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11 Things You Need to Know About Native Advertising

As I sat with my husband on the sofa after putting kids to bed, we collapsed on the sofa to watch some TV (prerecorded, of course). While we fired up our screens for a leisurely evening of media consumption, surfing and mild conversation. It was then that the term 'native advertising' popped up (as it only can when two digital advertising professionals are married) and I must confess to being confused as to what it is (or isn't). I then attending some Adweek sessions on the topic, and was even more confused as I was transported 7 years back during the discussions. I then decided to demystify this subject for myself and anyone else scratching their heads in order to preserve our sanity (and our scalps!).

 

Native advertising is the latest buzzword and trend in the online advertising industry with brands and publishers creating new departments, conferences allocating extensive covering and new companies are sprouting up with their offerings. Read on for 11 key things you need to know about native advertising.

 

1. Native Advertising Has Different Definitions

I discovered several different definitions as native advertising appears to mean different things to different people. According to Wikipedia, "Native advertising is an online advertising method in which the advertiser attempts to gain attention by providing content in the context of the user's experience. Native ad formats match both the form and function of the user experience in which it is placed."

 

Many professionals surveyed in the #StateofNativeAdvertising2014 survey consider Native Advertising to be sponsored content (53%), featured content (47%) or content 'brought to you by' (45%) whereas 38% felt that company branded pages and 25% felt that microsites were Native Advertising. Reuters' Felix Salmon contends that the difference between sponsored stories and native advertising is that "native content tends to aspire more to going viral" and generally being shared more.

 

It is important to note that Native Advertising seems to be more of a technique than a format, a way of ensuring contextual relevance, regardless of the format, with an element of shareabilty.

 

The lack of clarity around a definition makes it difficult to establish best practices, which is why the IAB in the USA created a task force aimed specifically at locking down a definition. They have since come up with the IAB Native Ad Playbook.

 

2. Native Advertising is Not New!

Are you thinking what I'm thinking? Yes, everything mentioned above is not new! The only thing new is the Jargon. Actually, come to think of it, not even *that* is new as we have used "native" to previously refer to Digital Natives and Digital Immigrants when referring to the different audiences familiar with the digital world.

 

3. OK, the Platform Part is New

It wouldn't be a digital advertising article if the word "platform" didn't appear. I stand to be corrected when I said native advertising isn't new as the presence of platforms allows for the first time the creation of scale and optimisation whilst automating the whole process. It also connects contextual relevant with real-time bidding (RTB) converging content with programmatic buying. This takes shareability and content marketing to a whole new level.

 

Native advertising can take place on closed platforms (where brands create and promote content/profiles within a platform e.g. promoted tweets on Twitter or sponsored stories on Facebook) or open platforms (where branded content can lives across multiple platforms). Examples of open platforms are Taboola, Outbrain and Plista who specialise in content distribution as well as StackAdapt, Instinctive, Adyoulike, Triplelift, Sharethrough and Nativo, who stake the claim to specialise in native advertising. There are also hybrid platforms with private marketplaces allowing external real-time bidding (RTB).

 

4. There are Loads of Formats

A big part of Native Advertising is the good 'ol fashioned webvertorial or webvertorial on steroids (i.e. content marketing). The latter being the area I've specialised in with publishers as they create custom solutions for advertisers by combining content with brands in order to bring relevance and added value to target audiences in the form of rich engaging experiences.

 

Other formats falling under the giant umbrella of Native Advertising are promoted blogs, videos, images, articles, music, social media (Instagram, Pinterest, Facebook, Twitter etc.) and even Search. Wikipedia use the Search Advertising example where ads appearing alongside the search results are 'native' to the experience.

 

5. Measurement: Breadth versus Depth

As with all measurement, Native Advertising is measured in terms of breadth (pure traffic) or depth (engagement, time spent or social media sharing). I advise that it's important to look at both as both quantity and quality of audience matter to Brand marketers. As all marketers know, the Awareness, Interaction, Desire and Action (AIDA pyramid) funnel gets narrower as audience numbers decrease while engagement and call-to-action metrics increase. Respondents surveyed indicated that more intuitive metrics will be developed to help equip brands to define success.

