Content & Cash: The Economics of Content

CASHContent &

Photo: © 1984 Betty Weinaug

“I am two people. Johnny is the nice one. Cash causes all the trouble. —Johnny Cash

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Business expectations To make an investment, organizations expect: • To know exactly what our product is • Proof of competency/quality • Exactly how much it will cost • Provable value and ROI

Hard numbers. Right now.

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yikes.

We can do it • We know content work is valuable• We know content is a benefit, nay

necessity, for businesses• And the business world is catching on,

too

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Today• Selling and scoping• Estimating value/ROI• Pricing

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But first…some anger management

1.It’s not (always) about disrespect or even money.

Photo: ©2012 John Alderman

Censored

Johnny “Cash” Alderman

“Economics is making the most out of life.

—Gary Becker

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Decision making is scaryInvesting in content:• Means NOT investing in other things • Might result in loss of:

• Money • Time• Other opportunities• Professional reputation • Emotional anguish

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And hard…People: • Are limited by what they know • Latch on to things that are familiar • Take their best guess • Often play it safe • And then immediately start worrying that

they’ve made the wrong decision

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2. Content is a harder decision than most

Photo: ©1980 Betty Weinaug

Content breaks all the economic rules • Things of value are usually• Exclusive• Transparent • Hard to replicate

• Endless supply AND endless demand

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“Content strategy” is a service• “New” industry • Very diverse • No obvious accreditation • Doesn’t fit nicely into a traditional

business

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3.Numbers don’t need to be exact.

Photo: ©1980 Betty Weinaug

“As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality.

—Albert Einstein

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Measurement is…A set of observations that reduce uncertainty where the results are expressed as a quantity.

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Exacts are impossibleNumbers reduce uncertainty: • Approximate values • Shortcuts for the brain • Common vocabulary

Think about numbers as a communication tool.

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Selling and scoping(building a relationship)


1. Do your homeworkGet all the information you can, find out: • What is the decision?• What impacts that decision? • What else do you need to know?• What experience do stakeholders have

with content? • Is there a budget?

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The goal: Make a confident decision that’s beneficial to everyone.

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2. Narrow down the need What’s the buyer buying?• Good or service• Service • Strategy • Planning• Designing products or processes • Implementation • Creation

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3. Make connections

23 Photo: © 1980 Betty Weinaug

4. Understand all benefits and costs

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Type Benefits Costs Monetary Profit or savings Cost of creation Sensory Get satisfaction/

alleviate painEndure extra pain or reduce satisfaction

Temporal Save time Lose time Opportunity-based Gain advantages Eliminate possibilitiesPsychological Reduce anxiety Add anxiety Social Increase stature Blamed for problems Convenience-based Makes things easier Makes things more

difficult

5. Tell a hopeful storyCreate a story that highlights key benefits, such as:• We can serve users better• We can be more efficient• We can beat the competitors• We can be more accurate

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Brand it, test it, believe it

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The Content Efficiency InitiativeBetter for the front line and the bottom line Buy making our intranet content more accessible, we’ll save hundreds of headaches and hundreds of thousands of dollars….

6. Eliminate fear

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• Discuss the details • Plug information gaps • Address concerns • Start small or do some proof of concept

work • Provide references (services) or samples

(goods)• Be patient

Estimating value and ROI(the magic formula)


Value = Benefits-Costs

Value of what?

Strategy or Service

Content as product

Content as influence

Efficiency tool

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Strategy or Service

Content as product


Efficiency tool

Value of what?

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Content as product What is the content product worth?• Benefit: Profit from the sale of the

product • Cost: Cost to create the product

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Strategy or Service

Content as product


Efficiency tool

Value of what?

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Content as influenceWhat is the piece of content worth?• Benefit: Increased profit as the result of

an end-user behavior change• Cost: Cost to create the content

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Estimates, not exacts Figure out what you know; fill in the blanks with assumptions • The average Johnny Cash t-shirt costs $20• Analytics show that 50 people start the process of purchasing a

t-shirt online every day, but only 10 finish the process• User research shows that the instructions on the purchase

pages are very confusing• We assume 5-10 people leave the purchasing process because

of something unrelated to the site, and 5-10 leave the process when they see the shipping costs

• We assume the remaining 20-30 people would complete the purchasing process if the instructions were more helpful

• Therefore, the value of the instructional content is likely around $144,000-216,000 per year ($20 x 20-30 people x 30 days X12)

• The cost of fixing the content is approximately $5,000

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Strategy or Service

Content as product


Efficiency tool

Value of what?

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Efficiency tool What is the tool worth?• Benefit: Cost savings as the result of

employee behavior change (or happiness)

• Cost: Cost to create/maintain the tool and train people to use it

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IntermissionPhoto: © 1982 Betty Weinaug

Strategy or Service

Content as product


Efficiency tool

Value of what?

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Strategy (or service) What is the strategy worth?• Benefit: Combination of: • Savings/profit from:

• Content as product• Content as influence• Tools • Sub-services

• Value of non-monetary benefits• Cost: Cost to create/implement the

strategy

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Pricing(you’re worth it)


“Everything is worth what the purchaser will pay for it.

—Publilius Syrus (1st century BCE)

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Ways to priceYou can base price on:• Cost• Competition• Demand/value

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“There are a lot of good economists, but there is only one Roger Clemens.

—Robert Solow (1987 Nobel

laureate)

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Estimating probable resultsBasic project information: • Maximum gain: $216,000• Maximum loss: $5,000• Chance for success: 70%

Expected opportunity loss: • Risk of approved: $5,000 X 30% =

$1,500• Risk if rejected: $216,000 X 70% =

$151,20046

Pricing basics• Give ballpark estimates early• Estimate on time, price on value• Aim for a consumer surplus• Always provide numbers in person

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“Price is like setting a screw. A little resistance is a good sign.

—Harry Beckwith

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Our friend, Johnny…Stats 50+ million albums sold

Created:96 studio albums 63 compilation albums 153 singles

Honors17 Grammy Awards

9 CMA Awards

Rock and Roll Hall of Fame Rockabilly Hall of Fame

Songwriters Hall of Fame Gospel Music Hall of Fame

Country Music Hall of Fame Nashville Songwriters Hall of

Fame

Kennedy Center HonorsNational Medal of Arts

Hollywood Walk of Fame

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Photo: ©2012 John Alderman

Censored

It’s about decisions

not disrespect

It’s NOTus-against-them

it’s about building relationships

It’s about reaching understanding

andreducing uncertainty

It’s about estimates

notexacts

It’s not traditional

but it’sachievable

Go prove it.

Your work is valuable.

Thanks!@melissarachmelissa@dialogstudios.comwww.contentstrategy.comwww.dialogstudios.com

58 Photo: © 1981 Betty Weinaug

Want to know more? Content Strategy for the Web (second edition) Check out chapter 10By Kristina Halvorson and Melissa Rach

How to Measure Anythingby Douglas W. Hubbard

Marketing Professional Services by Philip Kotler, Thomas Hayes, Paul N. Bloom

Naked Economics: Undressing the Dismal Scienceby Charles Wheelan

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http://www.contentstrategy.com/book.html