Advertisers are going native

Publishers and advertisers alike are looking for an alternative to banner ads. 'Native advertising', or embedding ads more seamlessly inside content, might be the answer.

It appears right now the next big thing in the advertising and media world is the concept of ‘native advertising.’ The term, which has been rapidly adopted by both publishers and advertisers, is a new format of advertising that promises advertisers greater effectiveness and publishers higher yield. Sounds great, but what is it?

Well, that is a tough question. Right now no one seems to have found agreement on what the term means.

“There isn't consensus on what constitutes 'native advertising' in this market” says Simon Lawson, Business Director at media agency PHD, which handles media planning and buying for clients such as the ANZ Bank, Pepsi and HP. “Like anything new, the exact canvas is a work-in-progress.”

Sound Alliance chief executive Neil Ackland is betting big on the viability of native advertising. The company, focused on the youth audience and owner of brands such as inthemix, FasterLouder and Mess&Noise, has just launched its new lifestyle brand, Junkee.com, and it has chosen a native advertising model as its primary source of revenue.

“Native is an advertising message that appears 'in-stream' rather than alongside the content,” explains Ackland. “Traditional banners try to interrupt the user flow and interaction whereas native ads are equal to the user interaction and form part of the organic experience of using digital media.”

He cites native advertising integrations Sound Alliance provided on Junkee for the theatrical release of ‘Spring Breakers’ as examples of the format’s potential. Sound Alliance struck a deal with Spring Breakers distributors to develop a campaign that involved content and editorial to be created around the film. The content is marked with a ‘Brought to You By Spring Breakers’ tag.

In the US, Virgin Mobile has partnered with Buzzfeed to develop native formats to promote the brand. This sees Virgin Mobile marked as a partner in articles such as ’15 Reasons why Gingers were cooler in the 90’s’, ‘15 Reasons Why We Love Our Jewish Mom’s’ and ’15 Cats That Need to Think Outside The Box’.

It’s not just media targeting a young audience that seems to be experimenting with the native world. Forbes, which targets a much older, more affluent audience, has been actively developing its BrandVoice concept for the past two years. In their own words, “Forbes’ BrandVoice allows marketers to connect directly with the Forbes audience by enabling them to create content – and participate in the conversation – on the Forbes digital publishing platform.”

The rise of native advertising comes at the same time as unprecedented pressure on advertising rates, particularly within the digital world. Publishers, who have long relied on advertising to fund content creation expenses, have found that the model of selling banners around content is not as enticing for some advertisers and agencies as it once was. Whilst click through rates have been lousy for the better part of the past decade and yield has been steadily decreasing, native gives publishers a rare chance to change the game and move away from a commoditised display environment. “Native advertising seems like a large opportunity for premium-priced online publishers to wrest back online spend from ad networks and demand side platforms (DSPs)” says PHD’s Lawson. “[It also allows them] to better compete for spend that might have otherwise gone to offline channels.”

But wait a minute. Is native advertising simply what we’ve known in the past as advertorial? Or branded content? Or co-creation? Or product integration? Is it the digital version of Tom Waterhouse posing as a member of the Nine commentary team, or the Blackeyed Peas making a phone call on a Motorola phone in a video clip? The common thread is that all of the above are supposed to be ‘native’ to the format of the content they surround. So is native more about ad sales than anything substantial?

Not so, says Sound Alliance’s Ackland, there is a key difference. “Our brand funded broadcast content is social. Our approach to native puts social at the core and we know that if the content is not just good, but really good then our users will share it, and when they do the brand’s story can travel far and wide.”

Lawson is unsure, “Native advertising could appear to be the online equivalent of integration into television shows, live reads on radio and printed advertorials. Whether it's substantively different, only time will tell.”

Roger Lintzeris is a director at media agency Mediacom, who count the likes of Fosters, Pacific Brands and Specsavers as clients. “Broadly speaking, the main difference seems to be around audience acceptance,” he says. “In an online environment editorial integrity doesn’t need to be as held in such high esteem – they’re just as happy to take a tweet or Wikipedia article as gospel as they would an article written from a national masthead – which can allow for an easier, more seamless integration.

For Lintzeris, the appeal of native is in higher response rates and also its e-commerce potential. “Native e-commerce is also a really big growth area and different from other content marketing. If I can read a frittata with chorizo, asparagus and goats cheese recipe and then add all those ingredients to a retailer shopping bag without having to leave the page, that’s a compelling proposition to advertisers and adds depth to the user experience.”

One thing the rise of native has done is move discussion away from the science of advertising to the more creative areas, something that excites Ackland. “At a time when the digital media agenda is dominated by data, demand side platforms, commoditisation, and buying efficiencies, we have found the market responding very well to an offering that focuses on the art of advertising; storytelling, ideas, narrative and creativity – all things that cannot be commoditised.”

However, all agree that native walks a tightrope between the needs of the user and the requirements of the advertiser, something that must be carefully treated.

“Publishers must be careful to maintain the integrity of their product whilst at same time seeking to better monetise their audiences” says Lawson. “Advertisers should also be open about their involvement in native advertising tactics to ensure a transparent and honest relationship with their customers and potential customers. “

Mediacom’s Lintzeris says, “The art is in finding partnerships that work with brand and editorial interests as one.”

Getting that content right, says Sound Alliance’s Ackland, is the only way native advertising will work. “Quality is the key. In digital we are living in an attention economy, so if the content is sub-standard or overly commercial in nature, nobody will read or share it. The equation is quite simple.”