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SPENDING STUDY A Look at How Corporate America Invests in Branded Content 2010

SPENDING STUDY A Look at How Corporate America Invests in Branded Content 2010. Overall Spending. AVERAGE SPENDING BY COMPANY. Summary

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SPENDING STUDY A Look at How Corporate America Invests in Branded Content 2010

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  1. SPENDING STUDY A Look at How Corporate America Invests in Branded Content 2010

  2. Overall Spending

  3. AVERAGE SPENDING BY COMPANY Summary  The total spend on branded content per company was lower than the prior year – presumably due to the recession – but still the total spend was the second highest it has ever been at $1,366,605 per company.  Spending on electronic branded content remained constant, while print and other forms received the majority of the reduced spending.  Nonetheless, total branded content spending on print forms still outpaced electronic and other forms in terms of gross funds. Print represented 43% of the total spend, while electronic and other accounted for 35% and 12% respectively.

  4. SPENDING AS PART OF THE MEDIA MIX Summary  Of the average overall marketing, advertising and communications budget, 29% of the funds were dedicated to branded content.  This is the second greatest ever proportion of overall funds dedicated to branded content; the record is 32% in 2009.  This year was the 4th highest average total marketing spend ($3,345,826) recorded, but was the 2nd highest average total branded content spend ever recorded ($1,366,605).  The combination of facts suggests that branded content is and will continue to be a major factor in how companies market and communicate.

  5. PROJECTED CHANGE IN BUDGET SIZE Summary  In a sign that the recession is easing, 31% believe that branded content spending will increase in the coming year, up from an all-time low of 24% last year.  Again this year, we explored projected changes in budget for branded content overall, plus each of the forms of branded content (print pubs, electronic and other).  The expected increase-to-decrease ratio for print pubs is even at 24% to 24%. Meanwhile, electronic and other forms are in growth mode with ratios of 39% to 3%, and 28% to 8% respectively.

  6. HOW BUDGET FUNDS ARE SPENT • Summary •  The aggressive adoption of electronic and other forms of branded content is impacting the leading cost factors, with more emphasis on personnel. This parallels other research showing companies increasingly hiring branded content personnel to manage these activities. •  The average spend for print forms is $256,655 on personnel, $214,874 on production and $125,343 on distribution. •  The average spend for electronic forms is spent $267,632 on personnel, $81,246 on production, $62,129 on distribution and $66,908 on programming. •  The average spend for other forms is $169,255 on personnel, $81,709 on production and $40,855 on distribution.

  7. OUTSOURCING BRANDED CONTENT • Summary •  The use of the services of external agencies (custom publisher, PR/marketing firm, design firm, video production company, interactive agency, for example) to handle some aspect of branded content initiatives dropped slightly with 50% of companies reporting that they outsourced some portion of their branded content. •  Outsourcing was more prevalent among print forms (45%) of branded content, than it was among electronic (19%) or other (23%) forms. Of all the branded content initiatives, some portion of those initiatives was outsourced 31% of the time.

  8. OUTSOURCING SPEND Summary  For all companies (those who did and did not outsource) the average total branded content outsourcing spend was $152,167, the second highest amount ever recorded. The record high was set last year at $312,081.  The story was similar for those companies that did outsource (thus excluding those who did not outsource). The average branded content outsourcing spend among this group was $563,500 versus a previous high of $885,646 in 2009.

  9. OUTSOURCING SPEND BY TYPE Summary  For those companies outsourcing some aspect of their branded content initiatives, the most commonly used types of outsourcing agencies are design firms (32%), other firms (30%) and publishing firms (19%).  The same three types of agencies were most used when the form of branded content was print, though the percentages changed more to the benefit of design firms (36%) and publishing firms (23%), while other firms dropped to 27%.

  10. SHIFT IN SPENDING Summary  For the first time this year, we asked responders to report to what degree their organization is shifting its spending from traditional forms of advertising and marketing to new forms (i.e., branded content, content marketing, custom publishing, or custom media)?  The majority of companies (61%) have experienced a moderate shift in their spending while 7% report an aggressive shift; a total of 68% of companies indicate that they are shifting to branded content.

  11. Qualitative Questions

  12. REASONS FOR USING BRANDED CONTENT Summary The primary reason to deploy branded content initiatives is to educate customers according to 54% of the companies surveyed. Customer retention (23%) was the second leading primary reason. The leading secondary reasons for deploying branded content initiatives were customer retention (35%) and educating customers (27%), though brand loyalty factored in at 26%.  Interestingly, up-selling customers was near the bottom of both lists, indicating that in the minds of marketers, branded content is viewed as an investment in longer-term returns rather than a stimulus for short-term transactions.

  13. EFFECTIVENESS OF BRANDED CONTENT Summary Branded content initiatives are considered by marketers as more effective than other leading forms of advertising and marketing.  The more targeted (direct mail) and journalistically-oriented (public relations) the medium, the more marketers seem feel that a given medium is more on par with branded content effectiveness.  Even so, 66% of marketers think branded content is superior to direct mail and 63% think it is superior to public relations.

  14. Sponsors The Custom Content Council (CCC) is the lead trade organization representing custom publishers in North America. The research herein was conducted by the monthly subscription newsletter ContentWise (www.becontentwise.com), which is the leading media providing news, information and research on the branded content industry. Methodology The research was conducted via online and mailed methods targeting a random sample of companies across all industries. More than five thousand invitations were distributed and approximately 200 surveys were completed and returned, producing a +/- 6% degree of accuracy at a 90% confidence level. Among the responding companies were: Allstate Insurance, ASPCA, Hoosier Energy, Honda Financial Services, Lockheed Martin, MS Department of Transportation, Proskauer Rose LLP, SiriusXM Radio, State Farm Insurance, World Vision, YMCA and Zale Corporation. More Information For more information on custom publishing go to www.customcontentcouncil.com or call the CCC in New York by dialing 1-212-989-4631. To subscribe to ContentWise call 1-602-427-0373 or visit the web site noted above.

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