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Is Branded Content Buoying Fashion Publishers?

Fashion publishers are pushing sponsored content to make up for declining traditional print advertising revenues. Is it working?
Gucci's Pre-Fall video campaign | Source: Courtesy
By
  • Lauren Sherman

NEW YORK, United States — On Monday, Gucci will release its latest fashion film, a Gia Coppola-directed spin on the tragic Greek love story of Orpheus and Eurydice, set in present-day New York City and starring Lou Doillon, Marcel Castenmiller, Laura Love, Rocco Di Gregorio, among others. Coppola and stylist Arianne Phillips worked in tandem with Alessandro Michele to capture the dreamy feel of the hot-shot creative director's Pre-Fall 2016 collection, which the film — shot across five locations and broken into four episodes — was created to promote. Michele even designed a custom pink 10-foot long wedding veil for Doillon's character.

But while shorts like these are nothing new, the genesis of the film was fairly unorthodox. Instead of tapping its internal marketing team or a traditional agency, Gucci worked with 23 Stories, the branded-content studio launched in January 2015 by publishing giant Condé Nast. Beyond Gucci’s own marketing channels, the film will be distributed through six Condé Nast (US) properties — Vogue, GQ, the New Yorker, W, Vanity Fair and Pitchfork — which, together, attracted a total of about 32 million unique visitors in April 2016, according to Comscore. Beyond their URLs, those six publications boast a cumulative social media following of nearly 67 million. The film will also be promoted via Vogue China and Vogue Japan. Gucci and Condé Nast suggest the project is bigger and more ambitious than anything else either party has previously done in the branded-content space, both in terms of the level of talent recruited and also the scale of the production.

To be sure, the Kering-owned Italian luxury house has the resources and capacity to create video content like this on its own. But Gucci is after Condé Nast’s larger, and presumably more diverse, audience. For instance, Gucci has 8.8 million followers on Instagram while these six titles combined have about 18.5 million. In this deal, Pitchfork’s millennial male followers — an important demographic for Gucci under Michele — are as crucial to the equation as W’s affluent luxury consumer.

The success of the buy — which market sources suggest amounted to somewhere in the vincinity of $2 million — will be determined by both “passively observable engagement,” — when the user takes some sort of action, whether that means watching or sharing the video — and panel-based measurement, where a small number of users are tracked to determine increased purchase intent or favourability of the brand.

"We're able to take advantage of highly original and qualitative content to engage with a broad, but targeted audience across geographic regions and platforms," Gucci president and chief executive Marco Bizzarri told BoF. "Digital narrative — whether through film, social media or native journalism — is the way that millennials in particular like to be engaged today. [It] will certainly play an increasingly important part of our strategy going forward."

The partnership is indicative of the growing role of branded content for brands and publishers alike. Indeed, more and more publishing houses are opening up their own in-house content marketing agencies to help better serve the advertisers whose dollars they so desperately want to keep in the face of declining traditional print advertising revenues. Vice, Buzzfeed, Hearst, the New York Times...it’s difficult to name a major publisher today that doesn’t operate a branded content studio. Since the launch of 23 Stories, Condé Nast has quadrupled branded content revenue, and branded content is on track to make up 15 percent of the company’s overall advertising revenue for 2016.

Paid content that has the look and feel of editorial, or “advertorials,” as they were once known, has long been a part of a publisher’s arsenal. But the need to grow “native advertising” — now the dominant term — is more urgent than ever, as revenues from digital display advertising have failed to make up for shortfalls in traditional print advertising. (In most cases, publishers can charge more for native advertising than they can for display advertising, which is often sold on a CPM — or cost per thousand impressions — model).

Rates vary widely. Video, for instance, often commands a much higher CPM than article pages, which can cost advertisers $1 or $2 to $25 and beyond per impression. With native advertising, however, brands can charge thousands of dollars per post, hiking up the overall fee in a way that is less directly related to impressions. Digital advertising deals at big publishing houses vary in size. While many are well below $100,000, others can reach upward of $2 million or $3 million, as with the Gucci partnership. In comparison, the general rate for one page in the print edition of Vogue is $196,535.

Whether or not spending on native advertising will ever fully supplant the losses from the decline of traditional print advertising is unclear, but the category is growing and will reach $21 billion globally in 2018, up from $8 billion in 2015, according to a report from BI Intelligence and the Interactive Advertising Bureau, a trade group. At the New York Times, for instance, digital made up 31 percent of advertising revenue in 2015, increasing by 8 percent year-over-year to $197 million. About 20 percent, or $39.4 million, of digital advertising revenue came from T Brand Studio, the native advertising wing of the New York Times.

