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VOTE: Does native cheapen the ? WATCH: John Oliver’s Will native native rant SEE: The native shift advertising in one graphic save or kill your brand? Publishers face a decision fraught with peril or prosperity. Bad native advertising is deadly; great native advertising is extremely lucrative. How can you get it right? Is it worth the risk? How do you prevent readers from feeling hoodwinked? How do you build a team to create high-quality native content? You can’t afford to skip this chapter. innovation in magazine media 2015-2016 ADVERTISING: native 3

NATIVE

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ast year, native advertising was a fierce debate. This year, it’s a war. But native advertising’s break-neck growth in 2014 could make this one of the shortest L wars on record. Native advertising (also known as sponsored content or brand content) became a full-blown phenomenon in 2014, according to Digiday. Advertisers spent a record US$3.2 billion on native advertising, up 50 per cent over 2013. That explosive growth, which is expected to continue this year, may quickly shift the native advertising debate from “Should we?” to “How soon can we start?”. But the battle is not yet over. Editors, publishers, and ad directors are still fighting a full-fledged, take-no-prisoners war that is dividing the publishing industry like no issue since… well, there has never been an issue as divisive as native advertising. M P innovation in magazine media 2015-2016 4 ADVERTISING: native A N

Why the unprecedented acrimony? ads over the next 12 months, according to a Perhaps it is caused by the historically high survey by Editor & Publisher and software stakes: Publishers have never seen a revenue company Cxense. decline of the magnitude they’ve experienced Among companies using native ads, the over the last five years when entire categories revenue growth is also intense. For example, simply evaporated. Huffington Post native advertising revenue Native attracts significantly higher rates grew a stunning 347 per cent from Q2 2013 to than most other forms of digital advertising; Q2 2014, according to AdExchanger. The Guardian announced its Unilever “part- Despite all the sound and fury surrounding nership” as a seven-figure deal. With native native advertising, the E&P survey also found advertising being touted as one of the most great confusion: An astounding 40 per cent of promising solutions to the revenue crisis, it respondents admitted that they are still not becomes a lightning rod for critics and pro- totally sure they understand the concept of ponents alike. native ads. Perhaps the fierce disagreements are also In 2014, many studies claimed to have un- provoked by native advertising’s perceived covered data supporting the arguments of each prostitution of a core tenet of traditional jour- side with damning statistics making mince- nalism: the separation of editorial and adver- meat of the other side’s arguments. tising, otherwise known as the wall between church and state. The opponents: It’s a bad idea that also doesn’t work Hoodwinking or helping? “Publishers have talked themselves into be- Or, perhaps, the war is so bloody because na- lieving that ‘native’ is the long-sought replace- tive ads by definition are made to look like ment for dwindling ad revenue,” global content the editorial content around them, or “native” agency Story Worldwide CEO Kirk to their surroundings. Critics see that as an Cheyfritz wrote last year. attempt to fool or “hoodwink” readers into A summer 2014 survey by New York-based thinking the content is part of the magazine’s content-creation company Contently found body of work created by its own writers. Pro- that two-thirds of Americans said they would ponents, of course, see the inclusion of branded feel deceived if they discovered a piece of con- content as adding valuable information or ser- tent had been sponsored by an advertiser. vices for readers interested in the topic at hand. Slightly more than half said they don’t trust Or perhaps the fight is intensifying because any content from an advertiser, no matter the use of native ads is intensifying. Twenty what. And almost 60 per cent said that a site per cent of publishers already run native ads running sponsored content would lose cred- and 25 per cent more plan to introduce native ibility in their eyes. The Contently survey also found that two- thirds of respondents were less likely to click on a sponsored ad and only 24 per cent scrolled “I believe that through sponsored content versus 71 per cent () should not of readers who scrolled through editorial con- tent. rent their virtue An earlier 2014 study by real-time analytics out to the highest company Chartbeat was equally troublesome for native ad proponents. bidder; there is a “The truth is that while the emperor that name for that.” is native advertising might not be naked, he’s almost certainly only wearing a thong,” wrote Journalist Bob Garfield, real-time analytics company Chartbeat CEO speaking at the Assoc. of Data Driven Marketing & Advertising 2014 Conference Tony Haile about the study in Time. “On a typ- ical article, two-thirds of people exhibit more than 15 seconds of engagement, on native ad innovation in magazine media 2015-2016 M P A N ADVERTISING: native 5

