The Growth of the Sponsored Content Market

sponsored-content

As technology has advanced and the need for businesses to develop an online presence has become more apparent, the effective use of content has become prevalent. Over the years, a number of traditional channels have emerged as primary online content discovery mediums. Because the manner in which traditional content sharing is done, it has become widely understood, and since people understand it, they tend to use it.

Some of the most used channels of content discovery include PPP, SEO, social media, email and more. All of these channels possess the capacity to deliver the right content to the right group at the ideal time. As with anything that produces results and is highly accessible, this channel is becoming bloated with excess content, which means that it is becoming increasing difficult for marketers to get their content in front of the right people. It is estimated that 2.73 million blog posts are published each day.

New Algorithms

Where social media platforms like Facebook and Twitter were once fertile ground for businesses to increase their reach, these platforms have adjusted their algorithms in order to reduce organic visibility for businesses. This almost ensures that businesses will have to invest in the ad programs on these sites in order to benefit from their massive reach. Additionally, certain paid media, such as the use of banner ads, are having diminishing returns each year — something that is primarily due to the fact that banner blindness has run rampant.

People have simply become conditioned to ignore graphic ads. Solve Media suggested that the number is dismal, revealing that a person is more likely to survive a plane crash before clicking on a banner ad. This suggestion seems a little farfetched, until you compare the numbers revealed in a 2007 Nielson study. Areas where ads are posted are hardly being touched when visitors touch down on a web site.

What is Sponsored Content?

So the challenge for a new solution has emerged — sponsored content. Until recently, the focus has been on using native advertising to deliver and distribute content. For clarity, native content is content in which the ads are so cohesive with the content on the page that viewers simply feel that they belong. For instance, an ad for a Christian seminary on a church’s website would be native advertising. The basic principle with native content is that the product on content that is being promoted on a site that is closely associated will likely be relevant to a certain percentage of the visitors to that site. Native advertising contains six primary types of ads that include promoted listings, custom, recommendation widgets, in feed units, in ad with native element and paid search.

The solution to the difficulty in effectively distributing content has been met through the concept of sponsored content, which falls into the in-feed subgroup. When an ad promoting content is found within the normal content feed, it is considered sponsored content. Whether it is on the newsfeed of Facebook or BuzzFeed, when the marketer pays to have a link or post including in the normal feed, it is considered to be sponsored content.

While most people look at sponsored content as a new phenomenon, the truth is that sponsored content is actually an evolved version what was once known as advertorials. While advertorials and sponsored content have a number of similarities, the primary distinction is in the placement. Advertorials were placed from the middle to the bottom of the content funnel, while sponsored content is placed at the top of the content funnel. When content is placed at the top of the funnel, it doesn’t have a salesy of brand-centric appearance to the reader. This approach expands the impact and influence of brands, allowing them to become ideological innovators, as well as purveyors of services and products.

Controversy and Pushback

While sponsored content has proven to be profitable and authenticating for general content, it has stirred up some significant controversy and pushback from a number of sectors, including consumers, publications and government regulators. One area of concern is the fact that sponsored content will often have the appearance of an editorial, and many are concerned that this appearance will ultimately damage the integrity of genuine editorials. Additionally, there is a concern that this appearance can also have a negative impact on a brand’s image.

It is immensely important to publishers and marketers that content is not perceived as misleading or deceptive. Based on a recent study, nearly 88 percent of companies are planning to either increasing or sustaining their budget for paid content. Many believe that sponsored content has a competitive edge in marketing because it does not appear to consumers to be promotional in nature. Concerns like this is what leaves somewhat of an ambiguous cloud over sponsored marketing. When there are big league publishers and brands that are lobbying for more regulations to monitor how sponsored content is used, there will also be a concern as to whether sponsored content will continue to be as beneficial as it has been to this point. It is possible, not likely, that regulations could regulate the concept out of its advantageous position.

The basic concept behind sponsored content is to use a non-biased approach of informing the consumer about a specific topic, subsequently positioning the brand as an expert in the area. The idea is that consumers will come to the company for expert advice, which will subsequently lead to sales.

Final Thoughts

One thing is clear — content will continue to grow in relevance and influence, and currently sponsored content is building momentum as far as its ability to convert traffic into customers. The concern is whether the practice will ultimately be viewed as deceptive, or if it will continue to be an acceptable form of advertising and marketing.

It is worth noting there is conflicting data concerning the effectiveness of sponsored data. A study conducted by Chartbeat revealed that only 24 percent of visitors scroll past the fold when viewing sponsored content, while 71 percent who visit editorial articles scrolled beyond the fold. Conversely, a study conducted by the New York Times suggests that readers spend the same amount of time on sponsored article as with traditional articles.

While there is a great deal of promise associated with sponsored content, the long term projections still present some questions.

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