The 3Cs Model of Digital Marketing
A popular business model in the early years of e-commerce (aka the Web 1.0 era) centered on content, community and commerce. These 3Cs collectively deliver the functional, process and relationship benefits that shape the consumption experience. Research findings show consumers seek process and relationship benefits as much as functional benefits, not the latter alone. Functional benefits refer to product features, performance, quality and brand image. They are obtained through the exchange of a payment for a product (“commerce” element) plus the marketing messages and other information that enhance the consumption experience and thus add value to the product itself (“content” element). Process benefits come from the ease and convenience of conducting business with the company in terms of not only transactions (“commerce” element) but also ongoing relationships that help both sides better understand each other’s expectations and capabilities (“community” element). Relationship benefits are rewards for loyalty that comes from frequent interactions and two-way communication (“community” element), and timely and relevant information that enhances the consumption experience (“content” element). Through the combination of content, community and commerce, digital marketing offer all three sets of benefits and hence greater customer experience (McKinsey and Company, 1999).
“Content Is King”
On the increasingly crowded World Wide Web, it is difficult for a website to get noticed and even more so for it to bring visitors back and back again. Content is considered as the key to meeting this challenge, thus the notion of “content is king”. It refers to the textual and/or audio-visual substance that consumers encounter and interact with as part of their experience at a website. Among the very first to recognize “content is king” was Microsoft co-founder Bill Gates who wrote an online column with that title in March 1996. “Content is where I expect much of the real money will be made on the Internet…. If people are to be expected to put up with turning on a computer to read a screen, they must be rewarded with deep and extremely up-to-date information that they can explore at will… They need an opportunity for personal involvement that goes far beyond that offered through the letters-to-the-editor pages of print magazines” (Bailey, 2010).
There are several rationales that support the notion of “content is king”.
- Content can be the key ingredient for creating the much-needed “stickiness” – the ability of a website not only to attract visitors, but also to engage them and to bring them back often.
- Interesting content attracts hyperlinks from other websites. A larger number of links tends to boost the ranking by search engines, which in turn generates more web traffic and enhances stickiness.
- Engaging content facilitates relationship building as it leads to greater understanding and bonds, and helps build trust between the company and its customers. Then add to that some essential tools for interactions (e.g., chat rooms and “ask the experts”). Relationships, trust and interactions together can help transform a sticky website into some sort of online community that further enhances relationship building.
- Through closer relationships, the firm may be able to better convert its frequent interactions with customers into opportunities to generate sale leads, cross-sell, up-sell and close deals, which are the “commerce” goal of digital marketing.
Website content can be both informational (e.g., news, shopping guide, expert opinions, and product ratings by consumers) and transactional (e.g., product descriptions and prices, inventory availability information, and related incentives such as coupons and specials). For a website to become sticky, its content needs to be:
- Relevant – fulfilling a need and having an appropriate scope,
- Refreshing – being updated frequently to stay current,
- Credible – being from trusted and authoritative sources or well-recognized brands
- Engaging – being creative, interactive and entertaining without becoming distractions, and
- Usable – being intuitive to navigate, easy to find and quick to download.
Creating sticky content is often easier said than done. Whereas content distribution has benefited greatly from the low cost of electronic channels, content creation is still a very costly process when done professionally, online or offline.
- Content creation is labor intensive. Employing a pool of creativity and content development talents in-house to give content the desired breadth and depth would be cost-prohibitive for most website operators other than those for whom content creation is their mainstay business. Among the latter are media companies (e.g., record labels, movie studios, magazine and newspaper publishers, and broadcasters) and knowledge specialists (e.g., research centers and business consulting firms). They can easily tap into their rich libraries of content.
- Keeping content current and well-organized is a full-time job for content creators and information specialists, not a part-time assignment for some busy marketers. Updating still involves some level of content creation. Even when little creativity efforts are required for the updated content, the updating process may not be easily automated.