content that plummets to around one-third… What this suggests is that brands are paying What IS native for — and publishers are driving traffic to — content that does not capture the attention of advertising? its visitors or achieve the goals of its creators. Simply put, native advertising has an attention Native advertising is content created by or deficit disorder.” for an advertiser that appears in the editorial Publishers who use native advertising are stream of content, using similar, if not the same, typography, headlines and style as trying to fool their readers by only subtly la- the editorial content itself, and focusing on belling native advertising content as adver- a subject closely related to the topic of the tising, native advertising critic and journalist editorial content it is paired with but graphically Bob Garfield told attendees at the Association and typographically labelled as advertising of Data Driven Marketing and Advertising or sponsored content. The controversy revolves around who produces that content (ADMA) 2014 conference. “I believe that (the advertiser, the publisher’s native content (brands) should not rent their virtue out to department, or the editorial team), how the highest bidder — there is a name for that.” obviously it is labelled as advertising, the Garfield is not alone. “We’re concerned quality of the content, and the reputation of about the audience experience,” Hearst Mag- the brand being advertised. azines UK group digital director Stephen Edwards told The Drum’s “Joy of CX” event in London last fall. “And it does undermine the brand, so we’re undergoing a massive pro- cess now, looking at how we create content invites the consumer in,” said Kraft director for brands that really rings true to our audi- of data, content and media Julie Fleischer. She ence’s expectations and our brand’s heritage told Advertising Age that Kraft’s native ads and history.” generate 1.1 billion ad impressions every year. “Can we just stop hyping native advertis- uses only native advertising and ing?” wrote JWT partner Todd Copilevitz in the company has projected US$120m in rev- Digiday. “It’s not new. It’s not the next big enue in 2014. “We have already worked with thing. It certainly is not the answer. Native more than two-thirds of the top 100 brands advertising… does nothing for the audience. across every vertical,” BuzzFeed executive vice That ultimately comes down to real people president of business operations Eric Harris making real stuff, responding to real custom- told the American Press Institute. “I do believe ers, and investing in experiences that create there is some form of native, content-driven brand preference and a propensity to buy.” advertising that will benefit every site out Pretty damning stuff, right? there. Well, not entirely. “On mobile — which is now more than 50 per cent of our traffic and growing — I think The advocates: When done correctly, native advertising is really the only monetisa- it engages readers and enriches tion strategy that’s working right now,” Harris publishers said. “Overall, BuzzFeed brand customers see First of all, native advertising, done correctly, an average lift of 55 per cent in brand affinity delivers exactly what Copilevitz wants it to do: and 88 per cent in purchase intent from our “Real people making real stuff, responding to custom social content across our Nielsen On- real customers, and investing in experiences line Brand Effect studies. that create brand preference and a propensity “We work with our clients to create engag- to buy.” ing content that communicates the attributes Take Kraft Foods, for example. and aspirations that the brand wants to be Kraft is quadrupling its return on invest- associated with,” Harris said. “Less successful ment with compared with programmes are often the result of forced or . “It (native advertising) is too much branding diluting the human ele- an invitation to engage; it’s not intrusive and ment.” M P innovation in magazine media 2015-2016 6 ADVERTISING: native A N

