Drive More Ad Revenue with Digital Sponsorship Models

Consumer and B2B media companies are competing on an advertising playing field that is heavily stacked against them. We sell industry-standard web and email advertising positions and price them individually on a CPM basis, or a flat fee where it’s easy to calculate an effective CPM anyway. We then try to sell this inventory to media buyers and agencies who have more digital advertising options than ever. These buyers boil everything down to CPMs and CPCs and compare you not only to our primary competitors, but also to Facebook, Google, and programmatic ad networks. They have more leverage than ever to negotiate down our rates. We give our ad reps a ton of digital ad positions to sell and ask them to compete against a plethora of other sources offering comparable inventory for lower prices. We ask them to go out, hat-in-hand, hoping they can convince someone to buy a few ad impressions or email newsletters from us. How can we possibly hope to win long-term at this CPM/CPC game? Bottom line, we can’t. What we need to do is change the game. For many companies, a digital sponsorship model could be exactly the game-changing strategy they need. In a sponsorship model, you take all (or most) of your web and email inventory, package it together in a single price, and sell a limited number of sponsorships. Here’s an example of how it might work: You only sell 10 sponsorships in any given month and you price them at a premium. Sponsors get their logo on every page of your website in a special “partner” section. They also get their logo in every email newsletter in a special “partner” section. Sponsors rotate ads in all of your run-of-site positions with the other partners. And they rotate in the ad positions in your email newsletter too. This changes the entire discussion with media buyers and agencies. [caption id="attachment_20327" align="aligncenter" width="468"] Premium partners are featured on every page of the Aqua site[/caption] First, you bring a ton of value to the table. Each partner gets their logo on EVERY page view and email newsletter that you send. This is huge branding value and can equate to hundreds of thousands of views each month. It positions the partner on your site as a key industry leader. The partner also gets exclusive access to the high-value, large ad positions on your website (rectangles, leaderboards, etc.). The only way anyone can get an ad in one of these positions is if they’re one of your ten partners. They cannot buy it separately. You also flip the supply and demand discussion on its head. For many media companies, ad sales conversations go something like, “I have a ton of ad impressions and emails, and I really think you should buy some of them.” We compete for their limited ad dollars. But with a sponsorship model, advertisers instead compete for our limited partner opportunities. “Only ten companies get to position themselves to our audience as our partners. I really want you to get in on this now because I have thirty other clients who want this.” Finally, we’ve completely changed the CPM/CPC game. We’ve packaged web ads, email ads, and logo branding everywhere all for one price … and we’ve limited our inventory to only ten sponsors. There simply is no way to compare a program like this to pure CPM/CPC buys. There are many different ways to structure a sponsorship model. You can create different levels, package in native advertising and social media promotion, and can continue to have other marketing options outside of the sponsorship model as well. But I would challenge any media business to look at the sponsorship model as a potential alternative to traditional digital ad sales models. Every company I’ve worked who has implemented a model like this has seen digital revenues increase significantly and it’s changed the conversations they have with media buyers and agencies.

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Drive More Ad Revenue with Digital Sponsorship Models

Eric Shanfelt

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Eric Shanfelt