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How Creating Content Could Sabotage Your Revenue

hooded figure with mask-lighting fuseThe basic premise of content marketing is one that we’ve all known since grade school: Give and you shall receive. Between DVRs, ad blockers, and plain-old banner blindness, it’s increasingly up to the consumer whether or not they get marketed to. By offering genuine value to users, content marketing gives consumers a reason to expose themselves to your marketing.

But can we take it too far?

It should go without saying that any marketing strategy has its limits. We face diminishing returns, and at some point any new dollars we invest will fail to produce additional profit. Still, most of us assume that investing more money or resources will almost always boost revenue, even if the profit isn’t there anymore.

This isn’t always true.

Sometimes creating content can actually cannibalize your revenue.

When Neil Patel shot himself in the foot

In October of 2013, Neil Patel launched a massive resource called Quick Sprout University (QSU), a series of videos. As smart and successful as he is, Neil called it a $45,300 mistake. His previous advanced guides could easily pull in hundreds of thousands of visitors and create thousands of email subscriptions. But the QSU videos actually did far worse than his previous resources. In fact, they failed to make up for the difference due to random downward fluctuations in traffic. In 5 days, they only generated about 7,000 views. At a cost of over $40,000, the videos were a huge brick of wasted expenses.

More importantly, however, was that the videos actually caused his revenue to drop. In fact, it dropped by 27 percent. Why did this massive content marketing undertaking actually hurt his revenue?

According to Neil, his audience was becoming so accustomed to accessing high quality free content that they were less willing to pay for content anymore. The QSU videos were undercutting the value of his core products and actually discouraging visitors from making a purchase from him.

Ultimately, Neil decided to monetize QSU by merging it with his core product (even though he had originally said he wouldn’t do this). We can’t fault him for making this decision — he had three options: Let the course continue to cannibalize his sales, eliminate the videos and admit that they were a huge waste of money, or use them as a draw to sign up for his product.

In the end, the attention that Quick Sprout University earned while it was free certainly might have turned a profit after it became a paid product. But that’s more like having a free beta and a paid final product than legitimate content marketing — even if it wasn’t planned that way.

The conflict between reciprocity and scarcity

Neil Patel’s mistake wasn’t producing an awesome resource for his fans, and it wasn’t investing too many resources in creating content. His mistake was sabotaging the scarcity of his product.

Content marketers can actually damage their revenue when they offer free information that reduces the overall value of their product.

Products solve problems. If you’re a good content marketer, your content solves problems as well. Content that doesn’t solve a problem for users is just a distraction or a waste of time. Consumers need a reason to expose themselves to your content.

But if your content solves the specific problem that your product is supposed to solve, consumers no longer need your product.

The principle of reciprocity only goes so far. As humans, it is certainly true that we have a desire to reciprocate generosity when it is offered to us. But it’s important to recognize why we do this. We reciprocate because we expect to become part of a virtuous cycle of give and take. This is a concept in game theory called “reciprocal altruism.”

If people discover that they can easily take from somebody who keeps giving, with no expectations of reciprocity, they will eventually take advantage of the situation, no matter how virtuous their original intentions might have been.

So when it comes to content marketing, I might be drawn to read your blog if it solves problems for me, and that might expose me to your product, which promises to solve additional problems. But if your blog has already solved those problems for me, my instinct to reciprocate probably isn’t going to be enough to convince me to pay for your product. I might recommend you to a friend and speak highly of you, but I probably won’t give you my money.

As a content marketer, when you decide on subject matter, medium, format, tone, and so on, you need to:

  • Think about the problem your product is meant to solve, and the type of person who would have that problem. Think about the other kinds of problems those people will have, and how your content can help them solve those problems, too. You typically want to avoid solving the specific problem your product addresses.
  • Avoid attracting an audience of people who expect everything to be free. Never set the expectation that you will give away the farm. You want to be helpful and generous to your audience, but you should be up front about the fact that you are in business to make money. Approach it any other way and people will resent you for the “bait and switch.”
  • Avoid getting too hung up on subject matter. Yes, you want to establish yourself as an authority, but your primary goal is to become a trusted source of useful information to your core audience. Subject matter doesn’t play as big a part in that as you might think, as long as you’re thinking about your target audience’s needs, on the whole.
  • Realize that it’s sometimes okay to approach the core problem your product addresses with your content, but you need to do it carefully. You can address the problem as long as you don’t undercut your product’s unique selling proposition. In Neil’s case, he talks about online marketing all the time on his blog. This doesn’t undercut his revenue. The QSU videos, on the other hand, compromised the value of its traffic by cannibalizing its core promise. They weren’t one-off blog posts; they were built to serve as a single comprehensive guide — just like his business is designed to do.
  • Consider where medium and format come into play. No amount of blog post content can fully undercut the value of a video series, for example. A disorganized group of blog posts is also less valuable then an organized eBook, even if the information contained in both is the same.
  • Understand if you aren’t selling an info product, the concern that content will cannibalize your revenue is reduced, but not eliminated. For example, if you sell hair products, and then teach your audience how to create their own hair product from home ingredients, you might hurt your revenue. At best, you’ll attract an audience of people who weren’t going to buy your product anyway.

