July 22, 2013

It is not surprising that publishers are scrambling to determine how you can monetize mobile sites and applications. Sponsored content is one approach being embraced by publishers, however the ad units have serious ramifications for publishers wishing to take care of editorial credibility.

Sponsored content plays a totally different role on mobile devices, particularly smartphones, than it does on desktops because it is smaller and harder to decipher from editorial content on a cellphone. As brands increasingly churn out content, mobile native ads that mix into editorial pieces pose an important risk for publishers that experience long separated editorial from advertising.

“The challenge has changed slightly in order that publishers be sure they have got the extra revenue from sponsored content, but they don’t need to ruin the emblem 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 tricky tight rope to stroll, but let’s face it, the intrusive banners on mobile is something that doesn’t work on a smaller screen for either the buyer or advertiser,” he said.

“Those boundaries should be tested over the following twelve months relating to publishers and what works for them. The challenge of a publisher is to position the content on the market and ensure that it’s done in a method that doesn’t irritate the patron experience.”

Mobile news at the rise
Mobile is growing to become the main way that buyers read news. In truth, 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 comparable 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’re 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 likely 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 editorial , however the message may be particularly deceiving to consumers that aren’t knowledgeable about sponsored content.

Forbes, The Washington Post and BuzzFeed are just a few publishers that use sponsored content as a part of a mobile monetization strategy.

Since tablet news-reading behavior aligns more closely with that of desktop users, publishers have to be most taken with sponsored content affecting smartphone readers.

Given the scale of a smartphone, there’s limited real estate for publishers to cram in a line of copy that explains that the content is sponsored.

Therefore, there’s a higher likelihood that buyers will click sponsored content with the false belief that it’s a news item.

A sponsored post on Gawker’s mobile site

Additionally, smartphone readers jump out and in of stories content whenever they’ve a couple of free minutes, and sponsored content may be irritating in the event that they are quickly seeking to discover a specific article.

The upshot is that the majority of the sponsored content ad units available today seem to be interested in solving short-term monetization problems for publishers.

Eventually, readers gets turned off from content once they feel bombarded by advertising messages as they flick through apps and sites from credible news organizations.

Facebook and Twitter are two examples where sponsored content compromises the user experience, and that they should both be models for publishers to circumvent.

Advertisers have shown a healthy appetite for sponsored posts on Facebook and Twitter, particularly on mobile where the foremost usage occurs. However, the user experience can often feel as though advertisers are shoving messages down users’ throats via their news feeds.

At a similar 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 variety of criticism from marketers for not taking full benefit of the built-in features of mobile devices. However, publishers continue to depend upon banners to drive revenue, presumably because there isn’t an easier, scalable alternative available.

Publishers also can use banner ads to make stronger the cost proposition for advertisers with cross-screen opportunities across smartphones, tablets and Web, despite the fact that the ad includes an analogous creative and is solely formatted to slot a couple of screen.

Limited revenue
It could also be unclear what quantity of money advertisers make by using running sponsored mobile content.

The same study from Pew last year found that only 7 percent of tablet readers and six 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 cash off of sponsored content is a vital issue for advertisers.

“It’s clear that the publishing industry is struggling for revenue,” said Jesse Chiang, media and data 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 inside the five years to 2013,” he said.

“The outlook moving forward for publishing industries is grim, too. Sponsored content has the potential for opening new revenue streams, though it is still seen how effective it usually is at mitigating declining publishing revenue.”

BuzzFeed’s mobile site with sponsored content

Publishers’ perspective
Some publishers, corresponding to The Washington Post with its new BrandConnect content product, position sponsored content as a technique for advertisers to get noticed in premium areas on Web and mobile sites.

Additionally, publishers are quick to indicate that editorial staff aren’t typically curious about creating advertiser-driven content, which can help set some standards around what sponsored content entails.

Clearly labeling articles as sponsored is important to the success of branded content.

As long because the content is labeled as sponsored, it’s as much as the reader’s discretion to make a decision if she or he is all in favour of reading more.

“Any advertiser-generated content is obviously labeled as such,” said Steve Stup, vice chairman of digital advertising on the Washington Post, Washington.

“We also know from research that The Washington Post has a really intelligent and educated audience,” he said. “With clear labeling they’ll make their very own decisions in regards to the value of the content.”

In BuzzFeed’s case, the publisher doesn’t get away mobile when an advertiser signs a deal to create a bit of sponsored content. Instead, mobile is included as component of this system that may run across BuzzFeed’s Website online, mobile site and apps.

According to Jonathan Perelman, vice present of agency strategy and industry development at BuzzFeed, Big apple, the concept of sponsored content may need seen like a nascent type of advertising two or three years ago, however the ad units are gaining traction with brands.

BuzzFeed’s sponsored content is labeled with yellow shading and contours the name of the sponsor brand because the author of a post.

“The consumer wants content and desires content wherever they’re,” Mr. Perelman said.

“Our content with native ads almost works better on mobile as a result native aspect,” he said.

Final Take
Lauren Johnson is associate reporter on Mobile Marketer, New York