Why Publishers’ Revenue From Branded Content Posts On Facebook May Drop

yanivmakoverThe Sell Sider” is a column written by the sell side of the digital media community.

Today’s column is written by Yaniv Makover, co-founder and CEO at Keywee.

Branded content is a major revenue driver for publishers, as illustrated by The Washington Post’s WP BrandStudio or The New York Times’ T Brand Studio, which played a role in securing the Mobile Grand Prix for the Times at Cannes in June.

In theory, branded content is a win-win for both publishers and advertisers. Brands are able to get their message out to targeted audiences in a nonintrusive way, while branded content helps publishers regain some of the advertising revenue they have lost to marketing platforms such as Google and Facebook.

But execution has proven tricky in generating traffic to branded content. In order to drive more revenue from branded content campaigns, publishers have been charging for a predetermined number of page views, as brands like to know how much reach certain content will achieve. But delivering on the expected number of page views to branded content is not always easy, for a number of reasons.

Branded content is typically not hard – or even soft – news and, as such, is rarely discovered via search. And while publishers may drive traffic to branded content from their home page or other ad units, it still has to compete with other types of content that may justify precious home page real estate or lower ad rates.

To overcome these hurdles and meet the agreed-upon number of page views, it became customary for publishers to turn to Facebook to drive traffic to branded content campaigns. Although until recently it was technically against Facebook policy to post branded content due to a lack of transparency – readers were unaware that they were actually looking at an ad – some publishers skirted the rules by opening a separate Facebook page clearly marked for branded content.

From these secondary pages they would specifically identify stories as “sponsored” in their headlines, then pay for the posts to be boosted within Facebook to generate traffic. This approach was quite profitable for publishers, since they could charge advertisers a premium on what they were paying Facebook, which advertisers could not see.

This all changed in April when Facebook changed its policy toward branded content. Publishers are now allowed to post branded content to their Facebook pages as long as the posts are clearly tagged as branded content, using a new branded content tool from Facebook.

Essentially, this new branded content tool dismantles the existing model for publishers earning revenue by posting branded content stories. Now, when publishers post branded content stories, Facebook will notify the advertiser and grant them access to the post’s high-level insights like reach and engagement metrics, along with total spend and CPM data. Advertisers can now see the CPM of a promoted story, which makes it more difficult for publishers to justify charging a premium for page views above what they’re paying Facebook.

Publishers selling branded content to advertisers will now have to place more emphasis on the other value-adds that they bring to these campaigns, such as their influence or quality of their content. Gone are the days of focusing primarily on content creation and reach.

Ultimately, Facebook’s policy change and new tool is a good thing for branded content initiatives. However, in the short term, publishers can expect to see their revenue from Facebook branded content drop as they figure out how to navigate the latest changes to an ever-evolving digital publishing landscape.

Follow Keywee (@GoKeywee) and AdExchanger (@adexchanger) on Twitter.

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