18 Experts Weigh in on Native Advertising
Hands down, this is the largest, most eclectic resource on native advertising to date. At more than 9100 words and featuring 18 industry leaders on the front lines of branded content advertising, this article is not for the faint of heart.
“Native advertising” has been a buzzword thrown around a lot in the last couple of months, and its reception has been quite polar. This article dives head on into who will benefit the most from native ad campaigns, how native ads are best implemented, and what the future of native advertising will look like.
Meet The Native Ad Experts:
Dustin O’ Dell – Mobile Sales Manager, AdTheorent
Dustin is a business development lead for AdTheorent with a background in consumer data and programmatic buying.
O’Dell is currently based in NYC, working with top agencies and brands applying innovative thought at the intersection of mobile technology, data, and marketing to change how brands engage consumers.
Scott Reese – CEO, blurbIQ
Scott is the CEO and Co-founder of blurbIQ Inc, the premier interactive media advertising platform that delivers smart interactive content across the visual web. He is a seasoned media executive and entrepreneur with over 13 years of experience building cutting edge digital businesses and advertising technologies.
Vinay Anantharaman – Co-Founder, Brandbacker
Vinay runs a fashion tech start-up in NYC, BrandBacker, which connects brands with bloggers for exposure. He formerly worked at Adobe on Acrobat and the Flash player as an engineer.
Roger Wu – Co-Founder, Cooperatize
Roger Wu is the co-founder of Cooperatize, a platform that helps advertisers distribute sponsored posts amongst the long tail of publishers.
Follow them at @Cooperatize .
Scott Yamano – CEO, Dedicated Media
Scott is CEO and Co-Founder of Dedicated Media, a leading digital marketing company that works with some of the largest Fortune 500 brand advertisers and direct response marketers.
Scott has managed sales and business development teams in the online and offline advertising field for over 15 years and held positions at MySpace and Fandom before founding Dedicated Media in 2004.
Will Price – CEO, Flite
Will is the CEO of Flite. Flite powers native ad solutions for the web’s top publishers, including LinkedIn, Forbes, Conde Nast, IDG, and many others.
Prior to joining Flite, Will was Managing Director at Hummer Winblad Venture Partners.
Peyman Nilforoush – CEO, inPowered
Peyman is the CEO and Co-Founder of inPowered. A media entrepreneur and visionary, Peyman, along with brother Pirouz, founded NetShelter in 1999, which became the world’s largest technology property on the web before being acquired by Ziff Davis in 2013.
Jordan Kretchmer – CEO, Livefyre
Jordan Kretchmer is the Founder and CEO of Livefyre, the first Social CMS Platform used by the largest companies in the world to engage consumers through a combination of real-time conversation, content creation, social curation and social advertising.
Kretchmer founded the San Francisco based startup in December 2009, and has overseen its growth to 100 employees and over $20M in venture financing.
Diana LaGattutta – VP Marketing, Nativex
Based in San Francisco, Diana is responsible for Marketing at NativeX.
An international marketing leader and pioneer in new media, she has launched five mobile advertising businesses in the US, EMEA, and APAC, for Enpocket, Sprint, Nokia, NAVTEQ, and NativeX.
Steve Sachs – CEO, OneSpot
Steve Sachs is Chief Executive Officer of OneSpot. Prior to OneSpot Steve served as Time Inc.’s chief consumer marketing officer, responsible for consumer revenue of 22 U.S. brands and leading consumer digital strategy and distribution.
He previously served as President of Time Inc. Lifestyle Group, President of Real Simple, and several other distinguished marketing and management roles. Steve earned a BS in Economics from The University of Pennsylvania and an MBA from Stanford University.
Lisa LaCour – VP Marketing, Outbrain
Lisa heads up global marketing at Outbrain, a content discovery platform serving big name brands like Allstate, Slate, and GE.
Lisa previously served as Director of Marketing at fashion and lifestyle brand DailyCandy where she built and managed the company’s first marketing team.
James Gross – Co-Founder, Percolate
James is the co-founder of Percolate, a technology company that helps brands create content at social scale. James also enjoys running and wants to build the world’s greatest technology company and surf team.
Kunal Gupta – CEO, Polar
Kunal Gupta is CEO of Polar and regarded as a rising young visionary, shaping the future of media. He has been recognized as a Top 30 Under 30, a United Nations Global Citizen, and Ernst & Young’s Entrepreneur of the Year. You can follow him on Twitter: @kunalfrompolar.
Tom Channick – Senior Communications Manager, Sharethrough
Tom is the Senior Communications Manager at Sharethrough, a software company that powers in-feed advertising for brands and publishers.
Prior to Sharethrough, Tom worked as a public relations strategist at Waggener Edstrom, helping design and execute communications strategy for Fortune 500 companies such as Abbot Laboratories and Target. You can follow him @tomchannick.
Ari Jacoby – CEO, Solve Media
Since the company’s launch in 2010, Solve Media has been firmly rooted in Ari’s passion for developing innovative and simple solutions to complex problems.
Sebastian Hassinger – Business Development Executive, ThoughtLeadr
Sebastian is a veteran of the tech industry in leadership roles at Apple, IBM, Oracle, and several startups before joining ThoughtLeadr‘s senior executive team.
Eric Berry – CEO, TripleLift
As CEO and Co-Founder of TripleLift, Eric is building the company to be the leader in social and visual amplification. Prior to TripleLift, Eric was a leader on the client services and product architecture teams at AppNexus, and was previously an attorney at Simpson Thacher & Bartlett LLP.
