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Insight/ Branding & Communications

Marketers Go Native With Their Advertising

by Samuel Greengard
Contributing Writer
CMO.com

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Article Highlights:

  • A growing number of firms—and their CMOs—are turning to native advertising techniques.
  • Old media outlets are often more guarded about how sponsored content is used than new media outlets.
  • Native advertising doesn’t require a CMO to produce “amazing” content.

If anything has become apparent to marketers during the past few years, it’s that consumers are increasingly fed up with all the clutter landing in their inboxes, mailboxes, and elsewhere.

A constant barrage of banner ads, pop ups, videos, e-mails, text messages, and traditional broadcast and print ads has rendered the majority of marketing efforts white noise. “It is increasingly difficult to get a message through to consumers,” stated Dee Salomon, senior vice president for consulting firm Medialink.

As a result, a growing number of firms—and their CMOs—are turning to native advertising techniques. The list includes Pepsi, Intel, Puma, Toyota, Verizon, Macy’s, and Microsoft, to name a few. Although there’s no precise definition for native—in some cases, industry players have somewhat different ways to define the concept—the general aim is to deliver a more relevant message by offering some form of content that is within the context of the user experience. This can range from promoted tweets and videos to advertorial-like content embedded in a digital format.

What’s more, the content can be displayed on closed platforms, such as Facebook or YouTube, or open platforms that reach across the Web. Either way, the concept is gaining attention—and followers. A white paper from Solve Media reports that the size of the native advertising market was $3 billion in September 2012. Meanwhile, consulting firm BIA/Kelsey predicts that social media advertising will swell from $4.6 billion in 2012 to $9.2 billion in 2016.

Native advertising can produce positive results. A recent study by San Francisco digital ad agency Sharethrough and IPG Media Lab found that the format achieves a 25 percent higher viewing rate than banner ads. But native also creates a few challenges. Among these: how best to use the medium, when to use it, and how to fit it into an overall campaign. “Native advertising takes advantage of a platform’s inherent strengths. It represents a more dynamic way to communicate a message,” said Ian Schafer, founder and CEO of Deep Focus, a New York-based agency specializing in digital and native marketing, in an interview with CMO.com. “But it’s important to separate the buzz from the reality.”

Beyond The Banner
It’s estimated that consumers encounter somewhere in the neighborhood of 3,000 marketing messages every day. They appear on electronic devices and in print publications, billboards, stadiums, subways, movies, supermarket floors, and even airsickness bags. Remarkably, in an era of big data and sophisticated analytics, many marketers continue to rely on nothing less than a brute force attack to capture eyeballs and clicks. “People are actively blocking banner ads and finding ways to reduce the clutter,” said Dan Greenberg, co-founder and CEO of Sharethrough.

Native advertising takes a different tact: It attempts to provide valued content to the consumer. This can take the form of a promotion for a clothing retailer, a smartphone app, or a film. It can also work in much the same way that an advertorial in a magazine or a TV infomercial attempts to sell consumers an exotic travel destination or Ginsu knives.

However, native is more than a content distribution technique. The goal is to direct the consumer to actionable steps that eventually lead to a sale. As Greenberg told CMO.com: “There must be a monetizing strategy associated with the entire process.”

In recent months, Facebook and Twitter have become epicenters of native advertising. “We are seeing more and more sponsored posts in Facebook and promoted tweets on Twitter,” Medialink's Salomon told CMO.com. She believes that these sites are a highly effective way to approach native advertising because the ads—along with the associated content—fit in perfectly with the medium. “People don’t have to change their behavior in any way. It’s simply a matter of providing a hook and content that’s interesting,” she said.

Promoted posts, tweets, and videos can be especially effective on mobile devices, pointed out Cherie Collins, president of Stellaractive, a Portland, Ore., strategy, development, and design firm that specializes in mobile marketing. It’s a way to push the message through on a device where people are a lot less inclined to accept advertising, she told CMO.com.

