When I was in Shanghai a few of weeks ago, I was invited to sit with some of Asia’s top bloggers to listen to an interactive marketing agency explaining their social media marketing strategy. There was much talk about creating conversations through blogger outreach and, I guess, the idea was to be transparent about what they did and how they acted with new media publishers.

Earlier in the day, some of those bloggers had spoken in the same room on a panel about their sites. There were young men and women from across the pacific region – from places like Australia, Singapore and Japan – and they all seemed to have a similar desire: to turn their blogs into a business. The common plan among these online publishers was to to escape their day jobs to a life of online publishing by getting enough traffic that they can sell advertising against. The problem literally presenting itself before them is that brands and advertising agencies are trying their best to get out of the ad game: our presenter never mentioned any campaign with a media budget. Her whole angle was to get bloggers and people using social media to start conversations about a brand for free (except in China where we were told that paying for posts that talk about brands is a common practice, even for international brands).

The reason many of those bloggers were in china demonstrated the attitude brands and their agencies now have towards online publishers. CocaCola had flown them in to develop a relationship with them and also show off their innovation and sustainability practices. From a PR point of view this seems like a good strategy but the missing part of the program seemed to be that there was no one from CocaCola or their agency Isobar spending anytime recording or understanding the advertising opportunities on each of the sites. It wasn’t even a consideration.

This is a critical issue that publishers of every size need to address (not brands).

In a simplified view of the past, one could argue that there used to be a simple trade between brands and publishers: you paid enough money to a magazine like Vogue and a healthy part of the magazine was covered in ads (and if you were Vogue, those ads would often enhance the publication). Now, there has been a paradigm shift in the way brands can do marketing. Done well, the correct leveraging of social media can mean that a brand doesn’t have to spend marketing budgets on ‘media’.

Of course there are still very large advertising budgets being spent online but I’d argue that these are really being directed to two camps: media networks and very-niche sites.

On one hand, media buyers handling their (large) clients’ money are typically finding a network like AOL to just allocate their funds across their titles. The networks have cornered a market and have closed out much of the emerging media. I have heard that some of the pioneering founders of the early blogs sold to networks like AOL because they finally got weary of trying, unsuccessfully, to get on major media buyers’ radars.

On the other hand, some brands are finding sites with very specific voices to get small buys with good return. I met only one blogger out of the crowd of thirty in the room who had left their job: Thai blogger Jeerapas Ariyaburoot has written about skin cream after she spent a year trying to overcome her bad reaction to a product she had applied to her skin. People today are going to her site, Jeban.com, to get advice before they buy skincare – it’s the perfect place for a beauty brand to target young Thai women. Advertising on a hyper niche site like this is less effort intensive than getting (well paid) executives to try to execute a social media strategy.

Most cross-topic sites like PSFK run banner advertising but the issue facing us is that the ad industry has shifted its attention away from paid placement. Brands are still interested in those sites, but from our experience the strategy appears to be to get those sites to talk about the company’s products and services for free. Some drivers include:

* The format of the ad units, designed for the web of the 90s, are difficult to wrap into the design of a publication to create the same balance that you can create in a glossy magazine.

* Media has got desperate and ads are getting in the way of content. When advertising is used in a disruptive way – for example to split text in an article – No one wants to click an ad half way through an article.

* The size of ads means that creative execution is poor and often an afterthought.

* The ad and publishing industries’ governing bodies aren’t driving a better format for publishers, advertisers or readers.

* New web browsers are being launched with ad-blocking pre-installed.

Arguably the biggest driver is that over the last few years advertising agencies have been shifting into the PR business by convincing publishers, editors and journalists to write about products for free. Ad execs are busy conducting social media strategies that often don’t have a media budget attached to it.

Where does that leave most online publishers?

With a lot of online advertising space unsold.

There is no longer a fair exchange between brands, their advertising agencies and online publishers.

The thing is, publishers can’t demand a for-profit organization to work in a less profitable way. We can’t insist that brands advertise on sites. We have to help them spread their message in a way that engages the readers and rewards publishers financially.

So I wonder if we’d all be better off without traditional online ads. Is it time to remove advertising from the web?

We need to find ways of working with brands beyond these clunky ad spaces around our content. The way forward, as far as I can work out, is brand-fueled content.

