The Native Money Pit: The hidden costs of branded content

Congratulations, publisher, you’ve won the pitch for that big native ad campaign. But branded content is notoriously low-margin, leading some publishers to lose money on campaigns if they aren’t careful. High-cost, premium content isn’t cheap to make. And without experience in honing efficiencies across production and distribution, only shrewd publishers will make content studios profitable.

A publisher might win a quarter of the campaigns they pitch for, in some cases spending a few grand on a concept video to explain the vision before they even win the work. The sky’s the limit with content production and distribution costs, and that’s in addition to salaries and other overheads, of course. Here’s how easy it is for that juicy campaign fee to disappear before you know it.

Hiring additional staff: Anywhere between $30,000 and $65,000
A lean team of in-house producers and editors means hiring professional freelancers to shoot that TV-like ad. According to branded content platform Polar, publishers spend up to 20 percent of the budget on creative and production, and north of this when video is involved. Directors can cost more than $1,000 a day, additional script writers, storyboarders, camera crew, lighting specialists and location hunters all stack up. And freelancers have two costs: themselves and their equipment, because the client wants that Audi ad shot on a Red Epic-X Dragon 6K camera.

Location, props and talent: $25,000
To make the ad really pop, the client wants an appearance from that morning TV presenter or that ex-girl band member from the 2000s. Four hours of filming might cost around $20,000 for some top (-ish) talent. And you need somewhere to shoot, filming in a pretty average house for a day can cost around $3,000, or over $1,000 on a school soccer pitch (which would usually cost less than $50 to hire). “The minute you want to bring a camera on to it, you get a different price for filming,” says a newspaper executive. Hair, makeup and props nudge the price up further.

Music and motion graphics: $25,000
The ad needs some inspirational music to boost brand recall and purchase intent. Royalties cost money, as does rearranging the music and hiring the 38-piece orchestra. A motion graphics specialist can be a few hundred dollars a day, add to that the cost of renting editing suites.

Distribution on Facebook, YouTube, Apple News: $75,000
Depending on how much organic reach and onsite traffic a publishers has, over half the budget can easily be spent on distribution. Polar estimates between 20 percent and 50 percent, and Facebook limiting the brand and publisher posts has pushed the cost up. Equally, margin can be made back on distribution if the work is good enough to get the right reach organically.

Post campaign analysis: $32,000
Measuring the return on investment for branded content is a combination of guesswork and expensive post-campaigns quantitative and qualitative research. While standard media metrics like dwell time and pageviews are often packaged up into rolling ongoing costs, or up to 10 percent according to Polar. Judging how a campaign drives purchase intent takes research panels and third-party research firms. A small price to pay if it leads to repeat business and a long-term partnership.

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