- It is unrealistic, even for leading media companies and knowledge specialists, to try being a credible source of content a wide range of topics. A major film studio may be considered as a credible source of content on entertainment but not necessarily so on related consumer electronics or home theater systems.
Fortunately, not all Website content needs to be purposely created. Much of the content may have been created for other purposes and can therefore be sourced externally. The process of bringing together content from different external sources is known as content syndication.
Syndication involves the sale of the same goods to many customers who then integrate it with other offerings for redistribution. The practice is common in the world of publishing, broadcasting and entertainment where the goods are information-based. A talk-show host, for example, syndicates a radio program to many local stations across the nation. Syndication is particularly suitable for content because as information-based goods, content is never “consumed”. An infinite number of website visitors can view the same piece of information; by contrast, a piece of merchandise, say a car, that is bought by a customer is no longer available for purchase by other customers. When content is encoded in some industry-standard formats (e.g., mp3 music) it can be easily distributed via various websites and networks to a variety of hardware platforms (e.g., desktop PCs and wireless handheld devices). It can also be downloaded (in essence, duplicated) with minimal additional cost. Content syndication networks can therefore be formed, expanded and optimized far more quickly than possible in the world of physical goods (Werbach, 2000).
Content syndication consists of three distinct roles to be performed by different parties. One party may perform more than one role.
- Originators create the content. They can be anyone, from little-known independent creative artists to giant media companies (e.g., Time Warner).
- Syndicators bring together content from various sources and make it available through standard formats and contracts. Their services as an intermediary between content originators and content distributors free them from the complex task of finding and negotiating with each other directly. An example is YellowBrix. It syndicates 4000 content sources, including news media, trade publications and industry blogs, plus more than ten thousand company profiles, and makes them available in various categories by industries (e.g., health care, financial services or energy) and business needs (e.g., business intelligence, reputation management, and press and media monitoring). Another is LinkShare. It works with hundreds of retailers (originators) to provide a one-stop service (e.g., monitoring transactions, tracking, reporting and paying commissions) for thousands of websites working as marketing affiliates for these retailers.
- Distributors deliver content to Web users. They are website operators who use the syndicated content to enhance the attraction of their sites as a part of their strategy toward some marketing objectives or as a value added-service to generate more web traffic and hence higher advertising revenues. Through syndication, they get access to readily available content and thus avoid the high cost of creating similar content on their own. For content distributors, syndication is a form of outsourcing. It transforms the availability of content from scarcity (due to website operators’ limited capability to develop own content) to abundance (thanks to access to external content sources).
Falling Short of Expectations
Has content proven to be king? More broadly, has the 3Cs model worked as being advertised? Since the burst of the Dotcom Bubble, the notion of “content is king” has encountered serious doubts and reservations. So has the 3Cs business model.
In the Web 1.0 era, the Achilles’ heel of content was its creative sources (primarily commercial) and distribution (essentially one-way media). Web content was for the most part commercially developed content (CDC) — being created by professionals, paid for by companies or organizations, in the forms of virtual retail storefronts, product brochures and catalogs, online advertisements, press releases, corporate news, research reports, creative multimedia and games. It would be then distributed, in the broadcasting fashion, via “commercial” channels, e.g., corporate websites, media portals (e.g., Yahoo and MSN) and marketing e-mails. Consumers were relegated to a passive content consumption role. For them, content creation and distribution were anything but user-friendly. At the minimum, consumers would need to be familiar with the hypertext markup language (html) and some digital graphic formats for building web pages, to acquire relatively expensive hardware and software tools for developing web pages and creative contents, paying for web hosting service, and so forth. Content contributions by them were therefore very limited, being confined mainly to providing seller/buyer and product/service ratings and evaluations at some leading retail websites (most notably eBay and Amazon).
There are serious problems with CDC under this environment.
