SOURCE: The Boston Consulting Group

The Boston Consulting Group

July 30, 2015 00:01 ET

Branded Content Scores Big With Consumers in Multiple Markets

Broad Consumer Affinity for Branded Content in Markets Such as the US Gives Marketers New Opportunity to Connect and Media Companies a Chance to Rebuild Revenue Streams, New Research by BCG Shows

NEW YORK, NY--(Marketwired - Jul 30, 2015) - The response to individual programs can vary, but as a category, branded content is a big hit with consumers in major markets such as the US and Italy, according to multimarket research by The Boston Consulting Group (BCG). In the US, one of four markets surveyed for a new report, 96 percent of consumers said they trust brands that use content to inform them or help them meet a need or that provide useful information without trying to sell them something. The report, Branded Content: Growth for Marketers and Media Companies, is being released today.

In the US and Italy, consumers widely recognize the utility of branded content and are willing to accept it for what it is and can be -- informative, fun, credible, and valuable. In two other markets, the UK and Germany, consumers are more tempered in their reactions but still largely positive, except when it comes to branded content on media platforms such as gaming and social networks. In all markets, positive attitudes toward brands are magnified by branded content, which can also create goodwill for brands about which consumers are indifferent or unfamiliar. Negative feelings can be exacerbated, however, meaning that marketers need to exercise judgment in how and where they deploy branded content campaigns. (See Exhibit 1.)

Consumers also give media companies broad permission to carry branded content. The majority of consumers in all four markets have the same or a higher level of trust in media properties that carry branded content as in those that do not. Consumers are most receptive to branded content on media consumption, as opposed to interactive, platforms. For most websites and print platforms, the traditional line between editorial and advertising is being blurred if not erased. (See Exhibit 2.)

"For many consumers and business executives, especially those who grew up in the baby-boom generation, branded content is often equated with advertorials," said Neal Zuckerman, a BCG partner and coauthor of the report. "Digital and mobile technologies have given branded content the chance to reintroduce itself. What we define as branded content today -- content with a consumer benefit that is presented in an authentic environment in the service of a brand -- has a powerful ability to connect. It offers marketers the opportunity to build or deepen consumer relationships while it provides media companies new sources of revenue by helping brands achieve their objectives."

BCG expects spending on branded content to increase by about 20 percent a year in the US, from $10 billion in 2014 to $25 billion in 2019. Almost 70 percent of marketers in the US say they will spend more on branded content this year than last.

The new report presents five main findings with respect to branded content:

  • Branded content is a powerful tool for many brands. Many brands can use branded content to create and deepen consumer engagement as well as increase purchase likelihood.

  • Branded content magnifies existing perceptions. Marketers can use branded content to positive effect throughout the purchasing journey, from building awareness through post-purchase reinforcement, but brands and media companies need to carefully target the "right" consumers.

  • Media companies can play. Consumers do not believe that there must always be a rigid line between editorial and promotional material, and they are giving most media properties permission to carry branded content. But there are important distinctions by platform and market.

  • Not all branded content works in the same way with everyone, everywhere. Age, national culture, brand category, brand affinity, and other factors come into play. Brands reaching out to younger consumers should embrace branded content quickly and fully. On the other hand, brands that appeal to older consumers, as well as media properties with older audiences, should be far more conservative in their branded content strategies.

  • Credibility is critical -- and style counts. For branded content to be accepted, marketers and media companies need to be candid and true to themselves. Strong majorities of consumers in all markets put credibility at the top of the list of must-haves for branded content.

"At the very least, media companies need to meet the growing demand of consumers and advertisers by developing a core offering that marries two capabilities: integrating native ads seamlessly into consumers' interactions with media and working with brands to develop creative content for distribution through media platforms," said Rich Hutchinson, a BCG senior partner and coauthor of the report. "At the same time, smart marketers will recognize that the goal is not to kick out a few clever videos or ramp up an interactive campaign that generates buzz in the trade press. Brands need to build a capability that can perform over the long term, integrated with and supporting the broader marketing strategy."

A copy of the report can be downloaded at www.bcgperspectives.com.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com.

About The Boston Consulting Group
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    Tel +1 617 850 3783
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    gregoire.eric@bcg.com