Pando

From fad to fixture: Native ads and content marketing are here to stay

By Shane Snow , written on June 5, 2013

From The News Desk

In recent memory, we've seen SEO, enterprise social media and monitoring, and marketing automation companies follow nearly identical trajectories in their rise and exit. Startups like Buddy Media identified gaps in existing marketing technology, and became canaries in the coal mines into which mainstream brands -- and hundreds of entrepreneurs -- rushed.

Over the past two years, we've seen a similar trend happening in a well-known and well-tested marketing channel, now dressed up in new clothes and offering new opportunities. Folks call it native advertising or content marketing. The advertising trade press can't get enough of it. All the old-school SEO companies are desperately trying to cash in on the wave, and virtually every media company with a digital presence is exploring (or actively running) sponsored content programs. Shoot, Marissa Mayer just paid a billion dollars for a company in which native ads are the main revenue opportunity.

The evolution of a new marketing trend like this follows a standard pattern, and we’re seeing it unfold right now with native ads, just like it did with social media marketing:

1) A handful of innovative companies use a new strategy to hack growth. We saw this mid/late '00s as risk-taking brands adopted social media.

2) The tide rises as early adopters try their hands at the strategy. Suddenly every tech company in the world started writing "social media" in its investor deck under "growth strategy."

3) Consultants and "experts" start appearing. The guy who got on Twitter six months earlier was now hawking his services to the companies wanting to get in on the action. There were suddenly a bunch of meetups about the topic.

4) Boutique agencies pop up. Established businesses and brands started using social, and small agencies began helping them. (Think Vaynermedia or Big Fuel.)

5) The big agencies finally get on the bandwagon. Major brands like Walmart and Ford joined the social media marketing arms race, forcing the big PR agencies to adopt the discipline.

6) Startups start building enterprise software to cut out -- or assist -- the agencies and consultants. Hello Wildfyre, Buddy Media, Vitrue, and a million others you never heard of (or you did, but never got far, like Postling).

7) A ton of startups starts filling every crevice of the space with products. URL shorteners! Auto DMers! Social games! Huzzah!

8) Startups consolidate, kill each other off, and get snapped up by enterprise acquirers. Salesforce bought Buddy, Google bought Wildfire, Oracle bought Vitrue. Publicis snatched up Big Fuel. The market for tools was saturated.

9) The long tail of startups and consultancies dukes it out and the market reaches equilibrium. Mature brands start thinking about how to up the ante, while a handful of innovators explore what's next. "Hey, what if we created our own stories to share on social, instead of sharing everyone else's links and dumb prompts like, 'Who loves summer?' Then we could bring the engagement to us!" (Back to Phase 1.)

Today, brands want to tell stories, and fuel their social marketing efforts with home-brew content. Media companies want brands to sponsor great stories like they sponsor baseball stadiums. The consultants are out in full force, and the big ad and PR agencies have all put "content marketing" on their menus. And enterprise startups like Percolate and, if I may humbly add, Contently, have built infrastructure to power it.

Content marketing is currently at about Phase 7.

A gazillion startups are now launching -- and being funded -- to add solutions for every slice of brand content. Whereas in 2011, every VC said, "I'm not sure about the market for content marketing," today the number on the investor slide for "how much brands spend on online content" has quintupled. We’re seeing new entrants like Nativ.ly and Postrelease, and established companies like TapInfluence, Outbrain, and Disqus pitch headfirst into branded content. And even content farms like Scripted and Skyword are talking investors out of millions of dollars to pursue the long tail of small businesses who can’t afford high-end talent but are willing to engage “writers with high school diplomas” to follow the big brands’ lead.

Of course, that doesn’t mean that many of these startups will succeed -- or are even barking up the right tree. But if ever there was a leading indicator of a macro trend in an industry, "number of startups pivoting into the space" seems to be pretty reliable. I think it’s safe to say that content marketing will be here to stay for some time.