Publishers Set To Take On Agencies With Branded Content & Even Their Own Ads

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In this article from The Wall Street Journal, writer Jack Marshal says traditional publishers are increasingly eyeing agencies’ traditional domain – branded content. Some in the US have even starting producing creative in-house, too…

This article is in the context of the US market

A New York Times Co. staffer recently spent weeks digging into a technology company, visiting engineering departments and interviewing executives to ferret out the best story there was to be told about the firm.

It wasn’t for a hard-hitting exposé. Instead, the writer was working for T Brand Studio, the company’s in-house ad agency, to put together a report commissioned by the media publisher on how best to market itself in an ad campaign.

Publishers are pouring resources into such initiatives as they try to turn their niche “branded content” businesses into significant growth drivers. They are expanding into areas that traditionally have been the domain of advertising agencies—from doing research for companies to creating ads that run outside their own websites.

For traditional news outlets such as the Times, The Wall Street Journal, the Washington Post, and Time Inc., expanding in promising digital areas like sponsored content is vital. In many cases, print advertising is falling faster than digital-ad revenue is growing, and in the online world the dominance of ad giants Facebook Inc. and Alphabet Inc.’s Google is intensifying. A recent round of poor financial results in the newspaper industry underscored those pressures, forcing publishers to cut costs and lay off employees.

Branded-content revenue has been growing at a fast clip industrywide, though it still makes up a relatively small portion of companies’ overall revenue. Publishing executives acknowledge that building large, profitable branded-content businesses won’t be easy. The most compelling products—deeply reported, interactive ads that tell stories—can be labor intensive, and some require sophisticated video production. Also, these businesses compete with a plethora of digital media companies such as Vice Media and BuzzFeed that have placed branded content at the centre of their business models.

Critics of branded content suggest that it blurs the traditional boundaries between advertising and editorial, and may risk confusing and alienating some readers.

The Times’ T Brand Studio, which employs 110 people, took in about $35 million in 2015, approximately 18% of the company’s total digital advertising revenue. That was up from $14 million the year before, according toSebastian Tomich, the Times’ vice president of advertising and innovation. The Times, like other big publishers, doesn’t disclose detailed financials for its branded content business. Mr. Tomich said it is “very profitable” and is expected to report “substantial growth” for 2016.

To help accelerate growth, the Times has begun moving deeper into more agency-like services, creating ad campaigns that may show up outside the Times’ own properties or offering consulting and research services, Mr. Tomich said.

Read the full article here.

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