But whatever form these content-centric marketing products take,
the rush of media companies looking to invest in them tells you one
thing: They believe a sole reliance on display ads isn't the best
way to turn, maintain or grow profits. The question, though, is
whether custom content will grow into a go-to revenue source for
media properties across the board or just a few select properties
that do it best. "The enthusiasm for content marketing is partially
an acknowledgement by the industry that banner ads can't be our
best and only answer," said Jeff Lanctot, chief media officer at
digital ad agency Razorfish. "There's an appetite for finding
something new and different to help brands stand out."
Some, like BuzzFeed, are betting exclusively on written posts or
image galleries, on which advertisers and their agencies
collaborate with BuzzFeed's team to create or distribute. A recent
one from Campbell's Soup contained photos of "15 Animals Who Are
Behaving Like People." (No, the connection to the Campbell's brand
is not clear to us, either.) Others, such as The Atlantic, are
using advertiser-sponsored articles to drive better results of
display ads on that same page, since they've found that
click-through rates increase more than one-and-a-half times when an
ad is placed next to a piece of content from the same advertiser.
For example, TheAtlantic.com is promoting a series of
Mercedes-sponsored posts that contain video interviews with
innovators across different industries.
And then there are those such as Gawker, who say they aspire to
have custom content eliminate the need for display ads, though they
seem a ways off from realizing that goal. Gawker property Gizmodo
has been the home of Intel-sponsored posts, the most recent of
which is titled "Photographing Bikini-Clad Surfers in Paradise Is a
Tough Job, But Someone's Gotta Do It."
Whether the trend is new depends on whom you ask. Detractors say
this is a modestly modern variation on old-school advertorials.
They also say it's more about differentiating than real innovation.
Randall Rothenberg, CEO of the Interactive Advertising Bureau,
contends that custom content is too labor-intensive and
cost-prohibitive to widely displace traditional ad units, since
advertisers typically don't run the same sponsored posts across a
wide swath of different websites. "Customization passes costs up
and down the supply chain," he said. (It's worth noting that part
of the IAB's mission is to help drive the adoption of ad-format
standardization in an attempt to grow the overall industry -- the
opposite of customization.) Believers say the approach is different
when developed in a way to maximize sharing on social networks,
producing coveted, so-called "earned media."
One way BuzzFeed is trying to fight the scale argument is by
testing out running its "story units" on other sites such as The
Awl and Demand Media's Cracked.com in an effort to create its own
kind of native ad network. Because it has to pay a revenue split to
those third-party sites, this tactic cuts down on BuzzFeed's
margins -- which regularly surpass 50% -- but extends its reach and
perhaps attracts a new set of advertisers. For example, the
Cracked.com home page recently displayed a story unit with a
"Sponsored by Geico" tag and the headline "The Most Delightful
Moments From Your Childhood in 28 Pictures." Clicking on the unit
sends readers to Buzzfeed.com to read the post.
Reach is still critical. If you talk to agencies and brands, few
are close to turning their backs on display advertising altogether.
One of the more progressive digital marketers, Intel, said display
ads will continue to play a big role in its digital advertising
repertoire. "We leverage display for reach and frequency and
driving to the right experiential destination, whether that 's
Intel.com or a custom [content] program," said David Veneski,
Intel's U.S. media director.
At the same time, Intel has executed custom-content campaigns
with more than a dozen different properties this year in an effort
to publicize the ultrabook category to millennials. That's
undoubtedly a positive sign for publishers betting on custom
content, but Mr. Veneski throws up a red flag when he explains what
next year will look like: probably as much content being created,
but with fewer individual partner sites. "It's a tremendous amount
of work," he said of developing individual content programs for
each partner site.
The challenges of the content model extend to publishers as
well. At The Atlantic, Publisher Jay Lauf says he hasn't yet
settled on the best way to value and charge for custom content
(right now, The Atlantic charges a higher cost per thousand
impressions, $40-plus , for an advertiser's ad that runs next to
its sponsored content because of better performance.) At BuzzFeed,
the business team has gotten used to missed opportunities to
connect a specific brand to a timely meme because of agency
turnaround times.
"The challenge, of course, is most brands cannot approve a viral
sponsorship in an hour," BuzzFeed President Jon Steinberg said.
Could Mr. Steinberg envision a day in which an agency or advertiser
embeds an employee in a media company with whom they do a lot of
business to help expedite content campaigns? While that hasn't
happened at BuzzFeed, CEO Jonah Peretti said his team does meet
with some of its advertisers on a weekly basis for this very
reason.
If that doesn't sound like a sustainable way for a new industry
to grow en masse, it's because it's not. Instead, Mr.
Peretti is betting that we will eventually see a rise of agencies
dedicated to content marketing, as we saw search-engine marketing
shops pop up in the early days of AdWords.
Razorfish's global chief media officer, Jeff Lanctot, can see
this future as well, especially as more of the buying of pixels is
pushed through ad-buying automation technologies. "People should
manage content marketing, brand integration, social campaigns and
other innovative initiatives," he wrote. "Machines should manage
banners."
What the speed of that transition will look like seems to depend
on an entity's agenda. One year from now, BuzzFeed's Mr. Steinberg
believes most major digital-media companies will sell a
content-marketing product. The IAB's Mr. Rothenberg, on the other
hand, sees a select few properties that continue to garner
attention for their customized advertising products unique to their
environment. At the same time, he predicts "global adoption" of the
IAB's Rising Stars Display Ad Units -- a collection of six new ad
formats that the IAB has been promoting to drive adoption by media
properties of larger, more interactive ad units that big-name
brands may find more attractive."It'll kind of look like the way
media industry is today, where you have a balance heavily weighted
toward standards," he said.
Inside the BuzzFeed Pricing Model
A $100,000 campaign with BuzzFeed typically nets five to 10
posts for an advertiser, according to Jon Steinberg, its president
and chief operating officer. But BuzzFeed doesn't charge
advertisers on a per-post basis; instead it charges advertisers a
cost-per-thousand-impressions price for the thumbnail images and
"story units" on BuzzFeed that tease the branded content and drive
people to the posts.