 

6. The Native Love Triangle: Publishers, Agencies and Brands

These three players are all involved, with Brands increasingly taking more control over their own Native Advertising (relying only on publishers for distribution) whereas in the past, publishers and agencies took on this responsibility entirely themselves. This is most definitely a threat for agencies and publishers who specifically look to Native Advertising as revenue alternative to narrower margins elsewhere. I advise publishers to leverage their expertise and creativity in order to offer brands something unique and thereby differentiate their offerings e.g. a Microsoft solution may more easily incorporate their social media products, mobile or Xbox whereas CondèNast could typically rely more on their rich content.

 

7. The Blurred Lines between Church and State

The split between advertising and content has always had a grey area where advertorials are concerned. This challenge has traditionally been solved by the 'brought to you by' text in order to ensure that the reader is not left feeling 'duped' thereby decreasing their trust in the publication. On the web, this grey area has gone more 50 shades, for example with links to sponsored microsites placed on homepages or all surrounding display advertising space. As long as there is transparency from publishers, consumers should continue to embrace relevant content and advertising. The concerns are valid; with the FTC (in the USA) even raising concerns for consumers being deceived by ads. This isn't purely a digital problem as I recently was told that even "recommended products" in women's magazines are paid for (or heavily incentivised) placements. I'm gutted to have my bubble burst. But I trusted those editors! Shock! Horror!

 

8. Mobile and Apps are the Next Frontier

As with everything else digital these days, the Native Advertising evolution needs to extend into the mobile and tablet space. Sponsored apps are a no-brainer, as they can offer value in functionality as well as content e.g. a currency company could (and probably somewhere already does) offer a sponsored currency conversion app or travel guides. The responses from a 2014 survey suggest there will be growth in native ads within mobile.

 

9. It is Revenue Generating

We wouldn't be talking about this at all if it wasn't revenue generating. Considering that native advertising is so broad, it would be strange if it didn't generate revenue as it seems to encompass so many forms of online advertising! Still, I feel I should mention this point as at the end of the day, it's all about the money.

 

10. The Forecast is Great

In a world where interruptive advertising is facing extinction, you can only imagine that brand dollars will flow in the direction of added value and contextual relevance. In fact, brands expect to spend a quarter of their budgets on Native Advertising. The implication for agencies will be hiring and training in this area, though many agencies already have some form of capability in this area. According to research from IPG media lab, native ads are viewed the same amount of time as editorial content and is much more likely to be shared than a banner ad (32% versus 19%).

 

11. Creativity is the Missing Link

In my opinion, there is still limited creativity in the delivery of native advertising in the interplay between engaging experiences, added value and brands. The creative agencies are missing from the love triangle probably due to the complexity. I think there is a big opportunity in this area for creative growth. Never before has there been such an array of powerful interactive resources to wow consumers using video, content and social while bringing brand values to life in a tangible and meaningful way. Watch this space! The big question is who will discover this first and being able to pull this off to win the Native Advertising race for consumers' minds and hearts.

 

This article was compiled using the following sources: Wikipedia, #StateofNativeAdvertising2014 survey by Hexagram and Spada, "How Native Advertising Will Change in 2014" – Lucia Moses, Adweek; "What is Native Advertising Anyway" - Tony Hallet, Collective Content

Europe Adweek Day 2: #aweurope

After racing from the tube at lightning speed for a coffee at Costa, the first dilemma of the day was this: how does one consume a boiling coffee in record time as no external food & drink allowed in the venue?  

Matt Shepherd, MD AdWeek introduced the first session, the Evening standard CEO summit. Moderated by Gideon Spanier.

Stewart Esterbrook, MD Starcom Mediavest

• We talk about ourselves as a human experience company and that's the value we bring to the table in understanding consumers
  • Agencies have allowed transaction to be the centre of gravity in the past but Starcom are shifting that to more added value conversation by building rounded engaging experience for consumers 
  • We are not device led but rather look at seamless experiences marrying content and context
  • Key to keeping talent is to develop people, show progress and create winning culture (as everyone wants to be on a winning team)

Arnaud de Puyfontaine, CEO Hearst UK

• What keeps me awake at night?

1. Leadership and people keeps me awake at night
2. Agility and pace of change is a concern but opportunity
3. Absolute obsession with customer knowledge and data

• There is no demise of print but a complete overhaul. They recently launched a new publication achieving 100,000 circulation.
  • Keep talent by helping people believe they are building the future

Dave Gwozdz, CEO Mojiva

Biggest concern is looking for talent but also retaining talent is key. Constantly looking to nurture talent pool as people often picked up by Facebook and Google. 