Added Trip Kucera, a senior research analyst at Aberdeen Group: “There is something very personal about mobile devices. People don’t want to deal with blatant and intrusive advertising, particularly on a small screen.”

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But social media isn’t the only tool for native advertising. Publications such as Forbes, Atlantic Media, and The Washington Post have begun to include content that is sponsored—in ways that aren’t always completely obvious to readers. Online site Buzzfeed has also embraced native advertising in a big way. In some cases, partner sites run headlines on their home pages linking to Buzzfeed-sponsored posts. The sponsored content appears on these sites in a similar way to other stories. They typically include a tag or label that differentiates them from standard editorial content.

AdAge reported that Buzzfeed pays publishers a minimum of $3 per thousand impressions for ad space on their home pages. In some instances, the fee is much higher. What makes this approach so attractive to advertisers is that the site’s audience shares content at social media sites at a much higher rate than usual. All of this “sharing” of content boosts exposure in the earned media space.

Not surprisingly, old media outlets are often more guarded and conservative about how sponsored content is used than new media outlets. Some have strong feelings about separating editorial and advertising, a.k.a. separation of church and state. But “publishers across the board understand that there is something significant here,” Greenberg said.

The use of native advertising is growing rapidly. Solve Media reports that about 50 percent of agency buyers will allocate money to the customized online advertising space in 2013. This comprises about 10 percent of their overall advertising budget. Nearly 60 percent of agency media buyers believe that native advertising is “very important” or “extremely” important, and nearly 20 percent of online publishers are likely to add a native advertising option to their sites. More than half of the venture capitalists, private equity firms, and angel investors that invest in media and ad technology said that they are “likely” to “very likely” to invest in companies that sell native advertising in 2013.

Salomon believes that native advertising is not a passing fad. It’s part of an overall trend toward quantifying and measuring engagement and better tying results to metrics. Added Schafer: “The measure of success is how many people see the content and act on it rather than simply visiting a Web site.”

Navigating A Native World
Although some native content is relatively easy to generate, a good deal of it requires market research and strategic planning. There’s also a need to find and pay talent, Schafer pointed out.

“It’s often free or inexpensive to publish the content, but it’s not free to create it,” he explained. Not surprisingly, less-than-compelling content can undermine marketing efforts. What’s more, “It’s important to know what drives sharing and why certain content is shared more frequently than other content,” Schafer added.

Schafer said that those looking to tap native advertising must stay focused on a basic truth: “It must be additive as opposed to being distracting and disruptive.” He said that one of the biggest challenges is determining what works and how to promote posts, tweets, and other content in the most effective way possible.

Unfortunately, the path to success is sometimes paved with a few potholes. For example, “People sometimes like things in Facebook that they don’t necessarily like,” Schafer explained. They might do so as a favor to a friend or receive a freebie or some other incentive that makes them decide to click. In the end, “algorithms can become muddled and clouded,” he said.

Greenberg said that those using native advertising must adopt the viewpoint that it’s necessary to earn the attention of consumers. “It starts with thinking about how to add value and drive a sale rather than simply shoving an ad in front of their faces to build brand awareness,” he said.

He believes that a strategy starts with the simple question: Who will this content interest? Is it an audience who is interested in cooking, automobiles, or sports? “You slice it the same way as a general media plan,” he said. It’s also critical to plug in third-party anonymized cookie data that’s used for display ads. “An organization can apply the same third-party demographic data to native ads, including age, gender, and psychographic information,” Greenberg added.

Native advertising doesn’t require a CMO to produce “amazing” content. “The goal is to develop content that resonates with people,” he explained. This can translate into producing a video every week or generating visual content every day. It can mean promoting blog posts, white papers, or videos that appear periodically, or producing occasional advertorial type materials that draw readers in.

“It isn’t about achieving viral success,” he concluded. “An effective native campaign just means you’ve created something that’s timely and relevant and has value to it. People view it because you’ve created something they like.”

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