The Huffington Post’s founders didn’t have experience in the traditional publishing world, which arguably made them open to new ideas for building a modern media company. One area that’s gaining traction, according to a top executive at the AOL-owned site, is in sponsored blog posts.
Taylor Gray, svp of marketing at The Huffington Post, said in a keynote address at the Digital Publishing Summit yesterday that the site has booked $3 million in ad revenue so far this year from “sponsor-generated content” in the form of blog posts by brands like J&J, IBM and Dell. The goal is to generate $30 million in revenue from the method he said, with Huffington Post acting in some ways like an outsourced social media agency for these clients.
Such moves, Gray argues, are needed by publishers looking to find their way in a world where ad space supply far outstrips demand. Publishers have tried to translate old paradigms to the web and mostly failed to find truly new ways of making money.
“[The Huffington Post] was started by people who didn’t know anything about traditional publishing,” he said. “It’s been free from that traditional thinking. That’s the reason behind its success.”
The sponsor-generated content program is an example of a new form of advertising that goes beyond a bigger banner or more fancy targeting algorithm. The idea is to bring the advertisers into the conversation occurring on the site — and toe the line with mixing editorial and advertising. HuffPo labels all advertiser blogs as such. But it treats them in many ways like it does other pieces of content. It is fed into its content-management system and given the same social media optimization.
One early problem was advertisers would often run warmed-over press releases that generated little interest. Starwood, for example, produced what Gray indelicately called “bullshit.” Instead, his team counseled Starwood to empower its concierges to write tip sheets for their cities. The content ended up proving popular.
“It’s getting our clients to think very differently,” he said.
HuffPo is not alone in the sponsored posts game. Gawker has long run such programs for advertisers. The idea is not entirely new, of course, being pretty similar to advertorial run for many years in magazines. IBM has over 20 blogs on HuffPo, according to Gray, using seven bloggers from inside the company to pump out content.
The Huffington Post, which AOL bought in February for $315 million, has certainly thought differently in many areas. It generates about a third of its content from an army of 16,000 unpaid contributors. What it does provide them, Gray said, is visibility and a form of personal marketing akin to going on a cable TV program. Another third of its content is in aggregating stories from around the Web, with another third original reporting.
Criticism that it built a media empire on other people’s content is “the stupidest argument I’ve ever heard,” Gray said, since everyone voluntarily contributes. The site has also come under fire for its aggregation practices, but Gray points out that Google’s recent algorithm change targeting content farms ended up benefiting HuffPo pages.
In all, HuffPo creates an astounding 600 to 1,000 pieces of content per day — all in the hopes 15 will pop. Gray said the site is able to maintain editorial quality because much of the content doesn’t require much in the way of editing.
The site has also embraced social media early and often. It is ahead of most publishers in its traffic breakdown, with Gray saying a third comes from social networks like Facebook and Twitter, a third from search and a third from direct. The direct traffic is declining as an overall percentage, a development Gray professes is a good one since it shows the site is becoming a bigger part of the social conversation.
That’s the big challenge for publishers used to a world where they set the agenda. This “spectator sport” era of publishing is ending, he said. Instead, users want to participate and shape the content — it’s not unusual for HuffPo articles to generate over 1,000 comments.
“People now understand they can have a voice, they can be heard, they can share and they have a power to themselves,” he said.