Branded content pricing may take time to revive for digital news publishers

A small dipstick will tell you how general and business news platforms are still struggling to get back to their pre-Covid pricing when it comes to branded content pieces, despite the pure play advertising seems to have largely recovered both in terms of volume and rates across TV, digital and print mediums.

Piali Dasgupta

When asked why brands are still hesitant to invest on news portals for putting out branded content, Piali Dasgupta, Senior Vice President – Marketing, Columbia Pacific Communities, said, “Brand integration for many brands is not being considered as an ROI positive advertising option when compared with other options such as display ads. Therefore, not many of them are doing brand integrations.”

As a result of this, a lot of publishes slashed prices by almost 30%, compared to pre-Covid times.

Dasgupta said that it will take at least two years for this revival with most marketers choosing to focus on ad units that are more ROAS (return on ad spends) positive.

Although, she added that for a few platforms these rates are on par with pre-Covid levels given that most large brands across BFSI, FMCG, retail, FMCD have moved 70% of their budgets to digital platforms post-pandemic. “That has resulted in higher demand across digital channels. Digital is growing at 25% and is driving the overall adex of the country. Ultimately, the prices a brand is able to negotiate with platforms also depends on the volume of ads they are committing to the news platform over a period of time. However, with news app downloads having gone up by 2x and the traffic to news websites having shot up by anything between 40 to 70% post pandemic, the ad rates have remained the same as pre-Covid, and in some cases, slightly higher.”

“Most news websites have been able to recover from that. As far as brand integration is concerned, the volumes have gone up by 5-10% post the second wave. A lot of FinTech start-ups in particular are doing brand integration. As things open up, in the next quarter we may see a 4-5% decrease in ad rates. But large media conglomerates such as the Times Group may not decrease their ad rates,” Dasgupta added.

The ecosystem has now effectively survived two lockdowns and bounced back from the repercussions of these lockdowns.

Preetika Ghosh

“In the last one and half years, marketing budgets across the board were slashed. The ones still advertising mostly were from the healthcare, homecare, insurance and E-commerce sector. Big pocket spenders like FMCG, Auto and QSR had cut back on their marketing budgets significantly. Advertisers spending regularly on content integration were spending on lower funnel KPIs- and this had a tremendous impact on the pricing, with platforms having a much higher visibility than before and very few advertisers,” said Preetika Ghosh, Director, Media Planning and Strategy, FoxyMoron.

According to her, these platforms had increased their ad rates (amid the pandemic) because of the sudden surge and a paradigm shift in the consumption medium of news (with print going down).

“When demand on the platform is higher than supply of advertisers, the costs will go up. But this is a double-edged sword- brands are fully aware that the costs are extremely exaggerated and there are fewer brands clamouring for the same spot and that gives them a huge buying advantage. Gone are the days when deals were closed on bulk or annual commits- more often than not, we have been part of negotiations wherein brands call the bluff, and can negotiate the rates down by 20-30% as well,” she said.

Brand integrations are treated as media innovations and hence, they come quite lower down in the pecking order, after performance and regular branding budgets.

Shantanu Bhattacharyya

Looking at the current situation, Shantanu Bhattacharyya (SVP - Strategy, Media Planning and Client Success) Logicserve Digital, expects the rates to bounce back to normal in the next six months or so with the new budgets.

He doesn’t believe that there will be a huge increase in the ad rates immediately in the coming quarter. “In the next quarter, brands will most probably focus on closing long-term deals with the current depressed rates or maybe with a little hike.”

“When it comes to our clients, we haven’t seen any specific shift towards news portals after the second wave of Covid,” he added.

Experts agreed that there has been an increase in ad volume post the second wave, when compared to the first wave.

Shrenik Gandhi

Shrenik Gandhi, CEO and Co-founder, White Rivers Media, shared that most advertisement rates are back to normal. In fact, some advertisement rates have increased as well, however, it is a very subjective observation that some portals have outperformed others.

“When things get back to normal, the rates will increase in proportion to the increase in retention and consumption. It won't be a surprise if it increases to at least 20% once things get back to absolute normalcy,” he added.

The challenge in the standardisation of these ad rates is also because integrating a brand in non-fiction content is often difficult, said experts. Also, for some brands, news portals appear to be opinionated and to place an ad or integrate the brand on their platform can be a risky move.

During the latest episode of BuzzInContent Conversations, multiple brands, including Nobel Hygiene, Perfetti Van Melle, stated that brands today need credibility and if news portals can bridge that gap, there can be a resurgence of branded content pricing in this space as well.