Will Click-Fueled Content Marketing Crash?

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PeymanAs the line between standard banner ads and content recommendations blurs, the need for quality control will proliferate, experts say.

While companies use content as a branding tool, Sacha Xavier, partner and media and innovation director at Neo@Ogilvy questioned whether banners idly generating impressions drive any value. “While these ads have high click rates, are they really producing anything or just running up your impression tab?” Xavier recently asked.

InPowered, an extension of NetShelter (acquired by Ziff Davis in May 2013), sought to turn articles on publisher sites into self-serve native ads in 2012. This came before the seeming heyday of venture capital infusions in the content marketing and native ads niche market.

Peyman Nilforoush, cofounder and CEO of inPowered, spoke to AdExchanger about content quality and the coming consolidation in native advertising solutions.

Talk about the transition from NetShelter to now.

PEYMAN NILFOROUSH: We sold NetShelter to Ziff Davis last summer and it was such a strategic thing for us because NetShelter’s whole mission was bringing trusted content to people. We became a category leader because of that. Ziff Davis bought us because they wanted to be the largest network in tech.

We had developed this technology with NetShelter that found the most trusted content and what we realized is the vision is so much bigger than any one category. We were able to take the technology and start inPowered [through] the funding from the sale of NetShelter. It also happened to occur at the right time, because as we were doing it, the whole industry was just taking off with the whole concept of content marketing and native advertising.

The content marketing space is crowded. Could the bottom fall out?

Back in the day when we were building NetShelter, there was something like 500 ad nets around. A lot of them went out of business or were acquired by larger players. At the end of the day, it showed us you’re either building value with the end consumer or you’re just the middleman player. And I think that’s what’s happening in the content space. A lot of people are trying to source out content they don’t own or produce. I think our whole philosophy is it’s all about the end trust with the consumer. When we launched NetShelter, banner click-throughs were at like 5-10%. In (19)99, that’s what it was, and people lost trust over time and stopped clicking. That’s what’s happening with content marketing. There are a lot of people driving the value down because over time, if you clicked on a content recommendation link and you went out to an article to a page you didn’t intend to visit, you’re going to stop clicking.

How does inPowered work?

At its core, inPowered (is a) content discovery and amplification platform (that) enables marketers to share trusted content – articles from credible experts –to fuel conversations and educate consumers on a real-time basis and only pay once they turn their best stories into native ads placed on the Web, social and mobile. Disney is among our most creative customers, and recently they have been leveraging inPowered to find articles about the newly released MyMagic bracelet, which enables park visitors to schedule their entire Disney experience in advance and never stand in any line. … We think it's this type of access to expert content that can change the game for consumers and truly empower their experience.

What metrics determine the success rate of an inPowered campaign?

When an expert says something great about a brand or product, inPowered spreads the word. We then report back on the lift in how many times their story has been read (organic reads vs. reads that occurred based on the inPowered amplification), the lift in how many times their story was shared (organic shares vs. inPowered shares) and the average amount of time people are spending reading each article. Success is based on the percentage lift inPowered achieves vs. the amount of organic reads/shares each article gets.

Practically speaking, success is when we get thousands (or tens of thousands) of people who never would have seen an article otherwise to read an expert opinion about a brand or product, and to then have them share that article with their friends and followers and keep it spreading. Our focus is measuring attention and engagement with the content as opposed to clicks. By focusing on real, trusted, credible third-party content, sharing that and amplifying that, like what Disney (did on) The New York Times – how do you make content live longer and continue to push it.

Would you say you’re somewhere between an ad network and content recommendation platform?

The idea of someone just clicking on a piece of content doesn’t really drive your business forward. We don’t own an ad network. We run on Facebook, content recommendations, ad exchanges. And what we’re seeing is places like Facebook have the lowest bounce rate because they don’t change the titles, they don’t entice you with something that’s not related. The worst-performing area for us are content recommendations, because they change the title and image of the article and it’s almost like the whole ecosystem is based on click bait. What we’re finding is –looking at social, Twitter feeds, people are picking up on this now. Content recommendations that drive you to click at any cost are breaking user trust to a point where people are starting to react negatively.

What’s your headcount and revenue?

We’re just under 40 people. We’re based out of San Francisco and we basically took in $26 million in funding when we were NetShelter and we rolled all the proceeds into inPowered. We’re still small and private, so I get in trouble when I release revenues.

 

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