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Content remains a giant mystery, but that hasn’t slowed the flood of VC cash

Content remains a giant mystery, but that hasn’t slowed the flood of VC cash

BY JAMES ROBINSON 
ON JUNE 20, 2014

Content marketers might actually have no idea which metrics translate into actual business results, but content marketing companies are seeing a huge uptick in venture financing, anyway.

Out this week from CB Insights is a report that content marketing startups raised $292 million dollars across 44 deals in the 12 months spanning the Q2 2013 to Q1 2014. This was a 47 percent bump in deal activity over the year prior, but a 125 percent spike in dollars, as latter-stage companies like Percolate, NewsCred and Contently rolled out big funding rounds.

Content marketing is a business sector that is a byproduct of the sheer amount of noise on the Internet. People need qualified resources to guide them through the muck. Even if no one quite knows the magic formula, there’s a consensus that some sort of formula is needed.

As Union Ventures’ Fred Wilson wrote on his blog last year — and is cited by CB Ventures:

There is a growing market out there for content marketing… in which brands, marketers, retailers and other businesses create blogs, Twitter accounts, Facebook pages and the like and then spend money filling those pages with content. I like to think of this as moving the message from a banner to your brand and changing the engagement from a view to a conversation.

It’s not a new trend. Just an exacerbated demand. NewsCred was founded in 2008, Percolate in 2010 and Contently in 2011. The three companies together took in $58 million in VC in the past 12 months. While there was the usual whirlpool of early stage challengers – Atomic Reach, DivvyHQ, OneSpot, Quill, Triblio, Written — all performing a host of interchangeable functions, for the companies that can rise out of that noise, some real promise lies in wait.

Mid-stage series B and C funding rounds were where the real action was at this past 12 months. Year-over-year, the amount of seed funding deals remained stagnant, while series B and C deals were up 150 and 75 percent, respectively.

Content is a cruel market. There’s a hidden mystery behind manipulating the billions of eyeballs online each day for brand gain. The Internet has suppressed the market value of content. In this space it will be the companies that can supply content metrics and guidance alongside providing an exchange for content creation, which should have the most opportunity to really scale.

There’s no real consensus in content marketing what metrics to optimize for a desired result. That doesn’t seem to be stopping VC from throwing money at the problem until someone conclusively works it out. For the time being, in the land of the blind, the one-eyed man will remain King.

 

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About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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