With brand marketers creating more subtly promotional online videos and blog posts than ever before, some are trying new ways of turning their efforts into viral hits.
More marketers are starting to buy space on websites for their so-called "sponsored content"—brand ads disguised as stories and blogs—using the same kinds of automated trading platforms and other ad technology typically used for display ads. It is a more aggressive effort from past strategies of placing a story or video on sites like Facebook and hoping consumers share it with their friends.
"You can only get so far through self-promotion," said Steve Sachs, a former Time Inc. executive who last year became chief executive of OneSpot, an ad technology firm. "Marketers are realizing you also have to pay for distribution."
Take Spectrum Brands Inc., SPB +0.74% home of Remington razors, which early last year started hiring bloggers to create stories and videos for the Web, like "How to Get Perfect Curls" and "Get the Right Swimsuit for Your Body." Spectrum hoped the articles and videos would "go viral," getting picked up by Web surfers and shared through Twitter and other social media. References to the Remington brand were embedded in the content, ensuring it would help promote Remington-branded products ranging from blow dryers to body shavers.
Later that year, however, Spectrum decided its own website wasn't drawing enough traffic on its own to get the content noticed and shared through social media in significant numbers. Through OneSpot, Spectrum began buying ad inventory for its content on automated exchange platforms, taking space typically used for traditional banner ads on sites like Oprah.com, Eonline.com and USAToday.com.
"We can spend a ton of money and put a lot of content on our website, but it just sits there," said Ryan Koechel, Spectrum Brand's e-commerce director. By promoting the content on other sites, Spectrum was able to reach more of its target audience of female viewers, Mr. Koechel said.
The episode highlights how the fast-growing market for "sponsored content"—stories or videos designed to quietly promote a brand—is evolving to resemble traditional digital advertising, at least in how it is distributed.
Marketers view sponsored content as a more effective way to reach consumers than traditional forms of advertising, because it appears less overtly promotional. But to work best, the content has to be shared on social media—which means hitting the right network of sites. And to do that, marketers have recognized they can't just rely on consumers to spread the message.
While still a small category, sponsored content is one of the fastest-growing ad segments, expected to draw $1.9 billion in ad spending this year, up 22%, according to eMarketer. That is more than twice as fast as the growth rate for traditional banner ads.
Most sponsored content still appears online as the result of traditional deals between marketing executives and ad salespeople, limiting its audience reach to a specific site or group of online publications.
But several ad technology companies are trying to change that. Google's GOOG +0.72% DoubleClick advertising platform has introduced services to help publishers manage and distribute sponsored content created on behalf of marketers. Buzzfeed, considered a pioneer among online publishers that accept sponsored content, has also created an ad network to bring such stories and videos to other online publishers and social media sites. Publicis Groupe's ad-tech agency VivaKi has joined with with Nativo, a platform for placing and targeting sponsored content on an automated platform.
Ad networks serve as middlemen between marketers and online publishers, and in some cases offer automated buying through which advertisers can select where they want ads to run, how long the campaign is to appear and how much they are willing to pay. The exchange-like technology can then bid on ad space matching the buyers' request, often in real time.
Marketing executives say the shift in how sponsored content is distributed could reduce big variations in the cost of getting space for sponsored content.
Right now, "you really have to do your due diligence to make sure you get your value," said Tom Gallagher, chief executive of Dairy Management Inc. His farmer-funded trade group that promotes milk products has run sponsored content campaigns through publishers including Slate.com and Life magazine's website. He said the cost varies widely between sites.