One example is Outbrain, a well-funded “content discovery platform” based in New York that helps publishers display stories similar to the one that a reader is viewing. It also lets publishers buy and sell traffic through “recommended articles” on third party sites — for instance, Cat Fancy might (in theory) pay for one of its feline features to appear as a recommended story on Modern Cat.

Outbrain also has a lesser known business where it supplies stories to companies like GE, American Express or General Mills. The idea is that it’s easier for non-media to buy content than to produce it themselves. But while big brands have been in this game for a while, smaller companies too are feeling a growing need to buy content in order to keep their Twitter, Facebook or blog presence fresh.

Outbrain now appears to have this base covered too. Today, it announced that it has acquired Scribit, a startup that lets companies find relevant media stories and host them on their sites — for instance, Scribit could help Annie’s Kitty Co. find and license an article from Cat Fancy for its social media pages. An earlier account of Scribit says its prices are as low as $50 a month.

In the bigger picture, Outbrain’s purchase of Scribit is part of a revolution in the way that content is being passed around the internet. Companies like Outbrain and rival NewsCred are eliminating the friction that used to dog media distribution. In the past, a shoe store that wanted to attract customers by posting shoe-related articles on its website had two impractical choices: engage in costly licensing negotiations or pirate the articles and risk a lawsuit. Now that shoe store can pay a single license fee for access to a wealth of content and a way to host them.

“The growth of content marketing has been unbelievable in the last 18 months,” said Gilad De Vries, SVP of Strategy at Outbrain. “The ability for brands to have the abilty to showcase licensed content is very valuable.”

De Vries did not disclose how much the six-year old Outbrain, which is backed by $64 million in venture funding, paid for Scribit.

(Image by Minerva Studio via Shutterstock)

OneSpot is in the latter camp. The Texas-based ad firm, which has clients like Dell and Home Depot, believes the banner ad problem can be fixed and points to its easy-to-use technology as a way to do so. In a nutshell, OneSpot offers a rapid way for brands to create ads from pre-existing content — reviews, white papers, slides and so on — and display them in high value settings for a good price through the help of ad exchanges.

In practice, this might mean that an ice cream chain selects a piece of content it controls — perhaps a company blog post or a video or a newspaper review. With the help of OneSpot, the ice cream chain zaps that content into the form of an ad and place it on sites where ice cream fans are likely to be. The advantage of this approach, rather than randomly spraying an ad around the internet, is that target customers are likely to engage with the advertiser because the ad is content they care about.

To explain it another way, OneSpot’s method lets brands take advantage of the fact that many online ad slots are now being filled with dirt cheap junk like this…

.. and replace them with quality ads for a low price. Here is an example of the OneSpot approach, where a piece of content called “Desert Survival” has been packaged into an ad — the advertiser, hoping that Outside readers will be interested in the content, has paid to place it (through an automated ad exchange) on the top right of the Outside page:

One big upside to this approach for advertisers is the chance to hand over the task of ad buying to OneSpot. Doing so spares them the dizzying task of working with ad exchanges to place the ad content themselves. OneSpot also gives advertisers a way to keep tabs on their campaign with real-time analytics; the advertisers can employ A/B testing to tweak their campaigns and measure ROI.

While there are a flurry of companies making big claims about changing the ad game, OneSpot appears to be the real deal. It has been working with major retailer clients since March and received $1.5 million in funding from investors that include RSL Venture Partners and 500 Startups. I sat down last week with founder and CEO, Matt Cohen, who explained his view on the ad industry:

“Advertising is a business model, not a type of content … It’s when one party buys attention from another,” Cohen said, arguing that “interruptive content” fails and leads to banner blindness.

The most intriguing aspect of Cohen’s model is that it appears to be a hybrid of bespoke “native advertising” which is being hailed as the way of the future, and the existing display advertising business that is still popular because it scales so easily. OneSpot-served ads also come with Twitter and Facebook buttons that make them easier to share (another increasingly essential element of online marketing).

If the OneSpot model catches on, it will increase pressure on advertisers to find quality content and, at the same time, benefit writers and other content creators.  It may also reinvigorate the sagging display ad market by replacing worthless “lose your belly” ads with more valuable ad content.

