Marketers spent record highs on branded content in 2009––allocating on average 32% of their overall marketing, advertising, and communications budgets to the category––up five percentage points from the previous high of 27% recorded in 2007, according to a study from the Custom Publishing Council (CPC).

Among corporate respondents to a CPC survey,* each spent an average of $1.8 million on branded content in 2009, with 51% allocated to print publications, 27% to Internet media, and 22% to categories such as video or audio, which were measured for the first time this year.

"Due to rising demand, branded content has proliferated in recent years, expanding beyond its traditional roots of print publications and the Internet. The study shows substantial growth in our industry sector," said Lori Rosen, CPC executive director. "Perhaps even more importantly, 78% of respondents reported that branded content is more effective than advertising."

Below, additional findings issued by the CPC.

Effectiveness of Branded Content

Marketers say branded content initiatives are more effective than other leading forms of advertising and marketing:

• 70% of marketers say branded content is more effective than television advertising.
• 61% say it is more effective than direct mail.
• 57% say it is more effective than public relations.

Educating Customers Is Top Objective

According to 54% of the companies surveyed, the primary reason for branded content initiatives is to educate customers, followed by customer retention (25%), and brand loyalty (21%).

Up-selling was at the bottom of the list, indicating that corporate marketers are looking for long-term returns rather than a stimulus for short-term transactions.

Outsourcing Branded Content

The use of external agency services (custom publisher, design firm, or video production company, for example) to handle some aspect of branded content initiatives matched an all-time high from 2005, with 54% of companies reporting that they outsourced some portion of their branded content.

2010 Budget Projections

Looking ahead to 2010, 24% of companies expect marketing spending to increase from 2009 levels, 20% expect a decrease, and 56% expect budgets to remain flat. Print publishing spending will likely decline, while other forms such as digital are expected to increase.

*Companies studied include Booz Allen Hamilton, Costco Wholesale, General Electric Energy, Honda Financial Services, State Farm Insurance, VistaCare, and World Vision.

About the data: The ContentWise and Custom Publishing Council's 2009 Spending: A Look at How Corporate America Invests in Branded Content was conducted via online and mailed methods targeting a random sample of companies across all industries.