Download native advertising

Our perspective on Native Advertising
O U R PERSPEC T I V E O N
NATIVE
ADVERTISING
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Introduction
Hyped as one of 2014’s biggest media trends,
native advertising is paid for content using
advertising formats. Ad units are distributed
throughout editorial content by the publisher
and seek to engage audiences by relaying
content relevant to the editorial. It is not
intended to trick the readers into thinking
the ad’s a part of the advertorial, but it seeks
to blend ads and editorial seamlessly.
Native advertising has been dubbed the media
business’s latest obsession. And viewed in the
context of the declining effectiveness of online
display advertising, it’s not hard to see why.
Clickthrough rates for online native adverts are
much higher than traditional online advertising.
According to native advertising ad platform,
ShareThrough, consumers looked at native
ads 52% more frequently than display ads.
Many brands see native advertising as an
opportunity to create content that readers
are more likely to engage with than traditional
online advertising, which explains why projected
spend is increasing. A recent eMarketer report
forecasts marketers will spend $4.3 billion on
native advertising in 2015, a 34 percent increase
from 2014. The figure is expected to double
to reach $8.8 billion by 2018.
Native advertising falls under the content
marketing banner and varies according to
company, platform and channel used. But it is
content that is automated, matched to the
editorial content, and it is typically labelled as
promotional or sponsored content within the
ad unit. It doesn’t only appear on news
publishing sites, it can appear on social
networks in several different guises, including:
promoted Tweets, trends and people.
promoted stories
promoted posts
$billion
4.3
forecast spend on native
advertising in 2015
Source: eMarketer
What does it mean to the industry?
The arrival of native advertising is changing the
relationship between brands, agencies and
publishers. With publishers setting up their own
divisions to create branded content, some
traditional advertising agencies are potentially
being taken out of the equation when it comes
to advertising in the traditional print media.
How is native advertising different to
content marketing and advertorials?
The definition of native advertising is contested
but it can be defined as ‘paid for’ content that
closely integrates with the medium where it’s
appearing. It must be clearly labelled as
originating from the advertiser as it is illegal
for any form of advertising to not maintain
transparency. Native advertisements align with
the publication or site’s established editorial
style and tone, and also provides the kind of
information that the publication’s audience
typically expects.
These qualities are what make native
advertisements difficult to spot, as they often
blend in with the ‘organic’ content extremely well.
Our perspective on Native Advertising
US social media
ad spending,
by type,
2012-2017
$6.40
$5.70
$5.00
$billion
$4.30
$3.70
$3.00
$2.36
$4.57
$3.98
$3.40
$2.85
$1.63
2012
2013
2014
2015
2016
2017
Note: includes desktop and mobile platforms and local and national
spending; excludes social marketing/measurement platforms and
services, social commerce and virtual currency; *branded content
integrated directly within a social network experience
Source: BIA/Kelsey, ”Annual US Local Media Forecast: Social Local
Media 2012-2017,” April 10, 2013
Display spending
Native* spending
Native advertising in numbers
52%
Consumers looked at native ads
more frequently than display ads.
25%
more consumers
were measured
to look at in-feed
native ad placements
(the most common
editorial native ad
format) than display
ad units.
Source: ShareThrough
Native ads registered
18%
higher lift in purchase
intent and
9%
lift for brand affinity
responses than
banner ads
32%
of respondents
said the native ad
“is an ad I would share
with a friend or family
member” versus just
19%
for display ads.
© MerchantCantos
?
Who are the players in the native
advertising space?
The marketplace is a mishmash of:
Advertising/digital marketing agencies
(e.g. Beeby Clark+Meyler)
Publishers
(such as BuzzFeed and the New York Times)
Social networking sites
(such as Twitter and Facebook)
Brands
(such as General Electric and SAP)
Ad tech providers
(such as ShareThrough and Outbrain)
Who is getting involved?
Publishers, brands, agencies and an increasing
number of startups have seized upon the
opportunities presented by native advertising
and content marketing more generally. In the
face of declining digital revenues, publishers
have jumped at the opportunity to get on
board. Publishers are setting up agencies to
rival the advertising agencies. BuzzFeed makes
the channel, the content, and the ads.
Which publishers are involved?
The US Federal Trade Commission notes that
73 percent of online publishers currently offer
native advertising opportunities.
Online publishers from BuzzFeed, Upworthy
and Yahoo to the New York Times and the Wall
Street Journal are offering native advertising
to clients.
100 percent of BuzzFeed’s revenue comes
from branded content. Already, most of
BuzzFeed’s revenue is derived from BuzzFeed
Creative, the company’s 75-person unit
dedicated to creating for brands custom video
and list-style advertising content that looks
similar to its own editorial content.
• Forbes has a ‘brand newsroom’.
Wall Street Journal has WSJ Custom
• The
Studios, its native advertising division.
New York Times has T Brand studio,
• The
its native advertising unit.
Guardian has Guardian Labs,
• The
a ‘branded content and innovation agency’.
Inc has just started a native
• Time
advertising bureau.
73%
of online publishers currently offer
native advertising opportunities
Source: US FTC
Our perspective on Native Advertising
Which brands are doing it?
Corporate titans such as Ford, HP, KimberlyClark and General Electric have all dabbled in
native advertising in 2015.