The numbers are contained in the latest National Readership Survey (NRS) report, which shows Tesco Magazine average issue readership grew eight percent to 7.22 million in the year to September 2012, while that for The Sun newspaper’s weekday edition fell by seven percent to 7.08 million.

We have been in a similar place before — Sky Magazine, which was an adjunct of the BSkyB TV service, was also once the most-read title, before the pay-TV operator ditched the print zine in favour of email, web and mobile customer communication channels.

There are some caveats to this time’s claim, however…

Cedar’s Tesco triumphalism is accurate only when reading NRS’ average readership over the year…

• Unlike newspapers, Tesco Magazine is published every two months, giving readers a longer opportunity to read each edition in any given period.
• On the parallel NRS-PADD report, which asks people what they read in the last month alone, The Sun continues to beat Tesco Magazine with 15.8 million readers against just 5.3 million.
• That NRS-PADD data also puts monthly rival Asda Magazine ahead of Tesco’s.

The average figures also ignore Sun On Sunday‘s 6.05 million readers, which, when combined with weekday readership, still gives The Sun a continuing lead.

Online, it’s a whole different story, too…

• Whilst Tesco Magazine‘s website claims 161,000 unique monthly visitors, The Sun‘s claims 26.4 million monthly unique browsers (source: ABC).
• NRS-PADD data, produced by UKOM and Nielsen, also shows The Sun‘s website saw 3.2 million readers in October, while Tesco Magazine‘s clocked 87,000 readers.

What is inarguable, however, is that growing numbers of retail brands are relying on publishing content — both through existing media and under their own brand — to reach consumers, and supermarkets are well-placed to do so in print, given their large footfall.

But I think we may be back, baby. After only a few hours at the Monaco Media Forum this week, I was struck by the enthusiasm displayed around a clutch of companies — especially those like BuzzFeed, Vox Media, Buzz Media, Thrillist and Tumblr — that suggests, just as Bill Gates said 16 years ago, content is the next hot business model again.

Theirs is a quite different approach from legacy media and, for many, effective monetization is at yet unproven. But a confluence of prospects appears to light the way, for a content template, at least for a certain sub-set of new-wave players. The ennui setting in around networks like Facebook is giving way to excitement about creation platforms like Tumblr. For an industry that was supposedly on its knees, this seems refreshing.

Here’s what I’ve been learning about why:

1. Branded content may be the money-maker

Everyone is talking about “branded content”, “sponsored content” or “native advertising”. While advertiser-funded articles, video and so on are not necessarily new, many old-line publishers had, until recently, been cautious to blur lines too far.

What we are now seeing, however, is a wave of pure-play online publisher with far fewer hang-ups about unifying church and state — and an old guard that, spurred by ongoing decline and recently-relaxed European rules, is following suit.

Marketers themselves are also bullish. Excited about growing publisher willingness and desperate to get their messages across unobtrusively, advertisers are super-keen to pile money in to content creation of their own.

Good timing. “The banner is about to die and is already cratering,” BuzzFeed founder Jonah Peretti said during a panel discussion in Monaco, channelling the community’s shared concern about falling rates. “Now more brands are coming to us saying, ‘We want to be more like a publisher and you know how to do that.’”

For publishers that can both amplify advertisers and retain readers’ trust, this could emerge as a realistic new revenue model to help sustain the content creation sector going forward.

2. Social is content’s best friend

Nobody is operating in old vacuums anymore. Content publishers are fortunate now to benefit from a massive traffic hose, the social networks.

As some users tire of sharing their own baby photos and “likes” online, new-wave publishers think the object of their sharing is, increasingly, becoming “quality” content. As Thrillist’s Ben Lerer said: “The people who stand out are going to be the content creators who create the best content.”

Fahad Khan, CEO of social media conversation manager OnePublic, said during another session: “I don’t have friends who are experts in all fields. They can’t fulfill my interest verticals. I turn to editorial.”

Said Vox Media’s Joe Purzycki, publisher of SB Nation, The Verge and now Polygon: “From a content and marketing perspective, there’s nothing more valuable than social right now. Within three months of launching The Verge, our content was being shared more widely on Twitter and Facebook than our next three closest rivals.”

