Display is a banner in a slot. Sponsored content is something you write, or something written for you, published as a post. They are different products with different economics and different risks.
What each is worth
Display for a small publisher: $150–500 a month for a good slot.
Sponsored content: $300–2,000 for a single post, depending on audience and how much writing is involved.
Sponsored content pays more per unit and costs vastly more effort. A post takes hours. A banner takes minutes.
The economics people get wrong
Sponsored content looks better per invoice and often looks worse per hour.
A $600 post taking six hours to research, write and revise is $100 an hour, minus the revision rounds nobody budgets for. A $300 monthly banner takes about twenty minutes a month once set up.
Sponsored content is worth it when the fee is genuinely high, or when the topic is something you would have written anyway.
The trust cost
Display advertising is understood. Readers know a banner is bought and it does not affect how they read your work.
Sponsored content spends credibility. That is the actual product being sold, and it does not regenerate quickly. Publish three sponsored posts in a month and readers begin discounting everything you write.
A reasonable ceiling is one sponsored post per eight or ten ordinary ones.
The line
Always label it. Clearly, at the top, before the reader has invested any attention. "Sponsored by X" or "Paid partnership with X". Not a grey line in the footer.
In the US the FTC requires disclosure that is clear and conspicuous. In practice: visible without scrolling, in plain language, not a hashtag buried in a list.
Keep editorial control. You can let a sponsor check facts about their own product. You should not let them approve your opinion. Once a sponsor edits your conclusions, you are running an advertorial and should say so.
Do not write a review you would not have written. If you would not recommend the product unpaid, do not recommend it paid. This is the one that ends publishers.
What sells best
The strongest sponsored content is not about the sponsor. It is genuinely useful writing on a subject where the sponsor's product is one reasonable answer.
"How to choose a raised bed for a small garden", sponsored by a bed maker, mentioning their product among others, is worth more to everyone than "Why AcmeBeds are the best raised beds". Readers finish it, it ranks in search, and the sponsor gets sustained referral traffic rather than one day of resentment.
Sell that. Charge more for it.
The hybrid worth offering
A sponsored post plus a month of display, bundled. The post drives an initial spike; the banner sustains presence. Price it at the post rate plus half the display rate — sponsors take it readily, and it gets you a month of guaranteed fill on your best slot.