Eric received bachelors and masters degrees in computer science from MIT and a J.D. from New York University School of Law.
Lewis Brannon – Paid Search Specialist, CPC Strategy
Lewis is a Paid Search Manager at CPC Strategy, bringing 3+ years of experience working in the digital marketing space in various roles.
He joined CPC Strategy after previously serving as an SEM Manager for a major travel website.
Jump to each:
- Why all the hype about native advertising?
- What are the most effective ways to implement native advertising in the short term
- What type of businesses will benefit the most from effective native advertising campaigns?
- How will native advertising take shape and play a larger role in traditional advertising over the next couple of years?
Why all the hype about native advertising?
Dustin O’Dell: First, we have to understand that it’s just the marketing of the word itself that has created the hype and the polarity because native ads can and do work, just as many other forms of advertising. Native ads, like other forms of advertising, work best when you provide the user with value and make the ad so relevant that it’s a welcomed (or at least tolerable) part of the consumer experience.
To be fair, brands are just now approaching a time where data can be processed fast enough and cost-efficiently enough to provide this type of relevance and targeting. Essentially, native ads have great potential but the true driving force behind that success is the ability to use utilize data to create relevance and not so much because of the specific ad format.
Scott Reese: In one sense, many people feel strongly that native advertising has existed in the form of the “advertorial” for a long time. This was an earlier form of brand-sponsored content. Today, native advertising has evolved with different user experiences around web content, page layouts and different content management systems.
In a nutshell, native advertising is advertiser-sponsored content that is identified as being sponsored, but otherwise matches the content style sheet of a web page and is accessed/browsed just like other content from the publisher.
Native advertising is a way for advertisers to produce, edit, and curate content that supports their brand and a publisher’s quality standards and provides information relevant to users’ interests. We also believe native advertising can and should utilize images and videos where best suited for the users web experience. We believe that, if done, right, native advertising is superior to standard display advertising formats and represents a fair exchange for user attention.
Vinay Anantharaman: I believe the hype by advertisers stems from the fact that native ads are integrated in streams of information which people are hooked on. If someone sees the ad enough they might get curious enough to click or remember the brand.
Another source of excitement is the cost of an impression is relatively low. The number of native advertising platforms creates a market dynamic, which should keep prices low for the foreseeable future.
Finally, the platforms for native ads provide advertisers highly granular control for targeting the ads.
Roger Wu: The rise in native advertising is similar to some of the advertising avoidance issues we have seen in television and with DVR. Banner ad recall and click rates are at an all time low. Consumers have grown savvier of these forms of advertising and have learned to block them out either mentally, so called banner blindness, or physically with software.
However, unlike some of the monetization models that television has created, publishing cannot do the same and therefore, native advertising is the obvious option. The clamor occurs around the idea that consumers may be misled and while this can be solved through a variety of disclosures, the inconsistent format coupled with a lack of standards may appear to cause confusion.
Scott Yamano: Native isn’t a new concept. The entertainment industry has been using product placement for decades now to help increase exposure for advertisers in unique and non-intrusive ways. The buzz about native in the digital space is driven by its ability to harness that same “personal referral” style feeling about a brand/product/service via the blogosphere.
Brands battling for mindshare in a crowded marketplace are jumping at the opportunity to use non-traditional methods to increase brand perception and purchase intent or drive performance marketing initiatives. The polarzing aspect comes in discussing what is truly native. Advertorials? Ads within content? Those are gray areas in an unregulated marketplace.
Will Price: As both audience buying becomes a fungible commodity and standard display ad performance suffers, publishers and platforms are looking to native ads to both differentiate their ad formats, which increase CPMs, while providing users in-line ad experiences that are contextually and graphically consistent with the publishers UI and UX.
Negative reactions are driven by the reasonable risk that users will fail to see where the ad begins and the content ends.
Peyman Nilforoush: The hype about native advertising is fueled largely by the downfall of the banner ad. As banner ad performance (and revenue) declined rapidly, something was needed to recover that lost performance (for marketers) and revenue (for publishers). Native advertising stepped in to fill the void by promising a model that would drive more clicks by presenting “relevant” information in a format that looked native to the individual sites. Sounds like a great idea, right? Yes and no.
Native ads are already facing quite a bit of scrutiny to determine whether or not it is a deceptive practice. The FTC just held a workshop two weeks ago in D.C. to discuss how native ads should be regulated. All of this goes to show that there is a serious trust gap for consumers when it comes to native ads. So, with regards to the potential of native ads, we think the potential of native ads is tied directly to whether or not brands embrace the need to deliver trusted content (earned media, instead of branded messages) to help inform and educate consumers instead so they can build a trusted relationship.
As to why I feel so strongly about native advertising: I was born in Iran after the 1979 revolution and it was a personal struggle for me and my family to access to credible information as there was no freedom of the press. I saw first hand how society becomes crippled without credible information, and that in order for people to make decisions, they first need to be informed. So I struggle with the current implementation of native advertising because it is not focusing on the consumer, and it is not ensuring that they are getting the information that helps them make decisions. So at inPowered we’ve made it our mission to change that and to help brands get credible information into the hands of consumers when they need it the most (when they are researching brands or products and need credible information to make a decision).
Jordan Kretchmer: It’s well known that banner ads are highly ineffective, and advertisers are looking for other solutions that truly connect with their audiences. Unlike banner ads, native ads don’t disrupt the user’s experience and have a much higher engagement rate (IPG Media Lab found that consumers view native ads 53% more frequently and are 13% more likely to share native ads than banners).