3. Matching supply with demand

More than just that, we are witnessing the emergence of a class of media company that relies on technology, not just its founding editorial mission, to determine what it publishes. By harnessing what search data says about what web users “want to read”, publishers can create articles to satisfy that need.

It is an efficient system to make a geek proud; journalism as platform, an audience for everything — no article goes to waste. Publishing begins to become a perfectly matched supply-and-demand game, and that minimizes losses.

Peretti: “You can reach millions of people that way, just from making something someone wants to share with someone. There’s an opportunity to build a big media company that’s technology-enabled and socially created for a world of sharing.”

Yet this is a very different kind of content creation from the journalists’ stories that readers don’t know they want but which reporters think must be read. A tail wagging a dog, perhaps. Serendipity, be damned.

Vox’s Purzycki said: “We’re not going to change what we’re writing based on social response all the time. But we use that data daily to drive ‘why was this popular’ and, from a brand standpoint, show them how widely it was shared”.

4. Devices are lighting up a new path

Two brief years in, tablets and mobile devices are giving optimism to content creators who see higher engagement, a straighter-line conversion from print and more attractive presentation

After 15 years in which the web was pretty much the only digital content channel in town, now we are delighting in a diverse number of screens and sizes and modalities, each designed for reading, watching and listening, not computing, and all of which beg, sumptuously, to be touched and consumed.

That’s only going to grow more commonplace. “Thirty-three percent of our traffic is coming from mobile,” Vox’s Joe Purzycki added. “We’re preparing for world where it’s 50 percent. These are perfect reading devices.”

5. Commerce and content can co-exist

Just as brands and publishers alike are beginning to think more expansively about advertiser-funded content, retailers are coming to regard content as one of the best possible drivers of ecommerce conversion.

Brands are being conceived, like fashion-and-beauty’s Asos and Birchbox, that marry articles and sales in the same place. Retailers are realising that, to move people to buy goods, storytelling is a great motivator, and honest, helpful guides are even better.

6. Paid content is really happening

iTunes’ 400 million credit cards on file, growing consumption of pay-for audio and video, and the continuing emergence of sexy new devices with payment mechanisms built in all point to a rosier outlook for business models that rely on charging consumers for content.

Even a start-up darling founder like Tumblr’s David Karp agrees, telling a Monaco Media Forum panel that the economics of content is the next hot investment area.”The ecosystem is at phase two right now – distribution,” Karp said. “The third phase has already started to show its face — the new economics. These people are building huge ecosystems — the next big step is going to be how they profit from it. We’re starting to see that in Kickstarter and in Etsy. I‘d be putting all my money in to that.”

7. Costs are falling

Content-making costs are falling rapidly. New technology platforms are allowing producers to make great stuff on the cheap and several publishers are leveraging pro-am production.

So much of professional content lately has been about cost cuts enacted by troubled big publishers. That hasn’t gone away. But now nimble web outfits are showing large players a plan for how content can be produced on the cheap, making possible content factories that can run at a fraction of their forebears.

This is often a rather different kind of low-grade output than that familiar to trusted professional print publishers — but quality doesn’t always have to fall with costs.

“We were producing broadcast-quality content from a small room in mid-town (Manhattan),” Vox’s Purzycki said.

That’s the view of a Forrester analyst, who forecasts the number of people buying digital content will grow by eight to 12 percent by 2017 in western Europe.

“While consumer research for years reported that consumers claimed they wouldn’t pay for content, the forecast revenues indicate otherwise,” Darika Ahrens writes.

“Forrester forecasts that, by 2017, in Europe:

• “20 percent of tablet users will pay for news,
• “the online game buying population will have increased by 27 percent,
• “60 percent of video-buying will be digital
• “and the number of music subscribers will double.”

The forecast sees a total 192.9 million people paying for those content types in seven European countries, making for a €10.2 billion ($12.2 billion) paid content industry in the region. The boom will be fuelled partly by the currently-radiating explosion in new devices designed for media consumption, many with attractive built-in payment mechanisms.

For context, it is worth recalling that Forrester in 2011 observed growing consumer willingness to pay but precious few services to support their comfort level, equalling pent-up demand. Now, however, those services are increasingly available.

