How Sponsored Content Transforms as It Moves to Facebook

Publishers have gravitated to sponsored content — stories, videos and podcasts that mimic journalistic content — to cope with rapidly changing online advertising. The Atlantic, Slate and The New York Times are among the publications that count sponsored content as a significant portion of their revenue. Companies such as Vice and BuzzFeed have created businesses centered on focused content. But the definition of sponsored content is shifting as viewers move from news sites towards Facebook and other social media platforms.

The New York Times notes that social media platforms can “for a competitive price … provide advertisers access to larger and more finely targeted groups of people, challenging the value of a publisher’s own channels.” Publishers must create campaigns for advertisers rather than rely on their readership’s size or demographics.

Worldwide_Global_Internet_Connected

“The differences between five years ago and now, in client expectations, are enormous,” said Slate president Keith Hernandez.

“The resulting arrangements are more client-agency than advertiser-publisher,” reports NYT, with advertisers “looking to media companies for a full range of services,” from production to placement across the Internet and social media. “We have the basic building blocks of a full-service agency,” said The Financial Times chief commercial officer Jon Slade.

Even though outside sponsored content didn’t get the green light on Facebook until April, the platform has become “a primary distributor for many publications’ sponsored posts.” As required by the Federal Trade Commission, advertisers are displayed as co-authors of each post on Facebook. But what troubles publishers is that “advertisers are now privy to a wide range of information about their sponsored content posted on Facebook — something that once was visible only to the publisher.”

Among the data available to advertisers is the amount of money publishers spent to drive traffic to the post. Previously, publishers were able to mark-up those costs, making it a lucrative part of the process; now advertisers can scrutinize them. To top it off, Facebook allows advertisers to pay to promote the content themselves, essentially cutting the publisher out of the distribution deal.

For Facebook, “this transparency eliminates inefficiency,” but publishers who touted their ability to get posts seen to their advertiser clients, “such visibility can be deflating.” If advertisers decide that they can do their own work to attract attention to their posts, publishers may end up competing with advertising agencies, not simply other publishers.