How are website sponsorships funded? Does the sponsor pay on the number of clicks, the number of times a video is viewed, or simply the number of page views?
Pure sponsorships don’t guarantee any metrics other than exclusive sponsorship of a website section, email newsletter or event. The sponsor generally asks about traffic, impressions and other items that can be measured, and makes their decision to sponsor based, in part, on those metrics.
The online publisher is really selling an endorsement that offers the sponsor the intangible benefit of being associated with its website, newsletter, brand, and the editors who manage the site.
When sponsorship metrics are calculated using a standard measure like cost per M impressions, the cost to the sponsor is often three to ten times higher than impressions available from an online competitor, who is selling impressions to all comers at a run-of-site rate.
It takes a strong brand, in a clear niche, with great content to succeed with the sponsorship model. Niche sites have even more power, using their reader relationships to influence the brand preferences of their users on behalf of their sponsors.
For some additional perspective, check out these comments from David Kaplan about the effectiveness of advertising on brand versus portal websites.