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Everything You Need To Know About Sponsored Content
Everything You Need To Know About Sponsored Content |
Everything You Need To Know About Sponsored Content Posted: 20 Jan 2015 02:28 PM PST Posted by ChadPollitt This post was originally in YouMoz, and was promoted to the main blog because it provides great value and interest to our community. The author's views are entirely his or her own and may not reflect the views of Moz, Inc.
Many of the traditional channels for online content discovery are thoroughly understood and their adoption rates are high. The readily accepted channels—from SEO and PPC, to email and social media broadcasting—can deliver the best content to the right people at the right time. Today, however, the Internet is experiencing a deluge of content, and many channels for content discovery are bloated. Estimates say that more than 2.73 million blog posts are written and published daily. Many industries are experiencing a content surplus, making it even more challenging for marketers to get their content seen. Social media networks like Facebook and Twitter are adjusting their algorithms to ensure the least amount of organic visibility for brands, too. Traditional paid media, such as banner advertising, is becoming less effective year-over-year because banner blindness runs rampant. According to Solve Media, you're more likely to survive a plane crash than click on a banner ad. That sounds farfetched until you look at the results from the Nielsen Norman Groups 2007 eyetracking study (shown below). Red areas indicate where users looked the most; yellow areas indicate fewer views; areas colored blue depict the least-viewed portions of the page; gray areas didn't attract any views/actions; and the green boxes are used to highlight advertisements. As a result, new techniques, tactics and tools are cropping up and being used by marketers of all stripes to maximize the visibility of their content. There's now an entire content promotion ecosystem. From influencer marketing to native advertising, brands are experimenting in new ways. Many brands are sponsoring articles on blogs or other online publications with large preexisting audiences. An interesting stat we just included in our own " Content Promotion Manifesto" is that brands spent, on average, 6.7 percent of their content marketing budgets on sponsored content in 2013. It's trending upwards, too. From the The New York Times to Forbes' Brand Voice, there's no shortage of famous examples. While advertorials have been around for decades, this top-of-the-funnel sponsored article channel is relatively new for many content marketers. Over the last year, we have received many questions from clients about sponsored content—questions about pricing, scale, value and strategy. We struggled to answer most of them; there wasn't anywhere to get answers. Because of this, we decided to reach out to 550 online publications to gather as much information about their sponsored content programs as possible. We wanted to find out the following:
We quickly learned that sponsored content on blogs and other online publications, when viewed as a marketing channel, is very immature. Pricing doesn't have much rhyme or reason, either. However, after collecting and interpreting data on 550 online properties, and dissecting countless native advertising studies, we hope to shine a light on a little known content marketing channel. The results of the study are outlined below. Note: The complete Media Buyers Guide to Sponsored Content study is available for download here. Defining Sponsored ArticlesWith content marketing adoption rates so high, many brands are looking to native advertising to promote their content. The Interactive Advertising Bureau (IAB) defines native advertising as "paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behavior that the viewer simply feels that they belong." According to the IAB, native advertising contains six different types of ad units: in-feed, promoted listings, in-ad with native element, paid search, recommendation widgets, and custom. Sponsored articles fall into the in-feed subgroup. However, so does promoted content on Facebook, LinkedIn and Twitter. Bcause they appear within the normal content feed of the publisher, it doesn't matter if the publisher is Facebook or BuzzFeed. In other words, sponsored articles amount to advertising on a media outlet in the form of editorial content that looks like it's supposed to be there. Brands value this because association with a publication and exposure to its audience can drive awareness, traffic, conversions, and leads. The Current State of Sponsored ArticlesWe uncovered lots of fascinating information about sponsored articles while conducting our research. They are actually an evolved version of what many marketers call advertorials, which have been around for decades. The biggest difference between the two is where the content resides in the customer buying journey. Advertorials are middle to bottom-of-the-funnel content.
An example of a magazine advertorial On the other hand, sponsored articles strictly reside at the top of the funnel. Their purpose is to be helpful, entertaining, or both. Top-of-the-funnel content doesn't appear to be salesy and brand-centric to the reader. It's the rise of content marketing that helped move advertorials up the funnel. This helps brands become not just purveyors of goods and services, but a producer of ideas and a distributor of knowledge. ControversySponsored articles have received pushback from some publishers, brands, and consumers—and even government regulators who are concerned because the articles resemble editorial content. This can damage the editorial integrity of a publication, as well as a brand's image. Both publishers and marketers have a vested interest in not appearing to mislead consumers. Native advertising in general is misunderstood by many consumers and marketers. (That's partly why we conducted this study.) In the video below, John Oliver does a good job of articulating many consumers' concerns regarding sponsored articles. Copyblogger's 2014 State of Native Advertising Report surveyed over 2,000 marketers and discovered that 73 percent were either completely unfamiliar with or hardly familiar with native advertising.
