Social media publishers are frequently engaging in different types of sponsorship for increasing compensation and often not fully disclosing the practice, according to a new study by Izea.
As defined by Izea, social media sponsorship is the practice of providing compensation to a social media publisher in exchange for mention, promotion or review. Compensation can be in the form of cash or non-cash incentives.
Social Media Sponsorship Incentives Mostly Non-Cash
“The State of Social Media Sponsorships” indicates that in 2009, total social media sponsorships equaled $46 million in cash and non-cash incentives. The bulk of this total, $35.7 million, or 77.6%, was in the form of non-cash incentives. The remaining $10.3 million, or 22.4%, was in the form of cash.
Both of these totals grew dramatically from $0.1 million cash and $2.5 million non-cash in 2004.
6 in 10 Publishers Engage in Direct Sponsorship
Almost six in 10 (57.3%) social media publishers have engaged in direct sponsorship, or specific compensation for a specific post or series of posts. Another 49.3% have engaged in indirect sponsorships, where a free product was provided and a post was expected but not required. And 27.2% have engaged in a material relationship, posting to promote a client, employer or other party with whom they had a financial connection.
Frequency of Sponsorships is High or Low
When asked how many times they have promoted an advertiser through social media channels in exchange for some form of compensation, the highest percentage (29.9%) of social media publishers said 20 times or more. Another 25.6% said once, and 25.1% said two to five times.
Interestingly, the middle ground ranges of six to 10 times (12.8%) and 11-20 times (6.6%) were the least common. About half of social media publishers have engaged in sponsorships five times or less, while another three in 10 have engaged 20 times or more.
Unfamiliarity with Disclosure High
Many social media publishers are unfamiliar with the concept of disclosing sponsorships and the fact that the FTC now has disclosure regulations in place. When asked what form of disclosure they use when working with advertisers, 21.6% asked what it meant.
In addition, one-third (35%) of PR, social media and marketing professionals have no familiarity with FTC guidelines regarding disclosure. Another 26.1% have heard of them but not read them, meaning six in 10 professionals in the social media sponsorship space effectively do not know the content of the FTC regulations.
Money Talks
Despite the bulk of sponsorship compensation coming in non-cash form, other study results demonstrate social media publishers show a clear preference for cash compensation, with 71% preferring it, 26.9% accepting it, and only 2.1% disliking it. While a high percentage of social media publishers accept free products (69.3%), only 25.4% prefer them.
Discounts/coupons are by far the least popular form of compensation, with a 9% preference rate and 49.2% acceptance rate. More than four in 10 social media publishers (41.8%) dislike them.
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