• Mobile ads don't make you cry and its a challenge to figure it out
  • If you don't think you are doing the most exciting thing possible, you should leave 

Matthew Dearden, CEO Clearchannel

• Core leadership responsibility is to create possibility of potential in a flatline economy
  • Shift from a real estate business to audience business
  • I believe the future of the Internet is mobile and we have NFC enabled sites
  • We even had ads with realtime data feeds
  • When digital adds value you can justify charging a premium
  • For extra £1 spent on advertising you get £6 GDP growth so would encourage more spending on advertising to grow the economy
  • Keep people by giving people jobs they love

Dan Clays, MD OMD

• Culture is so important that they have just appointment director of culture. Need a culture of innovation running through r whole business and also emphasis on knowledge share. 

Next up is the Wired Global Conversation with an impressive line-up. This was definitely the best presentation of the day for me, personally. The panel included Rupert Turnbull, publisher of Wired, Bob Greenberg (R/GA), Sir John Hegarty (BBH), Jon Kamen (CEO Radical Media), Steve King (CEO Zenith) and Simon Rees (CEO DCM - Digital Cinema Media).

75% of Europe in 2015 will have smartphones. What are the challenges?

• Marketing on mobile is in its infancy (Bob Greenberg) and refers to Jeff Bezos (Amazon) saying the Internet is in its infancy! The desktop and laptop are shifting to mobile and, combined with GPS, larger screen and voice activation will create tremendous growth though we still don't know what advertising and marketing look like on mobile
• Sir John says the product we produce is getting worse (or at least people seem to think so) - the elephant in the room! There is always a creative deficit with new technology though we are only beginning to work out a roadmap which will take longer. We don't know where advertising fits.
• Jon also says we are in an interesting point of disruption which will change our business forever 
• Steve says that mobile and multi-screen consumption is NOT the biggest change. There is a multiple of 20 in the disconnect between time spent on mobile and advertising (because the format hasn't been worked out yet). Definitely have not yet worked out how to make engaging relationships with consumers. 
• Simon informs us of the stat that Facebook more consumed via mobile than pc. 
• Bob: you can't separate mobile from social 

How are going to foster the next gen of creative talent? 

• Sir John says we have a dysfunctional government with a disaster education minister who wants to remove a creative education (giving ability to cv don't the future). Real problem in teaching kids about creativity. Governments are run by words!
• Steve King has 5 kids and sees technology as an innate social accelerator as his kids all are producing amazing creativity 
• Bob and Sir John sit on the board at Brand Centre where there is a creative technology track. New role: Creative Technologist

What about data?

Steve King talks about the terabytes of data which advertisers have. What do you do with all this data? We can improve the efficiency and efficacy of our communication. But 2/3 of consumers are concerned about privacy though a different 2/3 want relevant ads. Zenith are working with clients at how to use this data. Simon (DCM) worried about data and specifically, how data is interpreted. Cautious about a completely data led solution. 

Can advertising change behaviour?

Bob: Nike have seen they can change behaviour e.g. fuelband (I've done that!). Nike working on data visualisation - this is a creative way developing when applied to a live event with sports. Sir John objects and doesn't want people to know all this. He expects a huge backlash as this involves taking away freedom. "I don't understand myself sometimes - why are these companies saying we understand you?!?"

Other points:

• 400 M actively blogging in China showing desire for self-expression and we should do whatever we can to protect freedom of speech and editors. 
• Advertising must have trust and authenticity. We've lost trust in banks and supermarkets. A different approach is needed and Facebook says only 3% of advertisers "get it" - content needs to be rich, engaging, truthful and honest (Steve King). 

Next up was Microsoft, my old employer, handing out "cookies" (or shall we say 'biscuits' as this is a European conference) to attendees just as the session kicked off as a tongue-in-cheek salute to the whole internet explorer cookie controversy (which remained the elephant in the room). Andy Hart (newly promoted VP Europe) and Dave Coplin (Chief Envisioning officer) took to the stage for the MSFT Advertising session on Re-imagining Digital Advertising. This was an abstract session telling us how the world is changing and then giving us a peak in the kitchen of Microsoft Research with some super cool innovative products for the near future.

