What’s all the fuss about branded content and sponsorship?
Influencer marketing may seem like just a trend or hype in the digital realm, but there’s no denying the data. 42% of businesses make at least half of their regular operational decisions based off data, and that number is only looking to increase exponentially as DTC brands take hold parallel to e-commerce revenue projections nearly tripling in 2021. With an anticipated 265% growth rate, by 2021, it will account for 17.5% of the total global retail sales.
Thus, the push for innovative digital marketing methods is tantamount to brands making key breakthroughs in their industries. Look no further than our DTC Q3 Marketing Report for proof that influencer marketing is now a vital element to a brand’s success in driving online traffic.
However, if you also want some independent stats to convince you that brand partnerships and sponsored content are well worth your investment, we’ve put together some other folk’s detailed research ;)
- 80% of marketers find influencer marketing effective.
- 89% say ROI from influencer marketing is comparable to or better than other marketing channels.
- Nearly two-thirds of marketers are increasing their influencer marketing budgets in 2019.
- 17% of companies will spend over half their marketing budget on influencer marketing.
- $5.20 is the average earned media value per $1 spent on influencer marketing in 2018.
- 86% of marketers surveyed intend to dedicate a portion of their budget to influencer marketing in 2020. This compares to 37% of the marketers surveyed in their 2017 report.
- Nearly 2/3 (63%) of businesses who do budget for influencer marketing intend to increase their spending over the next 12 months, with 17% expecting their influencer marketing spend to remain the same.
- Instagram is the preferred platform for most brands (79%), compared with Facebook (46%), YouTube (36%), Twitter (24%), and LinkedIn (12%). This doesn’t factor in the emergence of new platforms like Twitch and TikTok, nor the growth of LinkedIn as an influential platform in itself.
If brand partnerships and sponsorships are so important, why aren’t more marketers doing it?
Well, simply put, it’s hard.
As much as 25% of businesses either lose money or just break even.
The main concerns of marketers amidst social media crackdown on fake accounts, is 1) discovering the right channels and 2) avoiding fake influencer accounts. 61% of marketers who are doing influencer marketing and even going as far as to say they’re doing is successfully are still struggling to identify the best brand partners to connect with their target audiences.
Furthermore, measuring ROI poses an entirely new challenge once you’ve booked your creators and gotten the content published. The idea that branded content is meant to ONLY build brand awareness is pure myth - 64% of marketers are looking for direct sales from brand partnerships nowadays.
Truthfully, running a successful sponsored content campaign and being able to measure and scale your successes with future brand partnerships requires a massive amount of data. If you’re a new brand, you don’t have ANY of the historical data that other brands have from testing massive budgets across huge cohorts of creators - what do you do?
Recall that around 64% of marketers ALREADY doing sponsorships intend to increase budgets in 2020 - reading between the lines, this means that brands who have tested this type of marketing are seeing ROI and are planning to scale, showing a level of confidence in the future of their brand partnerships in driving brand awareness, new audiences, and direct sales.
What makes branded content and sponsorship SO effective that everyone’s on board? How do I know this isn’t just some marketing fad?
Sponsorship has been around since 330 BCE, with rich Roman elites voluntarily sponsoring the gladiator games and other sporting events to garner public affection and enhance their reputation. In fact, most of the artwork and research of the Renaissance was sponsored by private families, banks, or academic bodies. The Medici family, one of the greatest and most famous patrons in history, may be one of the first examples of the use of sponsorship as a way to increase and reinforce the family’s (and their bank’s) strength in Italy and in Europe.
Fast forward to the “Madmen” era of marketing that most of us modern marketers are familiar with, the TV unleashed a new world of opportunity for all industries. At first, it was a “handshake” agreement: these commercial relationships kept television and radio organizations alive in exchange for their special degree of access to the consumer population. TVs and radios were truly household treasures, and brands sought to become household names through sponsoring radio and TV programs. In exchange for funds to put on the program, the sponsors often had their names featured in the titles of the shows: some people might still remember "The Maxwell House Showboat" or "The Eveready Hour."
In the late 1980s through the 1990s, corporate sponsorships exploded. For example, in the late 1980s, college bowl games lost their traditional names in favor of their sponsors: the Fiesta Bowl became the Sunkist Fiesta Bowl, the Orange Bowl became the FedEx Orange Bowl, and so on. Sports' stadium naming rights followed suit . For example, Boston’s most famous “garden” got a face lift and a new name: on March 3, 2005, Maine-based TD Banknorth, a U.S. subsidiary of Toronto-Dominion Bank, announced its purchase of the naming rights for $6 million per year (shoutout to Boston, the Bruins and the Celtics!).