Thirty-eight percent of the marketers could identify forms of native advertising from a checklist, and only three percent claimed to be very knowledgeable. Earlier this year, Contently surveyed 542 U.S. Internet users to determine what they thought about sponsored articles. Only 48 percent of the respondents believed sponsored content that was labeled as such was paid for by an advertiser that had influenced the content produced. The rest thought the label meant something else.
Just over 66 percent of the respondents reported they are not likely to click on an article sponsored by a brand and 33 percent said they're just as likely to click on a sponsored article as they are to click on (unsponsored) editorial content. There is also contradictory evidence surrounding the overall effectiveness of sponsored articles. Research from Chartbeat shows that only 24 percent of visitors scroll past the fold when visiting a sponsored article—compared with 71 percent for editorial content. However, The New York Times claims readers spend the same amount of time on sponsored articles as traditional news stories. This is backed up by a study from Sharethrough and IPG Media Labs. They found that consumers actually look at sponsored articles more than typical editorial articles (26 percent vs. 24 percent) and spend a similar amount of time on each (1 minute vs. 1.2 minutes).
Not all publishers offer sponsored article opportunities to marketers. During our research, some respondents told us that protecting editorial integrity and preserving audience trust were a higher priorities. On the other hand, many big name publishers like Forbes, The New York Times, Business Insider, The Atlantic, Washington Post and The Wall Street Journal have all embraced sponsored articles as a revenue source. BuzzFeed's entire business model is built around what it calls sponsored "listicles," a.k.a. sponsored articles. While some publishers are averse to adopting this native form of advertising, it doesn't seem to be causing any damage to the publishers who are using native ads. The U.S. Federal Trade Commission (FTC) hasn't quite figured out how to regulate native advertising. The FTC has delayed handing down regulations around disclosure requirements, language and graphic separation. Until that happens, the display of native advertising will remain at the discretion of publishers. With that said, the IAB has set native advertising guidelines for its members. The IAB reports that clarity and prominence of paid native ad unit disclosure are vital, regardless of native advertising type. Their two criteria are straightforward:
In the case of sponsored articles, a reasonable consumer should be able to distinguish between editorial content from the publisher and paid advertising. GrowthA 2013 survey conducted by Hexagram and Spada revealed that 62 percent of publishers had embraced sponsored articles, with another 16 percent planning to go this route by the end of 2014. Comparable research from eMarketer showed that only 10 percent of digital publishers didn't have and weren't considering native advertising on their sites.
The 2014 Native Advertising Roundup revealed that 73 percent of media buyers use native advertising, and 93 percent expect to spend the same or more in the future. Native advertising spending in the U.S. is expected to increase from $1.3 billion in 2013 to $9.4 billion in 2018. A full 40 percent of publishers expect native advertising to drive a quarter or more of their digital revenue this year.
Native advertising, when compared to traditional display ads, have been found to be more effective. 25 percent more consumers looked at sponsored articles than display ad units. Native ads produced an 18 percent lift in purchase intent and a nine percent lift for brand affinity responses. BIA/Kelsey released a study which shows brands are planning on spending more on native advertising, and publishers stand to benefit as long as they can preserve the trust and interest of their audience.
Examples of Sponsored ArticlesSince look, feel, design, language and requirements of sponsored content are left up to the discretion of publishers, the presentation of sponsored content on different sites varies widely. Some publications provide brands with what can be described as a virtual microsite within the site itself. Others are more streamlined, using an article that appears as a piece of featured content but is labeled as sponsored. Sponsored Article PricingThere are no real standards for pricing in the digital world with regard to sponsored content. This makes budgeting for the channel very tough to do. It also makes long-term strategic execution at scale and across multiple publications a near impossibility. While the value of sponsoring content is clearly understood by many brands, how to execute it and who to talk to in order to get it done is generally unclear. The study set out to add rhyme and reason to this burgeoning channel by exploring costs and comparing them across a broad spectrum of online publications and blogs. This is valuable information for marketers and media buyers wishing to negotiate with online publications. It can even be used by publications that have not yet offered sponsored content opportunities to establish fair pricing. Since publishers completely control their own pricing and standards, they maintain their own criteria for validating costs associated with sponsored articles. In today's analytics-driven marketing culture, where channels are often compared and returns are measured, sponsoring content across several different publications can't be so easily consolidated into a single "sponsored content" channel since each one has a unique value proposition. This study is the industry's first attempt to scientifically justify, quantify, and predict current going-rate prices of sponsored articles using explicit data points that can be measured for each online publication. Our goal was to create the first-ever quantitatively supported pricing standard for sponsored articles. We hope our research puts an end to these challenges and empowers marketers with the ability to budget, negotiate, and ultimately scale the deployment of sponsored articles within their channel mix. ResearchIn total, the research for this study was conducted over a five-month period of time earlier this year. It included manual outreach via email and phone to over 1,000 media outlets and blogs. The outreach resulted in responses from 550 publishers that sold sponsored article units. The study took an unbiased approach to data inclusion and included a representative sample set. It collected data on globally-recognized publications, one-person blogs, and everything in between. Publications were classified using the following criteria:
Everything that didn't meet the above criteria was classified as a blog. Each price collected in the study was the minimum charge for getting a sponsored article published, regardless of other pricing factors. A total of 17 factors were cited as justification for pricing schemes from the 550 publishers.
