Facebook is the main distributor for most publications' sponsored content

Increasing numbers of media outlets, such as The New York Times, are gaining significant amounts of ad revenue from sponsored content, prompting a shift in the relationships between advertisers, publishers and social media platforms. However, as traditional forms of advertising are devalued due to ad-blockers, the definition of sponsored content has changed. Facebook, which only recently allowed the use of sponsored content, offers the potential for large audiences. However, under its system advertisers must display the co-author's name under their post, this is required by the Federal Trade Commission. 

This change poses a persistent and tantalizing question to increasingly savvy advertisers: Could we just attract eyes to our posts ourselves? And if not now, maybe soon?

The change also discourages any illusions about how easy it could be for publishers to make money from native advertising. Sponsored content — which, in 2016, often means video — is expensive to produce and difficult to do well. Controlling distribution, albeit through Facebook, was for some a more profitable lever, and a way to pad deals that, while often growing in size, offered thin margins.

This is, of course, a boon to advertisers. “Many native campaigns are quite expensive, and if you limit the work you’re doing to the creation of content, and leave the distribution to the brand, then it can become more affordable,” said Stephanie Losee, head of content for Visa.

With less ability to charge for distribution, on their own channels or others, and a growing dependence on margin-squeezing outside platforms, publishers may be left to compete with creative agencies on their turf. Publishers becoming ad agencies, in other words, means competing not just with one another, but with the agencies that already exist.

In this nascent new order, competitors are defined largely by their limitations. While the terms and prices that publishers can accept from advertisers are set by the need to support a connected news or entertainment organization — the reason they chose this controversial path in the first place — conventional agencies are hampered by a dependence on lucrative TV work, from which they are accustomed to low volumes and high margins. Accordingly, publishers’ pitches often focus on price: their ability to create more content for less.