- With certain exceptions (e.g., news, weather information, financial market indices and stock prices), much of the CDC cannot be economically created and updated fast enough to be refreshing to frequent visitors. The cost of content creation by employing paid professionals has been high and is unlikely to decline sharply in the foreseeable future. Stickiness can be elusive.
- The emphasis of CDC is often on generating website traffic, or attracting eye balls, rather than engaging visitors and customers. Without engaging customers, relationship building becomes impractical.
- Being broadcasting in nature and non-engaging in emphasis, CDC tends to be interruptive to website viewing and irrelevant to the consumption experience. Trust is missing as a result. Not surprisingly, consumers trust commercial sources such as brand websites (70 percent), TV (62 percent), magazines (59 percent) and search engine result ads (41 percent) much less or no more than the people they know (90 percent) or other consumers’ opinions (70 percent) (Nielsen Company, 2009). To put it the other way, they trust information and recommendations from friends and strangers more than commercially generated content. Without trust, converting visits and interactions into transactions would be more challenging.
- Overall, the notion of “content is king” tends to direct marketers’ attention toward content often at the expense of community and commerce elements. That weakens the effectiveness of the 3Cs model. The true value of content, from the marketing standpoint at least, lies not as much in the content itself as in its potential contributions to building communities and facilitating commerce.
Given these serious challenges, even leading media companies have not been successful in leveraging their vast libraries of content (e.g., movies, videos, TV shows, news and more) to sustain their online ventures. An example is NBC Interactive (NBCi), which was shut down in 2000 after losing $662 million during its existence of about one year. NBCi was created by the American TV network NBC as a web portal combining NBC.com and AccessHollywwod.com (content sites), Xoom.com (a community and e-commerce site) and Snap.com (a search engine site). Its vast content being created for conventional media lacked the essential interactive capabilities to turn itself into a vibrant community and a viable e-commerce site (Ackman, 2001; Kumar, 2001). Another example in the merger of America Online (AOL) and Time Warner, which failed to find the synergy between the power of a “walled garden” online community by the former and that of content by the latter.
In brief, content or more precisely CDC has struggled to fulfill the expectation of being king. Monarchy could only be supported at great costs that the kingdom often finds it difficult to make ends meet. Meanwhile, a revolution– the rise of social media and user-generated content (UGC) — is brewing. In my next post, I will revisit the notion of “content is king”, but this time with UGC instead.
- Ackman, D. (2001) “NBCi: The Proud Peacock’s Folly”, Forbes, (April 10), at: http://www.forbes.com/2001/04/10/0410nbci.html.
- Bailey, C. (2010) “Content is king by Bill Gates”, Craig Bailey Blog, (March 1), at: http://www.craigbailey.net/content-is-king-by-bill-gates/.
- Interactive Advertising Bureau (2008), AIB Platform Status Report: User Generated Content, Social Media, and Advertising — An Overview, (April), at: http://www.iab.net/media/file/2008_ugc_platform.pdf.
- Krishnamurthy, S. and Dou, W. (2008) “From the Guest Editors: Special Issue on Online User-Generated Content Advertising with User-Generated Content: A Framework and Research Agenda”, Journal of Interactive Advertising, (2), pp. ??
- Kumar, A. (2001) “Short Life, Long Death of NBCi”, Wired Magazine, (April 12), at: http://www.wired.com/techbiz/media/news/2001/04/42964?currentPage=all.
- McKinsey & Company (1999), Superior Marketing in the Next Era of e-Commerce, McKinsey Marketing Practice.
- Nielsen Company (2009) “Global Advertising: Consumers Trust Real Friends and Virtual Strangers the Most”, NielsenWire, (July 7), at: http://blog.nielsen.com/nielsenwire/consumer/global-advertising-consumers-trust-real-friends-and-virtual-strangers-the-most/
- Kevin Werbach, “Syndication. The Emerging Model for Business in the Internet Era”, Harvard Business Review, May-June 2000, pp. 85-93.