Even critic Garfield conceded in his largely According to US-based ad agency MDG Ad- damning comments: “Someone like an IBM has vertising, 70 per cent of internet users want a lot to say about technology.” Indeed. Which to learn about new products through content is not to say IBM shouldn’t say it, only that as opposed to through traditional advertise- they shouldn’t do so in a disguised fashion. ments. We agree. As do most native ad proponents. Native advertising critics also fail to men- So, who’s right? tion that the negative Chartbeat report ended Both sides sound very convincing. with a positive conclusion: “The story isn’t For us, results rule. all bad,” wrote Chartbeat CEO Haile. “Some Big brands are not in the habit of spending sites like Gizmodo and Refinery29 optimise billions of dollars on ads that do not work. for attention and have worked hard to ensure Consider this: Native advertising spending that their native advertising experience is in the US alone is projected to reach US$5 bil- consistent with what visitors come to their lion by 2017. That’s more than triple the US$1.4 site for. They have seen their native advertising billion spent in 2012. And that’s only in the US. perform as well as their normal content as a Even as the new kid on the revenue block, result. The lesson here is not that we should native ads nonetheless constituted one-fifth of give up on native advertising. Done right, it all digital display ads in the first half of 2014, can be a powerful way to communicate with according to marketing firm BIA/Kelsey. a larger audience than will ever visit a brand’s By the end of 2014, native ad spending was homepage.” projected to hit US$2.29 billion, an increase of Another survey of 5,000 web users by the 21 per cent over 2013, according to eMarketer. Bureau (IAB) and Edel- By comparison, desktop display advertising man Berland later in 2014 found that nearly was projected to rise one per cent in 2014. nine in ten web users accept that native ad- That growth will continue. Fully 73 per vertising is a necessary part of the future if cent of buyers surveyed by media company consumers want to continue to get free online Digital Media Review and native advertising content. Almost two thirds of consumers said tech platform TripleLift in 2014 said they had they are open to native ads that “tell a story” a native ad strategy, and more than two-thirds rather than the ads that just sell something. of them planned to increase their native ad buys in 2014. For those who know how to execute native “Successful native advertising correctly (which we’ll get to in a moment), the returns are stunning. advertising: a Time Inc reported a 40 per cent growth in profits from the digital arm of its custom pub- collaboration lishing operation in 2013 on 20 per cent higher [creating] revenue, according to The Wall Street Journal. Time Inc’s native clients included such major for the brand, the brands as Procter & Gamble, Bank of America, publisher and, most and Jaguar Land Rover. While Meredith was reporting an overall importantly, the revenue decline of 2.4 per cent in 2013, the reader, by delivering content marketing group reported a 35 per high-quality, cent increase in operating profits. relevant, credible Bad ads get bad results. Duh. Here’s our take: It’s easy to prove that some- content.” thing done poorly will fail. That is exactly what the studies damning native advertising have Media Vitals editor Rob O’Regan done. And some of what they found is true: Some innovation in magazine media 2015-2016 M P A N ADVERTISING: native 7

about who should create the content for the ads. The biggest debate is whether editorial staff should be involved. Some publishers, such as Time Inc and The Wall Street Journal, have created in-house brand content teams separate from the editori- al department. On the other hand, publishers such as Mental Floss, Dennis Interactive, and Say Media, use their editorial staff to work with advertisers to create native ad content.

Only editorial staff can guarantee high- quality, brand-consistent content Publishers who use editorial employees defend the practice as the only way to guarantee a quality editorial experience for its readers. “For us, it’s a matter of trust,” Mental Floss co-founder Mangesh Hattikudur told Digiday. “We want to provide content that we can stand behind. I hate when I click on something that looks like editorial content but is actually a native advertising campaigns are terrible bland, horribly written ad.” and others are insufficiently labelled. Those At the start-up magazine Debrief, the strat- will (and should) fail every test, including egy always called for editors to write native ad impressing readers and providing results for content, but it took some getting used to for advertisers. the staff. “It’s not something they teach you in It is also very easy to get consumers to say journalism school or that you learn early on in in a survey that they would object to being your career,” editor Hattie Brett told Digiday. hoodwinked (who wouldn’t?). “It’s really important for editorial people to But why are consumers by the hundreds of be commercially minded now. I don’t think thousands clicking on and staying with the it means you have to sacrifice what’s at the best native ads? Because, done correctly, native heart of your editorial integrity. advertising is delivering an experience that “Everything I focus on and think about is fulfils readers’ expectations. whether this is right for my readers,” Brett con- We firmly believe that native advertising tinued. “But our audience, certainly, expects can substantially help revitalise the magazine content for free and are savvy enough to know media industry and usher it into the 21st cen- that if they want that content for free, then tury — IF its practitioners (publishers, editors, someone’s got to pay for it. [This works] as long ad directors, brands, and agencies) follow very as you’re working with like-minded [people] simple but also very strict rules. who share your ideals and brand mission, and “Successful native advertising comes down you can work them to create content that is to this: a collaboration that creates value for actually valuable, rather than irritating. the brand, the publisher and, most impor- “[Journalists] need to begin to feel a bit more tantly, the reader, by delivering high-quality, comfortable with this… I’m a controversial relevant, credible content,” wrote MediaVitals editor for saying that I don’t mind working editor Rob O’Regan. on native deals, but my reasoning for that is that as long as you maintain your editorial Who should create native advertising integrity, actually it can be a good thing,” she content? said. “I’d prefer to be involved in [a deal] from Even among publishers who have decided to the beginning to help shape it.” run native advertising, there is no agreement Similarly, Dennis Interactive wants all of M P innovation in magazine media 2015-2016 8 ADVERTISING: native A N

