12 Feb 2014

Why Content Shock Is Overblown: The Economics Just Don’t Add Up

Is there too much competition for attention out there? Do you find yourself going hoarse trying to shout using over-the-top titles like those of Buzzstream and Upworthy? Is so-called “content shock” the end of content marketing for small businesses?


A little background to understand the problem

@Lee Odden tweeted a fascinating question leading to this blog post: Does it still make sense for companies to blog? The question is based on the concept of “Content Shock“:

“In the world of content marketing, the prices cannot fall because the “price” of the content is already zero — we give it away for free. So, to get people to consume our content, we actually have to pay them to do it [by paying the content creators], and as the supply of content explodes, we will have to pay our customers [read: the content creators] increasing amounts to the point where it is not feasible any more. “

In plain English, the supply of content is booming. To shout above the noise, you need to pay increasingly higher amounts to produce better and better content. At some point the ROI won’t be worth it.

In particular, small businesses find themselves having to compete at the national level for what used to be “their” customers. The internet is increasingly eliminating place convenience as a competitive differentiator for small businesses. Why buy furniture at the local mall when you can have an equivalent item sent to you for less, even including shipping?

In response, small businesses learnt that they had to produce content so that search engines would rank them higher. That worked OK until their competitors scraped their keywords and built content targeted at the same top-of-funnel informational queries. You can substitute in your favourite content marketing tactic for a Q&A strategy (e.g. infographics, news coverage etc) but the point is the same. Companies with deeper pockets are competing with smaller guys for the same attention. Now what?


The real context and why things aren’t that bad

The content shock article got lots of responses explaining why things aren’t so bad, most of which are summarized here. There’s some truth to the responses, but lots of idealistic slogans masquerading as insight.

Let’s first look at the themes as identified by Mark Schaefer (the blogger who wrote the Content Shock article), in responses challenging his post. He already responded, but I’ll add my own comments. After showing why most responses to his article were besides the point, I’ll address the core economic issue of supply and demand and show why / how content shock isn’t really such a big deal.

Response 1: Great content will always rise to the top

Sure, in the fairy tales. Anyone who’s worked their tail off to produce great content that then gets ignored knows this is true. Linkbait = Content + Distribution, not “build it [the content] and they will come [without any distribution effort].”

Response 2: It does not cost any more to create great content so the economic assumptions are wrong

More fairy tales. Quality costs more money.

Response 3… see below. This had some value so I’ll save this to last.

Response 4: As long as people have a need or question, they will find and consume your helpful content no matter how much of it is in the marketplace

These are the same ivory tower thinkers who say “usability doesn’t matter – if people want our products, they’ll figure out how to use our 40-step checkout and make the purchase.” Then reality’s iron fist strikes them in the nose with a 0.01% conversion rate (thanks mom!).

Response 5: “Deep pockets” do not matter in the content marketing space, which provides equal access to all

Tell me that next time you want to run your clever 30 second video during the Super Bowl. Or when you want to pay for any other media distribution. Or for someone halfway trained in creating quality content.

When people succeed at content marketing without big bucks it means that they got lucky or spent a lot of time [=money]. You can’t rely on luck as a business strategy. And spending a lot of time/money is the problem Mark raised initially.

Response 6: Technology will help us overcome the consumption side of content shock

Yes, and cure cancer and AIDS and bring unicorns and world peace. If you believe this, hold your breath… We want you out of the gene pool. (Only teasing of course :).)

Technology is not the answer to everything, I’m afraid. And even if it helps filter out some things, i.e. reduce the supply that any individual is exposed to, this just compounds the problem. Now you don’t need to just compete with the competitors, but with the filtering system too. Hence SEO, Facebook marketing guides etc. So it might help individuals who feel overwhelmed, but we’re concerned about small businesses right now, i.e. the suppliers of content with limited budgets.

Response 7: The impact of Content Shock does not matter if you have properly identified a niche market

This is to the point – if you’re in a niche where there’s less supply, you have less competition.

Nevertheless, this misconstrues the argument Mark’s making. Mark’s saying that there are 10 spots on a search results page, and whereas you used to compete offline for your local watch buyer’s attention, now the competition is every watch shop in the country and some abroad. Granted there’s less supply in absolute terms, but the space in which you can be seen (hours people can read etc) is being fought for by more competitors.

That’s pretty dire.


Except that the economics tell another story

Just as the web makes you compete nationally for the same audience you only used to compete for with local competitors, it also increases the demand side of the attention. Before the web, my soccer business could only reach locals. Now I can also sell nationally (assuming I get set up to ship).

So yes, supply is increasing a lot – but demand has grown in parallel. As Mark himself points out, we consume a lot more content now than we used to a few decades ago.

And while Mark is concerned about exponential growth in supply, I want to point out incorrect assumptions he makes about the supply.

First, there’s a phenomenon that existed even before “content shock” or the term “content marketing” even existed:

Blogs die.

They either get taken off the web entirely, or stop being updated which is similar. Either way, the supply stops.

If you ever dig through Majestic link data, for instance, you’ll see that a huge amount of blogs and other sites experience this.

This matters a great deal because usually the key proof that we’re all going to suffocate under an endless amount of content is the statistics on the number of blogs created on WordPress.com and others that publish such numbers. Guess what? Lots of those won’t live out the year, much less the next.

A further important point is that Mark mixes amateur content creation with business content creation and assumes that since we only have so much time to consume content, the two are in competition. While that’s partially true – we do have limited time and a minute for lolcats is a minute I won’t use for reading a whitepaper – it mostly ignores the fact that amateurs don’t market their content.

My friend Julien wrote a fascinating blog about his trip to India. He did remarkable (crazy? hehe) things like following a stranger who randomly beckoned to him in the mountains of Kashmir, and somehow found Chabad [in the middle of nowhere, naturally]. Between his wit, photography and interesting adventures, he could easily compete with the loads of travel guides for the places he’s been, beating most or all of them. But Julien was just sharing with his friends and family over Facebook, as a way for us to keep up with how he’s been.

When WordPress.com and others publish these stats … they’re mostly talking about amateur blogging. Professionals are hosting blogs on their own domains etc.

So a lot of the increased supply of content is from people who are either not vying for attention only just barely.

Now, you could adapt the argument somewhat. Surely if amateurs are building loads more blogs, so are professionals. That’s true. But there’s a much bigger market that they can reach online not just much greater competition, as we said earlier.

And finally, the ROI on content marketing depends of course on the monetization. Granted business give the content away for free. But they will over time become more and more sophisticated at converting that attention. The ROI from higher conversion rates (another aspect of the economics) will certainly also play a role in continuing to keep this viable for small businesses. And that’s why if you choose to pursue a content marketing strategy, you should really request the free booklet we’re publishing soon on Blog Design For ROI.