How Consumers Respond to A Brand That Hosts Authentic Content, For-Free in An Ad-Free Environment?
The headline for marketers: How brands can reach profound user engagement beyond the boundaries of digital advertising?
The ecosystem of online content is comprised of three entities — marketers, users and publishers. All three have different objectives. None of them gets exactly what it wants.
Publishers objective is to increase revenue from both subscribers and advertisers. The gradual decline of users to pay for News content has required publishers to compensate the revenue lost by placing more ads.
Marketers aspire to create a genuine engagement between the brand and its consumers. However, the key tool marketers use — advertising — is extremely inefficient as it it targeted towards users that mostly insist to avoid or ignore ads.
Users would prefer to read high-quality content for free in an ad-free environment. Yet, 84% prefer to tolerate ads over paying for content and 1 out of 10 is paying News publishers on an ongoing basis.
Our pursuit to find a viable business model for marketers, brands and publishers was the main driver behind creating prandz — an early-stage platform that transforms brands into publishers.
Credo
Prandz is aimed at changing the business model of digital advertising. Instead of the common business model where marketers buy “real-estate” on social and online outlets to place their advertisements on, prandz offers marketers to communicate with high-quality, authentic content from global and leading publishers. Content marketing or any form of advertising is out of scope.
The ideal solution as it is depicted by prandz is better engagement for brands with users while providing an additional revenue stream for publishers.
Brand agenda and values are key elements that transform a brand into a content authority
Consumer loyalty to a premium brand usually exceeds the considerations of price and quality. Consumers are paying premium for a brand because they believe it represents the values and image they want to be associated with.
From the core values of the brand, prandz curates content based on relevancy to the brand essence and agenda. The DNA of values for a premium brand defines the mix of content that it would host.
For example, a sports brand can promote the values of competition, and the content would be connected to athletes that compete in multiple sports and arenas. The values of parenthood can be associated with an infant formula company. The values of fun and excitement can be associated with a snack/confectionery brand etc.
Product/Market fit
We have begun testing how consumers would react to consuming authentic content directly from a brand by intially choosing one market for a survey. The goal was to validate or refute 3 assumptions regarding this new connection between brands and authentic content from publishers.
I. Trust — How would users react to the fact they are receiving authentic content from leading publishers, but the brand is delivering it to them? Would they believe this content is biased by a hidden agenda or accept its authenticity?
II. A Viable Alternative — how likely users are to consume such content, given the fact they have access to it through multiple publishers with the caveats of advertisements and pay-walls. Would a clean interface that is absent from advertising and handed for free should grow their inclination to read the content directly from a brand?
III. Link to Commerce — how do users respond to subscribing to this free service. Are the special offers and discounts deter them from reading the content, or provide an added value?
To challenge the 3 assumptions, we have performed this survey on the Israeli market and asked the same group two questions:
I. Content Consumption — “How often you would like to read content that is hosted by a brand, given the fact it does not contain content marketing or any direct recommendation on the brand’s offerings?”
II. Subscription — “How likely are you to subscribe to such service for free, given the fact you may receive special offers and discounts by the brand that is delivering the content to you?”
The survey was taken on a representative sample and the results are a proxy to the 3 questions asked. The scale of answers was ranging from ‘very much’ to ‘not at all’. We have received the results with a breakdown of age, location and education.
Below are 3 key findings.
9 out of 10 are likely to consume content that is hosted by a brand, 6 out of 10 will do so to a large extent
Overall, roughly 6 out of 10 people are very likely to consume authentic content that is hosted by a brand. These results have strengthened our assumption that consumers find this offering appealing.
Among the age groups, millennials are the most likely to read authentic content from a brand, with 60% of respondents stating either ‘Very much’ or ‘Pretty much’.
The numbers for ‘Not so much’ and ‘Not at all’ were lower than 10% excepts for the 55+ age group, indicating that roughly 9 out of 10 are likely to consume content from the platform. This datum corresponds with the likeliness of older generations to pay for content, either through print circulation or online.
8 out of 10 are likely to subscribe to this service when they receive special offers and discounts on the brand’s offerings
For the second question, 85% of respondents have stated they are likely to subscribe to the service when given promotional offers.
Given the age breakdown, certain age groups perceive promotional offers as an added value. For example, 64% of millennials say they are very likely to subscribe vs. the 60% that are very likely to consume the content.
With that said, the general inclination to subscribe (‘Very much’ to ‘Moderate’) is decreasing to roughly 80%.
In other words, it seems there is a stronger inclination to subscribe among several sub-groups, but overall the act of subscribing is a mental block for a larger share of the population.
In both questions the differences between the age groups have not bees statistically significant.
Men are more likely to consume content, women are more likely to subscribe
The findings for the second question correspond with different inclination of women and men to subscribe.
58% of men and 57% of women have stated they are very likely to consume authentic content directly from a brand.
By itself, this slight advantage seems marginal. However, when testing the inclination to subscribe, 64% of women and 53% of men have stated would very likely do so.
These findings indicate women are perceiving the subscription as an added value, even to a point promotional offerings may be the determining factor for interaction with the brand.
The pain points of digital advertising and content are a global phenomena
The results of the survey represent one market but are a proxy to pain points of the ecosystem of content in most of Europe and North America.
Not paying for content is a global phenomenon, and so is the disinterest of consumers in ads. According to Reuters Institute, roughly 1 out of 10 people in the U.S. and the UK is paying for subscription to a News publisher. For advertising, the benchmark of 0.1% click-rate for display ads transcends any cultural and market differences in Europe and North America.
I have published several research-backed articles focusing on changes in attitudes towards advertising and why consumers are not paying for News & Magazines Content.
Pilot proposal for marketers
prandz is offering a new approach and authentic content as the primary engagement tool.
We have already established collaborations with top-tier publishers in the U.S. market.
Our business model is supported by a working prototype and includes all links in the chain — content acquisition, content curation, traffic generation and proper measurement.
We are proactively seeking commercial brands for a pilot kick-off. You can learn more by leaving your details here.
