T Brand Studio, the New York Times Co.’s native/branded content studio, has become an agency in its own right. Now, with a 100-person team—writers, creative directors, data visualization specialists, account managers, audience development experts and more—T Brand has, in more than two years, produced 157 campaigns. That’s according to Adam Aston, T Brand Studio’s editor in chief, who recently spoke with Native Insider.
And this week, at Ops, an Ad Monsters event, Sebastian Tomich, the Times’ SVP advertising and innovation, spoke from the business side of the house about the company’s views on native—or branded content, as the Times prefers to call it.
Tomich described a kind of co-creation process and data swap between the Studio’s advertising clients and the publishers. He said the majority of RFPs from brands are now requesting co-created efforts: “We’re doing end-to end creation, distribution and measurement.” He said the margins on the creative portion of client engagements are around 30%.
Tomich characterized T Brand Studio as an agency. “We come up with the ideas, execute and measure.” And, “I see us as a value layer on top of the platforms [Facebook, Instagram, etc.]."
There are challenges, of course. One, according to Tomich, is that brands have a lot of partners. And, two, internally, getting the team off the ground is “incredibly challenging.”
Still, in the two years or more since Tomich has been at T Brand, he’s seen the newsroom warm to the work the Studio is doing. At first, he said, the attitude from the newsroom was he was “introducing a sluice of sewage to the site.” Two years later, that negative feeling has turned around. In fact, Tomich said, “the quality of the work is indistinguishable from editorial” and the sponsored content is “labeled to death.”
On reconciling the ad industry vs. readers’ needs, Tomich said the two sides are far apart. “Viewability is based around the ad business, but it led us to redesign pages—and for us, that’s a big challenge. We have a $200 million subscription business that we have to protect every day.”
On ad blocking, Tomich believes the industry needs a “big shakeup,” and that’s not going to happen on its own. “Every single publisher needs to rethink how it monetizes its site. Margins are slim for publishers. The entire model has to change.”
Putting it even more bluntly: “There’s never going to be a clamor for advertising. At worst, we deliver things that are acceptable. Personally, I don’t think a purely ad-supported model will survive the way the ad industry is heading,” Tomich said.
Subscriptions will play a huge role, he said, but he wondered if many other publishers can deploy that model. “Most of the purely ad-supported digital-only publishers are supported by big venture money, and they’re looking for an exit,” he said. Most “publishers will have to do part advertising, part creative and part subscriptions.”
As for content distribution, Tomich believes that brands need to be on all platforms. “Publishers are working with a much smaller pie than we used to. We can create and distribute our content across Facebook, Instagram and others,” he said.
The Times Co.’s CEO Mark Thompson mentioned this week at an Interactive Advertising Bureau conference that the Times’ branded content business didn’t exist in 2013. And yet, “it delivered more than $13 million in revenue in 2014, and $34 million in 2015. We expect it to grow very substantially again in 2016."
The New York Times has 2.5 million paid subscriptions (with subscribers in 193 countries), of which 1.4 million are digital-only subscriptions, according to a company spokeswoman. Last fall, the Times outlined a plan to double its digital revenues to $800 million by 2020. As of last fall, T Brand Studio delivered nearly 20% of digital advertising revenue, which translates into around $35.7 million, according to a report in Business Insider.