Content
Takeaway: Content isn't king, it's the kingdom. It refers to any valuable information that can be used to engage and inform audiences.
Let's say you're interested in learning how to play a musical instrument. While flicking through a few websites, you stumble on a well-crafted video tutorial that explains everything from the best way to hold the instrument to presenting the easy first steps for playing your first melody. To you, that video is gold dust. It’s like the video itself possesses a special power to teach you something new.
Good content is like a secret treasure that empowers you to succeed in whatever you put your mind to. It can enhance your creativity with inspiring stories, breathtaking visuals or thought-provoking ideas. Content can also be a powerful tool for connecting with others.
Just as sharing stories around a campfire brings people together, sharing valuable content can create communities and foster meaningful relationships.
Content Is A Treasure Map
High-quality content, like a treasure map, guides and captivates audiences. It acts as a pathway to engage, inform and entertain, leaving a lasting impression on anyone who interacts with it.
Content comes in all sorts of types, forms and iterations. We asked ChatGPT for a list of what constitutes “content,” and it bashed out the following set:
Articles, blog posts, books, essays, poetry, scripts, newsletters, social media posts, website copy, images, photographs, infographics, illustrations, charts, graphs, memes, visual designs, films, TV shows, documentaries, advertisements, vlogs, tutorials, animations, video clips, podcasts, music tracks, sound effects, audiobooks, interviews, radio shows, voice recordings, quizzes, surveys, games, interactive websites, augmented reality (AR), virtual reality (VR) and immersive experiences.
[deep breath]
Content can also include social media posts, updates, stories, live streams, memes, videos and images shared on platforms. And don't forget PowerPoint presentations, keynote presentations, slide decks, multimedia presentations, online courses, tutorials, webinars, e-books, whitepapers, educational videos, learning materials, advertisements, promotional campaigns, brochures, flyers, catalogues, product descriptions sales materials, reviews, testimonials, comments and community-generated content.
As you can see, content is everywhere, in everything and it is simultaneously tangible and intangible. For this reason, content can be extremely valuable for organisations and must be managed and protected properly. Unfortunately, companies often take content for granted and only realise its true worth when they no longer have it.
Content has a unique characteristic compared to physical assets: it can depreciate over time if not maintained but is not diminished through use. Content can be reused multiple times without loss – and can even be used by multiple people concurrently. This trait of non-consumability makes the marginal cost of using content remarkably low and often creates a winner-take-all dynamic.
For instance, building a state-of-the-art factory for $1 billion will surely be a substantial investment for any company, and once it reaches full capacity there is plenty of room for less efficient plants to enter the market and undercut that investment. On the other hand, if a company creates a suite of high-quality content it can monopolise an entire market without any capacity limitations at all.
Content is a clear example of the wildly different constraints faced by companies operating in the realm of intangible assets compared to those which are top-heavy with tangible assets. The rapid rise of a dozen or so trillion-dollar digital companies over the past 15 years with nothing else besides content is sufficient proof that content is, quite literally, king.
Content As A Path To A Better Brand
A key reason why content is valuable is that it can be the backbone of a company's brand.
To learn more about brand, you can read this article. But the short explanation is that brand is an intangible asset that represents a company's identity, values and products. Content can be used to paint a positive brand image and help customers connect with a company on an emotional level to entice them into paying a premium for products or services. The vehicle for this connection is advertising.
A well-crafted ad campaign can increase customer awareness of a product by creating a strong emotional tie to a brand. “Emotionally invested” humans are far more likely to be loyal to whatever entity (person or company) is generating the desired emotion. They are also likely to recommend the brand to others, boosting the reach of the campaign far beyond the initial investment.
Coca-Cola, the global beverage giant, has mastered the art of using content to promote its brand and mould a strong connection with consumers. Over the years, the company has created many emotionally gripping ads, some of which managed to escape the four walls of Coke’s headquarters to become part of popular culture.
Coca-Cola’s ads often mix the drink with images of fashionable ideas and values. The timeless "Hilltop" commercial, for example, featured people from diverse backgrounds singing "I'd Like to Teach the World to Sing." Coke’s strategy was to link its beverage to the values of unity, harmony and happiness while tapping into universal human experiences like friendship, love and nostalgia. Content was the foundation of this campaign’s success.