Let’s remove the ad spaces and use the real estate better. When we receive an RFP for advertising, our first internal conversation is around what we would do for a brand if we didn’t have advertising space. This leads to us proposing far more innovative and engaging brand fueled experiences that, if they work correctly, not only benefits the brand (attention), the online publisher (revenue) but also the audience (content that wouldn’t have been created without the support of a brand).

Brand-fueled content is a key solution to online publishers’s financial needs. We aren’t talking (only about) advertorial here – we’re talking about creating content which fits within the title well, is received favorably by the reader and positively reinforces the image of a brand.

Monocle magazine is the pioneer of the brand-fueled content. They have reconsidered the advertiser-publisher relationship and created engaging branded content throughout their magazine and into online media like podcasts. It works very well.

There’s a huge discussion going on in our office around whether the next PSFK redesign will have advertising on the site or not. Could we make the design adaptable so that alongside our regular content, we can showcase branded content in an authentic and transparent way?

You’ll see on this page some of the concepts we’ve been playing with where we do away with advertising and look to a brand-led content support instead (Toyota’s logo is used just as an illustration – we have no relationship with them. Yet). Branded content for us can take several forms: written editorial, audio, video, applications and events – but it works best when it goes across content types.

Here are a couple of more dynamic ways we’re expecting to generate revenue in the next 12-24 months:

Brand Fueled Articles

Articles sponsored by a brand that interest the reader. PSFK retains editorial control but use aspects such as brand values as a brief. The resulting content connects with both the audience and the corporation. For an example, see this post where we wrote about Kiwi innovation with the support of the New Zealand Tourist Board.

Brand Fueled Videos

Like articles, these sponsored clips can be built on a brief. Video allows for better audience-engagement and if you publish everything on YouTube there are significant viral possibilities. For an example, watch out for our series of videos for the advertising planner community that start next week. These videos were brand-fueled by Alpert Executive Search – a recruiter who focuses on planners. The relationship is a natural fit and the content is beneficial to the audience, the sponsor and, of course, us.

Brand Fueled Events

Events are great content to work with brands together with. In October last year, Toyota sponsored PSFK to host an event in Japan. On the evening before it was revealed at the Tokyo Auto Show, we created a conversation with ‘influencers’ around the launch of the brand’s new car, the Nissan Leaf. The Nissan Leaf ‘s mission is to create a journey to zero emission. We translated this as Pure Living and we hosted a PSFK Salon with talks on architecture, energy use, urban planning, sustainability and transport. With the help of ad-agency TBWA we videoed all the talks and put them up on YouTube and a special micro-site.

In summer this year, PSFK will be hosting events in Chicago, Detroit and Los Angeles. These events will be sponsored by SyFy who is the imagination channel and we will celebrate imagination by inviting local creatives to talk. Do see see the natural connection?

Sponsored Posts

How do we stop all brand-fueled content turning into old fashioned advertorial? Possibly ensuring there are enough timely direct-pitches within the content. We’d suggest the occasional clearly labeled call-to-action advertorial piece in our content to drive action that the brand ultimately wants (more often than not, that means sales).

The Way Forward For Publishers

There are multiple ways to find new opportunities for brand-fueled content and there are concepts that haven’t been thought about yet. One of the keys to success though is that we keen this all honest. All brand-fueled content needs to be flagged that it’s sponsor supported. It’s important that I’m not creating content that has a hidden sales pitch. I’m creating content that I believe my audience wants – content that the audience has the freedom to choose whether they want to consume. It’s also content that naturally promotes the companies supporting the daily publication of this site – and in turn supports the continued growth of my publishing business.

We need to escape the idea that advertising will fund our businesses. Old media models aren’t going to support new media models. There’s are several ways to solve the conundrum. Publishers can erect paywalls, for example, but I’d hate to see our content get read by a hundredth of what it does today (750,000 people a month visit PSFK).

What do you think? I would love to hear your comments and constructive feedback – in the comments or via the wires.

(And…. if you’re a brand or agency and you’d like to chat to my Business Development Director about how we could create a win for the readers, a win for the brand and a win for PSFK, then email jeff.weiner@psfk.com.)