The Hunt for ROI from Social Media: A BRITE ’14 Panel

Everyone is on the hunt to figure out how social media can best impact a firm’s revenue. So, we are pleased to tackle this topic at BRITE ’14 with a dynamic panel of business leaders trying to crack the nut on how to spur social sharing and generate business revenue from it, which will include: the CEO of Bloomberg Media, the Head of Performance Marketing at Facebook, the President of BuzzFeed, and the SVP of Strategy and Development at The New York Times.

Part of the challenge is even defining what should go into any equation to evaluate “social ROI.” Within social media there is a three-way split between paid, earned, and owned. Social messages then interact with all the other touchpoints connecting a brand and its consumers, from TV ads to in-store displays. Plus, one has to consider category and business model differences—will the same process work as well for a low-involvement CPG product as compared to selling an automobile. Finally, there is the analytics challenge to move beyond “last click attribution” in order to more accurately understand and credit social media’s influence on the consumer’s path to purchase.

The Facebook ecosystem is obviously a key player here, and it is constantly adapting itself to find the best mix of paid/owned/earned for its brand advertisers. Our panelist Dhiraj Kumar ‘07, Facebook’s Head of Global Performance Marketing, sees clear evidence that Facebook’s move to add native ad units (the sponsored posts in News Feeds) have made a positive impact. Early studies have shown significant gains in click-through rates and drops in cost per click and cost per acquisition, leading to ROI increases when compared against sidebar ads. Adobe’s Social Intelligence Report (.pdf of the Q3 2013 report) provides additional nice data on paid/earned/owned effects on Facebook’s platform, and most recently found that the ROI from paid Facebook ads is up 58% year-over-year.

The recently appointed CEO of Bloomberg Media, Justin B. Smith, previously helped lead The Atlantic into the digital world. In the realm of generating profit from social media, he notably spurred the creation of two sub-brands, Quartz and The Atlantic Wire, that were designed to grow The Atlantic brand by avoiding any pay walls, including curated content, and allowing articles to be easily spread via social media. This past summer, 10 months after its launch, Quartz had millions of unique viewers and was generating half of its traffic through social sources. Its strong social distribution allowed the site to operate with a branded content model, and has been a leader in such revenue generation.

Last week we profiled  a third panelist, Jon Steinberg ‘03, President of BuzzFeed, whose company uses social sharing to build its brand and generate revenue from branded content. BuzzFeed has taken such an analytics-driven approach to social media, that they do A/B tests to optimize the size of the Facebook button on its website.

Our fourth panelist, William Bardeen ’04 is the SVP of Strategy and Development at The New York Times, which has also just joined the world of native advertising and will work with marketers to best understand the social flow of their branded content. Bardeen knows that the New York Times faces competitive challenges from the likes of upstart media companies like BuzzFeed as well as from Twitter, which is becoming the go to place for breaking news. Given that, The Times and other traditional news organizations are working hard to strike the balance between being a strong player in the social world—to hold on to readers and ad revenue—while maintaining a consistent level of well-researched reporting standards. 

REGISTER NOW for BRITE ’14 (March 3-4) and listen to this dynamic panel of business leaders.

BY MATTHEW QUINT

How Branded Content is Feeding the Staff of BuzzFeed

On all sorts of media sites, brands now seek our attention by sponsoring content rather than placing a banner ad. BuzzFeed is a pioneer of this marketing approach and attracts dozens of leading brands to mingle their content among its own articles.  The company built its brand by taking an analytics approach to social sharing, turning the success of the “listicle” format (here’s a recent favorite of ours) into a branded content business model. At BRITE ’14, BuzzFeed President Jon Steinberg will share how the company accomplished this and what it is doing to continually build and expand its brand.

All of BuzzFeed’s revenue comes from social content marketing (aka branded content, native advertising, sponsored posts,. . . ok, we will stop here). As Steinberg notes in a Sparksheet interview, “Advertorials and word-of-mouth have been a force in marketing and research since the 1950s. We’re just doing that online. It’s going back to good advertising and getting away from banners, which were always a terrible advertising product.”

BuzzFeed helped rejuvenate and adapt this form of advertising in which media companies – including players like The Atlantic and Forbes – now act as advisers, and even content creators, for the brand and its agency. This summer, BuzzFeed began piloting a new accreditation course, the Social Storytelling Creator Program, aimed at training agencies whose clients are sponsoring stories on BuzzFeed. “When you’re innovating a new platform like we are, you have to offer education,” explains Steinberg.

Even with a wall separating editorial and sponsored content staffs, however, this “ads that look like articles” technique has its critics. Take, for example, Andrew Sullivan who questioned its ethics by stating, “It’s more like product placement in a movie – except movies are not journalism.” In fact, Sullivan’s specific analysis and critique of BuzzFeed actually helped spur the company to more clearly and consistently identify all its sponsored articles.

Despite such criticism, with the revenue needs of the media and the interest of brands to develop engaging content, it is clear that sponsored articles will multiply. The evidence of how well this form of marketing “works” is still being compiled, however, but early indications are encouraging for brands. For example, a study conducted last year by IPG and Forbes (.pdf) found that branded content stories were considerably more effective than pure display ads at driving such measures as brand recall and brand favorability.

From a content standpoint, companies must find the most effective ways for sponsored articles to meet the needs of both the brand and the reader. At BuzzFeed, most brand campaigns include at least 5-10 unique pieces of content designed to integrate tone and message for the brand. “The challenge is if you unbalance yourself in either direction,” Steinberg acknowledges. “If it’s so fun and interesting but doesn’t convey a brand attribute, you have an issue. If it’s only about why a product is awesome, with no give or interest, then you’ve similarly erred.”

REGISTER NOW for BRITE ’14 and catch Jon Steinberg talk about how sponsored content, analytics, and even hard news are shaping the future of BuzzFeed.

By MATTHEW QUINT