• by Roger Wu , March 25, 2015

Native advertising’s recent hype has contributed to its growing footprint from in-feed advertising to promoted search results to sponsored content.  Most of these newly categorized ad units are monetized using common online advertising conventions: impressions, clicks, and affiliates.

One of these formats, sponsored content, however, appears to be the exception, with no department wishing to claim it, no set pricing standards, and no criteria for success.

Sponsored content has emerged as a hybrid-advertising format combining digital advertising and public relations with social media.  It functions as an advertisement since its placement is paid for; it functions as publicity since it’s a story that readers might enjoy; it functions as social media because the story has upside potential for viral or earned impressions.  Despite these benefits, it’s still unclear where the future of sponsored content lies. 

With only a vague idea of page views, sponsored content’s publicity value is incalculable, as is the intangible goodwill is generates.  If sponsored content is to come out of a public relations budget, perhaps that is enough.  On the other hand, the industry as a whole would prefer sponsored content come out of the much larger advertising budget, raising all participating publishers to another level.  If this is the case, advertising must have its definitive ROI metrics, resulting in performance- based sponsored content.  Some level of impressions, clicks, purchases, or other metrics must be part of the package. 

Currently many publishers are selling “posts,” which popular outlets are able to do based on their cache value, but newer players may not be able to compete. Today, the lifespan of creative has shrunk due to the lowered production costs, but we still see the same creative in multiple media buys.  Publishers need to see their sponsored content as single-use creative and understand the return and media value that a brand needs.  Sites like the Atlantic’s Quartz have been charging on an impression basis, allowing brands to compare sponsored content budgets with other advertising. 

Finally, what constitutes success with sponsored content?  The same metric as with any story: having someone read the content. Brands want sponsored content to drive their storytelling goals, leading to recall or at least enough to tell Google or Siri what to search for. Technology can now measure real engagement with a story and allow better storytellers to be compensated more per impression even if they drive a fraction of the traffic.

Why haven’t standards emerged for sponsored content?  Perhaps publishers are afraid of the CPMs that they require being compared to those of banner advertising.  Perhaps a brand’s multiple agencies and budgets are dueling between the influencer or advertising budget.  Or perhaps a third party needs to emerge as a referee for both to define the playing field and the rules. 

If we are to truly stake sponsored content as part of the future of publishing, publishers need to be comfortable with performance-based engaging content that is properly disclosed and promoted to their audiences as if it were organic.  Otherwise, brands will continue to dabble with test budgets until some form of ROI can be calculated.  From what we’ve seen, brands want to capture a tiny slice of the most valuable commodity -- consumer’s time and attention -- and not simply have a piece of content floating around in the woods where fallen trees don’t make sounds.

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