Branded Content Business Model

How to Succeed with the Branded Content Business Model

Branded content isn’t new. For more than a decade now, digital publishers have been generating revenue by producing content for brands. The branded content business model has become a critical stream of revenue that’s allowed publishers to thrive. But changes in the industry in 2020 are causing some publishers to reevaluate their approach.

City and regional magazines are competing against digital pure-plays like Buzzfeed and PopSugar for contracts with major companies. In more and more cases, mid-size publishers are winning out over their larger competitors. Brands are interested in working with publishers that have loyal, engaged audiences, and they want to know that the products they’re purchasing are 100% custom.

Globally, spending on branded content is expected to hit $13.4 billion this year, according to the branded content distribution platform Polar, with a compound annual growth rate of 40%. While current research doesn’t indicate what portion of that will be spent on partnerships with small and mid-size niche publications, there’s plenty of reason for the industry to feel positive about its current trajectory.

Almost one-third of respondents in a Digiday survey cited branded content as their most important source of revenue. It’s also the source of revenue with the greatest potential for significant growth in the coming year. The branded content business model is more lucrative today than ever before, especially for publishers who understand what it takes to succeed.

Let’s take a look at some of the latest trends impacting the way the branded content business model is performing for digital publishers.

Sophisticated Brand Studios

It used to be that only the largest digital publishers had brand studio businesses, but with the branded content business model taking off, some mid-size publishers are adopting this approach, as well. Having a brand studio business allows a publisher to take on more branded content assignments, and therefore generate more revenue through this important channel. The most sophisticated publishers are even expanding their brand studios to handle consulting, experiential businesses, and influencer marketing.

Editorial Sponsorships

Editorial sponsorships became less popular as branded content platforms grew over the past decade, but some industry leaders believe this strategy will regain its momentum in the coming years. The latest trend is to make editorial sponsorships multi-dimensional. Publishers are finding new ways to incorporate brands into their editorial worlds. For example, publishers might invite brands to contribute content to special series’ or setup booths at conferences or events. These invitations are a part of their editorial sponsorship packages, so brands feel like they’re getting more value for their money.

Tightening Margins

Despite overall optimism about the state of branded content, not every industry trend is positive. Research from Mediaradar shows that the number of advertisers making branded content buys has leveled off recently. It’s also gotten more expensive for publishers to distribute the branded content they create, as Facebook has gradually increased its fees for distribution. Agencies are putting pressure on publishers to justify their rates through advanced metrics, which adds another layer of complexity to the model.

Expanded Reporting

As brands look to squeeze as much value as possible from their publisher partnerships, they’re requesting more metrics to justify the cost. Brands now see paid content as a service, and as such, they expect their ads to receive the proper attention from publishers. In addition to tracking impressions, which is nearly a requirement, brands want to see demographic breakdowns, location breakdowns, and engagement metrics. If the branded content project involves video, expect the brand to ask for 10-second view numbers.

Pushing Onto Instagram

Up until this point, Facebook has been the main game in town when it comes to branded content. Publishers will frequently rely on the social network to distribute the content they produce for brands. In the coming years, though, we expect to see a greater reliance on Instagram. The photo-first network is rolling out a feature that directly funnels visitors to a brand’s checkout page, so users who click on tagged products can complete their transactions right away. This is expected to be very popular among internet users. Publishers who find a way to capitalize on the feature, and integrate it into their branded content packages, will be one step ahead of the competition.

Are you interested in selling branded content packages to advertisers at your publication? Reach out to our team of web publishing experts to learn more.