Content marketing might seem like an uncharted risk for you.

How will I know if it works? What are the costs? What if it fails?

 

It’s good to calculate risks. You don’t want to jump into something you are not ready for.

But are you also considering the risks of your current course of marketing? Which one of these best describes you?

 

Course 1: Word-of-mouth marketing

You have the kind of business most of us dream of. You’ve never wasted a dime on advertising.

But what risks are you assuming?

Your industry or market might face significant disruption. Plenty of small businesses have been forced to shut down after a nationalized competitor or digital giant comes in and changes the rules. Staying with this course is a bet that nothing drastic will change in your industry.

That’s fine if you are looking at an exit plan within the next 5-10 years. However, if you have a business you want to last for a long time or be able to pass to the next generation, you need to make sure it is equipped to handle major changes that are bound to happen.

You have assumed a level of loyalty among your existing clients. You’ve likely worked very hard to earn their trust, but customers are demanding more and more these days. At what price/convenience point would your clients leave you to try someone else? How strongly would they describe their relationship with you?

 

For example, Tricia is 45 and has her own family medicine practice. She has built up her patient list through referrals from patients over the years.

But Tricia can probably expect a lot of disruption in her industry in the next 20 years. It’s easy to imagine one or two major digital companies finding a way to provide virtual ‘house calls’ and a list of specialists, all without the need for direct human interaction. With the skyrocketing cost of healthcare, her patients may prefer this new service regardless of their level of loyalty.

 

Course 2: Traditional advertising (TV, Newspaper, Radio)

Certain businesses still benefit a lot from traditional advertising, but it has some serious risks.

You are participating in a ‘rent-an-audience’ strategy when others are opting to own. A competitor that builds and engages an audience on their own might be able to save costs and hold a significant advantage over you.

The impact of traditional advertising continues to diminish. Thirty years ago, a television spot in primetime might have gotten you nearly 30% of your community tuning in. Today, you are lucky to get 10%, and those numbers continue to drop. A study from Morgan Stanley said there has been a 50% collapse in broadcast TV ratings since 2002. The same is true for newspapers and radio. While these platforms might still be strong in your community, think about how effective they will be in five years.

You are investing in the least trackable marketing strategy. Traditional advertising feels safe because lots of people use it. However, it is nearly impossible to track the success of an ad. As analytics become more sophisticated and useful for measuring impact, the more experience you have in tracking this data the better.

If your marketing plan is heavily based on traditional advertising forms, you are perhaps taking the greatest risk in moving forward with it, given recent trends. You don’t need to abandon it completely, but you should consider other options.

 

Kelly owns a local sporting goods store. She has always gotten good returns from running ads on local radio when different sports seasons begin. She has seen a diminishing return on her ads lately, but still has the occasional person who mentions the radio ad.

She starts to get worried about the future after one local radio station that is struggling financially announced a sharp increase in advertising fees. Then, she saw an ad for Apple’s CarPlay announcing inbuilt software (making local radio obsolete). Kelly’s problem is that she is trying to engage with her audience where she thinks they still are, even though they are leaving quickly.

 

Course 3: Digital Advertising

Most companies seriously concerned about their future growth have dabbled in this field. They have a budget for Google Keyword search, Angie’s List, or Facebook ads.

The philosophy is the same as traditional forms – find the people with the biggest audiences (websites, Google, Facebook) and pay them to rent their audience.

Here are the risks you face if this is the cornerstone of your marketing:

The Internet was not created for advertising. Webpages, search, and social networks are nearly all created for connecting and accessing information. In contrast, radio and television were created to support advertising (stories with cliffhangers that kept you interested and stopped you from changing the channel). There are creative ways you can make your ads more useful or ‘native’ to the existing platform, but it is still artificial.

Banner ads are losing effectiveness. If you can call 3% effective, banner ads used to be a reliable stream of traffic. Today, those rates are closer to .1%.

Most digital media is moving to mobile, which makes ads even more difficult. A recent report said that 25% of all web usage is mobile and it continues to grow at 81%. However, when a screen is only a few inches wide, things like display ads and sponsored posts don’t show well.

 

Adam relied on Google and Facebook ads to start his new premium customized t-shirt business. While he was seeing some results, he wasn’t meeting the cost he was spending on the ads. Because his was a premium service, most of the competitors would skimp on quality and undercut his price. Also, he gets a lot of small-run orders from the ads, which weren’t as profitable as large orders.

 

Course 4: Content Marketing

Here are the risks for Content Marketing:

You are competing with everyone else for attention. By everyone else, this doesn’t just mean others in your industry, but everyone – from the New York Times to Cosmopolitan. People only have so much time to consume media and you have to make yours so great that they would pick it over everything else in their feed.

It is a long-term commitment. You can’t just try it for a few months. It needs to be something you commit to over the long haul.

There are more start-up costs. Word-of-mouth only costs time and doing well. Some traditional ads can still be cheap to create and distribute. A content marketing strategy involves putting together a full plan and having a dedicated team to execute it. The advantage in the end is that you own everything you create, but owning has always been more expensive at the start than renting.

 

Kiran has a gorgeous venue that he is trying to rent out. He does good business with weddings on the weekends, but he is having trouble selling it to corporates during the week for luncheons and meetings. Kiran decides to host his own events at his venue, targeting his Ideal Audience.

Kiran does a lot of research getting to know his Ideal Audience and figuring out what kind of event they would like. He spends a good amount of money to host the initial event with a free lunch and a well-known speaker. He gets a good response from the event, but soon realizes that if he is going to keep the events going, he will need to hire someone to manage the logistics.

 

Four Options for You

The point is that you have already accepted the risk for the one you are doing now. All things being equal, which one do you think is best for you?

Remember, the status quo is still a risk.