In order to do a quantitative analysis, explicit data was collected from all of the publications to calculate predictor variables. Those variables included:
AssumptionsIt is assumed that the data set in this study is a representative sample of the entire ecosystem of blogs and other online publications because the results closely mirror Moz's distribution of Page Authority that analyzed more than 10,000 SERPs and 200,000 unique pages. This regression model had a mean (average) Page Authority of 40.8 and standard deviation of 15.1. The distribution can be seen below.
The regression model in this study had a mean of 47.1 and a standard deviation of 15.5. The sample set of blogs and publications had a slightly higher Page Authority than the Moz study. This was expected because the study only measured root domains and not long-tail pages within those domains.
Aside from that slight disparity, the distribution curves are nearly identical. For those readers who are number junkies, the descriptive statistics of the Page Authority data in the study are below.
LimitationsVariations in sponsored content offerings – The study established the pricing baseline based on the cost of one sponsored article. Since some publications only offered long-term commitments to marketers that could include other benefits (banners, email, social promotion, etc.), some publications' unit pricing could be inflated. As a result, the regression model may not be an accurate price predictor in all scenarios. Social account data – Not all online publications have accounts on Facebook, Twitter and Pinterest. In these cases, the number zero was used to quantify followers. Also, for publications with multiple accounts on the same network, the study measured the account with the most followers. Alexa Rank Inaccuracies – Alexa admits publicly that there are limits to making judgments from its data. Sites with relatively low traffic may not be accurately measured by Alexa. AnalysisThe graph below seeks to show the exact methodology we used to conduct the sponsored content pricing study. It's purpose is to give readers confidence in our pricing models so they feel comfortable in adapting the formulas. When all prices are graphed, bloat appears on each end of the pricing spectrum. In order to reconcile the dense areas, the study broke down the pricing data and regression models for blogs and publications separately.
Blog Pricing Analysis The graph below represents the distribution of prices for all 474 blogs in the study.
Because of the wide range and low frequency of prices recorded in the "more" area, we decided to label these data points as outliers. By removing the outliers (approximately 3.8 percent of the sample) from the analysis, the variance decreased by 87 percent, making for a more accurate predictive model. All descriptive statistics for the blog data sample before and after removing the outliers were laid out in the study. With the remaining 456 cases, a multi-variable regression test for price against all of the predictor variables was run, after which the insignificant variables were removed to formulate the pricing regression model for blogs, as shown below.
The end result confidently determined the fair market price formula for a sponsored article on a blog:
Publication Pricing Analysis The graph below represents the distribution of pricing for all 76 publications recorded in the study.
The outliers were kept in this regression model because of the range in quality and size of online publications is large. The descriptive statistics are available in the actual study. Following the same methods as the blog analysis, the study ran a multi-variable regression test to construct a predictive model for publication pricing. After removing the insignificant variables the output looks like this:
The end result confidently determines the fair market price formula for a sponsored article on a publication:
What All This Math Really Boils Down ToWith the formulas below, marketers now have a way to assign value when purchasing or negotiating for sponsored articles on blogs or publications. Prior to this study marketers had no way of knowing if they were getting a fair deal or not using this emerging channel.
That said, media buyers should also note that many top-tier publications package their sponsored content offering in different ways. Keep this in mind when using the formulas above. Below are examples of some variation in sponsored article packages.
