Anjali Ramachandran, Head of Innovation, on AOL/The Huffington Post’s Native Age event yesterday – and thoughts on display vs. native:
Native advertising formats are one of those things that have been bandied about by the media industry for a while now. It’s definitely one of the buzzwords of the moment but I think describing it that way belies its real value.
I was at an event this week where AOL discussed the results of a piece of research on native advertising they did over the summer, called The Native Age. They interviewed around 2000 people (clients, agency folk, media owners and bloggers) for this and the consensus was that it’s very much a part of the media landscape today and will only grow in importance going forward – in fact by 2025 it will be one of the most preferred forms of advertising due to its relevance to Generation N, or Native (whatever you call it – C, N, X, Y – broadly this just means 18-35 year-olds!) who are of course amongst the core web demographic.
There was one very good slide about the decreasing impact of display advertising over the next few years, which would be a natural outcome of the rise of native advertising. What’s interesting is that the broader media industry doesn’t seem to acknowledge that native is something to be contended with as an advertising format going forward, or at least not enough. Display advertising is still what most people mean when they refer to digital spend; Nielsen’s most recent Global AdView Pulse Lite survey (Q3 2013) compares spend in ‘digital’ (which they clarify as ‘display internet advertising’) to that across other categories of advertising without any reference to native as a format. The elephant in the room is whether display deserves to be on the up when more audience-friendly advertising formats are making their presence felt.
The very definition of ‘native’ is debated; it isn’t just ‘content embedded within editorial’, but better defined as content that sits within the platform it’s in more naturally and therefore more amenable to brand impact. Leaving TV and print aside and speaking only of digital, this could be the Buzzfeed or Quartz model, or customised solutions like Twitter’s Promoted Tweets or Facebook’s Sponsored Stories. I tend to agree with Felix Salmon from Reuters when he speaks of the superiority of native over display; he says:
Native pageviews might hard to come by — but any smart brand would absolutely prefer a single native pageview to a dozen banner-ad impressions. The difference between the two isn’t something marginal, on the order of 20% or 30%: it’s huge — a good order of magnitude, at least.
That’s because a native ad is something that consumers read, interact with, even share — it fills up their attention space, for a certain period of time, in a way that banner ads never do.
And so native advertising enables media owners to charge a considerable premium. No wonder then that 73% of the US’ Online Publishing Association’s members already offer native ad solutions, a figure which is expected to go up to 90% by the end of the year.
Further, this premium seems to be worth it: might not be quite to the order of magnitude that Felix Salmon referred to but a Sharethrough/IPG Media Labs study this year concluded that native advertising results in 9% higher brand uplift and 18% higher uplift for purchase intent, with consumers looking at native ads 53% more than display.
It is a complicated landscape because within the industry no one quite agrees on what the metrics to be tracked are; at the AOL conference the golden word ‘engagement’ was vaguely mentioned a few times – shares being the one metric I could feel somewhat at ease with.
Native advertising inherently makes sense to me because of its potential for spread and recall over clickthroughs and the more murky pageviews of banners and buttons; 77% of display ads are apparently never seen, especially those below the fold. If native ads allow marketers to reach out to their audiences in meaningful ways that go beyond standard ‘I’m here, look at me’ then that should be a fairly strong reason in itself to be adopted, or at least considered very strongly. Think of native advertising as being closer to ‘product as marketing’, which crucially implies a bigger customer focus, over the traditional, more brand-focussed ‘messaging as marketing’ model that we’re seeing slowly wither away.
Display advertising is of course easier and cheaper, especially with programmatic buys and trading desks. But they’re trickier and quite frankly more often than not incredibly interruptive (you’ve probably heard of the increased amount of bot traffic in some parts of the world, especially with blind buys that are not verified, though those are not typically issues for inventory bought through a known media agency, as our Head of Digital Strategy Steve Taylor confirms).
Whether we like it or not, these are good enough reasons to pay more attention to native advertising than we’d like because it’s very simply the direction we are heading in. It might not be ideal for every brand, as native is more about brand equity than direct sales, but I’d wager that as with any good advertising, the former will inevitably help the cause of the latter.
The time might come when native ads start to be, in effect, traded as display ads currently are; there are a few players on the periphery, like RollUp Media, that are dabbling in this interesting model.
Till then, however, have fun on the playing field.
To close, here’s a useful infographic put together by the Huffington Post: