Survey: Branded Content Spending Up, But Agencies Getting Cut Out

When was the last time you hung out with a travel agent in a book store? Okay, probably never, but the point is: Neither of those things really exist anymore. The digital age has slaughtered the middle man. You book your trips on Expedia and buy your books through Amazon. That dynamic now appears to be spreading to the brand publishing world.

A Custom Content Council survey found that agencies are increasingly getting cut out of the branded content creation equation. This is happening for two reasons: For starters, brands are creating more content in-house. Only 40 percent of brands surveyed are outsourcing some of their branded content, down from 56 percent in 2012. But those who are outsourcing are spending more — an average of more than $1 million this year, up 5.5 percent.

What they don’t do is create the content.”

However, by and large, agencies aren’t seeing those dollars. “The biggest recipient of outsourcing is publishing firms, which got 36 percent of that spending, up from 32 percent last year,” explained AdWeek. “Design firms and ad agencies saw their shares shrink. PR/marketing firms’ share rose slightly, and interactive firms’ share was flat.”

This echoes a growing sentiment that agencies aren’t the best options for content creation. “[Media Agencies} know how to traffic it. They know how to plan it. They’re great at that,” BuzzFeed’s vp of agency strategy, Jonathan Perelman, told Digiday. “What they don’t do is create the content.”

While the survey didn’t bring good news for agencies, it did bode well for the brand publishing industry overall. Marketers are investing more and more in branded content. This year, marketers allocated an average of $1.8 million towards branded content, which makes up 37 percent of marketers’ ad budgets — up from $1.7 million in 2012.

Customer retention and brand loyalty follow in popularity.”

But why are brands spending an increasing amount on branded content? “Customer education was once again cited as the biggest factor in the decision to employ content marketing, with 49% of respondents naming this their primary reason and 29% naming it secondary,” explained the Custom Content Council. “Customer retention and brand loyalty follow in popularity.”

With branded content expected to comprise of more and more of marketers’ budgets in the years to come, it remains to be seen if there’s anything they can do to turn the tide.

What’s the deal with the Content Strategist? At Contently, storytelling is the only marketing we do, and it works wonders. It could for you, too. Learn more.