Breaking Down Publisher Business Models For Branded Content

February 21, 2017

What’s been covered in our Guide to Branded Content Series:

 

In Part 3, we will dive into how publisher business models vary across the various types of branded content programs.

Business Model Model Breakdown for Branded Content – read below for descriptions.

Sponsorships

Sponsorships are priced based on the display media running alongside content. The rates may be lower than Custom Content as advertisers have less influence over the content itself and the incremental publisher costs to produce and distribute it are lower. However, the quantity of content and scale of distribution available is the highest, and as such the overall value of sponsorship programs can be quite high.

Editorial sponsorships consist of existing editorially-produced content with an advertiser sponsoring the content after it has already been produced.

Built-If-Sold content features editorially produced content on a subject matter agreed to with the advertiser beforehand, with no mention or inclusion of the advertiser’s brand or product within the content itself.

Typically both types of sponsorship models are sold with companion display ads. While publisher revenue on a per-engagement basis may be lower for sponsorships, the publisher margin is higher as publishers are not usually incurring additional content production costs. Built-If-Sold programs have the potential for publishers to justify higher pricing, as the content is being aligned with a specific subject matter.

Sponsorships are consistently sold on a non-guaranteed Cost-Per-Thousand (CPM) model, and/or closely linked to the pricing of the companion display ads.

Custom Content

Custom Content is where the price for advertisers starts to climb. Pricing increases for several reasons:

  1. Advertisers have a greater influence over the content from start to finish;
  2. Publishers invest in custom content studios separate from their editorial teams;
  3. The content can take many more forms, such as articles, interactive content, video, audio and more, as discussed in our Content Creation breakdown;
  4. Publishers have to increase their distribution investment, particularly on paid promotion. Read more on this in Polar’s Business of Branded Content Whitepaper.

Custom Content is typically sold on a guaranteed CPM or Cost-Per-View (CPV) basis, though the deep customizability means other pricing models such as Cost-Per-Engagement (CPE) and Cost-Per-Lead (CPL) are possible.

Companion display ads are normally included as part of an Integrated and Promotional content program. If the content dictates its own unique layout on a publisher’s site, then there is little or no opportunity for companion display ads—like in the case of Netflix and Wired’s The Tech That Took Down A Titan.

The profit margin for both types of Custom Content can vary greatly. While there is plenty of opportunity for extra line items from the publisher, the cost of creating custom content (including content teams, video production, development) means much of that heightened price pours back into the program’s pricing. Also, several publishers have noted distribution costs can balloon quickly with the need to meet minimum view guarantees.

Advertiser Content

The cost to marketers looking to promote Advertiser Content—content created by the advertiser and distributed by the publisher— is also low. As a recap, Hosted and Destination content is created by the advertiser and distributed by the publisher.

In the case of Hosted content, the publisher hosts the content within their property, which might require minimal internal work. The main cost, however, for both Hosted and Destination, is the distribution and promotion of the content.

Typically, Advertiser Content is sold on a Cost-Per-Post, Cost-Per-Click, CPV or CPL basis given the advertiser ask is skewed towards the promotion of the content rather than creation.

Although the price is low, the profit margin remains quite high. No publisher resources are dedicated to content creation; hosting and distribution for Advertiser Content leverages a publisher’s owned audience for which they do not incur additional distribution costs. An important consideration: publishers usually only promote advertiser content on site, never through organic or paid social channels, greatly reducing the price.

Need to know more about how Branded Content aligns with the marketing funnel? Check out Part 1: The BasicsPart 2: Content Creation, and Part 4: Disclosure & Distribution in Polar’s ongoing series.

BRANDED CONTENT BENCHMARKS Q2, 2017

JULY 2017

Polar’s Snapshot of Global Branded Content Performance presents the complete picture for major markets and publishers this past quarter.

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