The screen grabs above are from one of the most popular, most successful native ad campaigns ever: BuzzFeed’s “Dear Kitten” ads for cat food company Friskies. The four online native ad videos (the first launched in June 2014 ) have been viewed 30 million times as of January 2014. innovation in magazine media 2015-2016 M P A N ADVERTISING: native 9

the content on its site to have the same voice and vision. “A lot of people keep it (native ad “Like it or not, native content creation) separate — that’s missing the point,” Dennis Interactive managing direc- advertising is here tor Pete Wooton told attendees at the Digiday to stay — no longer Publishing Summit/Europe last year. “The best people to write compelling content for reserved for digital the target audience the advertiser is trying to natives and a few hit are the editors.” Over at Say Media, editors who write native traditional outlets content can also decline to work with adver- with an edgier tisers they don’t believe share the Say Media vision. digital presence.” Joshua Benton, director Editorial staff writing is Harvard-based Nieman Journalism Lab “a trust parasite” Other editors, publishers and agency people look with unmitigated horror at the practice of having editorial staff write native advertising content. wrote Benton. “Call me old school, but I don’t like the idea,” “And… there hasn’t been much sign of public Jeff Dearth, partner at DeSilva + Phillips, told resentment, much less a public revolt,” con- Digiday. “Over time, it erodes a reporter’s abil- tinued Benton. “Thousands of native ads have ity to report the ‘truth’ when it comes to the been published to a collective audience yawn. companies they’re shilling for.” “Whether you like it or not, native adver- In August, 2014, John Oliver, host of “Last tising is now inside the big news tent. Maybe Week Tonight” on HBO, compared native ad- it’s just a new iteration on the advertorials vertising to raisins in cookies: Native ads are newspapers and magazines have run for de- “ads baked into content like chocolate chips cades. Maybe it’s a scurrilous devaluation of into a cookie. Except it’s actually like raisins journalism. Either way, it’s here, and at the in a cookie — because who really wants raisins highest levels of the business. What journalists in their cookie?” can do is push for clear labelling, shame those Oliver also labelled an advertising execu- who fall short, and hope that the business sides tive’s defence of native advertising as simply of their outlets won’t turn their brands into a sharing content creation tools with advertisers non-renewable resource,” Benton concluded. “repurposed bovine waste.” Letting advertisers create content or having journalists do it is a What’s the solution? “trust parasite” for publishers, he later said. To us, the answer is a combination of both schools of thought: Make a commitment to Native advertising is here to stay hiring writers and editors of the quality that The credibility of publishers “would seem to be would make the editor jealous, but place deeply wounded if something that looks like them in an autonomous native advertising an article is up for sale,” wrote Harvard-based content creation team outside of the editorial Neiman Journalism Lab director Joshua Ben- department supervised by an editor the team ton in November. And yet it’s hard to find a respects. major publishing company that isn’t looking Time Inc, for example, moved a top-level ed- to native as an important part of their business itor, Sports Illustrated group creative director strategy in 2014, Benton wrote. “Like it or not, Chris Hercik, out of the editorial department native advertising is here to stay — no longer to lead an eight-person unit charged with reserved for digital natives (Gawker, BuzzFeed, working with advertisers, brand editors, and Quartz) and a few traditional outlets with an publishers to create native advertising cam- edgier digital presence (Forbes, The Atlantic),” paigns across the company’s 25 titles. M P innovation in magazine media 2015-2016 10 ADVERTISING: native A N