When these native ads can be scaled and instantly distributed to a network of sites, their appeal becomes even stronger. On mobile, which conservative numbers put at 30% of all web traffic, native ads are the only way for brands to engage an audience, and the only way for publishers to create enough effectiveness for brands to want to spend money with them.
Diana LaGattutta: At NativeX, we define native advertising as “advertising that is contextual and complementary to the content in which it is placed. Not above, below, or beside, it becomes part of the user experience and often unique to the viewer or user.” Native is outperforming standard ad formats like banners, because the ads are so seamlessly integrated into the content. When Facebook introduced native ads into the newsfeed, the response rates jumped from 0.1% to over 2% and eCPMs (source William Blair Equity Research).
While native advertising provides a less intrusive user experience for the consumer, a better engagement mechanic for the advertiser, and better monetization for the publisher, not everyone is on the native bandwagon. There are many companies whose business model is based on ad standards like banners. Those are the voices we hear shouting that native does not scale. In fact there are a lot of companies who believe that we can do better as an industry and are working hard to scale native advertising.
Steve Sachs: While there’s been quite a bit of hype about native advertising, I think there’s also recognition that this type of highly integrated placement has been around for decades before digital. What’s exciting about the idea of native advertising in a modern digital context are the possibilities around the level of scale, real-time execution, and data intelligence that can only be achieved online.
I think there’s also a great deal of interest because promoting content is a key use case for native advertising – and marketers are still trying to figure out how to make their content stand out and how to get it in front of the right people.
Lisa LaCour: Everyone’s aware of the shortcomings of traditional display advertising when it comes to the kind of storytelling brands are used to executing on TV, for example. Native advertising is certainly an evolution, a step in the right direction in the sense that the more appealing or engaging you can make your storytelling unit, the stronger the branding opportunity. Traditional display still has its place, but up to this point it’s evolved into more of an eye-sore than an integral part of the digital experience.
Native advertising is reducing that eye-soreness with more integrated units that are “native” to the user experience. It’s like having a more welcoming storefront — naturally, more people will be enticed to walk into your store.
The controversy lies in what’s really behind the storefront and why the storefront is there in the first place. Some brands are using native advertising much in the way they’ve tried to use display ads — to hawk products. Those native ad placements are really no different than the old advertorials you can still find in print magazines, and that’s not very interesting. Dressing up an old ad to look like a Facebook update in a feed or an article on a news site doesn’t hold much value for users, because they don’t visit those sites to be exposed to product pitches.
James Gross: We are seeing an explosion in content as brands shift from digital banners to environments where banners don’t exist. The driving catalyst behind this is social. With Facebook, LinkedIn and Twitter now public, you have almost $160B in market cap that revolves around brands communicating via native platform content and not banners. Add Pinterest ($3.8B), Snapchat ($3.6B), and the rest of the dominant social platforms and you can see why this is a macro movement with real value shifting towards social.
With this shift in value, time, and attention towards social we are seeing publishers react and try to keep pace. Instead of running banners they sell ‘native’ executions which come in the form primarily of publisher, not brand, created, sponsored content. This has created some controversy and also led people to not see the real movement happening: social is changing the way brands think about marketing.
Kunal Gupta: From a publisher’s perspective, native advertising is receiving such attention because it is an exciting revenue generating opportunity in an industry that is seeing a decline in ad revenue. As their readership increasingly migrates to a publisher’s mobile sites and apps, an effective native advertising model allows for ads which focus on engagement and are non-disruptive. Look at the decline of the commodity of the banner: with ad fatigue and declining click-through, the banner isn’t driving the revenue in for the publisher it once did. And when was the last time you shared a banner ad with your friend?
Instead, native ads utilize the full screen on both desktop and mobile, offering engaging experiences and often including the banner in the overarching experience. One reason reception may be seem polarizing is through the sheer excitement of seeing this new ad unit grow so quickly; native ads are a piece of a greater success mechanism in the publishing industry.
Tom Channick: When most people talk about “native advertising”, they are referring to pieces of sponsored content created in tandem with a publisher. This content, and brand-direct content, is actually the backbone of native advertising. The hype around content stems from the fact that people are constantly looking for information to consume, whether it is created by a brand or not.
If you look at the rise of content platforms like Medium or Svbtle, it is clear that meaningful content matters once again. On the other side is native advertising, which according to the IAB Native Advertising Playbook, is broken up into six categories. The largest growing category is in-feed ads, which are already the monetization strategy of every major social media platform and are now expanding to every editorial site on the web.
Ari Jacoby: Native advertising is not simply a buzzword, it is a reality. Over 33% of major publishers will add some form of native advertising to their rate cards in 2014. Native ads simply perform better, and agencies/marketers that demand effectiveness will demand native ads. Done correctly, native advertising symbolizes a new ability to give value back to consumers in a format that is in-the-flow of a user’s experience.
The rap on native advertising is that it is often hard to execute at scale. The good news is that there are a handful of solutions that can truly deliver the reach marketers expect, like Twitter, Solve Media, Tumblr, and Facebook.
Sebastian Hassinger: From the brand perspective, native advertising represents an opportunity to escape the low-ROI world of display. Instead of shotgunning creative assets into every nook and cranny of every property where they land in locations that people either ignore or purposefully block, Native allows brands to deliver content that their customers want to engage with. The engagement rates and brand lift effects we see with our native units are orders of magnitude higher than display.
