. In addition, since costs per click for tablets and mobiles have been rising consistently over the last year, the overall campaign costs have increased for advertisers.

Finally, a recent survey from the Duke University Business School reveals decreases in traditional (TV, print, and radio) ad spending for B2C and B2B over the last year. This trend is expected to continue throughout 2013 and through the next four years.

Traditional media is a one-way communication, and as the above data suggests, marketers are finding such advertising to be less and less effective. In a great post, provokingly titled “Traditional Advertising is Truly Dead,” Robert Bruce from Copyblogger neatly summarizes the condition of TV, print, and radio marketing: “If you’re throwing brand advertising at the masses and hoping something will stick, you’re playing a game that’s already over. Consumers have taken their ball and gone home.”

Examples of brands that successfully switched from advertising to content

Cedar Creek Cabin Rentals

This small vacation rental company was spending $140,000 a year on pay-per-click advertising in 2010, according to an article in the New York Times. At the time, keyword costs increased dramatically as new companies, both large and small, started advertising online. As a result, the owner of the company, Tom Telford, found himself struggling to minimize costs and sustain the firm’s AdWords campaign.

As a result, he looked for other possible methods of connecting with potential customers. After consulting several SEO experts, who recommended developing more valuable content, Mr. Telford decided to start a blog discussing everything that may be of interest to those renting vacation homes. Simultaneously, he decreased his PPC advertising significantly — first to $100,000 per year and later to $33,000 as his content started to rank in search engines and bring in substantial organic traffic.

After blogging five days a week for six months in 2012, Mr. Telford found that his website was receiving 91% more organic visitors than in the previous year, and the number of conversions had increased by 37%. The content also allowed Cedar Creek Cabin Rentals to pay less per click in their PPC campaign (or what was left of it) as the company had become more relevant to Google and its quality score improved.

River Pools and Spas

This Virginia-based pool construction company had an advertising budget of $250,000 in 2009, which helped produce $4 million in sales. However, the owner of the business, Marcus Sheridian, realized he was not utilizing the company website to connect with his target audience. He started to blog regularly and optimize content with the help of a new content management system.

As a result, after two years of content creation (and despite the economic recession), the firm was able to cut its advertising budget to just $20,000. The blog itself now generates a significant number of leads, and the business grew to $5 million in sales. River Pools and Spas managed to decrease PPC spending by 50% in less than a year, while at the same time increasing organic search visits to its website by 120%:

Nike

Since 2010 the big clothing brand has steadily decreased its spending on traditional advertising. It fact, since 2010, Nike has lowered its spending on TV, print, and radio advertising by as much as 40%, according to an article on CNN Money. At the same time, the company’s revenues increased by $3 billion, while its net income went up by over $500 million.

Why, you may ask? Over the last few years, Nike has changed its marketing strategy to focus on young customers who have “given up television to skip across myriad online communities.” Nike now believes it can make do with fewer huge TV campaigns, opting instead to connect with consumers online by building a variety of digital communities and developing content focused on big sporting events.

The online communities not only establish lines of communication between Nike and its customers, but they also allow the company to better study consumer behaviors and trends. Knowing what the customers are paying attention to helps the brand market its products even better. Nike now spends more on non-traditional brand marketing than any of the other top 100 US advertisers, while its revenues and income continue to grow at a faster pace than those of its closest rivals, such as Adidas.

Although content marketing takes time, there are ways in which you can start reaping the benefits right away. Below are several actionable tips that will help you decrease your advertising costs and increase your brand success in the long run. However, these recommendations are just the tip of the iceberg, so learn more on the subjects of content creation and branding, and strive to continually improve your marketing strategy.

Stop paying for clicks on brand-related keyword searches

You should be dominating SERPs for your brand keywords. If your competitors do not bid on your brand, there is absolutely no reason why you should be paying for visits from people who already search for your name. If another company is bidding on your brand, analyze and/or test how much business you would lose to your competition by not using PPC. Instead of cutting costs from paid search, you can shift money to a product-related campaign where it will be more effective.

This is a recommendation from Josh Bernoff of Forrester Research, who argues in an article posted on CMO that making your customers happy through customer service will get you positive reviews and social shares. Advertising is useless in this regard, as money can’t buy you love. But why would you even want to have lots of positive reviews? Because as the Nielsen report about global trust in brand messaging quoted earlier shows, consumers trust recommendations from people they know and customer opinions posted online.

Look into your analytics for content with the longest time-on-page, lowest bounce rates, and most social shares. In addition, check Google Webmaster Tools for your most linked pages. Content performing best in the mentioned areas is what visitors find most useful about your website. Plan to do more of this stuff!

Eliminate login-only content

Our attention spans are too short to waste time on registering and logging in to get to content. Getting rid of passwords will help your rankings as well as your trust. If content is your product, make sure there is a free and easily accessible version in addition to the paid one (use the freemium model).

Blog regularly, at least a couple times a week

You have likely heard this one before, but there is no better way for a small business to develop interesting content than by being passionate about what it does and writing about it regularly. If you have not started a blog yet, go through the nitty-gritty details with the simple guide to business blogging. If you already have a blog, but it is not helping your website very much, refer to the previous tip about analyzing your audiences’ engagement. Find out which posts are the most popular, and augment such content.

The takeaway

As brands engage in more two-way conversations with consumers, marketers need to recognize customers are expecting more from them than a product and its packaging. Consumers want brands that understand them and help them with questions they find difficult to answer. One-way advertising struggles to deliver on that front.

Content marketing helps companies prove that they can make a real change in people’s lives, which can ultimately generate sales. Therefore, decreased advertising spending and increased content development efforts are the future of marketing, and essential if you want to keep up with the evolving competitive landscape.