Some of the best native ads, and why they’re the best

beer-maker Leinenkugel to sponsored a kids-making- market its “Summer Shandy” inspiring-changes series as beer. The campaign was an part of the company’s “Project interactive summer events Sunlight” effort. Similarly, Skype calendar that more than half a promoted a feel-good original million readers shared on social video about a technology school media. in Uganda. BuzzFeed’s native campaigns Because Upworthy uses its also work when they involve a editorial staff to create the game along the lines of what branded content, building the BuzzFeed would do anyway. For native advertising in the distinct example, BuzzFeed partnered Upworthy style is not difficult. with “Game of Thrones” to create Native ads get a lot of A/B a native campaign featuring a testing and the headlines mimic typical BuzzFeed game: “How the Upworthy flavour. Would You Die on Game of The results are impressive by Thrones?” any measure. According to the What does BuzzFeed think company, Upworthy’s native BuzzFeed is the next big thing in native BuzzFeed is the granddaddy of advertising? “Video is a huge, native advertising, having been mega-trend, and the fact that it’s at it for four years and having being viewed on mobile at such sold more than 1,000 native a high rate and being shared at ad campaigns to more than a high rate aligns all these things two-thirds of the top 100 brands together,” said BuzzFeed CEO (among others) across almost Jonah Peretti. The company’s every vertical. “Dear Kitten” came from BuzzFeed does so well because BuzzFeed Branded Video and its clients do well with its native had more than 20 million views ads get almost three times the campaigns, seeing on average on YouTube at the end of 2014. engagement time as the site’s an amazing 88 per cent increase In just two years, BuzzFeed has editorial posts, as well as more in purchase intent and a 55 created between 1,800 and than triple the shares and page per cent lift in brand affinity, 1,900 short videos that garnered views. Often, Upworthy’s native according to BuzzFeed’s Nielsen 1.7 billion YouTube views. And it’s ad content beats out the editorial Online Brand Effect research. not like a couple of viral videos content, according to the How do they do it? “We accounted for most of those company. work with our clients to views. More than a quarter of all create engaging content that BuzzFeed videos have gotten Time Inc communicates the attributes more than a million views each. Time Inc’s partnership with and aspirations that the brand Land Rover eschewed a typical wants to be associated with, and Upworthy ad agency approach of using less successful programmes Another publisher that appears clichéd phrases and slick are often the result of forced or to have figured out the native ad images to create a memorable too much branding diluting the formula for success is Upworthy. experience related to the Land human element of the content,” The success of an Upworthy Rover. said BuzzFeed’s executive VP native ad campaign is rooted in “We wanted to create articles Eric Harris. the first step in its creation: A that weren’t about Range Rover BuzzFeed’s native campaigns sit-down meeting with Upworthy at all, [but] that aligned with a also succeed when the client staff to determine what part lifestyle our consumer would be includes interactivity because of the advertiser’s brand or interested in,” Jaguar Land Rover that interactivity encourages products would work best on the North America social sharing. For example, Upworthy site. and manager Kim BuzzFeed collaborated with In a very Upworthy way, Unilever Kyaw told The Wall Street Journal innovation in magazine media 2015-2016 M P A N ADVERTISING: native 11

Forbes One of Forbes most successful native ad campaigns features Gap International’s founder and CEO, Pontish Yeramyan, writing about running successful world-class businesses. Not only does Yeramyan write at a level commensurate with that of Forbes staffers, but she, like other Forbes native ad content partners and authors, does not mention her own company in her content other than in her own by-line.

