Native Ads: A Thing of the Past (and Future)

The term "selfie" entered our lexicon only recently, thanks to the ease with which they can be taken and distributed via cell phones and mobile data connections. But the practice of taking a photo of oneself is decidedly not a new phenomenon.

Last week, I did something I don't often find myself doing: I watched live TV. I landed on The Voice for a while and caught a Nissan commercial/music video featuring the contestants on the show. This reminded me of the similar ads American Idol used to produce with Ford. While my friend had a visceral reaction to the ad ("It doesn't make me want to buy a Nissan"), I spent less time extolling the virtues and necessity of branding and more time thinking about what these ads are: they're native.

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Content Distribution Is A Hot Mess Right Now

Ryan Skinner

[UPDATE 4 Sept: I have updated this post to the original draft, which includes specific and strong recommendations to publishers and marketers. They had been redacted, but a colleague asked "What would you DO about this?" so I saw fit to reinclude them. These are my answers; there are no easy solutions, but these are a step towards guidelines. Updates at the end of the piece, in bold.]

Publishers Are Engaged In Self-Harm, With Marketers As An Accessory

You remember when the email spam problem maxed out almost a decade ago? Or when content farms threatened to turn Google search results into useless piles of keyword-slurry? Or peak belly fat?

There should be a word for the moments when the mechanisms that aim to keep our electronic information corridors running well fail.

It’s shaping up to be one of those moments for the content distribution space (and particularly its subdiscipline native advertising, or sponsored content).

You can pity the reader who arrives at an article on many publishers’ websites today; I’m talking about you, Guardian and Forbes, but also you, New York Times and Washington Post. How is the reader to know if the article they’ve come to read is the product of a straightforward pay-to-publish play, an informal “link exchange” relationship, an “influencer” play, an independent opinion piece, or a piece of pure editorial? They can’t.

For the record: The “clear labeling” commandment is a fig leaf. By the time a reader has gotten so far through the article that they’re wondering why it keeps promoting a particular mindset, product, or opinion and started searching for cruft around the article, the trust in the information, the source, and the medium is lost.

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What Lies Behind That Result From Facebook

Ryan Skinner

Pundits’ take that Facebook has “solved” mobile advertising after its home run last week hid a bigger, behind-the-scenes story:

We’re finally seeing branding and direct response marketing merge in a meaningful and measurable way; Facebook is just one place where it’s happening most demonstrably.

Here’s important context: Facebook’s quarterly earnings beat projections last Thursday, driven by the 62% of its ad revenue that comes from mobile. Also note that Facebook’s only ad revenue from mobile is its in-feed ads (or native ads, or whatever you want to call them).

The in-feed ad is Facebook’s holy grail. If they can manage to position ads in users’ mobile feeds so that these ads: a) perform well, and b) don’t kill engagement with Facebook, then they can print money against their 1 billion-plus monthly active users.

Facebook knows they’ll need advertisers’ and their agencies’ help to achieve this. That’s why I want to draw your attention to a slightly less publicized study that came out of Facebook and two partners the week prior to its quarterly earnings announcement.

Working with the social ad platform Adaptly and Refinery29 (one of a new set of savvy content-driven eCommerce outlets), Facebook showed that social advertising that merges branding and direct response outperforms direct response ads alone, by a margin of about 70%.

Facebook Valuable Content Uplift

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FT Digital Media: Anguish Over Products

Ryan Skinner

Two ways media’s changing now, and two ways it’s going to change:

The FT Digital event in London last week pulled together some of the cream of the European media world. The big conclusion they were made privy to?

The media world will soon discover exactly how many ways you can skin a cat.

The old-fashioned way for media brands to skin a cat – make the content and license rights to distribute it, or advertise next to it – doesn’t work anymore as a standalone product. As a result, the business model experimentation we’ve seen so far in the media world is turning into business model explosion. Evidence: Half of the speakers and attendees at this media event wouldn’t have been at a media event at all only three or four years ago. Facebook. Shazam. BuzzFeed. And tech VCs, for example.

Two pieces of news exemplified changes taking place right now:
One, Facebook’s acquisition of Oculus (a virtual reality gaming device) forced discussion toward the value of a platform – the device is only as valuable as the community of developers creating remarkable content for it; tech and media companies alike need to take a platform approach to their assets.

Second, The New York Times’ launching of NYT Now – a premium version of the Times exclusively for smartphones – showed how media companies are bending themselves backward to divorce (call it “conscious uncoupling” if you will) resources from revenue. The mobile app will take a Facebook-like approach to making money by allowing advertisers to publish sponsored content in-feed.

And two discussions painted a picture of media’s future:

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Content Marketing Fortnight VII: The Pains And Joys Of Going Mainstream

Ryan Skinner

What’s happening (that’s important) in the world of content marketing? This is your fortnightly round-up of the best of the best stuff online for marketers who think about content; for the previous “Fortnights”, go to the bottom of the post. (And for more information about what the Content Marketing Fortnight is, see my intro from the first one. Get this curated newsletter in your inbox every other week – send me a mail.)

NewsCred scores $25 million. Tech news: “What’s content marketing?”
It’s no $16 billion, but the $25 million Newscred raised to expand its content marketing cloud offering is no insignificant sum. The company is moving fast to help brands win relevance with content, boasting a unique weapon (licensing for premium content with thousands of top-shelf sites). Re-code – previously the Wall Street Journal’s tech team – was taken aback, asking, “What’s content marketing?” Percolate’s Noah Brier answered them.