Electric sponsored 10 Lifechanging
• General
Ways To Make Your Day More Efficient (by
•
•
•
GE) in BuzzFeed.
Chevron partnered with The Atlantic.
Dennis Publishing has launched a range
of native advertising placements with
brands including Barclays, HP and Castrol.
Diageo is partnering with The Guardian’s
branded content division to create and host
ads based on the publisher’s most popular
lifestyle articles.
Have there been success stories?
The New York Times has succeeded with a
series of attention-grabbing sponsored posts.
Using both native ad-units and traditional
online banner ads on the homepage they
drove people to the url paidpost.nytimes.com,
where they found arguably its most famous
narrative article on women’s prisons for
Netflix’s ‘Orange is the New Black’. The article
was illustrated and accompanied by audio clips,
a slideshow and graphics. It was also widely
read: the campaign got more than 145,000
impressions, according to Nudge.
Beeby Clark+Meyler led a native advertising
campaign for GE which reached 5.1 million
people and resulted in 416,000 clickthroughs
and a clickthrough rate of over 8 percent.
Where do the traditional advertising
agencies stand in relation to native
advertising?
Native advertising currently accounts for
9.2 percent of the total digital display spend by
UK agencies, but that figure is estimated to
reach 15 percent by 2015, according to a report
by Far Partners. The 17 percent of agencies
that don’t yet incorporate native advertising
into their media plans, stated that they are
planning to do so.
Is this a threat to advertising
agencies?
Yes
&
No
Traditional publishers don’t always have to be
involved. There are still plenty of opportunities
from native social adverts. Moreover, even
where the client is hiring someone from a brand
newsroom, they may still choose an agency
to handle that relationship with the publisher.
Are there opportunities for B2B?
Absolutely. Forbes’ sponsored content
programme for German software company
SAP drove 300,000 page views from five
sponsored articles. Then there are the
distribution options, which allow B2B clients
to craft highly targeted campaigns. LinkedIn
is now the most popular social distribution
channel among B2B marketers and it enables
businesses to promote sponsored content,
including text, video and presentations.
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And what about the controversy?
Native advertising has generated controversy
at some prestigious newspapers. The principle
of the separation of church and state has
governed the editorial practices at newspapers
since the dawn of newspaper printing. Simply
put, journalists wrote editorial and advertisers
paid for adverts. And it was relatively obvious to
readers what was promotional and what wasn’t.
It is also worth noting that ambiguity can
also have a knock-on effect for the audience
relations with the brand. Evidence shows
that people’s trust can reduce if the origin
of the content is unclear.
But arguably, there has always been a grey area
where promotional content is concerned. Paid
for advertorials, which are written in a
publication’s house style and are designed to
bridge the gap between an advert and an
article, have been gradually undermining the
distinction for many decades.
Expect to
see more
opportunities
on mobiles
What are the opportunities
for native advertising?
The real opportunity comes in producing rich
creative engaging content that will be popular
with a publication’s audience. Native advertising
presents an opportunity for innovative digital
storytelling.
Expect to see more opportunities on mobiles
as well, as mobile native advertising takes off.
Facebook’s sponsored posts have already
proven to be effective on mobiles and expect
more app makers to jump on the bandwagon.
Dating app Tinder announced it was poised to
introduce native advertising on a recent
earnings call. Twitter’s senior management also
clearly sees potential. It recently acquired Namo
Media, a company that offers native advertising
for mobile apps.
Conclusion
This format is still developing and with it is the
ecosystem. As it continues to evolve it presents
opportunities for creative storytelling by
combining strong editorial nous with the latest
digital storytelling techniques, but only
if there is trust for the brand, no sales pitch
and very clear transparency over where the
content is from.
Our perspective on Native Advertising
Appendix
Who else is in the game?
There are a host of new platforms offering specialist
services relating to native advertisers.
StumbleUpon – offers a full-page native advertising
network for brands and publishers. Reach the right
audience with targeted content distribution.
Tan Media
Polar – native advertising platform.
Infinigraph – content amplification.
Outbrain – ad platform.
Appsfire – mobile native advertising.
Respondhq – the native advertising platform.
Stay & Wander – a digital agency specialising in
influencer led native advertising.
ThoughtLeader – build the most powerful native
advertising platform on the planet.
The Amplify – data driven native advertising
on Instagram.
Nativo – the native advertising platform.
Revenue.com – a native advertising tech that helps
brands amplify the reach of their content via in
stream ads.
PowerLinks Media – complete native advertising
platform – connecting buyers and sellers of native
advertising
Bidtellect
Woobi – specialises in the development of custom,
scalable, native advertising solutions for web, social
and mobile games.
Pianoadv – native advertising and blogger
management agency, we tweet quality content to
benefit business and self.
Native mobile
ShareThrough – produces technology that breaks
down an ad to make it fit the look and feel of the page.
ShareThrough churns out multiple versions of the
creative and has the ability to update the headlines
and images in real time.
Polar – whose native ad platform is used by The
Huffington Post, Condé Nast, Bloomberg and
others, packaged up a set of benchmarks that show
how the format is performing on mobile, tablet and
desktop. Polar found that native ads do better on
mobile than on desktop, where native ads have to
compete with so many other elements for attention.
Nativo – optimises ads in real time, across devices, in
the content stream, and unlike other native ad
platforms, readers stay on the publisher’s site after
they click an ad.
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