It’s become a lucrative revenue stream for media brands….but sponsored content may be keeping them from seeking a truly sustainable business model. And that’s a big problem.
Joe Pulizzi really hopes he wrong on this one, but he believes sponsored content is poised to kill the traditional media industry.
Pulizzi posted an intriguing piece in his recent newsletter titled “How Sponsored Content Could Kill Media.” And boy, is it an eye-opener.
He relates how sponsored content, in just the past 10 years, has gone from a barely noticeable blip on revenue screens to the primary business model from many media brands.
“As the traditional media model of advertising continues to break down, publishers are increasingly turning to sponsored content as their savior. And why not? It has led to some amazing turnarounds – including those at The Washington Post and The New York Times,” Pulizzi writes.
“So now, media companies that used to shy away from sponsored content opportunities are going all-in. Sponsored content has become the en vogue business model for media. But while this shift is certainly exciting, what it’s actually doing is keeping media companies from seeking out a real business model – one that will help them achieve success over the long term,” he continues.
And this is what has him worried. The problem is that brands are getting better at creating and distributing their own content, effectively eliminating the need for going through media brands at all.
“In the corporate world, it seems like all the right pieces are being gathered – they just need to be put into the right place. And did I mention corporate coffers? Brands have so much more money to invest in this, it’s not even funny,” Pulizzi notes.
And this is how media brands may find themselves in some serious financial trouble.
“Just as they did with traditional advertising, these content-empowered brands will likely start to pull back on their sponsored content investments. Without other revenue sources to depend on, and with advertising all but dried up, this pull-back could represent a final, fatal blow to the media industry,” Pulizzi warns.
It’s ironic, isn’t it? Pulizzi and his team have done more to further the art and craft of content marketing than any organization I can call to mind. They’ve helped to create this engine that is poised to devour media brands. He knows what he’s talking about, and I applaud his foresight on this, and his forthright evaluation of the situation.
Media brands that rely on sponsored content risk far more than their reputation – although the risk there is considerable. As brands hone their skills in creating effective content of their own (thanks in large part of Pulizzi et. al.), the revenue source underpinning these media outlets could soon evaporate. I hope they have a plan for what comes next.