“We are far ahead of our target this year in terms of revenue,” says Josh Stinchcomb, senior vice president and managing director of 23 Stories. “However, what’s equally important to me is that, now that we’ve done really good work in a lot of different categories, the results that we’re seeing are justifying the investments. We’re seeing engagement rates that rival, if not exceed, editorial norms. This content is resonating as deeply as anything else.” According to a survey conducted by the Content Council, a trade group, 72 percent of marketers believe that branded content is more effective than traditional magazine advertisements.

But as many publishing companies note, fashion brands have been slow to invest in branded content. While sponsored posts touting a beauty product’s efficacy or the must-have status of a handbag are commonplace, few have opted to commission bigger products like the Gucci film. Indeed, most of 23 Stories partnerships have been with brands outside of fashion, like Lincoln and Microsoft. That’s because unlike other retail or tech companies, apparel companies have long produced their own branded content on a regular basis in the form of runway shows, in-store experiences, books and exhibitions. It’s different from, say, an automobile maker, which doesn’t have an understanding or history of creating content beyond a traditional advertisement.

In many ways, fashion brands don’t need publishers to help them “figure out” content in the way other categories do. “I think there is a question to whether this kind of media can work in luxury and fashion,” says Adam Aston, vice president and editorial director of T Brand Studio. “It’s an industry with conventions of beautiful photography and models and more produced settings.”

And yet, branded-content studios are making headway with fashion as consumers have increasingly come to expect a constant drip of information in their feeds. Today, brands need to release more than runway images; they need more content, and more varied content, to keep consumers engaged. "People look at these channels constantly," says Drew Elliott, chief creative officer at Paper Communications, the entity that includes Paper magazine and a 15-year-old branding studio called ExtraExtra Creative. (Branded content now accounts for about 50 percent of ExtraExtra's revenue.) "One campaign every six months, with six to 10 images, is simply a broken model. Six images is not even enough to fill two days working of programming. There is an enormous deficit of content."

What’s more, traditional publishing companies, which have built up longstanding trust with their audiences, have tremendous power to influence consumers in a way that brands publishing to their own channels do not. “A single brand expression on social channels isn’t necessarily enough,” Elliott continues. “If you’re constantly talking about yourself, it’s not nearly as potent.”

Different publishers offer different approaches to branded fashion content. T Brand Studio, for instance, takes a more journalistic approach, aligning it to some degree with what is being produced “across the wall” in the magazine’s newsroom, as Aston puts it. For instance, a 2014 project with Cole Haan, called “Grit and Grace,” reported on the physical demands endured by New York City Ballet dancers through words and video. While the page clearly indicates that the post is paid for by Cole Haan and that New York Times editorial staff did not participate in its production, there was no direct mention of product. A year later, Cole Haan once again partnered with T Brand Studio, but this time the product — in this case, the company’s ZeroGrand collection — was featured more prominently in the imagery and storytelling. “The first piece was more journalistic, the second was more branded in its sensibility,” Aston explains. “But [the latter] still featured a beautifully written essay.”

To be sure, glossy women's fashion publications may be furthest ahead with fashion brands. Like many of its competitors, Hearst Branded Content Studio sells deals across multiple properties, tailoring the output to each audience. (Hearst says that 95 percent of its "major" campaigns — across print and digital — include some form of branded content, and that it's the fastest-growing revenue category.) For example, a recent project promoting Coach's Spring 2016 collection ran across Marie Claire, Harper's Bazaar and Elle, with three very different approaches. All three publications tapped influencers to model Coach's wares, but while Marie Claire focused on "how to wear last night's party outfit to the office today" and Harper's Bazaar homed in on mastering floral prints, Elle emphasised personal style. The influencers were "handpicked" by the editorial teams, and the content — while marked as a sponsored partnership — was also written by staff or freelance members of the editorial team.

“Everything that we do from a branded content perspective has to be done at the standards of our editorial,” explains Todd Haskell, senior vice president and chief revenue officer, Hearst Magazines Digital Media. “That might mean the editors are involved in story selection or identifying writers. It has to be clearly communicated to the reader in the promotion of the content that it’s [sponsored]. It also has to feel like it is speaking to the reader in the voice of the publication. The level of quality has to be the same. The most important thing that we can do is put the reader first.”

Indeed, while publishing houses may have the resources and talent to produce compelling branded content, brands will only continue to invest if they see results. That can mean higher-click through rates, an increase in social followers, or a simple measurement of impressions. For instance, Haskell says that click-through rates of display ads on branded from Hearst Digital Studios are two-to-three times higher on average compared to ads on pure editorial stories. “I think the reason that we’re seeing brands in fashion, luxury and beauty work with us is that there’s a recognition that what we, as an organisation, do exceptionally well is understand what drives consumers to engage with content online,” he says. "To take action.”

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