Corporate sponsorships also became more integral for nonprofit organizations. You’re familiar with this type of sponsorship if your company has ever organized a run or a drive on behalf of the Red Cross or the Pancreatic Cancer Action Network.
Sponsorship is not new - although it’s changed to being all about the brand awareness to not only that but also driving immediate, direct sales and reaching all sorts of traditionally inaccessible audiences. It’s actually been studied for its effectiveness on a psychosocial level. We’ve picked through the studies to provide you the important bits below.
- YouTube audiences still cannot fully distinguish which videos are sponsored vs. organic: according to a 2018 study, nearly 1 in 4 viewers were “unsure” if content was sponsored or not. Only 30.2% paid attention at all to whether content was sponsored.
What does this mean? Influencers are doing a good job at integrating promotional and marketing materials from their brand sponsor into the content of their videos.
- Audiences are equally divided on whether sponsored videos are more or less trustworthy than non-sponsored content. Of the 30% that could determine the difference between sponsored and unsponsored content, a poll was taken of their opinion towards both types. Just as many people reported that sponsored content is more trustworthy and has the consumers’ interests at heart as people that reported unsponsored content was more trustworthy.
What does this mean? YouTube audiences are evenly split on their likelihood to trust or distrust a sponsored YouTube channel or video.
- Baby Bjorn may be one of the first brands to develop a true sponsored content model for YouTube, focusing on YouTubers DadLabs as their ambassador channel. Baby Bjorn is a brand created in the 1960s that jumped into sponsored content in 2007. At the time, Baby Bjorn was already familiar with using everyday people to promote their products, and they took advantage by taking it online very early on.
DadLabs is probably the first YouTube channel to get multiple, repeat sponsorships from well-known brands. The YouTube channel features unboxing videos and reviews of popular baby and kid products. In 2007, just before the “big YouTube boom” of branded content marketing, DadLabs had JetBlue, BabyBjorn, SitterCity, Graco, and Boon. We can see how they attracted some major names to their channel because they have a strong, consistent format of reviewing products parents can find useful. We’re showing at least 473 sponsored videos from 2007-2012 - videos slowed and stopped from DadLabs after 2012, but it makes sense. Their focus on authentic parenting content means that when the kids grow up, the baby product review videos stop coming. Their last video was officially in 2016, and even though they only produced 25 total videos between 2013-2016, they were still getting major sponsors in the last years of producing content. BestBuy, Dove Men’s Care, Clorox and Hot Wheels added themselves to the channel to sponsor videos between 2013-2016, showing that there was still a solid ROI from this channel for family brands even without producing the usual weekly videos.
What does this mean? Brands, whether centuries old or still in their infancy, are able to use branded content to increase audience engagement and brand awareness. Now, many D2C brands are funneling most of their marketing budget into branded content efforts, showing that “micro-influencers” have always been an important element of any company’s marketing strategies, and that YouTube and podcast have brought it into the digital era.
- Podcasts are generally seen as more authentic and have more “subscriber loyalty”: more followers of podcasts tune into each episode than YouTube followers. Podcast listeners also listen to more of the content on average than YouTubers watch the video in its entirety. Still, YouTube click-thru rates hover between 0.3-1.5%, whereas podcast’s average out at 0.52%.
What does this mean? Podcasts have a more engaged audience, generally speaking. YouTube’s visual format just makes it slightly easier for consumers to click-thru to the advertisement landing page. Many people have called for a podcast aggregator, essentially a platform built like YouTube but for podcasts. They’ve suggested a centralized database could allow for more visual content relating to podcasts to help facilitate more click-thrus, but this centralization would run the risk of ostracizing popular indie podcasters.
- There are specific content genres and video trends that work extremely well to attract consumers with the willingness to buy and readiness to purchase. You can read more on the psych of the “How To” video and why our evolutionary instinct to mimic is a secret tool for marketers to capitalize on here.
How can I get started researching and designing a sponsorship strategy, and sourcing brand partnerships for my brand?
We’ve written out all the steps you’ll need to take next, or you can contact us for a free consultation and industry analysis for your brand and budget! Request a meeting here.