Networks and Tools for Sponsored ArticlesWhile conducting research, several tools and networks kept coming up. Some networks set up for the sole purpose of connecting marketers with publishers for sponsored content. Even HubSpot has built an informal ad hoc network for its partner agencies to connect with its publishing customers. Content measurement tools, including Nudge, which was built to measure sponsored content, are starting to crop up, too. A few other networks and tools worth noting:
With the growth of online content showing no signs of slowing, the use of sponsored content as a marketing channel will undoubtedly continue to grow as well. Besides, it's a proven revenue stream for publishers who have often struggled to make money on the Internet. However, as the popularity of sponsored content grows, so does the likelihood of it being regulated by governments. Until then, consider this post your definitive guide to sponsored content. The study can be downloaded here. Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read! |
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Seth's Blog : Freedom, control and good ideas
Freedom, control and good ideas
Where should great programmers choose to work?
[I say 'choose' because anyone who has worked with programmers understands that the great ones are worth far more than the average ones. Sometimes 50 times as much. That's because great programmers are able to architect systems that are effective, that scale, and that do things that other programmers can't imagine until after they're done.]
While this is a post about people who work to become great programmers, I think it applies to most fields, including sales and design.
Many programmers are drawn to famous, hip, growing tech companies. There are literally tens of thousands of programmers working at Apple, Google and Facebook, and each company receives more than a thousand resumes a day.
It might not be a great choice, though. Not for someone willing to exchange the feeling of security for the chance to matter.
The first challenge is freedom: Not just the freedom to plan your day and your projects, but the freedom to try new things, to go out all the way out to the edge, to launch things that might not work.
A key element of freedom is control. Controlling what you work on and how you do it. If you are part of a team of a hundred people working on an existing piece of software, you will certainly learn a lot. But the areas you have control over, responsibility for, the ability to change—are small indeed.
The team that built the Mac (arguably one of the most important software teams in history) was exactly the right size for each member to have freedom and control while also shipping important work.
Alas, when an organization gets bigger, the first technical choice they make is to build systems based on programming jobs that don't need brilliant engineers. The most reliable way to build a scalable, predictable industrial organization is to create jobs that can be done by easily found (and replaced) workers. Which means less freedom and less control for the people who do the work, and more freedom and more control for the organization.
When faced with the loss of freedom and control, many talented people demand an increase in security and upside. That's one big reason (irony alert) that fast-growing companies go public—so they will have the options currency to pay their team handsomely, which puts the future of the company in the hands of Wall Street, which will happily exchange stock price growth for the banality of predictable. This, of course, leads to programmers losing even more freedom and even more control.
It's entirely possible that an industrialized organization is going to change the world, but they're going to do it with you or without you.
The alternative, as talented outliers like Marco Arment have shown us, is to take a good idea (like Tumblr or Overcast) and make it into something great.
The challenges here are that finding a great idea is a lot of work (and a distinct skill) and making it into a company that succeeds is a lot of work as well. Programmers who do both those jobs are often left fighting for the time to do the programming they actually love to do. (Mark Zuckerberg decided to give up serious programming at Facebook, Dave Filo chose not to at Yahoo).
The alternative? Be as active in finding the right place to work as great founders are in finding you. The goal might not be to find a famous company or even a lucrative gig. Instead, you can better reach your potential by finding the small shop, the nascent organization, the powerful agent of change that puts you on the spot on a regular basis.
This is a lot of work. Not only do you need to do your job every day, and not only do you need to continually hone your skills and get ever better at your work, but now you're expected to spend the time and energy to find clients/bosses/a team where you are respected and challenged and given the freedom and control to do even better work.
If I were a great programmer, I'd be spending the time to figure out what I'd want my day to look like, then going to events, startup weekends, VC firms and other places where good idea people are found. The best jobs might be the most difficult to find.
Bernie Taupin needed Elton John as much as John needed Taupin.
You can't get away with this strategy of self-selection if you're simply a good programmer. It won't work if you don't have a point of view about your craft and if you need management supervision in order to ship great code. You need to build a trail that proves you're as good as you assert you are. But those are all skills, skills worth acquiring in an age when they are worth more than ever before.
Once you have those chops, though, the onus is on you to choose not to be a cog in a well-oiled machine that will rob you of freedom and control, not to mention the personal development and joy that come with a job where you matter.
To be really clear, it's entirely possible to be a great programmer doing important work at a big company. But those companies must work overtime to create an environment where systems-creep doesn't stifle the desire and talent of the best people on the team.
The naive person wonders, "how come so many great architects build iconic buildings early in their career?" In fact, the truth is:
doing the work that earns a commision for an iconic building makes you into a great architect.
Michael Graves and Zaha Hadid didn't wait for someone to offer them a great project. They went and got it.
[If this resonates with you, I might have precisely the right gig for the right programmer. You can read the details here. If you know someone, please share.]
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