Last year, $1.5 billion was spent on branded content designed to mimic the look of editorial, according to Pew Research Center's 2013 State of the News Media Report.
Compared to the $8.6 billion spent on banner advertisements in 2012, this may not seem like much. However, spending for sponsored content rocketed 45% in 2011 and then 39% in 2012.
Forbes, for example, recently charged sponsors $50,000 to $75,000 per month for a four-month contract when it ran approximately 1,200 native-ad programs through September as part of its BrandVoice format [above]. The posts garnered more than 1 million social engagements on platforms including Twitter and Facebook.
To address this mushrooming trend, the Federal Trade Commission held a workshop in December titled, Blurred Lines: Advertising or Content? Speakers debated the ethics behind blending ads and editorial content.
“By presenting ads that resemble editorial content, an advertiser risks implying – deceptively – that the information comes from a non-biased source,” said FTC chairwoman Edith Ramirez at the conference.
This echoes the sentiments of The Wall Street Journal's managing editor Gerard Baker. In September, he decried news outlets' practice of portraying branded content in an editorial style as a deal with the devil. His main fear is that branded content could risk damaging the reputation of news outlets as purveyors of honest journalism.
If Baker's assumption is accurate, then a number of print, digital, and broadcast outlets – both new and seasoned, including the Journal itself, The Washington Post, The Huffington Post, Slate, Business Insider, and The Atlantic – are in on this so-called Faustian pact, hosting branded content for household names such as IBM, JetBlue, Pillsbury, Dell, UPS, McDonald's, and BMW.
Church and state separation
Eric Harris, EVP of business operations at BuzzFeed, was in attendance at the FTC's meeting. He argues that, when done objectively, branded content can work as a legitimate revenue stream.
“When done well, active and social advertising, with church and state separation and proper labeling, is anything but selling your soul to the devil,” he explains. “From our perspective, as long as people know it is
advertising, we don't see how this is a bad thing.”
BuzzFeed has no banners and all of its revenue is from branded content. For each program, the outlet creates several pieces of content for or with the brand or agency, which pays BuzzFeed to “natively” promote that content on its website and across social platforms.
Harris defines branded content as material created along with brands and agencies that speaks to the aspirations and attributes they want to communicate to the market. BuzzFeed has been using branded content, or
as the company refers to it – social content-driven advertising – for four years.
Forbes has strict guidelines to separate the editorial from the sales side of the business. The outlet has an editorial newsroom made up of full-time editors and staff reporters that extends to 1,200 contributors, all of whom report to Lewis DVorkin, Forbes Media's chief product officer. The magazine also has a separate brand newsroom, which has its own staffers, who report to sales.
DVorkin sees a growing trend where advertisers are creating their own content for Forbes to host.
“A number of our BrandVoice partners are starting to build their own mini newsrooms and hiring journalists to write to a consumer audience,” says DVorkin. “Advertisers that are doing this are performing quite well with their content on our site.”
Meanwhile, social radio network BlogTalkRadio's editorial team works across both branded and general content, including news, sports, and entertainment.
More than 1,800 shows are created on the network every day. By working in this way, the team handpicks what it believes is the best content for advertisers to connect with. BlogTalkRadio's model differs from most native advertising as the network's content already exists – it is simply curated for advertisers. That means the branded content doesn't compromise the editorial line, quality, or the listeners' enjoyment of the content, explains the network's CEO Alan Levy.
“As most of our content is produced independently by our hosts, we don't have any issues with maintaining a balanced editorial line,” he says. “Our main challenge is making sense of the thousands of hours of new content on the platform, and making sure we are pulling out the very best of it for our partners to be associated with.”
Transparency is key
When it comes to branded and editorial content, transparency is crucial for reputable news sources and is key to authenticity.
Forbes' branded content is labeled and identified with a blurb, clearly visible at the top of sponsored posts.
To highlight branded audio content, BlogTalkRadio plays a 10-second audio piece at the beginning of each episode and incorporates a placeholder image with brand logos on its website, along with a written description of the show.
Guidelines for branded content tend to sit with a news outlet's top-tier management team, which must reach a unanimous agreement on decisions.
According to BuzzFeed's Harris, branded content in video is the next big thing to look out for.
BuzzFeed is on a mission to educate brands and agencies about the art and science behind social-driven branded content, with a goal of helping the platform's partners grow their businesses. In May, BuzzFeed launched the Social Storytelling Creator Program with VaynerMedia to provide “social storytelling agencies” with expanded training, tools, and support on its publishing platform.
That same month, BuzzFeed announced plans to invest in and expand video operations and build a social video studio in Los Angeles designed to create news and entertainment video content exclusively for YouTube.
Expansion plans entail creating new channels, including recreating a video news format that is shareable.
“Our LA team is creating social videos from an editorial perspective, and they have grown our video presence on YouTube to more than 100 million views per month in about a year,” Harris explains. “Video consumption is moving toward short one- to three-minute movies that will be passed around like articles and listicles on social networks.”
Standing your ground
Of course, on the editorial side, not every piece of news about a brand is going to be favorable. This can cause conflict between a news outlet and a brand partner.
Publishers such as BuzzFeed make it clear from the start they do not edit content based on advertisers' requests or needs. Harris says BuzzFeed, which works with many top brands, has lost a number of deals because of this. In 2013, the site was running more than 600 campaigns and advertisers counting in the double digits were upset with the outlet at one point or another.
“We get plenty of angry emails,” he says. “But we explain to advertisers that we are a news company, not unlike The New York Times – we keep our editorial and business separate. We don't have control over what the editors write, nor do we want to. Most respect that, but every once in a while they don't, and we lose a deal.”
More top editorial titles are jumping on the branded content bandwagon with each passing moment. The New York Times will offer a form of native ads in 2014, and Time Inc. will also ramp up branded content efforts.
“This is a part of the advertising or marketing world that's not going to go away,” DVorkin says. “We need to evolve it along with our partners. This is a learning curve for people on the editorial and marketing side.”
2013 revenue from branded content: 20% (ad revenue)
2014 revenue from branded content: 30% (prediction)
Staffers devoted to branded content: 6
Brand partners: 28
Most interesting program in 2013: The most popular BrandVoice post in 2013 was by partner NetApp. The post was titled, "The real problem in working from home (it's not what you think)," and discusses how telecommuting may prevent employees from working effectively. Since June, the article has had 649,907 views.
2013 revenue from branded content: 100%
2014 revenue from branded content: 100%
Staffers devoted to branded content: 100
Brand partners: 300
Most interesting program in 2013: In November, BuzzFeed's Los Angeles studio created a video for Purina's Tidy Cats titled, A cat's guide to taking care of your human. The humorous video amassed 3.5 million views on YouTube in under a month.