Sponsored mobile content puts editorial credibility at risk
July 22, 2013
Sponsored content on Forbes
It is no surprise that publishers are scrambling to figure out how to monetize mobile sites and applications. Sponsored content is one approach being embraced by publishers, but the ad units have serious ramifications for publishers wishing to maintain editorial credibility.
Sponsored content plays a completely different role on mobile devices, particularly smartphones, than it does on desktops since it is smaller and harder to decipher from editorial content on a mobile phone. As brands increasingly churn out content, mobile native ads that blend into editorial pieces pose a significant risk for publishers that have long separated editorial from advertising.
“The challenge has changed slightly so that publishers make sure that they have the additional revenue from sponsored content, but they don’t want to ruin the brand that they themselves created,” said Nitesh Patel, London-based senior analyst for wireless media strategies at Strategy Analytics.
“I think it’s more of a difficult tight rope to walk, but let’s face it, the intrusive banners on mobile is something that does not work on a smaller screen for either the consumer or advertiser,” he said.
“Those boundaries will be tested over the next 12 months in terms of publishers and what works for them. The challenge of a publisher is to put the content out there and make sure that it’s done in a way that does not irritate the consumer experience.”
Mobile news on the rise
Mobile is growing to become the primary way that consumers read news. In fact, a Pew Research report from October found that 64 percent of tablet owners and 62 percent of smartphone users say that they use their device to access news weekly.
This is equivalent to one-third of all U.S. consumers accessing content via a mobile device weekly.
Moreover, one-third of mobile news consumers said that they are getting news sources from their mobile devices, meaning that mobile is increasingly becoming the medium on which publishers make first impressions with readers.
Sponsored content is one of the solutions that publishers are experimenting with to capitalize on increasing mobile traffic. The units basically stack an ad on top of an article, but the message can be particularly deceiving to consumers that are not familiar with sponsored content.
Forbes, The Washington Post and BuzzFeed are a few publishers that use sponsored content as part of a mobile monetization strategy.
Since tablet news-reading behavior aligns more closely with that of desktop users, publishers should be most concerned about sponsored content affecting smartphone readers.
Given the size of a smartphone, there is limited real estate for publishers to cram in a line of copy that explains that the content is sponsored.
Therefore, there is a higher likelihood that consumers will click on sponsored content with the false belief that it is a news item.
A sponsored post on Gawker's mobile site
Additionally, smartphone readers jump in and out of news content whenever they have a few free minutes, and sponsored content could be irritating if they are quickly looking to find a specific article.
The upshot is that most of the sponsored content ad units available today seem to be focused on solving short-term monetization problems for publishers.
Eventually, readers will get turned off from content when they feel bombarded by advertising messages as they browse through apps and sites from credible news organizations.
Facebook and Twitter are two examples where sponsored content compromises the user experience, and they should both be models for publishers to avoid.
Advertisers have shown a healthy appetite for sponsored posts on Facebook and Twitter, particularly on mobile where the most usage takes place. However, the user experience can often feel as if advertisers are shoving messages down users’ throats via their news feeds.
At the same time, publishers are experimenting with sponsored content because there are not a lot of other viable mobile advertising options available.
Banner ads that squeeze desktop creative into smaller-sized bars get a lot of criticism from marketers for not taking full advantage of the built-in features of mobile devices. However, publishers continue to rely on banners to drive revenue, presumably because there is not a better, scalable alternative available.
Publishers can also use banner ads to beef up the value proposition for advertisers with cross-screen opportunities across smartphones, tablets and Web, even if the ad includes the same creative and is simply formatted to fit more than one screen.
It is also unclear how much money advertisers make as a result of running sponsored mobile content.
The same study from Pew last year found that only 7 percent of tablet readers and 6 percent of smartphone owners sometimes shop from mobile ads, suggesting that mobile ads are primarily used for lead generation by advertisers.
Branding is a critical key performance indicator for any advertiser, but risking a publisher’s integrity without making substantial amounts of money off of sponsored content is a significant issue for advertisers.
“It’s clear that the publishing industry is struggling for revenue,” said Jesse Chiang, media and information industry analyst at IBISWorld, Santa Monica, CA.
“IBISWorld projects that magazine and periodical publishing has declined 4.6 percent annually while newspapers have declined 6.8 percent in the five years to 2013,” he said.
“The outlook moving forward for publishing industries is grim, too. Sponsored content has the potential of opening new revenue streams, though it remains to be seen how effective it can be at mitigating declining publishing revenue.”
BuzzFeed's mobile site with sponsored content
Some publishers, such as The Washington Post with its new BrandConnect content product, position sponsored content as a way for advertisers to get noticed in premium areas on Web and mobile sites.
Additionally, publishers are quick to point out that editorial staff are not typically involved in creating advertiser-driven content, which could help set some standards around what sponsored content entails.
Clearly labeling articles as sponsored is critical to the success of branded content.
As long as the content is labeled as sponsored, it is up to the reader’s discretion to determine if he or she is interested in reading more.
“Any advertiser-generated content is clearly labeled as such,” said Steve Stup, vice president of digital advertising at The Washington Post, Washington.
“We also know from research that The Washington Post has a very intelligent and educated audience,” he said. “With clear labeling they can make their own decisions about the value of the content.”
In BuzzFeed’s case, the publisher does not break out mobile when an advertiser signs a deal to create a piece of sponsored content. Instead, mobile is included as part of the program that will run across BuzzFeed's Web site, mobile site and apps.
According to Jonathan Perelman, vice present of agency strategy and industry development at BuzzFeed, New York, the idea of sponsored content might have seen like a nascent form of advertising two or three years ago, but the ad units are gaining traction with brands.
BuzzFeed’s sponsored content is labeled with yellow shading and features the name of the sponsor brand as the author of a post.
“The consumer wants content and wants content wherever they are,” Mr. Perelman said.
“Our content with native ads almost works better on mobile because of the native aspect," he said.
Lauren Johnson is associate reporter on Mobile Marketer, New York
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