• Our attention spans are getting shorter as we look to our phones, phablets, tablets etc. to cut through 
• We get shown 1009 messages a day (PWC/IAB study, Eye blaster/Mediamind)
• Technology is about enabling humans to be better at what they do
• Qwerty design is 142 years old designed to slow typing to avoid keys jamming- behind the core of these devices
• A video was then shown of Microsoft Research (who design technology 10 years out). In the future every single surface will be able to display 2-way transmission. We saw Xbox technology showing the entire room illuminating and making the room part of the game.
• Smart glass connects Xbox to your mobile device – essentially making 2 devices aware of each other, e.g. phone showing map through the supermarket with special offers
• Smart phones are rather stupid given that they know what you are doing next (calendar), who your friends are etc. and yet relying on you to push a button 
• Context is everything: emotional, social, environmental, external
• Big data will change humanity (nah, that hyperbole isn't big enough!)
• Consumers feel violated in Creepy Valley: there was company who knew a man's teenage daughter was pregnant before he did
• We need to launch "Invitational Marketing" i.e. consumers inviting your brands into their lives to share experiences and messages which will enhance their lives (though you must understand their context, lean in or lean back). Ads should be beautiful, useful and relevant. 

Despite being early, the room was already jam-packed for Programmatic Buying: A win-win for Agencies, Advertisers & Publishers. One angry attendee who was refused entry proclaimed "How could they have such a small venue for such an important topic?!" This session was presented by Powerlinks Media (Mike Harty, Co-founder & COO).

Topic 1: What is driving prices down?

Dan Shaw (ITG)

• Very difficult justifying advertisers paying a premium for data. 90-95% data is questionable which creates question mark about the 5% which is good. Premium doesn't justify the cost. 
  • Seeing more clients asking to be on white list of 1000, 50 or 10 sites because context is so important. Want to be more insightful or targeted and willing to pay a premium.

Harvey Sariant (RadiumOne)

• First party data is so important and publishers sitting on so much. How can they build segments for reading?
  • White lists are only about trust and brand safety 

Topic 2: Audience vs, Context ... Where is the scale? How can we standardise, achieve scale while reaching in niche environments (500 ads seen by each user every day)?

• Good progress in getting publishers to stop competing and start collaborating 
• Clients and planners still want larger formats - data is a hot topic but it's not where the money is being spent currently. Need measurement (the right measurement) and KPI's for it to mature. 
• MWhat is digital these days? We need a cross-platform metric (eg. viewability) across all devices

Is the age of below-the-fold dead? Yes

Seeing more clients talking about viewability from a DR perspective instead of chasing the last click to help the industry move forward. We need trade bodies to start taking the lead to help publishers. We need a way to only render an ad on the page when the page is viewed.

Topic 3: Complete Data; a pipe dream? Valuing an impression the moment of the cookie drop

• WPP changed their terms allowing them to collect data as they seem fit (IDG)
• Can we overtarget through programmatic buying? There is a temptation. 

Topic 4: Delivering for Brand Advertising 

• We need a new set of metrics which is standardised
• 55% of marketers interviewed by Digiday said that online metrics should be aligned to offline
• Clients know that TV performs well and they are comfortable with it

Topic 5: High Impact Ad Delivery and Creativity: Click-through rates are decreasing and creative agencies are becoming disassociated with the digital space. What do we think? 

• Skyscrapers and MPU's are our bread and butter
• We need to find ways at bringing creative agencies back to the table
• Can we loop back to the creative agencies? 
• Need for collaboration and measurement 
• Viewability would involve serving ads in real time (IAB guideline says 50% of an ad should be viewable for at least 1 second) 
• It's not just the agencies - clients are starting to ask questions 
• There are free tools for publishers to show what is and isn't viewable and it's not so scary
• Nobody wants the conversation "have u been serving non viewable ads?"