New York Times One of the most popular and successful native ad blog “CMO”. The ad system’s algorithm not campaigns of 2014 ran in The native ad package, entitled only places the ads, but also The New York Times. Entitled “Seven Ways to Up Your Game filters out comments sections “Women Inmates,” it reviewed in Tailgating,” gave readers containing objectionable content. experiences of female prisoners high-end solutions to tailgating The ads don’t actually appear in a journalistic style in keeping challenges such as regattas and next to the comments but with NYT standards while never Formula 1 races. It worked: The above them, giving advertisers mentioning the sponsor (the campaign scored double the somewhat of a safe degree of Netflix original series “Orange number of pages views (80,000) separation. The attraction is is the New Black”). Instead, and a 50 per cent increase that people who comment are the piece was presented with in time spent (three minutes) the most engaged and thus, graphics in the signature orange compared to Land Rover’s typical arguably, the most valuable. and black colours of the popular banner ads, according to Kyaw. The Washington Post has its own Netflix series. The native ad version of this approach, giving story was clearly labelled as an advertisers the opportunity to advertisement and had a URL Medium teamed up with place native ads next to opinion with “paidpost.nytimes.com” in it. automaker BMW to create a pieces on the paper’s Op-Ed The campaign did so well that for digital mini-magazine about page. The offering is popular many days it was in Chartbeat’s design, that was sponsored by with special interest groups and top ten most-read stories on the BMW and included native ads lobbyists who get the opportunity NYT site, with more than 50 per about the auto-maker written by to state their case right next cent of the traffic coming from Medium staff writers. to what would otherwise be an social media, demonstrating the unanswered argument by their powerful share-worthy nature of Rolling Stone, Us Weekly, and opposition. the “ad”, a perfect execution of Evolve Media the native advertising concept. All three publications have instituted a controversial form of native advertising: campaigns that let marketers run native ads in the comments or opinion sections of their publications. Using a “Sponsored Comments” ad format from blog comment hosting service Disqus, advertisers can choose specific topics and readers. The format has attracted advertisers that include Ziploc, Maker Studios, and The New York Times. M P innovation in magazine media 2015-2016 12 ADVERTISING: native A N

Condé Nast also created a separate operation What kind of native content works? and utilises former Condé editors and writers The content must be extremely relevant to the as well as Condé freelancers. subject at hand, and the advertiser brand must “We’ve hired people who used to work on be a respectable organisation, according to a editorial teams across the portfolio to work on study by the Interactive Advertising Bureau our marketing solutions group so they have a (IAB) and firm Edelman very deep, intimate understanding of what the Berland. brand aesthetic and voice sound like so they Nine out of ten respondents identified rele- can write branded or promotional content that vancy as the top consideration in getting them feels very synergistic with the editorial stuff,” to read a native ad, while eight out of ten cited Condé Nast’s executive director of activation, brand familiarity and trust as well as subject marketing solutions Elizabeth Line told The matter expertise. Line. The publisher’s own brand reputation also innovation in magazine media 2015-2016 M P A N ADVERTISING: native 13

Source: mdgadvertising.com

drives native ad receptivity among readers, sites longer,” said Raman Bhatnagar, CEO with 33 per cent more willing to read native of Cxense. “Getting to the point of offering ads on the site of a reputable publication. meaningful native ad content, however, A still impressive six of ten said they’d be means using an ad server that can serve na- more likely to click on a native ad that offered tive ads in the format that matches the site, a story rather than a sales pitch. And half said truly understanding the interests and context that high-quality sponsored content could of each user, and then delivering to them the actually increase the reputation of both the content they desire.” advertiser and the publisher. “When done correctly, native ad content Another conundrum: How to best label can be a boon to publishers. It lets them do a native advertising better job of targeting paid, relevant content Another hot button in the native advertising to readers — keeping them engaged and on debate is the labelling of native content. Crit- M P innovation in magazine media 2015-2016 14 ADVERTISING: native A N

Nine companies to help ramp up your native ad services

This scaling challenge has prompted entrepreneurs to start companies dedicated solely to scaling native advertising content creation and . Here are a few:

NATIVO: Automated look- and feel of a publisher’s page, new level in an arrangement and-feel mimicking: Nativo including images, on desktop with ad network MoPub. The claims to be the ultimate and mobile devices alike. combined companies created “native advertising” scaling Sharethrough can scale ads a mobile native ad exchange 1service because it can optimise by distributing them through which leverages MoPub’s own ads in real time, on any device, its network of thousands of billion-mobile-user exchange, and, in contrast to other native sites, including Forbes and USA and redirects it from banners ad scaling services, keep a Today. Advertisers get half a to native. The new offering’s reader on the magazine’s site. loaf, though, when it comes to software development kit (SDK) Among Nativo’s clients are the sites where their ads will empowers developers with the Reader’s Digest, Entrepreneur, appear: they can block sites ability to create custom native and Wall St. Cheat Sheet. The they don’t want, but they can’t ads within the exchange tool company’s goal is to have choose sites they do want. and then advertisers can bid for the native ads it creates for Advertisers also are restricted placement. and MoPub its clients look like they came in that they are unable to are trying to entice publishers out of the publisher’s content retarget consumers who by promising them the ability management system. Nativo click on their ad. Publishers to build in powerful targeting claims readers of its native ads also get half a loaf: They get options, frequency capping, and spend an average of a minute revenue but lose the reader creative management. and a half on their content. because clicking on the ad takes consumers away from the NATIVEX: Predictive SHARETHROUGH: More publisher’s site. analytics: NativeX has automated look-and-feel created the first (and, at mimicking: Sharethrough MOPUB: Massive press time, only) native has created a technology exchange numbers: 4ad exchange for mobile game 2that can take a native ad, Twitter took its in-app advertising. NativeX break it down in real time, and promoted tweets (rather applies its unique predictive rebuild it to mimic the look 3like native ads, right?) to a analytics tool to the challenge

ics claim publishers minimise the labelling the formatting and presentation of native because some studies indicate that readers ads. Some publishers use colour screens and/ might be less likely to click on something that or labels with some variation of phrases like is clearly an ad. “sponsored by” or “brand content” or “partner For example, in a study by mobile platform content”. company Polar, consumers were found to be The US Federal Trade Commission held more likely to click on native ads that were hearings in late 2013 on native advertising, less prominently labelled. The use of a subtle focusing intently on the question of transpar- background colour resulted in an almost 60 ency and labelling, but reached no conclusions per cent higher click-through rate compared to and issued no guidelines. native ads shaded with a more dramatic colour. No one at the hearings suggested that na- Similarly, using a headline and body text style tive ads for products or services should not similar to the editorial style also resulted in be labelled. The point of contention was; how higher click-through rates (64 per cent) over prominently (the type size and placement of ads with dramatically different typography. the label and the use of colour screens). Because native advertising is so new, stan- There was also legal uncertainty over dards have not yet been created to regulate whether the author of native ad content should innovation in magazine media 2015-2016 M P A N ADVERTISING: native 15

of placing relevant native ads reducing the issues of visibility, LIVEFYRE: More look- in games. Part of the attraction style-matching, and labelling and-feel matching: A of NativeX’s tool is publishers because it’s simply so unique company called LiveFyre have the power to customise ad and unanchored to one position is also in the native ad design to blend with the design, on a page. Depending on the 8content creation race. Unlike style and user interface of the subject and the site, advertisers OneSpot, LiveFyre exclusively app. can change the type of floating uses social media feeds frames (think UFOs for a sci-fi extracting content relevant to POLAR: Scaling native site). LeadBolt also offers the advertiser’s services or advertising production: unique native frames and products. After gathering the In addition to scaling interstitial frames that match material, LiveFyre then puts native ads across sites the style and typography of the the content in a native ad or 5and platforms, advertisers and site or app. even a microsite. Livefyre also publishers face the challenge offers either automated or of creating the ads themselves. ONESPOT: Look-and-feel human intervention to remove Polar aims to help publishers by matching plus targeting: objectionable material. LiveFyre streamlining native ad creation Where some services can can also target specific sites and reducing the production mimic a look and feel, and where advertisers want their costs. Unlike the other services, 7others can place ads, OneSpot ads to appear. Polar only helps create the ads, does both, and more. What not sell them. Polar counts The sets OneSpot apart is its ability OPENX: In-stream Washington Post, Torstar, and to take the advertiser’s own ads on a network: Source Media among its clients. content or positive reviews of OpenX has also their products and use them to created a mobile native LEADBOLT: Imagination create ads to run on publishers’ 9ad exchange, promising and creativity: Ad sites. And then, because “a seamless multiscreen network LeadBolt OneSpot buys ads through experience at scale.” The brings imagination exchanges, it can guarantee company is offering both rich 6and creativity to the native where the ads will appear (if not media ads and content stream ad scaling challenge. The precisely what page). Another ads that are “a part of the company’s most delightful OneSpot advantage is its ability content flow” and, thus, “won’t offering is called “Floating to allow marketers to retarget jar the user.” Ads.” The ads literally “float” people who click on an ad. across a screen, drastically

