Weighing the Benefits: Sponsored Content Versus Advertising

Screen shot of Pulse on an iPad from the cited article.

We saw an interesting article in Advertising Age last week regarding the news reading app called Pulse. Like so many other platforms catching fire today, Pulse organizes content into a more visual system that makes finding and reading content easier. It is a competitor of the more commonly known Flipboard. Both companies, Flipboard and Pulse, are taking the bold step that so many internet start-ups have missed over the last decade – they are entering the game with a revenue plan. However, the two companies are approaching their money-making ventures in different ways.

Flipboard, according to the article, has gained some attention from advertisers because of the flashy magazine-type ads it sells. In fact, if you visit the advertisers section of the Flipboard site, you can see that they tout the availability of full-page ads that can also be fully interactive in a mobile environment. This is a fairly standard advertising/revenue generation model. Content is accompanied by flashy ads that hopefully are appearing in an environment that will garner them some interest. Print advertising has been working this way forever.

On the other hand, Pulse, despite the tried and true status of the paid advertisement model, is trying something different. Pulse executives are offering sponsored content opportunities instead of paid advertisements. This means that like an advertorial in a print publication, an article would appear that would be noted as sponsored content, and readers would have to pay to be able to access the content.

Why is Pulse moving in this direction? “The canvas is getting smaller, and brands are at their best when they are unshackled and can focus on being powerful storytellers,” Dmitry Shevelenko, Pulse’s head of monetization products, wrote in an email. “Skyscrapers, takeovers and other bombardment tactics popularized on the desktop web are largely irrelevant on intimate devices.” The article also notes that the kinds of “full page” ads Flipboard is offering just doesn’t work as well on the smaller screen. The impact is minimized, especially on a smart phone device.

Benefits to the advertiser

In many ways, sponsored content can be more attractive to advertisers than the ads of yore. Whether the environment is mobile or web, customers are becoming less patient with “interruptive” marketing. Tactics like flashing skyscraper banner ads have most certainly seen their day in the sun. “Roadblock” ads that you have to look at before proceeding to a website or to a new page are best categorized by most people as really annoying and disruptive to the overall experience. If someone is reading, whether it’s a print publication, a website, or articles via Pulse, what they’re most after is good content. Sponsored content is still content, and if it’s compelling enough, people will click it and read the full article. This is why text ads are one of most preferred email marketing recommendations. People don’t often click on a banner ad, but a block of content is much more attractive.

Sponsoring content also can help build the brand of a company as a thought leader. It can increase the likelihood that your company will be perceived of as a good resource for information, and it of course also indicates that your company is active in the industry.

The downside

In the case of mobile apps like Pulse, the biggest question right now is whether people will be willing to pay for content they used to get for free, especially if they see that the content is sponsored by a company (this would tend to make you think the information would be biased in some way). It will take awhile to move past the era of free content into the future landscape of increasing paywalls, but that seems to be the way  the publishing industry is headed. The interesting trend to watch will be whether publications will move towards the sponsored content model as they move their platform to mobile devices. Will B2C and B2B publishers continue to sell “full page ads” for iPad versions of their publications, or will we see a great decline in the use of banner ads in favor of more and more “pay to play” content?

What are your thoughts about this both as a marketer and/or as a consumer? Would you be willing to pay for content? Would you prefer that over seeing banner ads? And if you’re in marketing, what are your thoughts? Do you agree that sponsoring content is the wave of the future?

We’d love to hear your thoughts!


4 comments on “Weighing the Benefits: Sponsored Content Versus Advertising

  1. I think I am alone in this sentiment, but I like sponsored content. BUT IT MUST BE VALUABLE to me in some way. That is the trouble isn’t it.

    I think we lie to ourselves to believe that un-sponsored content is also unbiased. I have seen more than my fair share of bloggers that have made up information or write only to bilk their own products.

    Paid resources can also be unbiased.The New York Times did not become less of a trusted resource because they moved to a paywall model.

    Not every type of sponsored content is necessarily biased. Telling a customer story helps the business. It is also a form of entertainment, but of course there is a push to present the positive over the negative.

    In the future ads, or content that interrupts the user experience of a product, is not going to last long. It has something to do with focus. Ads are intrusive, they need to be designed to compliment our activities not distract.

    • I was wondering about that too. If you are getting paid or trying to build your business you’re bound to interweave some bias into your content, even if you don’t mean to. If you pay for that content, are you willing to siphon out the bias or do you just want to go to a resource that you feel is more objective? It gets tricky.

  2. Paywalls are seeing some success with newssites (especially the NYTimes) so it seems smart for Pulse to look this way. The major stumbling block will be to ensure it doesn’t influence the journalistic integrity of the information ( a concern for decades with sponsored stories and advertorials, etc). Pulse seems to have a unique approach in that they are not just selling stories but they are offering them up to the consumer at a cost (an opt in approach with $ attached). This is a very different model and one my firm is looking at closely for our advertisers.

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