Very thought-provoking book that asks the reader to questions some of common industry assumptions.
The author suggests that we overestimate the value of content; successful companies excel not because of the quality and uniqueness of the content they produce, but because the content facilitates connections between customers. However, companies should not rely on best practices that might be beneficial for other organizations, but need to find their own approach and use content to help their customers connect in a way the most beneficial for the company’s objectives.
Interesting: the decline of newspapers may not have been created by the decline in the readership of the content (the circulation revenue did not decline so sharply), but the decline in advertising – which has primarily “connecting” function. As buyers and sellers were better served by online resource, newspapers lost advertisement that always supported the content itself.
Another interesting example: comparison of Tencent and Facebook. Though Tencent has a very effective digital currency, Facebook’s attempt to create a digital currently were unsuccessful. Tencent might have accidentally found an application of digital currency when popular handles started to generate value in real currency. The company makes avatars and other electronic enhancements available in exchange for its digital currency, what keeps generating interest. Facebook’s attempt to create digital currency did not have sufficient context for the product to become popular. As a result, these companies have very different revenue profile.
The book explores music industry from the content perspective in useful and also entertaining form. The change of the musical recording format chart is particularly insightful.
Value of format is also specific for an industry, or, maybe, even a unique product. The popular book 50 Shades of Grey was initially published electronically, and did not reach wide audience in this format. The book’s popularity came after the debut of its print edition.
Quite interesting – and very successful – approach of The Economist: as the company’s brand have been well-known and functioned as a status brand, the company did not have to hurry to provide any unique content online, and did not need to create any additional free content. The Economist does not credit its success to exceptional quality of content, though it promotes consistency of style. As sufficient number of people would be happy to be seen with The Economist and not actually read it, the promotional efforts of the magazine in US were based on this nuance. Marketing efforts were not concentrated in San Francisco or New York, but in many other less expensive markets where The Economist might have “many potential readers, but not actual ones.” This approach saved marketing dollars and achieved desirable results.
Editorial quality experiment: readers were asked about the editorial quality of the article branded as The Economist, The Huffington Post, or unbranded. The article was accompanied by high quality ads (Jaguar, AMEX), or simple popup ads, or had no ads at all.
- The Economist: editorial quality of the article without ads or with high quality ads was perceived the same; simple popup ads decreased perceived quality of the article
- Huffington Post – no difference in perception of the editorial quality of the article disregarding the presence of the ads or their quality
- Unbranded article – any ads increased perception of the editorial quality (if anybody is advertising… the content must be worth it…)
An example of an advertising approach that must also be considered by companies based on their unique business rather than a general industry “best practice.” Ebay discovered that brand paid search advertisement brought new visitors to their site, who did not quite buy the products. However, the ads were clicked by returning visitors, who would not need an ad, and would click on organic listing anyway. In short term, the paid brand search advertisement’s return was negative for Ebay. Ebay suggested that other brands might have similar results. Google disagreed based on its own research, and recommended each brand to evaluate the benefit of search advertisement for its unique business 🙂
Business strategy itself requires consideration of company’s unique position in the market and “connection” of all strategic elements. If the company is thinking about “Content,” it needs to focus on how the content will help to connect its customers or leverage existing customer connections.