When the branded or sponsored content is presented in the content stream alongside editorial or community-contributed content, the user experience is undisturbed, and customers choose to interact with the content themselves. Native, for brands, simply works.
For publishers, native represents a dramatic overhaul of their business model. The trouble with display is rooted in the effectively infinite inventory for display. A publisher can always break articles into more pages, or distribute galleries across multiple pages or otherwise create more inventory. This drives the prices for display ever downwards. However, native units are naturally constrained – a publisher who runs too many native units diminishes their own editorial voice and risks their audience leaving. As a scarce resource, native units are therefore naturally going to increase in price as more sell – the reverse effect from display. The big brands will pay the premium because the performance is so much better than display.
Eric Berry: Native advertising has become a dominant force in digital advertising over the past 18 months. As with all high-impact trends and technologies, numerous myths have circulated, making it challenging to separate the signal and noise.
The discussion around native advertising and the nomenclature itself are relatively new, but the concept is not. Arguably, magazines have been employing native advertising for years through sponsored articles. Google’s AdWords, paid placements in TV shows, and radio hosts plugging products are, to varying degrees, time-honored examples of native advertising.
Lewis Brannon: I think the concept of native advertising represents a paradigm shift in the way consumers react to online advertising. The word “native” itself suggests that the advertising methods and platforms being developed will allow advertisers to more seamlessly integrate ads, and in effect, cloak them, as to reduce to negative reaction from consumers.
The idea is that advertisers will be able to convey their message directly into the normal flow of consumer behavior, which will naturally lead to higher interaction rates than some of the other traditional web-based ads, like banners.
What are the most effective ways to implement native advertising in the short term?
Dustin O’Dell: There definitely isn’t a simple answer to this, and it will vary greatly across different advertisers and mediums. However, to effectively implement native advertising I believe brands have to put on their “content creator” hats. If brands begin to provide truly valuable content, then consumers will begin to view it as something more than advertising and form a real connection and that’s where you want to be.
Native ads done poorly are akin to old print advertorials and these tactics don’t work on consumers anymore. Brands and publishers alike need to move away from this and move towards understanding what really matters most to their consumers and how their consumers interact with their brand across all mediums. Then approach how to best to market the brand.
Scott Reese: The effectiveness of native advertising may vary by channel. For example, in the search space, sponsored results have been long utilized form of native advertising. In social media, sponsored posts and links match the natural user experience for channels such as Twitter/Facebook. However, on standard web pages, effective native advertising may take the form of sponsored ‘feeds” or sponsored stories.
In general, effective forms of native advertising will: (1) match the style and layout of the web page, (2) invite interaction from by the user in the same ways as other content published by the web publisher, (iii) not be located in standard IAB ad locations, and (iv) not utilize effects – such as rich media – that are not used by other page elements without the choice of the user.
Vinay Anantharaman: I think that Facebook ads are great for certain type of products like smart phone apps and games. The target audience of many apps is wide enough that reaching users through traditional advertising like TV, magazines, etc. is prohibitively expensive. Facebook provides an excellent way to reach a wide demographic for relatively cheap.
Not only should cost be considered, but many of the users are relatively savvy with technology so the resistance to downloading the app is lower.
Roger Wu: Sponsored posts with disclosures are the easiest type of native ad unit to include since it does not force publishers to include software plugins or to inject code into their templates. These posts are extremely effective for many reasons, including:
– the ability to show up in feed,
– being written in the publisher’s trusted voice, and
– strategic placements and media buys for more effective campaigns.
Scott Yamano: The most effective way to implement native is via social and through social influencers. Getting a large collection of those mavens together helps to create scale while still delivering a “native” message. Digital is the perfect medium for native advertising because of its ability to quantify the effects of the placements. Blogs are personal referral machines that are a perfect vehicle to deliver a native message.
Their audience is usually very targeted, the message can be done in a referral format, and there’s the perception that blogs focus on the user experience more than the revenue generated by the postings.
Will Price: Native advertising works particularly well on mobile devices, which are bereft of obvious ad placements. In-line, in-stream mobile ads map to the user experience on mobile and allow publishers and advertisers to leverage the massive mobile user base without having to resort to 320×50 units.
Peyman Nilforoush: We think the critical component missing in the deployment of native ads is the credibility of the content that is delivered. The most effective way to deploy native advertising is to ensure that the content you are distributing is trusted, third-party content like articles and reviews from credible experts.
By distributing credible information, brands have the opportunity to establish themselves as a trusted source of information for consumers, which helps build consumer trust and increase their consideration of your brand.
Forrester research shows that 55% of consumer trust third-party expert content, whereas only 32% trust content on a company’s site and only 10% trust banner ads. So remember – if consumers don’t trust your content, then it doesn’t matter how well you distribute it.
Jordan Kretchmer: Scaling is an issue. The most effective way to approach this is by surfacing original content that exists about a brand from their advocates and use that to promote their products without having to create content themselves.
Diana LaGattutta: Big publishers with large audiences will begin with custom ad formats that make sense for the user experience. Big data has an important role in native advertising. Because the ad becomes part of the experience, it is important that ads are relevant. Most consumers have developed “banner blindness,” so we don’t even notice banners anymore. We do notice native ads, so it important to protect the user experience.
Others are tackling native by focusing on a particular content segment. For example our company is focused on building native solutions for mobile games. Consumers spend more time in mobile gaming than they do in any other app category, yet there are no behemoth publishers that own the category, like we see in social. And games are very artistic and image rich. Each publisher requires its own custom ad format.
We are working to create technology that allows a game developer to integrate elements of the game, like a character, into the ad frame. All of this is done on the server side for rapid innovation and iteration.
Steve Sachs: A native advertising program in both the short term and the long term should start with a focus on business results. Whether that business result is along the lines product considerations, conversions, or some other recognizable outcome, marketers should work backwards from the end-game to identify the best implementation strategies. That level of thinking helps to get other program components like content, creative, media, and metrics aligned with real business goals.
For example if your business goal is to drive product consideration for a new mobile device, you’d be thinking about what content would be most useful to that scenario and what media might be most relevant and native creative that would be most likely to engage the right users to learn more about the product.
Lisa LaCour: Native advertising can be an excellent output of a broader content marketing strategy for a brand that’s focused on just delivering great experiences for consumers. There’s plenty of evidence to the effect that consumers are much more interested in brands’ content than their advertising, so with that in mind, native advertising can be a great way to promote content. In that instance, the native ad or storytelling unit could be a headline promoting a piece of branded content on a media site or social platform.
A user is much less likely to get upset if, when they click on that headline, it it takes them to a content experience that is genuinely entertaining or informative and delivers on the promise of the headline. Proper disclosure and labeling of the source of content and how “integrated” the unit looks is also important but secondary to delivering a valuable, authentic experience for the consumer.
James Gross: Facebook and Twitter are the gold standard. LinkedIn is also accelerating quickly with how they are bringing in sponsored content.
Kunal Gupta: Most-effective and short-term aren’t usually grouped together, and for good reason. As a marketer, a successful native advertising campaign often involves identifying the target audience beforehand and than applying a measurement metric which links to what you are trying to market. Approaching native advertising with concrete goals, whether it be engagement by number of tweets or likes, performance by CTR on headlines or calls-to-action, or awareness through brand tracking and referral traffic, will help guide your decision making process and define success or “effectiveness” of your campaign.
At Polar, we built our native ad serving platform MediaVoice with publishers, and the speed at which they need to penetrate this market, top of mind. Publishers see improved workflows by eliminating existing manual steps to run a native ad, consolidated reporting on engagement and social activity, and the ability to scale the native ad campaigns across desktop and mobile – getting them to market with a great product quickly and efficiently.
Tom Channick: Native advertising works best when it is choice-based and content-based. Great content that is non-interruptive will always be the most effective strategy. For brands, this means looking at all types of content, from Vine videos to sponsored editorial to long-form video.
For publishers, this means working with brands and platforms that produce and distribute meaningful content.
Ari Jacoby: The most effective ways are to look for technologies and opportunities that present advertising in a way that drives engagement without being interruptive of the user experience.
Look for ways to immerse the user in brand messaging while still adding value to the experience.
Test, measure, and see what resonates with your audience.
Sebastian Hassinger: Every publisher needs to define what native units they want to run – text, images, video, audio – and what the user experience will be for each unit. It’s important to choose a platform that can serve units that conform to each property’s look & feel and delivers the most seamless UX possible.
Publishers also need to clearly identify sponsorship and keep the UX as close to the editorial and community content on their properties. Brands need to work with creative agencies and studios who truly understand native and are capable of making compelling content – no repurposing display or television assets!
Eric Berry: Effective native advertising requires an advertiser to produce content that is both interesting to the consumer and capable of achieving the commercial goals. Brands that already produce this sort of content will find no challenge beyond identifying the content that their various demographics organically consume.
Advertisers that do not naturally produce content appropriate for native advertising will find it more challenging to drive meaningful results.
Various technology providers enable advertisers to understand what content resonates among their consumers, and others provide insights into the sort of content in the industry that drives engagement. Armed with this type of data, the process of creating effective native advertising can be simplified and enhanced significantly.
Lewis Brannon: It obviously depends on budgets and goals, but I think right now it’s all about experimenting with different platforms to see what gets results. There is no full-proof, cross-industry method for success. I think a good place to start is by simply shoring up your social presence. Making efforts to grow your social following, engaging your users with relevant, share-able content, and for brick and mortars – ensuring that your Google Places and Google+ account is configured correctly, and claiming your business on Yelp are all good first steps.
Once your social presence is where you want it to be, you can start buying native ad space within that social media (like Facebook sponsored stories, Twitter’s Promoted Tweets, Sponsored Yelp Listings, etc). Beyond that, bigger brands will have the opportunity to experiment with things like original video content for campaigns on YouTube, sponsored playlists and brand-channels on Spotify, and the like. However, those types of campaigns will require significant creative resources and will benefit large-budget advertisers in the short-term.
What types of businesses will benefit the most from effective native advertising campaigns?
Dustin O’Dell: Branding and awareness is often the goal with native ads, but any type of business or brand can benefit from native advertising, if done properly. Not to sound like a broken record, but it’s the understanding of your consumers that will lead a business to success.
Too many brands and businesses advertise for the sake of advertising and have no real insight as to how their consumers interact with their brand.
Scott Reese: We believe native advertising can be used by all advertisers from large brands advertisers to direct response/performance marketers. The objective remains the same – to reach the right person, with the right ad, at the right time – only now, the equation involves getting the content and context right.
Success will likely follow from advertising in the interest of users in a way that embraces user choice whether the ad campaign aims to build awareness or drive a purchase.
