A Model of Inbound Marketing : Why Can Brand-Neutral Content Marketing Build Brand Preference?

To attract consumers, brands are embracing a content marketing strategy -- becoming content publishers by producing brand-neutral content without touting brand information. It is puzzling why this type of content marketing can endogenously build rational consumers' brand preference in a competitive environment. We provide a mechanism that highlights the strategic roles of non-branded content in consumer information search processes. When consumers make search decisions, they trade-off the information value from the search against the post-search hold-up problem -- firms would raise prices once consumers incur search costs. We show that the brand-neutral content marketing amplifies the hold-up problem for the competitor while precipitating it for the content marketer. First, consumers' primary information needs for generic content lead to the prominence of the content marketer so that it will be visited first. Then the content marketer strategically leverages the hold-up tension between its competitor and consumers. Second, by handicapping itself and excluding brand content, the content marketer can commit not to holding up consumers. Consequently, the content marketer obtains premiums -- capturing more consumers at a higher price than its competitor. This endogenous outcome shows a de facto brand preference. The content marketer's premium can arise under observable prices and general distributions