Native Advertising: Worth Pursuing

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.

This opportunity looks good from any angle and always has (all the way back to P&G’s investments in soap operas), but it looks particularly good for brands trying to promote themselves on mobile screens. Here, being “next to the show” was a non-starter; users don’t like banners filling up their small screens. Facebook’s and Twitter’s ability to incorporate native ads in to feeds (giving brands access to precious mobile real estate) has been a key driver for optimism from their investors.

Given these factors, native advertising has been able to achieve high click-through rates and share rates compared to other forms of online promotion. That’s why publishers themselves have been among the biggest adopters of native advertising; many use it to buy traffic via vendors like Outbrain, Taboola and Linksmart.

So how is native advertising imperfect? It’s more than imperfect. It can be downright scary. Here’s how.

When a brand puts itself in the middle of things, its failures become that much more visible. For example, AXE ran a piece of native advertising called “14 pieces of indisputable evidence that women are getting hotter” that led the overwhelming majority of viewers to proactively tag it as “Ew”, “Trashy” or just “Fail”.

Secondly, it’s new. That by itself is enough to put some marketers off. Best practices, executions, even prices, have not bedded down yet. Many publishers and marketers are still hesitating with respect to native advertising, playing "wait and see".

Lastly, and perhaps most seriously, native advertising could mislead consumers, and – in fact – it includes a perverse incentive to do just that, which I covered in my post last week. This is so pressing that the United States Federal Trade Commission held a workshop on native advertising called “Blurred Lines” in December 2013. As it turns out, the risk lies less with consumers (or even brands or publishers), but with native advertising itself: it will disappear if it deceives consumers, because the ROI will evaporate.

So how does a marketer get this right?

The report gives a number of guidelines, but I think they can be quickly glossed as what I am calling “The Skinner Test” for Native Advertising (in homage to the Apgar Test - a simple test of newborns undertaken by maternity ward nurses that has saved countless lives, as documented by Daniel Kahneman in Thinking, Fast and Slow). The Skinner Test requires that you weigh and answer four questions with a yes, no or partially/somewhat:

1.    Could the native advertisement appear on the site unlabeled as advertising without causing a backlash? It should be labeled, but if it was unlabeled would it stand out?

2.    Is it shareworthy? Is it reasonable to expect that an unmotivated reader would want to share the native advertisement, on Twitter or Facebook, for example?

3.    Does it appeal to a clearly defined sub-set of an audience? Native advertising works best against a niche.

4.    Would a reader or viewer of a native advertisement be more likely to prefer your brand? In the chase to produce loveable content, some brands risk skipping the “value to brand” objective altogether.

Like the Apgar Test, the Skinner Test requires some consideration. Four questions; answer yes (1), no (-1) or partially/somewhat (0). A final sum of zero or less is unacceptable. A sum of 1 or 2 needs improvement. A 3 or 4 means you’ve got the basics down.

Native advertising introduces new challenges for marketers, but – given the long-term value of getting better at it – it is worth pursuing. Analyst recommendation: A (slow, circumspect and eager to learn) Buy.

Do you have experience with native advertising? Let me know what you’ve experienced in the comments.

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