Vinay Anantharaman: Retailers and companies looking for brand exposure benefit the most from native advertising. For retailers, they have found a strategy to create and engage large followings: contests for products. The platforms provide demographics on who is following the page, which allows for discovering new groups of people to target, which creates an opportunity to iterate quickly and improve the conversion rates.
On the side for companies looking for exposure, native platforms provide advertisers a creative, interactive, and engaging way to create ads. The ad campaigns range from users submitting a photo with a product to online games. Traditional advertisings’ output medium can’t allow these forms of expression.
Roger Wu: Native advertising appears to work best for businesses that need to drive awareness, while not being optimal for those seeking direct response (Google AdWords is still the best for this). Businesses with great stories behind them will be able to harness the power of storytelling and content to differentiate themselves and set their brand apart. These stories will be able to provoke an emotional response in us that a banner advertisement, a sponsored tweet, or a few lines in a search that a standard ad won’t be able to.
Being able to tell the full story in a compelling manner will drive word of mouth which will eventually drive potential customers to search, social, or to ratings and reviews sites. Any company with close competitors, undifferentiated product offering, or up and coming brand equity will benefit by getting into a customer’s consideration set.
Scott Yamano: Social influencers tend to skew towards consumer-focused products and services. The blogger can test a product or service, write about their experience, and include links for the readers to experience the product for themselves.
It’s not just for branding efforts either. True performance marketing can be driven through native advertising, but a clear value proposition for the product or service needs to be established for native advertising to be effective.
Will Price: Native ads work particularly well for real-time marketing, whereby the promoted content or conversation is the creative.
Eliminating the need for custom creative allows brands to reach consumers in real-time, while adding to the conversation with a perspective, relevant media, and with units that spark engagement.
Peyman Nilforoush: Native advertising – when utilizing credible information that consumers trust and targeted correctly – can have a large impact for any organization that is trying to increase brand awareness and brand consideration with consumers who are researching similar products or services.
So it’s not a situation where “native ads” work best for consumer technology, automobiles, or any other specific market. Native ads can work for most categories and verticals, as long as the information being distributed via those native ads provides value to the consumer and is trusted by them.
Jordan Kretchmer: Any business which is truly looking to connect with their audiences should likely consider native ads. By providing relevant content in a space that audiences are already visiting, advertisers are able to be viewed as a content provider for audiences and not a distraction.
However native advertising is still more intensive to manage than other digital formats, so it’s more likely to see larger brands utilizing it today.
Diana LaGattutta: Mobile will benefit enormously from native advertising.
Banner ads have consistently under-performed in mobile, and standard advertising is not able to sustain a healthy mobile app ecosystem.
Steve Sachs: Ultimately native advertising has some relevance to all businesses. But it’s clear to us that big brand campaigns are particularly well positioned to benefit from native.
The reason for this is that large brand campaigns use large, diverse swaths of media, which in turn provide a valuable exhaust of data.
Leveraging that data for optimizing forward campaign work is extremely useful for brands who are seeking to build online relationships with their target customers throughout the purchase path.
Lisa LaCour: Scale is still a challenge in native advertising, so in that respect, a brand that is focused on digital storytelling and has budget to experiment will probably be the most immediate beneficiary of the native advertising opportunity. At the same time, it’s becoming clear that native is the best shot brands have at engaging consumers on mobile devices, where traditional display is especially challenged.
As more consumes migrate to mobile devices more frequently for all their needs, any brand trying to grow their business needs to take a long, hard look at their mobile strategy and the opportunity native currently affords them. As for more direct-response marketing, I think the jury’s still out on that one, but in general, marketers should probably just focus on the most scalable ways to drive engagement, or however they’re defining meaningful action, with their brand. If native advertising is part of that mix, then great.
James Gross: All companies will. With the size and overall scale of platforms like FB (750M daily active users as an example) no business can ignore the opportunity that daily communication on social channels can present.
Kunal Gupta: Resource allocation factors heavily in decision making in the publishing industry and traditional display advertising is often hardcoded into a publication and requires attention for each layout and story in which it may appear, as well as differing desktop vs mobile layouts. Publishers benefit from a new revenue stream which is scalable if implemented correctly.
The format also works well for e-commerce as users are already on a device which can take them to an online store. It works well for brands and marketers who take the time to make engaging content for readers – advertorials are nothing new, the real-time possibilities of native advertising are what differentiates it. A campaign can change based on events of the day or how users are interacting with it. Who will benefit most? Those make native advertising a piece of a greater marketing tapestry, coupling the content with banners, rich media, and videos.
Tom Channick: On the content side, almost every single brand, regardless of size, has something worthwhile to offer consumers. Sometimes it may just be an excellent blog post, while other times it may be a 10 min. short documentary. Content marketing is a powerful strategy. Now with native advertising, there are platforms that have achieved true scale.
Facebook and Twitter already offer this type of scale, but now marketers can scale native campaigns across the internet through in-feed ads.
Ari Jacoby: All businesses can benefit from native advertising, as long as the targeting is granular and the KPI’s are well-defined. We have seen amazing success with Fortune 1000 advertisers on global, national, and local levels. As mobile advertising grows, we’re seeing lots of hyper-local mobile-focused native advertising solutions popping up, most through tools like geo-fencing or social sharing. These kinds of solutions, like Foursquare’s small business platform, are perfect for retailers and big box chains with stores across the country.
Automotive, finance, CPG, and travel advertisers are getting the “biggest bang for their buck” in performance-based branding and we expect that trend to continue.
