Native ads need to deliver value to marketers and readers

Peter Houston, founder of Flipping Pages Media, investigates the reasons behind the growing backlash against a format that was touted earlier in the year as the saviour of the marketing business.

On Newsline last month, Greg Grimmer wrote about the first signs of a backlash against Native Advertising. He pointed to an Ad Age article that called for marketers to stop calling everything that isn’t a banner ad ‘Native Advertising’ and confirmed his suspicions that the terminology was getting in the way.

Big, bold, blustering buzzwords – and the confusion they bring – are as much a part of the digital marketing landscape as the enabling technologies that spawn them. New techniques, even new spins on old techniques, demand new terminology.

But proper native advertising is easy to understand – no different is the essence to the advertorials of old. The format is worth paying for because it places a targeted marketing message in a highly relevant and credible context. The media brand that carries the advertiser’s content basically rents out its cachet and a tried and trusted distribution channel.

Enthusiasm for native advertising aligns closely with the adoption of content marketing techniques and rests heavy on the fact that online display advertising has pretty much failed. With click-through rates for banner ads bottoming out way below a single per cent, storytelling has come to be seen as a powerful way for brands to re-engage consumers.

The focus on content is a sensible evolution in a marketing landscape where consumers are equally blind to banners and buttons and annoyed by interruptive advertising techniques. So why the emerging backlash against a format that was touted earlier in the year as the saviour of the marketing business?

To be fair, native advertising has always had its naysayers; the most vocal could never quite get past the politically correct terminology. Labelling advertorials native advertising seemed to be little more than an attempt to hide the crossing of the lines between advertising and independent journalism.

After a couple of false starts (remember the Atlantic’s Scientology blunder), media owners seem to be getting to grips with this lack of transparency. Maybe editors have realised that they can keep enough control to maintain their brand integrity, maybe they have just figured out better ways to label sponsored content, maybe people are simply getting over themselves.

Whatever has happened, talk of an apocalyptic collapse of the sacred divide between Church and State doesn’t seem quite so fevered.

A bigger problem appears to be proving to advertisers that native advertising programmes actually work. A recent Digiday article declared that the native advertising honeymoon is ending because marketers have had the temerity to ask for metrics.

No matter how it gets wrapped up in the ad industry’s latest sales pitches, if the guys with the cheque books can’t prove performance, they will soon stop spending their hard earned cash on native advertising and find a new bandwagon to jump on.

The media houses that have gone big on the format are evolving their metrics to let paying customers see how their content is doing. Forbes, who’s three-year old BrandVoice network is reportedly delivering 20% of its online ad revenues, has launched a pair of dedicated advertiser dashboards.

StatsDash gives ‘tradtional’ publishing measures (top posts, pageviews, total visitors, repeat visitors); SimpleReach gives data about social sharing and social referrals. For customers like enterprise software supplier SAP, who have published more than 250 posts on the BrandVoice platform so far this year, this sits perfectly with their ambitions to be a publisher in their own right.

But these are still not really marketing metrics and publishers, more used to caring about eyeballs, don’t readily get their head around the idea that advertisers want to know about outcomes – clickthroughs, conversions, cash spent.

Evolving metrics to suit marketers’ crass commercial concerns might be tough for publishers, but it is absolutely do-able. Scaling native advertising revenue may be a little more difficult.

On Monday, Frederic Filloux wrote on the Guardian about the Quartz news site, which relies heavily on sponsored content revenues. He says the site’s business model relies on a “small number of advertisers, served with high yield campaigns”. He explains that clever layout and targeted content see the site delivering CPM much higher than traditional display ads – possibly ten-times higher.

For Quartz, Forbes, and many other publishers, native advertising is a high value rather than a high volume proposition. The problem is that this could constrain their ability to scale up and force it to look for yet more new revenue sources – live events are in the Quartz pipeline – or ways to deliver more native advertising inventory.

Publishers’ enthusiasm for native advertising comes directly from the search for revenue to breathe life into flat-lining digital advertising models. The big benefit of native advertising over digital display is the value the content delivers to the audience. If it becomes a game of volume over value, the backlash will build and native advertising will become just another failed format.