Sponsored content is popping up everywhere, and more brands and publishers are eager to get in the game every day. Brands know that to actively grow their pool of new prospects, they have to publish in more places than their own media properties. Enter: sponsored content.
Brands seek out independent publishers to host content on their behalf, giving brands access to loyal, targeted audiences, with trust to boot. Unlike Google adwords and other ad-serving platforms, however, there is no standard way of buying (or selling) sponsored post placements. Not surprisingly, brands, marketing agencies, and the blog publishers they work with are reporting varying levels of frustration and confusion. So, we’re conducting research on the matter to help chart a better way forward.
If you’ve ever bought or sold sponsored posts please click here to take our brief survey. We’ll be making our findings public in a complete report in the coming weeks. The responses to date are already revealing some interesting insights.
Despite the buzz, standard business practices and the technology that supports them will always move slower than the blogosphere can write about a hot topic. And sponsored content, as a marketing tactic, has a lot of moving parts, making it more complex a marketing channel than display or text ads. There’s a lot of catching up to do. It starts by clarifying a few key questions.
What Exactly Is Sponsored Blog Content?
Depends on who you ask, because it’s not a single post type, but rather a category, which makes consistent pricing difficult. Generally, sponsored blog content is considered “paid media:” articles, infographics or video that blog publishers are paid to post on their own sites.They come in five varieties:
Paid Review: A product or service review, usually including a description, rating and recommendation that the blogger writes in exchange for either free product or cash.
Custom Content: An original article that incorporates the brand in a way that is useful, informative or entertaining for the audience. Brands usually provide a framework and key points, but blog publishers tend to have a great deal of editorial freedom.
Original Sponsored Post: An article written by the brand, for use on just one blog, often similar to a guest post, but the placement is paid.
Syndicated Sponsored Post: A piece of content created by the brand, but used on many different blogs. Sometimes these “native ads” are pushed through a platform like ad units that appear within the content stream of participating publishers.
Product Placement: These are more common among video bloggers, where incorporating a product into the content is as simple as showing it on screen.
Of course, not every transaction between a brand and publisher is considered “sponsored.” Any press release, announcement or interview that the publisher decides to post purely on editorial grounds is not sponsored content. Nor are guest posts that the publisher decides are worthwhile contributions to the site, sans payment. Public relations pros have been working these “earned media” angles since long before the internet. Only when money (or something of value) changes hands is the content considered advertising.
What is Sponsored Blog Content Worth?
To answer that question, it’s important to recognize that branded content is a much bigger topic than the sponsored content subset. It includes blogging on one’s own site, static page content, email newsletters, whitepapers, ebooks, and all the social media activity a brand can generate.
Daniel Newman did a great job describing the use of branded content in his article on Social Media Today called, The Rise of Brands as Media Companies. He wisely pointed out,
As reported rates of trust in traditional advertising continue to sink to levels well below 50%, brands are going to continue to invest in channels that increase trust. This means we will see more informative content and very likely more influencer driven content where brands seek out persons that already have the trust of a certain audience type. This method which has seen an influx of activity in the past 2 years will also require evolution as more people begin to see gaps between influence and money.
While 91% of B2B marketers and 86% of B2C marketers claim to use content marketing, and eMarketer forecasts sponsored content spending to reach $2.3 billion in 2014, not everyone is on board with paying influencers to deliver their message through sponsored content. That affects what different stakeholders think it’s worth.
As mentioned above, PR folks don’t usually focus on paid opportunities, but many do welcome the chance to distribute more content at will by paying for it, considering the precedent of platforms used to syndicate press releases.
Search marketers don’t typically have the budget for paid placements since organic, unpaid, do-follow links are the name of their game. But that’s beginning to change in cases where SEO firms are diversifying across a variety of inbound marketing channels. Still, “not getting a do-follow link” and being tagged with a “sponsored” label are often seen as reasons why a sponsored post should be worth less, not more than a guest post.
Social media marketers can and do use sponsored content to help fuel social engagement, but again, depending on how they work with clients, paid media buying in social is more often limited to the social streams of influencers, not their on-site content streams.
Ad agencies and the kinds of brands that are likely to hire them, on the other hand, can’t seem to buy enough sponsored content. Knowing how much more effective a single content placement can be compared to a display ad, many brands and agencies are willing to pay whatever blog publishers command. Which brings us to the supply side of the equation.
What Determines a Sponsored Post’s Value?
As online consumers naturally segment their attention across millions of websites, the blogs they’re reading become the new media outlets through which brands can reach them. Now, to connect with an audience of appreciable size, content must pass through dozens, hundreds or even thousands of micro media outlets, as opposed to monolithic mass media.
Blog publishers are beginning to recognize their role in this new micro media model, and they’re demanding to be compensated for it. After all, they own a slice of both the target audience and the trust that brands need.
So far, our research is indicating that about 90% of the time, prices are determined by publishers naming their own flat rate. However, those rates vary widely between $15 and $5,000, depending a number of factors, including,
Is there a formula? Not exactly. Brands report paying highly variable rates with little correlation to the outcome. And most publishers who offer sponsored post placements don’t make their rates public. Determining how much the most popular sites like Buzzfeed earn on a CPM basis is an exercise in statistical gymnastics.
Clearly, it’s tough for brands and marketers to get a clear picture of what any given publisher might charge. Likewise, publishers know little about best practices when it comes to price, because there are no generally accepted pricing formulas.
What is Holding the Sponsored Post Market Back?
In order for this nascent micro media marketing model to thrive over the long run, publishers do need to make money. At the same time, for it to grow, brands must be afforded the opportunity to spend at scale, like they have with ads for many years now.
The brands and agencies we’ve spoken with about sponsored post economics point to three major challenges that are holding them back:
Lack of price and product consistency.
In order to make a large media buy, brands need to know how much they can get for their money, and for which kind of sponsored content product. Currently, that’s not possible without contacting every potential publisher one at a time, save for a handful of niche platforms.
Of course, not all blogs or topics are created equal; a high quality blog in a very focused niche may reasonably command higher rates than a mediocre blog with a larger but more diverse audience.
No results-based pricing.
Flat rates rule when suppliers (publishers) dictate the terms. However, as publishing choices increase, brands will want more accountability. Although base flat rates may continue, especially when publishers create custom content, brands want to see more cost per impression, cost per click, or even cost per view pricing. Better publishers who have mastered audience engagement will likely appreciate pay-for-performance.
No central marketplace to reach many publishers.
Of the brands and agencies we’ve surveyed so far, 66% want to maintain or increase the number of sponsored posts they publish, while 87% of publishers would like to grow their rate of sponsored post publication.
Most brands and agencies are forced to hunt for the right publisher targets, then initiate what can be a lengthy back-and-forth until one piece is finally published. Publishers simply have to sit and wait to get found, then hope the prices and products they offer fit what marketers need. Without efficient matchmaking, fewer sponsored posts are being published than either party would prefer.
Clearly, sponsored content is poised for growth. Brands and publishers just need to work out the kinks. If 68% of people spend time reading about brands that interest them, ad 80% appreciate learning about a company through custom content, shouldn’t this be among our top marketing priorities?
To add your own perspective to the discussion, please complete our brief pricing survey here. Your input contributes to the collective knowledge we all need to help improve the quality and effectiveness of online marketing, not just for brands, agencies and publishers, but for the consumers we all serve.