A Year of Reckoning for Branded Content

Editor’s Note:  CommPRO is reaching out to our community, asking the c-suite for 2016 predictions.  We welcome your commentary.  Please email editor@commpro.bizBy David Berkowitz, CMO, MRYIn 2015, marketers grappled with existential questions about advertising and content that will lead to wild conflagrations in the year ahead.Over the past year, ad blocking threatened publishers as widespread consumer adoption wiped out billions of dollars’ worth of advertising impressions. The rise of native advertising has assuaged some of the bleeding, but a lot of what’s known as native advertising is easily blocked by browser and mobile plug-ins, and the Federal Trade Commission is now on the lookout for cases of marketers deceiving consumers through such ads.Publishers and marketers alike have coincidentally birthed a remedy to ad blocking: branded content. Such content marketing typically takes one of three forms:

• Content produced directly by the brand and promoted largely through ads on social and video networks
• Content produced in conjunction with publishers (including in-house studios from Buzzfeed, Time, and others that function like creative agencies)
• Content produced directly with individual content creators or influencers (solicited directly, through talent management companies, or hybrid talent and production shops known as multi-channel networks).

Branded content meanwhile is facing steep challenges of its own. For marketers, it is tough to scale distribution cost efficiently, especially as social networks have essentially eliminated any free lunch. Marketers typically need to pay for practically every impression and interaction, even from consumers who opted in to be fans of that brand. Publishers in turn need to determine just how well their studio models scale. It’s a sign of how terrible the media business is that such outlets think the way to stay in the black is to emulate the ad agency model.When executives at publishing, technology, and agency companies push branded content models in the year ahead, they will face increasingly savvy and jaded marketers who will ask the mother of all questions: “What is this doing for my brand?” All the stats about display ads getting blocked and consumers trusting influencers won’t matter once that question is asked. Marketers increasingly will be determined to know what they are paying for. Say a branded content campaign costs $1 million up front, or it has a similar budget for a campaign priced at $0.50 per engagement. Maybe the pitch is perfect and the marketer bites. How can one then convince that marketer to keep spending more?With traditional media, marketers know what they’re paying for, even if metrics are based on estimates drawn from small samples of the population. With branded content, publishers are inclined to charge what they think the market will bear. The fact that marketers will pay for something at a certain rate doesn’t validate the model; it merely validates the model’s temporary viability. The goal for all parties should be to determine the return on a marketer’s business objectives and then determine the Goldilocks pricing that is just right.[author]About the Author: David Berkowitz is Chief Marketing Officer at agency MRY, where he spearheads marketing operations, directs the agency’s communication strategy, and gains visibility for its clients such as Coca-Cola, Visa, and Johnson & Johnson. Previously, he spent seven years at agency 360i, ultimately serving as Vice President of Emerging Media, having co-founded the agency’s social media practice in 2006 and led the Startup Outlook initiative. He has spoken at more than 250 events around the world, including South by Southwest (SXSW) in Texas, Digital Age 2.0 in Brazil, Crowdsourcing Week in Singapore, and the keynote at Interactive Marketing Summit 2013 in Turkey. He has also been the featured speaker at corporate summits at the headquarters of Google, Coca-Cola, Cox Communications, and About.com. David has written more than 500 bylines for outlets such as Advertising Age, The Economist, Mashable, and Mediapost. He has authored his own MarketersStudio blog since 2005. He has spoken at more than 200 events globally. While working as an editor at research firm eMarketer, he interviewed 175 executives and authors about technology and business. He is frequently quoted online and in print, having appeared in The New York Times, The Wall Street Journal, Reuters, the New York Post, the Associated Press, and USA Today. Ad Age, Ad Week, and PR Week have all named him among the most influential advertising and marketing professionals on Twitter.[/author]