Display Advertising Is Hard to Quit

Branded Content Increasingly Contributes to Bottom Lines, but Display Persists

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An ad unit on Mic.com.
An ad unit on Mic.com.

BuzzFeed has made waves in the worlds of media and advertising by eschewing display ads in favor of branded content created specifically for advertisers. It seems to be working, as the company reportedly banked $64 million in revenue in 2013 and is now valued at $1.5 billion.

Mic.com is newer and smaller than BuzzFeed, but is sometimes mentioned in the same conversation, as a New York-based digital media company staffed by young, ambitious journalists and content creators. And it, too, would like to get away from display ads, according to public comments by its chief executive and a knowledgeable company employee.

"Display advertising just isn't an effective strategy as we build a media company for this generation," CEO Chris Altchek told Digiday in November 2014. As a result, he said then, Mic "won't run display ads going forward."

But Mic.com hasn't dropped display advertising yet. On a recent Thursday, a good chunk of article pages on Mic's site sported a large, interactive banner ad for the new Discover It Miles credit card. In previous weeks, ads for the U.S. Army and Nordstom filled the same unit, which a company spokeswoman said was introduced in June.

Some of these display ads are part of larger branded content partnerships, the kind of program designed to engage consumers with highly developed "banner blindness," but some aren't.

Mr. Altchek told Ad Age that a majority of the company's advertisers buy a package including both branded content and a "hero" display ad unit.

Mic has strived to create a more engaging, aesthetically pleasing display ad experience that actually provides value for both advertisers and readers, Mr. Altchek said.

Mic doesn't want readers to equate banners like the Discover ad -- which, in one iteration, allows readers to close airplane windows by placing a cursor on them -- with the low-quality, poorly designed ads that have ginned up reader opposition to digital advertising.

"360 x 250s are not a pleasant experience," Mr. Altchek said, making a contrast with what he said are the "elegant" and "creative" ads on his site. Mic's display ads are made in-house and served in-house, so they load quickly, he said.

So far, Discover seems to be a happy customer.

"Discover is always exploring new relationships with promising new media partners like Mic in order to more effectively reach our audience at different points across the digital landscape," the company said in a statement. "The Mic creative platform allows us to reach our audience while providing a seamless user experience."

Mr. Altchek, who often talks about Mic's focus on young, college-educated readers, said advertisers spend money based on the quality of a site's audience.

"Ultimately, the advertisers will flock to the publications that have the best audiences and that trust the publisher the most," he said.

Seth Rogin serves as chief revenue officer for Mashable, another company that is exploring new forms of advertising while simultaneously banking a significant portion of its revenue from display.

"Display advertising on Mashable works, and we know that because advertisers who buy with us are voting with their dollars and coming back time and time again," he said.

Mashable, over the past few years, has maintained a balance between traditional advertising (about 55% of total revenue) and branded content (about 30%). Mr. Rogin said it doesn't make a ton of sense to go all-in on one type of advertising, such as branded content.

"I don't think putting all your eggs in one basket is a good idea, in terms of serving brands and serving readers," he said. "All of these things can be powerful."

Speaking more broadly about the attention lavished on branded content, Mr. Rogin said, "I think we're an industry that focuses on novelty."

Forbes has also witnessed the staying power of display advertising, which might speak to a certain hesitation among advertisers to jump head-first into branded content.

"Display is still sort of the tried-and true in digital advertising," said Forbes Media chief revenue officer Mark Howard, who noted that his team still has to educate brands about the benefits of creating a content plan.

Forbes, through its BrandVoices program, offers four separate branded content choices for marketers. Branded content is growing as revenue source for the company, Mr. Howard said, but Forbes still makes the bulk of its money from display advertising.

Forbes advertisers, like Mic advertisers, often pair branded campaigns with display ads. One benefit of display advertising, Howard said, is the ability to "turn on or off" these ads, depending on the time of year.

Agency-side executives also had a few nice things to say about display advertising, especially when it's paired with custom content campaigns.

"Display advertising can be great for making sure you are top of mind in that last mile to the conversion or the sale," said Shenan Reed, MEC's president-digital, North America. "It's not the best place to tell your brands story or to develop a relationship with the consumer, but if you have already done that, it can help you stay top of mind."

Display advertising can't match branded content in creativity, said Mark Book, VP-director of social content at DigitasLBi. But it plays a role, he added: "I do feel that display advertising can be attractive to a reader, and that there's a chance for utility to be placed in a display ad, whether it's a micro-game or specs on a new product that you've been searching for."

The elephant in the room throughout these conversations and calculations, however, is ad-blocking, which might push publishers further from display ads that could be bypassed and more harder-to-block branded content.

Mr. Altchek, in a separate interview with the Guardian, said Mic is addressing the problem by serving another kind of advertising to readers who have installed ad-blockers -- branded content.

"What we've focused on doing is showing people branded content to people who are consuming Mic through an ad blocker and that's worked well, it's allowed us to continue to monetise those audiences," he told the Guardian.

Besides, Mr. Altchek said that Mic -- which is expanding its branded content offerings to new platforms, with a particular focus on "short-form media" -- is committed to making things that are actually worth readers' time.

"We try to make our branded content really good," he told Ad Age.

There's also a strong financial incentive to get it right. Mr. Altchek said that branded content provided the "majority" of the company's fourth quarter revenue.