The Way Companies Use Content Is Changing Rapidly

In just a few short years, New York based syndication startup NewsCred has gone from serving mostly publications to increasing revenue 11 fold and growing customers by 570 percent by providing, curating, and customizing content for the world's biggest brands in the rapidly growing practice of content marketing.

The company, founded by Shafqat Islam, Iraj Islam and Asif Rahman, was validated today, as was the field of content marketing in general, by a $15 million Series B round of funding from Mayfield Fund and Greycroft Partners, and by the fact that they've signed The New York Times as their newest content partner, joining over 2,500 others including Bloomberg, The Guardian, and The Economist.

This represents a huge change in how media and content are used and consumed. There used to be a direct line between publisher and reader. Now, content is available from a massive variety of sources, and often isn't accessed by going directly to a provider's home page, but through social media.

Increasingly, the source is from brands that are looking to create online audiences and keep them engaged. As NewsCred CEO Shafquat Islam told us, "All of these brands have acquired these massive audiences at scale. Over the few years they've acquired these huge audiences that are direct relationships through Facebook or Twitter or email, their website or their apps, and they need something to say."

And having put years into building technology, licensing, and content partners, NewsCred had the quality and volume of material, and was well positioned to help brands do that at scale. Brands use content to attract people to their website, engage socially, and drive email engagement.

Current clients on the brand side include Pepsi, Johnson and Johnson, General Electric, and Toyota.

It's not the size of the funding alone that makes it clear that investors are excited about content marketing, but the source. Part of the company's first round, raised about year and a half ago, came from FirstMark, known for making contrarian bets. Content marketing's not contrarian anymore.

The Mayfield Fund was a principal investor in Marketo, a marketing automation company which appears to be headed towards an IPO. Rajeev Batra, a partner at the fund who is on Marketo's board will be joining NewsCred's board as well.

Greycroft was a large investor in Buddy Media, which recently sold to Salesforce for $689 million. These are both funds that made large and successful bets on digital marketing companies. And now they're looking to content marketing.

When marketers are spending 25 to 30 percent of their budgets on content, investors start to perk up. According to Islam, the round only took two to three weeks to put together, which speaks to investor's eagerness.

"Social publishing has the Buddy Medias of the world and that has already developed. There's media monitoring and that's already developed. Email is already developed and there's big players. For marketing automation, there's Marketing and Eloqua," Islam says. "Content marketing, it was still wide open for the taking, and I guess investors wanted to bet on the one that they thought would lead them and take that market. "

And as exciting as bringing The New York Times on board is from a content perspective, the symbolism might mean even more.

"This deal was years in the making," Islam said. "And I think its a big statement that content marketing as a category has really evolved when large and mainstream publishers, and the New York Times is among the largest most reputable ones, are actually looking at software partners like NewsCred to help them figure out that space."

It's the difference between just adding another syndication partner, and finding a partner that can help them access an entirely new and unfamiliar market.

Media's a difficult business to be in, and even companies as well regarded as The New York Times need to figure out digital models that are sustainable in the long run. Figuring out new ways to distribute and make money off their content is a large part of that.

"Our investors are basically saying that 'we believe in premium content,' Islam says. "This money, I almost feel like we raised it on behalf of the content partners we work with, because it will allow all of us together to reach new audiences and generate new revenue."

As for what they'll do with the funding, the company wants to grow internationally, Islam says. While content marketing is pretty evolved in the US, the UK, Europe, and Japan are about year behind. And so, to grow in those markets, the company needs to license content in every language.

The second part is the move towards integrating with other marketing and software tools to make NewsCred's content "ubiquitous in the entire marketing ecosystem" so its as easy as possible for brands to do interesting and innovative things with what the company provides.

Some argue that using content in this way somehow devalues it or renders it inauthentic. If that's the case, people simply ignore it, and companies won't see results. And if companies are misleading about where content comes from, they're likely to see significant backlash.

The amount companies are spending makes the case that if used carefully, content marketing has significant potential, as does the eagerness of media companies to get involved.

Disclosure: Business Insider is a NewsCred client