As the coronavirus continues to present hurdles for content marketers and publishers across the board, the industry is still leaning heavily on brand advertisers to help them meet their bottom lines. And as advertisers adapt to a changing landscape, many are still adjusting to this new normal. That said, research shows that a large portion are ready to look past the crisis, as six in ten (58%) of advertisers say that it's time to replace coronavirus messaging with product-specific ads. Still, publishers are eager to meet advertisers where they are. Want proof?
Digiday recently pointed out that for some publishers, advertising spaces that were usually reserved for large U.S. retailers are now being bought up by mid-sized U.S. and U.K. retailers, albeit with smaller conversion guarantees. And at Lean Startup Life, we’ve seen firsthand the ongoing revival of branded content campaigns that has happened in recent weeks despite rumors of a lengthy economic recession.
If branded content falls within your purview, I highly suggest reading through the blog post that our Head of Marketing recently published on the subject.
Since we last spoke about affiliates, Amazon made commission cuts to their affiliate program and started limiting certain categories. There’s no question that publishers felt the weight of those cuts in mid-April. Despite this - we’re seeing that publishers are increasing their affiliate budgets and seeing great ROI. That’s what I want to talk about this week, so let’s dive in. A Convergence of Opportunity Since The Great Upheaval in March, direct-response-style revenue categories - like paid subscriptions and affiliate sales programs - have been seeing a huge boost in ROI. At first, it was the drop in CPCs combined with record traffic numbers. The CPC trends have been on an upward swing since April, and yet, the ROI continues to be positive.
Why is this? As far as I can tell, it’s all about volume. People have transitioned more fully into a digital-first lifestyle. They spend more time online, and have moved their interactions and transactions there more fully. For example, Q2, which historically was not a particularly strong quarter for eCommerce before the crisis, this year saw online shopping numbers surpassing Q4 2019 numbers. Let’s take a minute to let that sink in. Q4 is the Super Bowl of online shopping. Black Friday, Cyber Monday, Christmas. Q2 was bigger than that. This is no longer an anomaly, a blip, or a temporary crisis. What we’re looking at is a complete transformation. So yes, rate cuts were a blow.
But Amazon is starting to show signs of reverting to old rates. And for now, those increased traffic numbers- along with a few other factors which I’ll discuss shortly - seem to be doing enough for publishers to press on and see profitability. Keys to Scale I want to examine what’s enabling publishers to scale and expand their efforts. First - affiliate rates. We’re seeing that working with Amazon’s generic affiliate program can still be a profitable endeavor, but the best value and ROI is a result of direct partnerships. Not only with Amazon, but also with other commerce juggernauts and select brands. For example, certain direct-to-consumer companies are seeing immense growth, and are seeking out partnerships to expand their reach.
Publishers and content businesses in the age of Coronavirus have the opportunity here to forge direct relationships with those brands and more, delivering measurable results. This is clearly a win-win for both sides. Next - let’s talk about distribution strategy. We’re still encountering a lot of publishers who are hesitant to invest in paid promotion for their affiliate content, and instead are relying solely on their organic traffic. To be blunt - this strategy is leaving a huge revenue opportunity on the table. Over the past couple of months, we’ve seen a handful of publishers begin to dip their toes into the world of paid affiliate campaigns, and the results are overwhelmingly positive. Publishers are seeing an average of 30% overall ROI right out of the gate, with optimization and strategy fueling growth that can in some cases be as high as 70%. Setting Up Success If you’re currently running organic affiliate programs, jumping to paid is fairly straightforward. The major groundwork has already been done - now it’s just time to take it to the next level.
Here’s how the most successful publishers are making it happen in a practical sense: Choosing top performers: testing articles, if not done strategically, can be costly. The best strategy is to pick out organic articles with high ROI, and test those in a measured way, adding more in gradually as winners start to emerge. Confirming that tracking is correctly implemented: To measure the ROI of your paid campaigns, you’ll need insight into how those specific campaigns are performing. Some publishers have advanced analytics set-ups that can easily show the results of organic vs. paid campaigns for the same piece of content. At the same time, it’s also common for publishers to create a clone of the successful content with unique tracking, rather than promoting the existing page.
Tailoring the format: The difference between a successful and unsuccessful affiliate campaign is very often a function of what the content looks like. Simply cloning a successful organic page will not be enough. Performance of paid campaigns is improved significantly by emphasizing the calls to action on the page with formats that stand out and language that is geared toward a sale. Taking these three actions along with the right targeting and bidding strategy is the best way to set up your campaigns for maximum growth and ROI. As for what to sell - we’re seeing a continued trend of seeking out comfort and entertainment.
