Part 2: Paid Distribution Reliance For Branded Content Distribution is Not Sustainable

June 13, 2016

Last week, we wrote about how CPV (cost-per-view) pricing is the new currency for branded content. This increased attention on the volume of views a publisher-driven branded content program delivers, which has led to an increasing reliance on paid distribution.

Today, distribution of branded content means much more than a native promotional unit on a publisher’s website. In addition to native ads, a successful branded content campaign relies heavily on offsite distribution, including paid channels and organic social channels to drive guaranteed minimum views. Traditional display ads, newsletters and apps are also part of the mix.

The heavy reliance on paid distribution is not sustainable. As Lucia Moses wrote about in Digiday last week, buyers are starting to ask for greater transparency.

When developing our latest thought-leadership paper, The Business of Branded Content, we interviewed executives from 30 premium publishers, to assess how they run, manage and sell their branded content programs.

GRAPHIC: Distribution Channels

Distribution methods for branded content

*Paid Distribution is defined as paid social (Facebook, Twitter, Taboola, Outbrain among other means).

Key Insights:

  • Given its premium nature and the audience’s familiarity with the media, native ad formats remain the key promotional vehicle for branded content.
  • 3 out of 4 publishers leverage paid distribution to drive audience to branded content.
  • Organic social media is leveraged by 42 percent of publishers today and it is expected this figure will increase in the coming year.

What we found interesting was how the attitude from editorial teams has changed about using organic Facebook posts to promote branded content. Due to Facebook’s recent rule changes (referred to as “with” or “handshake”), where publishers promoting branded content must tag the advertiser, we have shifted from organic promotion on Facebook being a taboo to now being safe and trusted (thanks to increased transparency).

GRAPHIC: Paid Distribution

Paid distribution

Key Insights:

  • Almost 50 percent of respondents use some level of paid distribution for every branded content campaign.
  • Another 21 percent use it on 3 out of 4 programs to drive traffic.

While proving effective as a means of achieving campaign-guaranteed exposure, we are recommending publishers to proceed with caution on the amount of paid distribution as a share of total views. Paid distribution is a double-edged sword; the benefit of increased reach through these channels is coupled with the risk of lower quality, non-endemic audiences.

Most publishers acknowledge that reliance on paid traffic is not a long-term model. Today, it’s relatively cheap to drive views through Facebook. However, as buyers become more informed through the new rule changes from Facebook, we expect increased pricing pressure from buyers on publisher margins.

GRAPHIC: Paid Distribution Disclosure

Paid distribution prices

 

Key Insights:

  • Almost 75 percent of publishers blend paid distribution costs into overall packages. However,  as mentioned above, they should expect clients to start asking for more visibility.
  • Facebook now requires publishers to tag the advertiser when promoting branded content articles. As a result, Facebook provides the rates a publisher paid directly to brands.

Several publishers we interviewed noted that they are beginning to hear more clients ask about both separating these costs and providing insight into what percentage of their views are driven by paid distribution.

Publishers should prepare to start disclosing paid social reach metrics and costs, as they will inevitably be required to share this data with buyers.

Looking for more insight into how premium publishers are evolving their branded content strategy? Polar customers can download The Business of Branded Content, the latest in Polar Academy’s thought leadership series.