Print aficonados are becoming digital cognoscenti - APA Mintel report 2011
New Mintel intelligence shows content marketing has tracked GDP and is now in good shape to rebound and grow in the face of further economic gloom.
The latest market intelligence on the content marketing industry from Mintel, commissioned by APA and sponsored by Menzies Digital Marketing, reveals that the popularity of digital formats has bolstered the industry and made it one of the most robust marketing disciplines, now worth an estimated £880million.
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THE RISE OF DIGITAL
Whilst print remains the most commonly used format in content marketing, accounting for 52 per cent of all content developed, this figure has fallen significantly since the last study four years ago when it made up 71 per cent of the total and 90 per cent in 2005.
Digital activity encompassing websites, e-zines, email, mobile applications and video now accounts for 37 per cent of the industry, an increase of 22 per cent since 2007 and 32 per cent since 2005. On the basis of these trends digital is expected to overtake print as a share of total by 2013. To reinforce this assertion website revenues have grown rapidly and are up 65 per cent and e-zines have risen by 165 per cent since the last report. Despite this rebalance of channels print is still very much viewed as an essential part of the content marketing mix moving forward.
THE ECONOMIC OUTLOOK
The advertising market as a whole was hit hard by recession with total year-on-year expenditure down 13 per cent in 2009, followed by only limited recovery in 2010. Content marketing experienced a drop during this period (12 per cent) following four years of solid growth. However, there was a strong revival in 2009 and Mintel has uncovered a strong correlation between the strength of the economy and the strength of the content marketing sector over the last decade.
The outlook for the sector is positive with 2011 turnover forecast to return to the 2007 high. A growth rate of 10 per cent is expected for 2012 and then varying between seven and nine per cent to 2015. However, the industry is set to break free from GDP if predictions of double dip recession are realised. Flourishing digital activity and three years of business consolidation and innovation will provide buoyancy enabling the sector to continue along its growth trajectory. Supporting this is the fact that 21 per cent of content marketing initiatives have been gained this year (up to 4th July 2011) and 39 per cent in the 18 month period since January 2010. This indicates a prolific market with the pace of new business accelerating exponentially.
MAIN SOURCES OF GROWTH AND NEW BUSINESS
The recovery and growth of content marketing is attributed to a number of factors including demand from consumers for branded content as an added value exchange for their custom and the flexibility and cost effectiveness of the channel.
The report shows that new and existing clients have contributed equally to growth highlighting the appetite for increased levels of content from brands that already use branded content. Supporting the growth in new business, the number of pitches has almost doubled since the last report and trebled since 2005. The number of pitches per agency also doubled during the same period from 11 in 2007 to 22 in 2010. To maintain margins pitch investment is more tightly controlled with average spend per pitch now a third lower than it was seven years ago. However, last year pitch investment reached almost £3million almost £1 million more than the investment made in 2005.
- The main sources of growth over the last three years were found to be:
- Higher spend on digital work (excluding websites) by existing clients (17.5 per cent increase)
- Higher spend on digital work (excluding websites) by new clients (17 per cent increase)
- Higher spend on websites by existing clients (14 per cent increase)
- Higher spend on print publications by new clients (13 per cent)
The next two years are seen as a development of current trends, the exception being existing clients spend on print, which is thought likely to decrease from 11 per cent to 7 per cent. Content providers see the rise of tablet content and mobile apps as offering greater potential than traditional digital work such as web copy and e-zines. Furthermore, the emphasis will be on producing measurable returns for clients.
Additionally bolstering the industry is its reduced reliance on third party advertising. Whilst carefully chosen advertising can be welcomed by consumers, brands are increasingly turning away from the ad-funded model instead focusing on themselves; rewarding their customers through pure content. This reflects the shift in mindset of using content as a pure engagement tool rather than as a revenue generator. Overall there has been a decrease of nine percent with ad revenues falling from 19 per cent of total turnover in 2007 to just nine per cent today.
SECTOR SPLITS
Retail continues to dominate accounting for 23% of total content initiatives. In terms of the print sector B2B customer magazines have experienced the most growth rising from four percent share three years ago to 16 per cent today. This was also reflected in the digital space, with B2B showing a significant 13 per cent rise from four percent to 17 per cent. B2B magazines move to become the second most prolific content sector followed by charities and financial services. Utilities and the public sector experienced the biggest drop in terms of share over the last three years but are still the fifth largest content marketing sector. Travel, leisure and automotive take sixth, seventh and eighth place respectively.
OTHER KEY FACTS
PRINT
Circulation:
Average circulation of customer magazines exceeds that of consumer magazines and customer titles account for ten of the top twenty ABC audited magazines by circulation
5 per cent of titles have a circulation of 1 million or more
14 per cent of customer magazines have a circulation larger than 250,000
50 per cent of titles have a circulation of 50,000 or less which reinforces the trend for tighter targeting and increased segmentation of audiences
Frequency:
The most popular publishing frequency is quarterly accounting for almost one in four titles
Pagination:
Despite the recession publications have not been trimmed demonstrating brands' commitment to engaging content. Pagination has either stayed the same or increased for 75 per cent of magazines. Only six per cent have reported a decline (the remaining 19 per cent account for new titles)
The average pagination is between 31 and 48 pages
Distribution:
Post continues to be the most widely used method of distribution at just under 60 per cent of titles. This is a substantial increase on 2007 figures which showed that post was only used by a third of titles
In-store distribution (12 per cent) is the second most popular distribution method
International:
One in five customer magazines created by UK content providers are distributed internationally
DIGITAL
Reach:
Digital reach is now extensive with a user total of 41.2 million, averaging 1.1 million visits per digital title per month
Frequency:
A third of website based content is updated daily, indicating marketer's commitment to keeping content fresh and up-to-date. This also reflects findings from APA commissioned YouGov research in 2010, which showed that consumers wanted new content daily from their favourite brands
Email is being used very selectively with 60 per cent of brands sending out no more than six content-driven emails per year
The most common e-zine frequency is 3-5 times per year
Smartphone formats and apps are expected to be the growth digital channel moving forwards
Comments Julia Hutchison, COO, APA
"Having worked through five years of recession coupled with fast evolving communications, the report shows that the industry is now better equipped to create more effective content solutions for clients. Through innovation, entrepreneurial flair and learning to work within tighter budgets content providers are now in a strong position irrespective of economic recovery or further deterioration.
"The ever increasing levels of convergence have played strongly to content marketing's strengths and we are seeing more clients choose to supplement their offerings with multi-channel content - a clear example of this being Google's decision to launch a print title earlier this year.
We are cautiously optimistic for the next period of industry growth and with continued support from APA through initiatives such as the annual Content Summit client-side marketers are becoming even more aware of the benefits of a content-marketing strategy"
Sarah Clegg, Managing Director, Menzies Digital Marketing said,
"Recent economic challenges coupled with huge media diversification and the vast explosion of devices has meant that publishing agencies have swiftly and dramatically transformed themselves. What was traditionally seen as contract publishing has evolved, almost beyond recognition, to be very creative multi-media agencies. By bucking the trend and focusing on an innovative multi-channel approach, these agencies prioritized the customer and offered the choice demanded - a successful transformation which offers a stark contrast to the eroding consumer magazine market."
