Advertising History

Native Advertising: It’s Been Around Awhile and it Looks Like it is Here to Stay.

Brad Davis on “Native Advertising”- it’s one of the buzzwords of the year, right up there with “selfie” and “twerking.” (Sorry, Miley but that will be the only reference to your very successful social media campaign here.)  “Native advertising” has gotten a lot of ink of late.  But these types of advertising solutions have been around for decades, just under different nomenclatures. After all, what were soap operas but vehicles to advertise detergents?

In a recent meeting a major magazine executive said “Native Advertising? We’ve been doing it for about 100 years.” And at the same time, one exasperated media buyer exclaimed, “ This is the 40th time I have heard this term today! Do you guys all get together and preplan this?” Well of course not!

But native is a topic, and viable advertising solution, that is gaining steam and legitimacy. I participated on a panel at last month’s Digital Hollywood on the “viability” of native advertising, moderated by consultant Robert Gonsalves. And native advertising has been the subject of an FTC forum and an IAB guideline rollout, both just within the past two weeks. The FTC titled its gathering “Blurred Lines” (OK, Miley, you win).

Originally there was a significant suspicion that native advertising was another flash in the pan, not unlike branded entertainment. (Branded entertainment defined here as custom created video content, built around an advertiser or product, usually in concert with an individual premium publisher.) But, the validation by the IAB and FTC is significant. The IAB has defined native advertising as:

“A concept encompassing both an aspiration as well as a suite of ad products. It is clear that most advertisers and publishers aspire to deliver paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behavior that the viewer simply feels that they belong.” In addition, they have offered guidelines around in-feed units, paid search units, recommendation widgets, promoted listings, IAB standard with native elements and “custom.” (1)

In addition to this industry oversight, a new crop of companies are rising to support the industry, including Nativo, who optimizes ads in real time and helps content stay on the publisher site and Polar, which is attempting to streamline the production process. Nativo just won “hottest startup” at LA Tech Summit , which speaks to how hot this native trend is. The focus of companies building their business models on supporting Native Advertising shows the increasing revenue potential to premium publishers. This is important because small and mid size publishers have to continually prove the difference in their solution sets to compete for share of dollars.

The need for publisher guidelines and the growth of new businesses focused on native advertising validates the space, but there are still issues and unanswered questions with its emerging state. In short, they appear to be:

  •  The need to move beyond “advertorial”: build value to the consumer and the editorial conceit of the publisher.
  • “If it looks like an ad, it’s an ad”: Yes, as the IAB and FTC have recommended, it should be designated as such, but it doesn’t have to act as such.  Otherwise results will diminish accordingly.
  • This is not a “stand-alone” solution: Integrated programs should be built around a native advertising foundation.
  • Scalability and reach: This is required to become a sustainable publisher solution. Ad Age wrote recently about publishers currently having to resort to “buying distribution and traffic off of their publisher platform” explicitly to meet impression guarantees for branded entertainment/native advertising solutions.

At the same time, to bring value to the consumer, the ability to integrate the user into the native advertising solution will increase utility with the consumer, and engagement with the product. The consumer can become part of the native ad experience through moderated user-generated content. We are doing this successfully at Photobucket, by allowing brand advocates to become part of our Stories native ad solution. Also, value is increased if the solution is consistent with the editorial conceit of the site, as Flipboard has done with its solution set.

Even though you will find an “advertising,” “promoted post,” “sponsored by,” or “provided by” on a native ad, for real consumer value the solution must be consistent with the value that the publisher brings to the marketplace. As mentioned, just because it is called an ad it doesn’t have to act like an ad. Steve Smith recently noted in MediaPost:

“The most striking thing about the scroll of Tumblr native ads is that most of them still do look like ads. They are taking on some of the tones of the feed and all. But generally it just feels like the print and short-spot interstitials that are struggling to fit in.”

Alternatively, Facebook’s’ native ads have documented very high clickthrough rates because of their consistency with the overall editorial integrity of the experience and their effective consumer targeting capability.

Additionally, as with any solution, native advertising should be considered only part of the suite of publisher solutions. Sellers consistently make the mistake of recommending their “coolest, shiniest object” as a stand-alone solution. Just as other publishers’ solutions are not stand-alone marketing solutions for the advertiser, this applies to native ads as well.

Finally, native advertising must move to scalable models that enhance their distribution. For example, Flite, a rich media provider, has helped us created a solution that takes the native advertising experience and places it in a rich-media enabled traditional advertising solution allowing for greater distribution, avoiding the need to “buy traffic.” The IAB notes the need for this in its guidelines around standard ad units being utilized for native executions.

The “native” buzzword has clearly evolved into a viable, necessary ad solution which brings value to the consumer when executed properly. As small to medium premium publishers continue to fight for share of market, this is an excellent tool to differentiate them in the fragmented advertising space. Good publisher content is good for advertisers, and good native advertising is good content—and a good monetization solution to boot.

Brad Davis is CRO/ EVP-Sales at Photobucket, one of the world’s leading dedicated photo and video sharing services. Look for their columns every fourth Tuesday on The Makegood.