Is cost-per-view the future of branded content pricing?

A recent Polar research says that 57% of publishers use CPM pricing for branded content programs

BestMediaInfo Bureau | Mumbai | June 9, 2016

In a recent research conducted by Polar, a global solutions provider for publishers, it was found that about 57 per cent of publishers use cost per thousand (CPM) pricing for branded content programs. Polar interviewed over 30 chief revenue officers and executives of premium publishers to examine how they run, manage and sell their branded content programs.

The first area explored was pricing and packaging. When it comes to rate cards for branded content, there is certainly a feeling that it's a bit of the 'wild-west.' Publishers struggle with how to consistently price and package branded content programs.

Polar asked who the buyer of branded content programs was. Majority of publishers sell to a combination of media agencies and brands directly. Polar found that publisher sales teams are still more comfortable working with media agencies. On the other hand, brands still turn to agencies first as opposed to publishers for executing content marketing. Brands are very much experimenting with branded content and require request for proposal (RFP) support. And lastly, local and trade publishers rely mostly on brand-direct sales rather than agencies.

“As we continue to see the native marketplace expand, we are seeing new groups of professionals taking the lead on these programs. While we initially saw most of the buying coming from media agencies, we are increasingly seeing new groups of clients coming from PR, communications, and in-house newsroom,” said Pete Spande, Chief Revenue Officer, Business Insider.

They then asked publishers how they price their branded content packages. Cost-per-view (CPV) is the fastest growing pricing scheme with almost 50 per cent of publishers pricing branded content based on views. A majority of publishers currently offer a flexible pricing approach with many providing a combination of alternatives. Today, 57 per cent of publishers still offer CPM-based pricing arrangement, which is the most commonly used when dealing directly with media agencies.

This is still a holdover from media agencies that are more comfortable with legacy digital advertising with budgets usually tied to impressions and reach.

“CPMs for native media have been the primary pricing model for us due to agency budgets structured this way, although program success is most commonly measured as views to the promoted content,” said, Greg Giusti, VP of Ad Products and Operations, Seeking Alpha.

Polar's research predicts CPM-based pricing is likely to be phased out in mature markets as content programs are increasingly measured on views and engagement with the branded content pages themselves in this era of brand recognition and social reach.

Adding to the point, Liz Percy-Robb, Product Manager, Johnston Press, said, “As customers look to branded content for greater engagement, moving to a CPV model allows us to use social and other platforms to provide a more measurable experience.”

Pricing tiers vary widely across publisher verticals such as consumer news, lifestyle, finance, and trade, to name a few. The CPM rates published generally represent turnkey costs, which include content production costs, paid social distribution, display promotional costs, and of course, native promotional media. Content and video views (or CPV) of branded content have become the new currency for sponsored programs. Many consumer publishers provide clients with hard-guarantees or soft guidance when pricing is based on views.

As native advertising and branded content has matured, pricing too has. Most of the CPM rates are blended and don't truly account for many facets of a publisher's branded content program save for the actual inventory. Instead integral parts of a comprehensive branded content campaign are lumped in with the initial inventory or not accounted for at all.

Polar recommends publishers to shift to the CPV model, which more accurately reflects the engagement of branded content. The data questions why are video views priced so much lower than other content views? The answer is supply and social platforms such as Facebook, Snapchat, Twitter and Instagram are battling it out among themselves and the publishing industry to cement their place as the first destination for branded videos. They flood the market with video inventory, driving down prices, driving viewers away from content creators as the content is all viewed offsite.

To achieve this, publishers need to utilise social networks for the distribution of their video content and incorporate video into an all-encompassing branded content strategy that keeps readers on their site or leads them to the brand's call-to-action, rather than relying on video alone.

Info@BestMediaInfo.com

Info@BestMediaInfo.com