Federated Media, a content marketing pioneer, backs out of content marketing

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Does Native Advertising Face A $3 Billion Question?

Ryan Skinner

Predictions about native advertising’s medium-term impact are both short-sighted and simplistic.

Hedgehog and the Fox by Isaiah Berlin

In 1973, the Wall Street Journal quoted a professor: “Academic politics is the most vicious…because the stakes are so low.” Thereafter, the idea (that the intensity of a dispute is inversely proportional to its stakes) was named after the professor: Sayre’s Law.

Sayre’s law applies very well to native advertising. According to Forrester data, digital advertising dollars are today some 20% of traditional advertising dollars. Of those scarce digital ad dollars, something far less than 10% goes to anything that could be characterized as native advertising.

Perhaps that’s why the dispute has been so vitriolic (at least, by advertising’s standards).

The day after the New York Times launched a redesign to facilitate more native advertising, Tom Foremski, a media commentator, said: “Native advertising is the world’s worst idea and I can’t believe the New York Times management is so gullible and clueless in agreeing to its publication.”

He joins an authoritative cast of native advertising skeptics. Another, Bob Garfield, described native advertising to the Federal Trade Commission as something akin to bat poo. Even Barclays Capital believes the practice peaked in 2012 and will shrink to a less than $500 million market by 2017.

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Native Advertising: Worth Pursuing

Ryan Skinner

Forrester analysts are encouraged to “make the call” and here’s a call that is sure to invite some heated disagreement (native advertising has a way of doing that).

Today my report about native advertising came out and, if I had to bottle up the recommendation of the entire report in a two-word slogan, this would be it: Worth pursuing. That’s not “pour all your advertising dollars into it”, “go hog wild!” or any variant on that theme. By “worth pursuing”, I would say that it: a) is a very imperfect tactic, b) holds great promise, and c) requires some experience to get right.

(First of all, if you’re not sure what native advertising is, quickly go here [definition] or here [examples]).

Let’s start by assessing the promise of native advertising. What’s so great about it?

From a marketer’s perspective, the opportunity to go from a position “next to the show”, “interrupting the show” or “between the shows”, to “part and parcel of the show” is extraordinary. The church/state editorial wall that media outlets have trained advertisers to respect has become porous, and it’s the outlets themselves who are pounding holes in it (most recently, the New York Times). That change should not be underestimated.

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Will Native Advertising Be A Tragedy Of The Commons?

Ryan Skinner

One thing can be said definitively about native advertising: It is poorly understood.

  • It’s advertising, but shouldn’t act like it (even though it should definitely be labeled as such).
  • It’s like advertorials, but also far more than that – just as media sites are more than web newspapers.
  • The media world loves it and loathes it. Bob Garfield famously compared it to islands of bird poo at an FTC workshop in December. But most publishers are ramping up their native advertising.
  • Readers say they have been misled by it, though millennial-friendly media titles like BuzzFeed, Mashable and Gawker are doing more and more of it.
  • Lastly, when a committee of the best and brightest in native advertising sat down together to define it, they settled on six different types, or categories.
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Rise of the Content Distribution Space

Ryan Skinner

This morning’s announcement by OneSpot – a company that helps marketers place their content in front of relevant buyers through display advertising – of series A financing to the tune of $5.3 million may pale next to recent multibillion IPOs and valuations, but it says a lot about a new space opening up: content distribution.

While OneSpot and Resonance HQ (which offers a similar service) drive content engagement through banner ads, native advertising or sponsored content puts branded content straight into digital publishers’ editorial mix (often with “sponsored by” or “sponsor content” next to it). Vendors like Outbrain, Taboola, AdBlade, Sharethrough, LinkSmart, Nativo, Media Voice and AdsNative are vying for a $2 billion per year native advertising market that’s growing by as much as 20% year on year.

Add to this the plays by Facebook, LinkedIn, and Twitter that allow marketers to purchase visibility for their content in certain users’ timelines. For both Facebook and twitter, this is their only source of revenue for a growing proportion of mobile users, and it looks like Wall Street may be rewarding them for this mobile-driven success.

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Content Marketing Fortnight II: Advertising is...unclear

Ryan Skinner

Here’s your fortnightly round-up of the best of the best stuff online for marketers who think about content. (For more information about what the Content Marketing Fortnight is, see my intro from the first one. And, if you want to get this curated newsletter in your inbox every other week, send me a mail.)

Advertising is _______.
The head of the IAB comes late to the party that is advertising’s identity crisis. In all truth, I think he’s done a good job of summarizing some tectonic shifts:

Digital technologies have put the very definition of advertising and marketing up for grabs. Now, when a marketer asks for a new campaign, the response from the team is literally a question mark.

At the forefront of those shifts: An idea that advertising should be more useful and valuable. Content marketing winds are blowing down Madison Avenue.

How do VCs value content marketing
An interesting article in VentureBeat shares compelling analysis of VC investment in the content marketing space. Six investment buckets emerge. It’s worth noting that the top four relate specifically to helping brands get broader distribution for their branded content messages. (NB! I have a report coming out next week about distribution of branded content).

Branding e-singles

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