The final session of the day for me was a panel titled The consumer has changed but has marketing? I unfortunately had to go to other meetings so missed other sessions I would have liked but luckily the conference is streamed and on video This panel consisted of Rupert Staines (MD RadiumOne) , Mark Creighton (CEO Mindshare), Kelaine Blades (7digital), Jennifer Roebuck (French Connection) and Nick Ellsom (founder Fast Thinking)

• Kelaine: your smartphone is your remote control to life, it's timely, relevant and personal but how do we integrate it across everything?
• Nick: marketing is reactive and requires infrastructure
• Jennifer: it's operationally almost impossible to keep up – "digifrenia" is about consumers feeling overwhelmed even at the current pace (so it's not just marketers feeling overwhelmed)
  • Kelaine: you can't even use the same message across the big 3
  • Rupert: Brands don't lag behind, it's the people behind the brands who lag. Simply not enough attention at high levels in the company to address the changes consumers are going through. Companies are suffering inertia and we are still operating around an antiquated structure. Every company without data at its core will not understand its customer base. 
  • Mark: disagrees with Rupert - it's about structure (moving deck chairs on the Titanic). It's always going to be disruptive. We are just about to create seamless transfer between devices and get connected TV's!
  • Rupert: It's a real challenge as there are a lot of companies (see Lumascape) doing a piece of the puzzle
  • Mark: Many aspects are really difficult to articulate to clients e.g. Appnexus and RTB
  • Nick: Lots of DR spend and not brand spend because its measurable
  • Rupert: Nonsense that all value still attributed to last click
  • Digital gives smaller brands a chance to rise to the top
  • Nike have commercialised "I Am Player" by selling virtual boots so there is a huge opportunity for brands
  • Mark: Developed a game for Kleenex called sneeze man. Brands can step in and help small developers who cannot afford the App Store 

So after 5 hours of listening and typing furiously on my Ipad Mini, that was the end of the day for me. Lots of common themes and issues have emerged and I'll be publishing these after Adweek has ended. In the meantime, enjoy the little summaries with nuggets I'm providing. All feedback welcome. Let me know if there are sessions over the next 2 days you think I should attend. I have meetings tomorrow but should get a good chunk of sessions again in the afternoon.

 

Useful Sites for Media Insights

I recently needed to compile some industry figures and stats, so I grabbed my board and went surfing. My first wave is always to visit the blogs, however for data like ad spend and agency structures, I needed to catch another wave.

Below is a list of the sites I scoured, some reaching dead-end due a massive price tag for reports and some revealing great in-depth data.

• iMedia Connection: http://www.imediaconnection.com/index.asp - US site with great articles on digital and sectors and a UK section, very informative and interesting!
  • http://www.imediaconnection.com/uk/ - see this one on the growth in online ad spend in the UK http://www.imediaconnection.com/content/17021.asp
• Adage: http://www.adage.com - go to data (but will you need a subscriber login eventually
  • This is where you'll also find digital family trees
• M&M: http://www.mandmglobal.com/ - great insights and reports  for international perspective with some UK-centric content
  • http://www.mandmglobal.com/company-profiles/agency-networks - excellent agency profiles with key execs and contact details
  • Check out their global agency map
• Campaign: http://www.Brandrepublic.com – UK equivalent of Adage, login required (although this is free)
• Emarketer: http://www.emarketer.com/ - great stats and trends, US centric but international info is there (some info is free and some needs to be purchased)
• IAB: http://www.Iabuk.net - membership required
• NMA: http://nma.co.uk – subscriber login required
  • Great report on top media agencies: http://www.nmatop100.co.uk/Top100/top_media.aspx
• Adbrands: http://www.Adbrands.net - great overview of companies and their brands (free)
• Brad Insight: http://www.bradinsight.com/
  • Access to ALF (the monthly printed advertiser and media contact book etc. (Note: reports need to be purchased)
• Hitwise: http://www.hitwise.com/datacenter/ Reports, stats etc e.g. on search, web 2.0 and trends
• Forrester: http://www.forrester.com - Reports etc, most to be purchased but lots available if you register for free
  • Interactive marketing section: http://www.forrester.com/Research/Document/0,7211,40242,00.html   
• Jupiter Research: http://www.jupiterresearch.com/bin/item.pl/home/  - apply for free guest access to Sample Reports and Analyst reports

I hope you've found this to be useful. Please feel free to add to this list by emailing me or leaving a comment below. Happy surfing!

Comscore State of the Global Internet Report

Check out the Comscore State of the Internet White Paper. It was distributed to attendees of a free webinar a few weeks ago. I found it very interesting since it covered a rage of topics as well as international markets. The reports gives a snapshot of today with some predictions about where things are going. Read up on the diffeence between Nominal and Effective reach. I hope you find it useful. Download SOGI_Slides_031308.pdf

Let me know your thoughts or questions. Please comment! Don't be shy now ...