Sebastian Hassinger: Media and Entertainment brands have the simplest path to native – content is their product, so creating compelling creative assets often means simply picking some choice clips or stills from an upcoming TV show or movie and running them as sponsored videos or turning them into animated GIFs or meme images.
However, any brand with a compelling story – think Chipotle’s “The Scarecrow” video, for example – can make compelling content. It’s best to relate the content to the brand and avoid the approach of creating content for maximum virality but with little connection to the brand. Your audience may remember the content but not your brand.
Budgets can range from mid 5 figures for pilots & experiments to high 6 and low 7 figure budgets once a brand has found its native ‘legs’ and wants to push scalable distribution. Brands should avoid over-investing in a single ‘silo’ of native advertising, instead distributing content across multiple properties for broadest reach and most diverse contexts for finding your audience.
While most native today is focused on top-of-funnel branding efforts, native is not limited in that way. Every type of campaign can be conceived and executed in a native context, with results that put display to shame.
Eric Berry: Certainly a sect of businesses that will benefit greatly are those that already have strong social presences and a loyal brand following. Word of mouth has always been and will always be the strongest form of advertising. When approaching native advertising its important to create content that is easily shareable to one’s followers. Consumers are actively participating in social discovery, and if you build engaging sponsored content it will be shared.
Pinterest has emerged as one of the most powerful ecommerce drivers because it inspires users with images, while Facebook has been particularly successful through its tremendous reach.
Lewis Brannon: This ties in to the previous question, but I definitely think big-budget companies stand to benefit the most in the short-term because they have the resources to produce high quality video content for YouTube, and they already have large social followings at their disposal for Facebook and Twitter campaigns.
However, as the entire online advertising model appears to be shifting to more of a native type of model, all businesses can and will benefit if they figure out the best ways promote their message using the resources and platforms available.
How will native advertising take shape and play a larger role in traditional advertising in the next couple of years?
Dustin O’ Dell: The future of native ads will live mostly as original content, created by brands. Brands are already doing a lot of this and I believe there will be much more of it in the future. A great example of this, is the recent Chipotle Scarecrow short film and iOS game. Hate it or love it, it was very popular and a giant leap ahead of standard banners, preroll videos and promoted tweets. You can bet brands will continue to push the envelope and produce fantastic original content and I think that’s a good thing, as long as they are doing it with their consumers in mind.
Additionally, I think the rise of programmatic buying will actually allow advertisers and publishers to become more creative and strategic, resulting in an evolution of native advertising. With programmatic buying taking the mundane process of buying and selling (traditional digital) ads away from humans, we will be free to focus more on the creation of inspirational and valuable advertising.
Scott Reese: We expect native advertising to begin to take advantage of images and videos as that content continues to form more of the page and draw more user attention. We also expect native advertising show some standardization so it can become more easily integrated with programmatic buying decisions.
We also expect native advertising technologies to create new classes of “Big Data” around user interaction and what engagement time means. Finally, we expect native advertising to adopt forms of dynamic creative so that native ad units can be dynamically created based on behavioral and contextual targeting attributes.
Vinay Anantharaman: I think larger companies will continue to do both because people value the content on both native and traditional ad platforms.
I can see that traditional advertisers will reduce the price to be competitive with native platforms.
Roger Wu: Sponsored posts, native advertising, product placement, and content marketing will play a larger role as customers continue to ignore traditional advertisements (and some digital ones). Companies love when their brand is part of the story or better when their brand IS the story.
We’ve seen this phenomena recently when consumers paid to learn about iconic companies with great stories like The Social Network, Jobs, or The Internship. Amazon’s drone story took over social media for a few days after it aired. These examples are definitely outliers where large media budgets and very smart storytellers and marketers were able to craft a plan that fit our imaginations. However, with native advertising these campaigns are not far away from our small and medium sized businesses (SMBs).
We will see SMBs turning to native advertising as it becomes more accessible as publishers become more and more niche just as they found great value in AdWords. The sales funnel will be completed, with native advertising acting as the discovery mechanism at the top of the funnel, social media as the tickler in the middle, and search as the final step prior to conversion.
Advertisers will begin to feel more comfortable with native and letting go of control of the message as they have with social. They’ll start to work with partners and platforms that can help to control the message and look for more human ways to communicate rather than algorithmically.
Scott Yamano: Native advertising will continue to grow because the medium is so widely available. Blogs are easy to build and launch, thus creating very little barriers to entry. Interest clearly exists on the advertiser side to break through the noise of other mediums and gain a mindshare foothold over their competition.
But, native won’t take the place of banner advertising space. It’s incremental media that can now be packaged up and sold to increase the overall value of a site.
Will Price: Native ads logically must succeed for premium publishers to survive. Standard, IAB units allow for audience fungibility, whereby the lowest cost impression will get the “buy.”
Premium content and native are natural allies and help support a vibrant, ad-financed content industry.
Peyman Nilforoush: I believe that digital marketing as a whole is facing the same trust epidemic that native advertising is facing, and that if our approach to digital marketing doesn’t change dramatically, then all of today’s best practices won’t be “best” for long.
We, as marketers, need to shift our entire viewpoint to focus on the need of the consumer, otherwise the consumer will discard our messages for those of a company who treats them with respect and adds value. What the consumer needs is good, credible information so that they can make an informed decision about your brand.
