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The Changing Digital Landscape pt. 2 -Content is now paid media

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This is part 2 of a 6 part series further exploring predictions I made in my presentation at the NetSquared DC Meetup  “What’s on the Horizon for 2013” event.

Fifteen years ago, Nielsen declared banner ads are not fit for the internet due to banner blindness. Yet, banner ads remain the dominant advertising unit spread across the web. In 2011 alone, 5 trillion banner ad impressions were served online, an average of 20,753 ads per online user.  

The effectiveness of banner ads are diminishing. Fewer and fewer people are paying attention to them. Even those who find them relevant choose to ignore them. The average click-through rate of banner ads is a dismal 0.2%. Yet, as advertisers, we continue to view the web as a place where we place pretty graphic ads next to content people want to see with the hope that site visitors will click on them.

People primarily use the internet to find information, entertain themselves, and communicate with others. People choose to engage online with and follow brands for the same reasons.

List of fan page benefits according to Facebook Fans

Your website visitors and brand page followers want you to produce great content that aligns with their needs. By doing so, you will see greater returns than traditional online advertising.

The main drawback to content marketing has traditionally been efficiency and scale. Organizations often have to produce a great deal of content over a prolonged period of time in order to see decent ROI, which most are not equipped to do. Secondly, content marketers were confined to the audience they can build on web properties, unable to achieve the reach of traditional online ads.

Enter paid content - the ability for content marketers to turn their posts in paid ad units. This concept has been around for many years, but the costs and barriers to entry have significantly decreased with the emergence of self-service ad platforms on social media and blogging platforms with user numbers in the millions. You get the same targeting ability as banner ads combined with the effectiveness of branded content.

Online advertising companies have recognized the diminishing returns of traditional online ads and have made drastic moves to provide paid content alternatives to banners. Companies like Federated Media, the six largest advertiser in the world, has sees the benefits of this and has is switching to a paid content model. Other large media and social brands, from Buzzfeed and Tumblr to Twitter and Facebook, allow advertisers to promote branded content to their a targeted audience to increase their reach and engagement.

Paid content is the future of advertising. Studies dating back to 2008 show that branded content provides upwards of a 30% greater return than banner ads.

Some question the scale of paid content versus banner advertising. With the advent of social ads, and the reach of media companies, this issue is decreasing each month. It is also an irrelevant concern. While scale may be important for brand recognition, if you seek to drive meaningful action through your ads, such as recruiting members, selling products, or collecting donations, it is more important to reach a relevant audience than it is to reach a large audience.

The advertising landscape has changed. Your organization needs to focus on creating compelling content that informs, persuades and entertains your audience. You content strategy is now your paid media plan.