Gadgets, comfy clothes, houseware, and home office and exercise equipment are the clear standouts of the last couple of months. As long as people continue to have mixed feelings about venturing out, we expect this trend to continue. If there’s one thing that I want you to take from this email, it’s that there is a wave of digital transformation happening, and publishers are well-positioned to leverage this transformation into more revenue opportunities. Get your strategy right, and you’re ready to ride the wave. How are things in your neck of the woods? I’d love to hear about your affiliate strategy, or chat about your paid Facebook strategy in general.
If you look back at what I’ve covered in these emails so far, there’s a gaping branded content-sized hole. I haven’t addressed branded content here for the simple reason that for the last couple of months since The Great Upheaval, branded content initiatives have been pretty much non-existent. That is until they started coming back. That’s what I want to talk about today, so let’s dive in. The Slow Revival The health of any revenue stream can easily be measured by the amount of money publishers spend on it.
Let’s examine branded content spending for the past 3 months: Branded content spend, in normal times, tends to peak at the end of the month, as publishers look to fulfill their reach obligations. Looking at February, that spike happened predictably. Like every other Facebook campaign type, there was a drop in spending in the middle of March as shelter in place orders started to take effect. However, we did see a small spike at the end of March, most likely due to those same fulfillment obligations. That said, the spike was much lower. From there, April spend was down to virtually zero. In May, however, we started to see things turn around. Video, for example, has experienced a steady rise in CPMs, a good indication of brands regaining confidence. Though the current situation has caused some brands to delay or pause their campaigns by a week or two, the increase remains steady, with more brands coming back online consistently.
Brands are slowly starting to re-invest their advertising dollars, and branded content has seen a steady upward trend. We fully expect this to continue. Timing is Everything This year, brands went dark in Q2 to reassess and understand the new reality. As this was happening, we started getting requests for estimates and planning Q4. This started in April. Usually, Q4 planning doesn't start until months later in the year. This tells me two things: Brands are delaying budgets, but not forgoing them. There is clearly a growing demand from brands. There are, on the whole, a small percentage of publishers fully utilizing their potential when it comes to branded content in the age of Coronavirus.
Seeing that there’s safety and stability in revenue stream diversification, this seems to me like there is a clear opportunity for publishers to double down on their branded content sales efforts and increase that revenue stream. A Tonal Shift So brands are coming back. But when it comes to their content, it’s definitely not business as usual. Most of the new campaigns coming in are more subdued, socially conscious, and somber in their tone. In the past, travel-focused campaigns were very prevalent, promoting everything from destination weddings to off-roading adventures. In our new normal, those have gone by the wayside. Travel content is now at a minimum and is mostly about virtually exploring destinations rather than traveling to them.
Overall, there’s an emphasis on sustainability, social responsibility, and useful how-to content. It’s also interesting to note that COVID-19 is not being addressed directly. There are some brands that are tackling it in a roundabout way, covering virtual education, rebuilding small businesses, investment stability, and family. Financial planning content is definitely having a moment. Pacing is Key Let’s talk brass tacks. We’re still seeing publishers making a common mistake in their branded content campaigns: using paid distribution as a last-minute stop-gap to fulfill their traffic obligations. That practice, especially in this uncertain environment, can end up being costly. If you’re thinking about utilizing paid content distribution to fortify your branded content initiatives, the best thing you can do is start early. If you start your paid campaigns early, you can pace your spending according to your organic traffic, which gives you time to optimize your campaigns fully. This approach gives you higher quality results at a far more efficient cost.
Recently, Facebook shared how participants from its Journalism Project’s Retention Accelerator program plan on growing engagement in the coming months, with a special focus on building loyalty with readers who they’ve acquired since mid-March. The article shows how publishers can drive meaningful revenue by optimizing their billing systems (apparently, nearly a third of cancellations come from payment failures), as well as how to increase the lifetime value of readers with effective onboarding. It also shares ways to mitigate churn through retention curve analysis, an approach that we’ve seen first-hand can drive substantial long-term value for content publishers. I found that last part about reducing churn especially poignant, as it stresses how important it is for publishers to re-engage their at-risk subscribers, which is a challenge that we’ve been hyper-focused on helping our customers overcome in recent months.
Facebook points to email newsletters as an essential tool for encouraging habitual readership, which is another area that we’ve been heavily exploring. While there’s no doubt that newsletters are vital for engaging both paying subscribers and casual readers alike, it’s also a channel where publishers are seeing an uptick in ad revenue, especially from food, drink, and pet advertisers. To quote an industry executive, “When publishers embrace email marketing and invest in it as a channel for consumption and monetize it, they are investing in a channel they own that performs with real people.” Every little bit helps content marketers and publishers in this tough economic time.