If you provide them with that – credible information from third-party sources instead of just more targeted ads – that helps establish your brand as a source of credible third-party content and builds trust with consumers.
Jordan Kretchmer: The solution for marketers isn’t more advertising, but less advertising, and focusing on content, context and creativity rather than mass eyeballs. Native advertising can accomplish all of this, encouraging brands to think how they can make all ads more relevant and purposeful for their audiences.
Native also brings proven increase in revenue to publishers, so many more publishers are adopting it as the go-to method for generating meaningful revenue. It is where the market is going, there is no doubt about that.
Diana LaGattutta: Native looks different in each medium and often according to publisher, but I’m seeing native advertising everywhere: TV, magazines, film, web, and mobile, in the form of paid placement, paid content, and recommended links.
Data science has an important role in ensuring that we execute well. Good native advertising is a blend of art and science, intelligently targeted and elegantly presented.
Steve Sachs: I see native advertising as a means to an end for delivering brand messages and promoting useful content. Whether native will have staying power with tomorrow’s multimillion dollar media budgets remains to be seen.
In order to become part of mainstream media buying it will need to start getting more programmatically oriented, make more effective use of data intelligence, and carve out a unique business proposition that drives better outcomes than what you can already achieve with traditional online advertising.
Lisa LaCour: If traditional advertising can learn anything from native advertising at this stage of the game, it would be how important it is to give consumers the best experience possible, and it’s hard to do that when you’re interrupting them with annoying product pitches.
The less interruptive and the more value-oriented brands can be, the better. Anytime brands and publishers can work together to satisfy audiences while at the same time delivering on their own objectives, everyone wins, and that’s what’s been missing in traditional advertising for awhile: consumers were left out in the cold. Changing that trend is long overdue.
James Gross: It all relates, here again Twitter’s work with TV is the best example (with Twitter handles and hashtags left and right). The other platforms will follow.
Kunal Gupta: Advertising on Twitter and Facebook shows what way native advertising is trending. The revenue model for both depends heavily on native ads.
On mobile, both social sites only use native ads. Once e-commerce makes purchasing as seamless on both desktop and mobile as it is in iOS or on Google Play, we’ll see more tangible products showing up for purchase on mobile.
BuzzFeed and their kin are proving native advertising already plays a large role. The site’s revenue model depends completely on native ads, while the Huffington Post Partner Studio is a separate editorial team dedicated to creating content for marketers which is just as compelling as their news stories and features. These are the initial steps in what will become a sophisticated industry. I predict any smartphone user will start seeing 1-3 native ads a day in the coming year.
Tom Channick: On mobile devices, native advertising will not just be a monetization strategy it will be the monetization strategy for most publishers. Cluttering a mobile site with pre-roll and other ad formats is not an optimal user experience. Over 50% of ad clicks on mobile are accidental, and I bet it is even higher than that.
The modern internet, especially on mobile, is about clean UI, meaningful content, and less interruption. Native ads filled with excellent content fit that model.
Ari Jacoby: We’re in the middle of an advertising goal shift – from mass reach to hyper-targeting receptive consumers while they’re in certain mindsets with personalized campaign messages. Surprisingly, we’re not far from realizing this opportunity.
Many of the current news topics, like native advertising, responsive design or bot fraud, focus on the necessary pieces to realizing this end goal. Traditional advertising will blend with native advertising by 2015 – our ability to target human audience in a personalized way will win out over less effective online strategies.
Sebastian Hassinger: Native will most certainly increase dramatically in importance and share of advertising spend over the next few years. The “hottest” display formats, notably preroll video, are very intrusive, placing themselves squarely between the user and the actual content they are seeking. This is driving a spike in the installation of Ad Block Plus and interest in ad blocking in general. Native advertising is “opt-in” and can be served like content. It does not engender animosity in the most non-commercial of online communities.
Additionally, many of the publishers we work with tell us the same thing – web traffic is tipping over to predominantly mobile browsers vs. desktop. This is resulting in a growing pressure on display CPMs because display simply does not work on mobile. Native will be the preferred option for mobile advertising, with the best native platforms serving the same creative assets across multiple desktop and mobile properties, dynamically rendering the assets natively for the context in which it is viewed.
Eric Berry: Online advertising is constantly in flux. Banner ads have yet to deliver the branding potential that many hoped they would. Native advertising in the digital world is very difficult without a technology layer. There is a renewed vigor in the space with a litany of venture capitalists investing in promising companies and numerous technology players providing solutions that enable scalable, easy-to-use native ad products.
This has led to an unusually high level of innovation, resulting in better, more scalable solutions. For many advertisers and publishers, now might indeed mark the first time when native advertising is an approachable solution at scale.
Lewis Brannon: I see all web-based advertising platforms becoming more and more native. As consumers become more tech and web-savvy, advertisers must keep up and become less “overt” and more “covert.” This is not to say that the goal is to trick consumers, rather the aim will be to offer increasingly relevant content to individual users to help them better inform their buying decisions.
I think traditional advertising like radio, TV, print, billboards, etc. will still have its place, but I think it’s a safe bet that budgets will continue to be allocated more towards the increasingly native digital side.
If you made it this far down, I am impressed. Thanks for checking out this expert roundtable and be sure to check out other and future installments to our native advertising series, including:
- Native Advertising: A Definitive Overview
- Native Advertising: Business Types That Should Consider Going Native
- Native Advertising Examples and Publishers
- Native Advertising: How to Get Started
- The Future of Branded Content
- Inside the FTC Workshop on Native Advertising