A burgeoning trend among brands is to become content publishers who produce generic and brand-free information to educate consumers and influence their decision making. As consumers now become more empowered and active in seeking and choosing the types of information they care, generic content marketing gains increasing popularity and grows into critical information source to consumers. However, it is puzzling to both academics and practitioners why and to what extent non-branded content marketing can build rational consumers' brand preference, and thereby ultimately benefit a brand in a competitive environment. This research aims to provide a mechanism from the perspective of consumer search and potential reversal of hold-up problem. When consumers search for primary category-level and secondary brand-level information, they rationally anticipate and trade off between the value of information from search and the potential post-search hold-up problem. A content marketer who only provides primary-level information attracts consumers to search it first. Given consumers have resolved primary-level uncertainty, the information that delivers value of information is about secondary brand-level information. Anticipating that the competing firm will provide its brand information and the fact that searching for that information reveals consumers' preferences toward brand-specific values, to avoid being held up, consumers sometimes optimally forgo further search and prefer to purchase from the content marketer. The content marketer strategically takes advantage of the hold-up tension between its competitor and consumers and effectively captivate consumers by engaging in brand-free content marketing that is not meant for holding up consumers. The reversal of hold-up endogenously generates ``brand preference'' - more consumers purchase from the content marketer than from the competing brand advertiser. We also show that the equilibrium price of the content marketer can be higher than the competitor's price, irrespective of whether the rival commit on price or not. We further extend to the N-firm setting and examine how such price premium changes with the number of competing firms. To investigate a brand's incentive to become content marketer, we also compare the content marketer's profit with the profit that a brand can obtain under symmetric disclosure.
Michelle Y. Lu is an Assistant Professor of Marketing at Destautels Faculty of Management. Her research explores topics including content marketing, digital media and token economy. Her research is published at the leading field journal including Marketing Science. She obtained her Ph.D in Marketing at Yale University and B.A. in Economics from Peking University.