Coca-Cola also understands the power of user-generated content as a means of promoting its brand. Through campaigns like "Share a Coke," whereby its bottles were personalised with names, Coca-Cola fostered a sense of ownership among consumers. It also encouraged people to create their own content and share those experiences on social media.
The genius of this ad campaign was that it convinced consumers to essentially do Coke’s marketing job on behalf of the company – all for free (well, aside from the “payment” of social media clout, which some people would consider to be valuable). They say the best marketing is when your customers do it for you, so the “Share a Coke” campaign by Coke probably had a fantastic ROI.
Is Content An Expense Or An Asset?
When it comes to accounting, the International Financial Reporting Standards (IFRS) defines an asset as a resource controlled by a company because of past events, from which future economic benefits are expected.
So, under this description, is content "controlled by the enterprise as a result of past events"? The answer is yes, because content is either created in-house or produced under contract and is therefore owned by the company that created it (or commissioned it). The act of content creation is the “past event” and the control stems from that direct ownership.
But what about "future economic benefits"? The key here is the word "future" which refers to the timespan over which content holds value. Some content, like the ad campaigns for Coca-Cola, could have a short lifespan and therefore limited value. In that case, the content is likely to be classified as an expense since it only incurs costs for the company during the sales generation process.
However, other types of content can be valuable in the long run. Considering content as an asset goes beyond semantics and accounting principles. It has significant implications for content creation and management. Developing content is not always just an expense. It regularly creates valuable assets that enhance a business's worth. Recognising this can help justify investments in content, particularly during cost-cutting phases and tight economic conditions.
Take, for example, a go-to whitepaper created by a cybersecurity firm on the basics of practising good digital hygiene for employees. This kind of content would carry lasting relevance and might stay online indefinitely with only minor updates. If it gains popularity, generates web traffic and builds trust for the brand that wrote it, that whitepaper could become an asset that provides ongoing economic benefits for the cyber firm. In this case, the content would be considered an asset rather than an expense.
And although unlike physical assets like petrol, content cannot be "used up," it can be repurposed, repackaged, published in multiple media formats, or combined with other content, continually delivering value. But this means content requires upkeep, such as updates or additions. Neglecting maintenance reduces its value, resulting in depreciation, just like with physical assets.
A good example here is the streaming service Netflix. Netflix invests heavily in producing and acquiring a wide range of content, including movies, TV shows and documentaries. Its strategy focuses on providing original programming, such as the series "Stranger Things" or "The Crown," which sets them apart from competitors. This exclusivity drives subscriber growth and enhances customer loyalty. Netflix also uses algorithms to put the most relevant shows in front of viewers.
But if Netflix were to take its foot off the gas for a few months and cease producing fresh content, its users could get bored with the stagnant library and cancel their subscriptions. Even with this hypothetical “with-or-without” test, it’s easy to see that content is perhaps the most valuable intangible asset for Netflix.
Why Value Content Assets?
Not all content is equally valuable. As an intangible asset, content is not valued in the same way as physical assets and so may not appear on the balance sheet. Yet this doesn't mean its value cannot be determined or that it’s pointless to expend any effort to assess its worth.
Very simply, if the value derived from content surpasses the cost of its creation, then it can be considered value-adding. If it fails to cover its own costs, it would be value-negative.
To gain a clearer picture of your content assets, an audit can be conducted, and the results placed in a content asset register. This process would involve examining each piece of content and recording data such as title, subject, author, creation date, last modification date, versions or editions produced, extent (word count, pages, etc.), places of use or publication, filename or storage location and the responsible person.
At a wider angle, several methods are commonly used to value content assets, each with its own merits and suitability depending on the context. Here are a few:
Market-Based Approach: This method assesses the value of content assets based on comparable transactions or market data. Companies look at similar content deals, acquisitions or licensing agreements to gauge the market value and come to a valuation;
Income-Based Approach: This focuses on the potential income or cash flow generated by content. It involves estimating future revenue streams, considering factors such as audience size, advertising revenue, subscriptions or sales. Discounted cash flow (DCF) analysis is often used as part of the evaluation;
Cost-Based Approach: This method estimates the value of content assets based on the cost incurred to make them. It considers factors such as production costs, R&D expenses and IP investments. While this approach provides a baseline value, it may not capture the true market worth of the content.