I can’t stress enough how often content marketers get caught up in subject matter. All too often, we come across:

  • Freelance writers who write advice for freelance writers
  • Lawyers who write advice for lawyers
  • Lifestyle entrepreneurs writing about lifestyle business

The reason we see this all the time is because most online marketers write about marketing in order to market themselves. This is a unique case. Digital marketers (like us) write about marketing because everybody in business needs to know about marketing. Our clients need to be somewhat educated in how marketing works in the digital age.

We are solving problems for our target audience. But this doesn’t necessarily reduce the need for our paid products — our colleagues and our clients are always going to need new information — and our insight and experience at guiding them to implement it effectively will still come at a premium, no matter how many free resources we share.

However, when this same practice is used in other industries, it’s actually another way to cannibalize business revenue. A law firm writing advice for lawyers isn’t necessarily attracting any clients when they do it. But they are certainly providing their competitors with useful advice — and giving away information that they could charge clients for.

This is what happens when we put the focus on subject matter, instead of on our audience.

How to keep content from consuming your revenue

If I’ve been giving you the impression that offering too much value with your content is a bad way to expand your reach because it compromises the value of your product, I assure you this was not my intention. Nor have I been trying to say that it’s a bad idea to invest a lot of resources in content marketing.

I’m simply arguing that content marketing needs to add user value without compromising product value.

It is possible to invest a great deal in content and turn a positive result.

Shopify is a great example. These days it’s practically a household name, even expanding into physical retail with its point-of-sale system. But Shopify started from close to nothing, and its success wouldn’t have been possible if it hadn’t caught the attention of a man named Tobias Lutke.

Tobias’ primary investment in content marketing was to build an open-source blogging platform called Typo. The platform earned itself over 10,000 installations, and earned a massive audience for his own blog in the process. This audience would ultimately prove instrumental in launching Shopify.

This just goes to show that target audience is so much more important than subject matter. Blogging and e-commerce are two very different subjects, but they are both very interesting to similar kinds of people: namely, web entrepreneurs.

Shopify continues to make big investments in content marketing. One of the most successful was a contest that arose as an idea from Tim Ferris, who suggested that Tobias put up a $100,000 reward to the Shopify store that could earn the most revenue in six months. The experiment was a massive success that more than paid for itself, and even earned exposure on massive platforms like The New York Times.

Both of these are examples of how big, successful content marketing campaigns often stretch the limits of what we traditionally think of as content. Tobias was a blogger, but he owes much of his success not just to blogging, but also to creating his own blogging platform. Similarly, investing $100,000 in a contest was a way to encourage other influential people to create their own content, broadly defined. is another example of massive success. Aaron Patzer launched the site in 2006, and invested in not just blog posts, but also slide shows, videos, and infographics. The important thing to take away from this is not that you should invest in slide shows, videos, and infographics — it’s to take note that was the first company to heavily invest in these content marketing tactics.

The strategy grew Patzer’s site to 100,000 accounts in a year, and 2 million accounts by 2009. Just three years after it launched, it was sold to Intuit for $170 million.

Again we see that successful content marketing pushes the limits of content:

  • It solves problems, not for similar experts, but for a target audience, often with diverse subject matter.
  • It goes deeper than blog posts, often going so far as to invent brand new media.
  • It doesn’t cannibalize the core promise of the product.
  • It involves other people, including influencers.


We don’t like to hear it, but excessive content marketing can sometimes not just fail to turn a profit, but can actually hurt revenue. Obviously, things don’t have to be this way. Successful content marketers understand why the product is valuable, and craft content that is valuable to the same audience, but in a different way. Furthermore, they push the envelope, continually redefining the meaning of content, and they aren’t afraid to invest in doing something different.

Looking for more insight on creating content that adds value to your brand? Don’t miss Content Marketing World 2014, September 8–11, 2014. Register today!