The Landscape of Content Marketing vs. Native Advertising

More and more, brands are turning toward content marketing and native advertising as outbound marketing strategies continue to deliver minimal results – over two times as many marketers cite inbound leads as their primary source versus outbound. This shift is also a direct response to consumer opinion: Nearly 55 percent of consumers would consider ending a relationship with a brand that fails to deliver content tailored to their needs and interests. In other words, your target audience isn’t asking for content – it’s demanding it.

However, brands are confused as to which is the better investment: Should they go with content marketing, where the sales funnel may be longer but the long-term trust built between a brand and its consumers is invaluable? Or should they go with native advertising, where promotion of a product or service is much more upfront, possibly leading to faster conversion rates? For most marketers, it all boils down to ROI.

Unfortunately, this is something many strategists are struggling to prove. According to HubSpot’s “State of Inbound 2014–2015” report, proving ROI for marketing activities is the top challenge for marketers.
State of Inbound 2014—2015 Report

However, those who can prove a high ROI are focusing their efforts on blogging, organic search, and content distribution. And that’s not surprising: These link-building activities produce conversion rates that are six times higher than those practices not associated with content marketing.

State of Inbound 2014—2015 Report

Clearly links are important, so this brings us back to the question at hand: Content marketing or native advertising? To answer this question, Fractl and Moz surveyed over 30 different content marketing agencies, asking questions concerning services, cost, and reach. With help from Relevance’s native advertising report, we were able to analyze the cost data from over 500 digital publishers. Here we’ll walk you through three key takeaways when comparing the return of native advertising and content marketing.

1. Native advertising cost is largely associated with publisher authority and reach.

According to Hexagram’s “State of Native Advertising” report, 62 percent of publishers and media companies offer some kind of native advertising program. And estimates from BI Intelligence show spending on native ads will grow to $21 billion by 2018.

Still, the staggering cost is not surprising when you consider some publishers charge up to $200,000 for their native advertising programs. Analyzing the native advertising cost data, we determined the average cost of native advertising for news publishers with a domain authority (DA) greater than 80 and with more than 100,000 social followers – top-tier placements sought after by most brands – was $54,014.29.Cost of Native Advertising
When we expanded our analysis to include all publishers who have a DA greater than 80, we found the average cost of launching a native advertising campaign was $35,482.50. And when we dropped to less valuable publishers with low social reach or a DA below 80, although they offered a significantly reduced price, the highest cost was still $20,000.

What does all of this mean? Native advertising cost is connected closely with a publisher’s DA and social reach. Keep in mind, though, that engagement isn’t a guarantee and since these costs can be excessive for most brands, there’s a need for other options to leverage your content, and this is where content marketing comes into play.

2. Most agencies are producing up to 10 campaigns per month, and their most successful campaigns can earn more than 1,000 links.

With more than 75 percent of marketers believing that their commitment to content marketing will continue to increase, we wanted to take a closer look at how agencies are running their content marketing programs.

Our survey results revealed that the common practice is to offer retainer packages, which often include production on multiple campaigns, promotion, and on-site/overall strategy consultation. The pay-per-word structure was the least popular, whereas monthly retainers were the most popular practice at 70 percent. These retainers tended to fall into four brackets: $1,000–$5,000, $5,000–$10,000, $10,000–$50,000, and $50,000–$100,000.Monthly Retainer Analysis
So what do these retainers get you? On average, 65 percent of agencies produce between one and 10 campaigns per month for each client. Popular assets include articles and infographics – nearly 60 percent of production; case studies, interactive graphics, and videos account for close to 30 percent of production. The least popular content? Motion graphics, apps, flip books, parallax, press releases, long-form content, and white papers – all earning less than five percent.Preferred Content Types
When we excluded outliers, our respondents indicated that their average campaign earned 27 links. But when we asked about their most successful campaigns, nearly 25 percent of respondents said they secured over 1,000 links for their clients.Secured Links for Most Successful CampaignsHow do you benefit from all of these content formats? By way of high-authority links that directly affect your organic search positioning through a diverse, high-quality link portfolio – unlike sponsored content, which is limited by Google’s guidelines. More specifically, “advertorials or native advertising where payment is received for articles that include links that pass PageRank” generate “unnatural links” that can violate its guidelines. As a result, these publishers must offer a “nofollow” link instead of a “dofollow,” which blocks credit from being passed to the client.

3. A higher budget for content marketing can increase the number of links more than 160 percent.

When we took a closer look at how agencies measured the success of these campaigns, the most popular way was the number of leads at 20 percent, whereas some of the least popular ways included referral traffic, keyword rankings, the total number of links, and landing page views – all earning less than 10 percent. However, our respondents did make a distinction between the total number of links versus the number of high-quality links; tied with total shares for second, these more valuable links were desired 66 percent more than the total amount of links.

Our data revealed that the budget has a strong impact on the number of links earned. For instance, those clients spending between $5,000 and $10,000, compared to those spending between $1,000 and $5,000, saw a 136 percent increase in the total links generated by their campaigns. When the budget was increased between $10,000 and $50,000, the total number of links increased 162 percent.

Correlation of Cost to Number of Links Generated
The biggest takeaway from our research? Whether you go with content marketing or native advertising, you’ll always need to reevaluate your campaigns to determine what worked and what fell short. One way you can evaluate your return? Use a content ROI calculator: They measure traffic, social shares, links, and major placements to determine the return on your campaign investment. There’s always room to increase your content ROI, so download our research bundles that include data-driven insights on content creation and promotion best practices to help elevate your future campaigns.Fractl Content Marketing Guide
We’d like to thank Relevance for providing us with the raw native advertising cost data from over 500 publishers.

Relevance Sponsored Content GuideAnd we also want to thank the 32 agencies that participated in our study and provided their sensitive data to produce our report.
Participating Agenciespremier sponsor