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Monetizing Digital Media: The State of Brand Studios in Digital Publishing companies

By NativeAI / January 23, 2019

Over the past few years the number of publisher brand/content studios — in-house teams that develop campaigns and strategies for advertisers — has jumped from 15 to more than 600.

Organizations have rushed to create studios because of a need for additional revenue streams and because they believe they have a set of competitive advantages in the space. As a collection of industry leaders concluded, developing brand/content studios makes sense because:

  • Publishers know their audience best and can prepare content in a way that they know will resonate.

  • Publishers are in the content business. They have top-notch creative access to execute with excellence.

  • Publishers are adept at distributing content on both their owned and operated properties, as well as on paid distribution platforms.

Have those assumptions held true? Are publishers actually seeing a big payoff from their studio efforts? Which approaches are working best? How is the space evolving?

Here are four key insights about the current state of publisher studios:

1. Creating a Successful Brand/Content Studio Isn't Easy

For those hoping that the brand/content studio approach would be a simple solution to their problems, the past few years have been sobering. A number of organizations have already scaled-down/ended their efforts and even the successful ones have grappled with challenges.

As an examination by Digiday found, publishers have faced a number of difficulties with their studios, including:

  • Higher than expected spend on staff and technology

  • A need for more managers/executives and approval processes

  • Low margins on some work-intensive campaigns

  • Inconsistent spend from brand advertisers

  • Rising costs for distributing campaigns on digital channels

That doesn't mean that brand/content studios are not worth it, but rather that they are not easy to execute successfully.

As Stephanie Losee, the Head of Content at Visa and former Head of Brand Content at POLITICO put it:

"Some publishers are closing their custom content studios because it’s too hard and it’s not profitable enough and they don’t see it scaling. And they’re right. It is too hard right now and it’s not very profitable... But I think that we’re all going to have to go in this direction [of continuing on] because I don’t see any other direction."

2. Savvy Organizations Have Developed Owned Offerings to Entice Advertisers

Despite the difficulties, a number of publishers have built out thriving brand/content studios.

What's the secret to their success? The foundation has been in developing owned offerings that feel natural and that both audiences and advertisers find deeply compelling.

For BuzzFeed, this has meant creating native advertising opportunities that are best-in-class. As its Executive Creative Producer outlined, the publisher has established a "startup within a startup" that is focused on making transparent and compelling content for brands that is fully in-line with BuzzFeed's tone and style (for example, the pieces it has made for Purina).

For New York Media, this has meant transforming additional owned properties, such as its social accounts, into ad opportunities as well: the publisher has smartly monetized its Instagram feed and developed sponsored posts for brands that lead directly to e-commerce pages.

3. Some Publishers Are Seeing Success Expanding Services Beyond Owned Channels

Some publishers have also found success in providing services for advertisers beyond owned channels. Essentially, they have developed mini (or not-so-mini) agencies that aid brands with a wide-range of content, advertising, and strategy needs.

The most visible example of this is The New York Times' T Brand Studio which employs dozens of content creators and strategists, and which also includes the staff of HelloSociety, a social media marketing agency acquired by the Times. The studio is heady in its ambitions, promising brands that it can provide expertise in the areas of editorial, photography, technology, strategy, design, video, events, and audience development. Other high-profile publishers, such as The Washington Post and Wall Street Journal, have also built out these sorts of large in-house agencies.

Along similar lines, some smaller studios have started to provide specific services to aid advertisers on non-owned properties. For example, PopSugar has embraced white labeling and now develops content pieces for brands to use across the Web.

4. The Competition Is Heating Up from Content Agencies and Brands Themselves

Just as publisher brand/content studios have started to become more like agencies, so too have agencies started to become more like brand/content studios.

Both large, multi-disciplinary agencies and smaller, content-focused agencies have been aggressively moving to build out their capabilities in areas such as native advertising, video, audience development, and storytelling.

Moreover, brands themselves are also building out their own content studios. For example, Pepsi has been expanding the Creators League, an in-house content operation that tackles everything from digital ads to documentary films.

How can publishers take on this increased competition from agencies and brands? One way is by embracing their roots. Last spring The Guardian revamped its content studio to look less like an agency and more like a newsroom operation: the team was organized into topic desks, similar to the editorial staff, and the ways important campaigns are executed was brought closer in line to the way large journalism projects are tackled.

Is this the right approach? Only time will tell. What is certain is that with their brand/content studios, publishers have found themselves in the middle of a quickly-evolving, very-competitive space and they will need to rely on approaches both old and new in order to succeed.

Written by NativeAI / January 23, 2019