• by Jamie Tedford , Op-Ed Contributor, July 18, 2013

Content marketing is by many measures the future of social media advertising -- and all advertising, for that matter. People respond better to it because it doesn’t interrupt them when they are doing what they love (unlike annoying pop-up ads or disruptive TV commercials.) So it’s no surprise that content marketing -- which, by the way, is also quite cost-effective -- creates greater return on investment than many traditional advertising formats. That's why it's time for brands to start thinking like publishers.

The content economy in action

Today's marketers spend about a quarter of their marketing budgets on content marketing. That's because they know consumers prefer it: a whopping 61% of consumers report feeling better about and buying more from companies that offer custom content. Moreover, 90% of consumers say they find custom content useful and 78% believe that organizations providing custom content are interested in building good relationships with them.

According to a recent Hubspot survey, the majority of marketers find that inbound marketing, including content marketing, results in more cost-effective lead generation compared to outbound strategies. Moreover, they estimate that inbound marketing results in 54% more leads overall. It's clear that content marketing is a powerful force, and the market for it is only growing. Big companies have started to take notice and are figuring out how they can get their slice of the pie.

Yahoo + Tumblr = content

Take Yahoo's recent acquisition of Tumblr, for example. On the surface, you may wonder why Yahoo would buy the young blogging platform (for a cool billion, no less). While it might seem like a crazy move on the surface, if you understand how big the content economy is likely to get then you know exactly why Yahoo CEO Marissa Mayer is so hot on Tumblr.

Yahoo has struggled in the post dot-com era to attract users, especially the younger and hipper set, who have largely bought into the Googlopoly. Tumblr, contrary to the stodgy Yahoo, is a Web 2.0 darling, popular with everyone from tweens with a Bieber obsession to moms with a flair for fashion. Put simply, the site is a content powerhouse. And with 300 million unique monthly visitors, Tumblr is clearly one of the top destinations for people on the Web, especially when they are searching for great content.

Tumblr's monetization strategy centers primarily on “native ads,” which in this case take the form of sponsored content on the site that mirrors the look and feel of typical blog posts. Their “Radar” and “Spotlight” features promote paid advertisements alongside popular organic content, helping brands gain mindshare with the uber-active blogosphere that Tumblr has fostered.

That means that Yahoo will have the opportunity to expand on what it already does best (yes, that would be content) while helping Tumblr to more effectively monetize their platform. Yahoo's own content network today grosses 600 million uniques monthly, so when combined with Tumblr they will reach nearly 1 billion people each month. That’s the same number of people that use Facebook, to give you an idea of just how much the acquisition will increase their reach.

And of course what Yahoo wants first and foremost is to make back the money it spent on Tumblr -- and then some. How will it accomplish this? By helping brands more effectively leverage Tumblr to achieve their marketing and business goals.

The power of the content niche

One great thing about Tumblr is that it is inherently built of niches -- like-minded people who are interested in consuming specific kinds of content in bulk. In addition, unlike Facebook, Tumblr has the advantage of being a network often composed of people who don’t know each other at all in real life. Instead, they gather on the site because they have common interests or passions. That means that brands can reach beyond just who Facebook user “knows” to people they associate with in loose circles of affiliated interests.

And the better marketers understand what their demographics are interested in consuming, the better they can tailor their messages to fit in the right voice and format. For example, on Facebook, we have directly observed that the most successful promoted content is that which people see as part of their normal activity stream. In-stream ads dramatically out-perform sidebar ads. Taking that one step further, updates or posts that are already attracting attention organically are the perfect candidates for paid spend, since they are already tried and true.

Marketers need to take content marketing seriously

Marketers need to wake up to the fact that they can no longer treat advertising as a simple broadcasting opportunity. Instead they need to entertain, inform and delight their audience. In other words, they need to think like publishers. When it comes to platforms like Facebook or Tumblr, the most important thing is to understand how to accomplish this by using the various offerings of each platform in a savvy and integrated manner. Ultimately, this will lead to the greatest returns on marketing investment -- and more valuable customers for your brand. Facebook is already capitalizing on this trend, and Tumblr is not far behind. Yahoo, smartly, chose a perfect time to enter the race.