November 14, 2017
The pace of change is rapidly accelerating in the certain pockets of digital advertising. Branded content is one of these pockets that is attracting more investment from brands, agencies and publishers. All of this can be a good thing if those involved recognize the need to evolve and stay ahead of the market as it matures.
Although branded content is primarily bought by media agencies today, there are signals that this is changing with many senior publisher leaders telling us they are now developing a client-direct business in addition to partnering with creative, content, PR and communications agencies. With so many buyers and sellers of branded content, all with varying degrees of sophistication, experience and maturity, there is naturally a lot of confusion as to how branded content should be bought and sold.
The business model for publisher-led branded content has matured over the past three years and we expect it to continue to do so.
Here is a simplified framework that explains the evolution of branded content business models:
Also referred to as the “print model”, these branded content packages are sold on a flat fee and are on time-based model (or share-of-voice). Typically there is some level of transparency as to what brands can expect. A typical sponsorship package could look something like this:
And the whole package is priced on a flat-fee (e.g. “$150,000”). Very little, if any, transparency up front as to what to expect, outside of the start date, end date, and quantity of content pieces that were to be produced. This model was clearly inherited from print and the market quickly outgrew it.
By 2015, most major brands had at least experimented with digital branded content programs. However, NBDF (never-been-done-before) experimental budgets were longer large enough to sustain growth. As display advertising came under attack in 2015 (ad blocking, viewability, programmatic, agency rebates and fraud, just to name just a few), agency buyers were happy to reallocate a portion of larger display budgets into content, to both save themselves and appear innovative to clients.
CPM became the new currency for branded content. A CPM on what exactly? The content promotion, not the content itself. Looking back, this made no sense, and certainly did not create real value for advertisers.
Here are some examples of promotional formats across a variety of premium publishers:
CPM driven packages were priced on the native media used to promote the content, whether or not the brand was actually mentioned in the media or not. This model helped the market grow for a few years, but buyers quickly moved on.
CPV (cost-per-view) is now the primary business model for branded content, even though not all sellers have fully caught up yet. The “V” in CPV refers to a view of the actual content page (a page view) or branded video (a video view). It is not to be confused with viewability of the promotional media impression (i.e. vCPM, a “viewable impression” is very different from CPV).
CPV models were born out of the performance metrics by which content programs are measured on by buyers. Views to the content (written text content or watchable video content) itself have been a primary metric for at least three years now.
At the end of the day, brands, clients and agencies are partnering with premium publishers to produce high-quality content and to distribute that content to targeted and relevant audiences. Build it and they will come is no longer relevant, in that buyers want assurance that right people will actually see the content.
We recently published an updated CPV pricing benchmarks guide (available exclusively to publishers), broken out by different content verticals and geographic markets. Download it here.
CPE (cost-per-engaged-view) is where we see the currency for branded content evolving to in 2018, as buyers will start to pay attention to not only how many content views they received but the quality of those content views. Put simply, not all views are created equal.
Although many publishers may say they are not selling on a CPV model today, they actually are (and are best served to wake up and realize it). As soon as a publisher reports to a buyer how many page views or video views a branded content campaign received, the buyer is calculating the effective CPV rate for the program.
There are many challenges with the CPV model the industry is currently on and it’s time to think beyond CPV. More to come from us soon on this.
Kunal Gupta is the Founder & CEO of Polar. Follow his leadership blog at findfocus.today. At Polar, Kunal leads a talented team transforming the media publishing industry with technology. He is passionate about leadership and finding focus in a modern era. Connect with him on LinkedIn, Medium or Twitter.
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