Ahrens reckons:

“The potential impact on marketers is huge. Successful online content providers no longer need to rely on ad spend. (There will be) fewer chances to reach consumers with ads.”

She says marketers should respond by building their own content channels, sponsoring content packages within a paid content environment and otherwise start advertising as though it were creating content for end consumers.

But is there truth in any of this?

Although Ahrens’ report cites Rara.com and Netflix as examples of content providers that rely exclusively on payment, others, like Spotify and The Financial Times, also operate advertising businesses. And, while those businesses are freemium funnels with which to snag paying subscribers, they are not just sidelines; they also turn over several million dollars.

For many a company, the adage should be that a healthy business is one with diverse revenue streams. The Times may have started charging news readers in mid-2010, but it did not give up on its ad sales business. Indeed, its pitch was that confining its audience to a few select, paying readers would drive up its online ad rates.

This thesis also contradicts the trend that is now increasingly worrying publishers — that, on the free web, ad rates are shrinking horribly because the number of websites on which to advertise is expanding. If premium content services start charging, there are plenty more low-rent alternatives. Advertising opportunities won’t shrink – but premium advertising opportunities will.

So, one can’t deny the tenet of Ahrens’ observation. Thanks to technology developments, the outlook for content payments is positive. Of those providers who succeed at it, some will rely exclusively on user payments, and some, like The Financial Times, will seek to reduce advertising in their revenue mix as much as possible. Many publishers were buffeted by the advertising downturn of 2008-2010 too hard to go on relying on that model alone. While The Times website still runs ads, they many of of the sponsored-section variety Ahrens describes.

New-wave marketing strategies like sponsored content have a large part to play, both as an alternative to free, ad-funded content and alongside it. Vice Media, for instance, relies on big upfront sponsor deals to finance its edgy online magazine and video projects, like its Intel-bankrolled Creators Project.

The consequence of such a model is that, as more content becomes marketer-created, disclosures describing the relationship between advertiser and publisher must be visible to readers, who are as used to the traditional church-and-state separation of editorial and commercial as content producers themselves are.

Sugar Inc is a case in point.

Since launching in 2006 as a network of women’s interest blogs, Sugar has grown into a media powerhouse through organic expansion and a steady diet of acquisitions. But even though Sugar has multiple revenue streams, a swelling readership and claims it is profitable, it receives little notice.

“From the media landscape, we don’t get much attention,” says Chief Revenue Officer, Kristine Shine. “It’s interesting because from a brand and advertising perspective, there’s tremendous interest in women-only content sites.”

The Sugar sites themselves are targeted at “trendsetting Y women” and arranged in verticals that focus on topics like food, fitness, beauty and kids. Its flagship brand is celebrity site Pop Sugar.

From a business perspective, the most remarkable feature about the sites is the degree to which brands and advertising are baked into the content. In practice, this means everything from product placements in videos to slide shows in which readers can click through to buy the items they see.

Sugar also works with brands like Target and the Gap to create “branded content” videos, often in partnership with third party bloggers, that run on the sites as sponsored stories. Here’s an example in which Sugar worked with blogger Jessie Adore to promote Levi’s Curve ID program.

Shine wouldn’t disclose specific numbers but did say that half of Sugar’s revenues came from a “display” and content bucket while the other came from a commerce bucket (which presumably includes commissions from third party product sales).

Sugar’s multiple revenue streams aren’t unusual, of course. Scratch the surface on most digital content brands and you’ll find a variety of side ventures that help buttress the editorial operation.

The question here is whether there is something particular about Sugar’s female audience that makes the sites so amenable to commerce and branded content — or whether any other media site could borrow from Sugar’s playbook.

David Reibstein, a marketing professor at Penn’s Wharton School of Business, says that research suggests that women who use social media have a greater inclination to share and to listen than do men. This could mean that audiences on women’s sites like Sugar, which have a heavy social component, are more willing to consider purchase recommendations than general interest audiences.

But Reibstein says that tools to let consumers buy what they see are still evolving. This could mean, in turn, that Sugar is simply ahead of the curve among content sites in optimizing commerce potential.

Finally, there is the question of whether mixing media and commerce can work only for fluffy fare — or whether buy-through options will one day become a part of serious news media as well.