be identified. More intriguingly, there was de- Meredith uses editorial style headlines on bate over whether native ads not promoting a its native ads and includes them in the stream product or service but instead just providing of editorial content but delineates them as sponsorship for content of relevance to the advertising with a grey screen and the label advertiser’s customers needed to be labelled. “Provided By” plus the brand’s name. “From a legal or regulatory standpoint Forbes includes a sentence at the beginning there’s a reasonable debate about whether of the article identifying it as “Brand Voice” there needs to be disclosure if the content content and a link to learn more about native isn’t actually promoting a product or service,” advertising. advertising lawyer and partner at Los Ange- BuzzFeed labels its native ads on the home les law firm Manatt, Phelps & Phillips Linda page as well as on the ad page by inserting the Goldstein told The Wall Street Journal. brand’s name and the label “Brand Publisher” Practices vary widely. Quartz, for example, at the top. In mid-2014, BuzzFeed de-empha- places the brand logo at the top of the ad plus sised the labelling, replacing “presented by” a “sponsored content” subhead at the top of with “promoted by” and “brand publisher.” the article as well as a disclaimer at the end The yellow screen that had wrapped around of the piece. a native ad was removed, replaced by a yel- M P innovation in magazine media 2015-2016 16 ADVERTISING: native A N

low screen only over the initial label (“brand simply on clicks but on the time and attention publisher”). they accrue might just be the lifeline (quality publishers) have been looking for. What’s the model? “Time is a rare, scarce resource on the web Native advertising is so new and has grown so and we spend more of our time with good fast that the industry has yet to find pricing content than with bad,” Haile said. “Valuing models that everyone can agree on. advertising on time and attention means that The Polar study mentioned earlier found publishers of great content can charge more that the flat-fee sponsorship model is the most for their ads than those who create link bait. popular, used by 41 per cent of the publishing “If the amount of money you can charge is companies surveyed. The second most popular directly correlated with the quality of content model is the CPM or click-through model used on the page, then media sites are financially by 18 per cent of the respondents in the Polar incentivised to create better quality content,” study. Haile wrote. “In the seeds of the ‘Attention Some companies are beginning to push an Web’ we might finally have found a sustainable “attention web” or “time engagement” pricing business model for quality on the web.” model. Real-time analytics company Chart- beat CEO Tony Haile is leading the charge for If native advertising is so unique, how the new pricing approach. In a bylined piece in can it possibly be scaled? Time magazine, Haile wrote: “Valuing ads not By its very nature, native ad campaigns must be unique to the environment in which they are placed. The pieces must be related to the content around them and reflective of the magazine brand’s voice, style, and typography. So, how can that kind of uniqueness be scaled across multiple magazine brands? Several solutions popped up in 2014, some involving integrating previously published 475 content that matched the brands’ style, con- You are 475 times more tent, and standards, while other solutions likely to survive a plane involved technological wizardry. crash than you are to Many advertisers find it difficult and expen- click on a banner ad, sive to continually publish the kind of unique, according to research by fresh content a native ad campaign requires. advertising consultancy firm Solve Media innovation in magazine media 2015-2016 M P A N ADVERTISING: native 17

Some of those brands have their own content trustworthy source that enhances their expe- or they own the rights to content that has been rience and knowledge as well as perhaps giving published elsewhere but, until now, could not them something of value (e.g., a coupon). be published in a native campaign. If that is the case, they are happy with native Last year, Forbes gave their native adver- advertising and will click on another one… and tising partners permission to use previously another and another. The IAB study authors published content in native ads. Forbes native state the case simply: “Tell stories, share your ad teams are working with the brands to iden- expertise, but resist the urge to sell.” tify and vet content that could be included in Violate the reader’s trust, however, and Forbes campaigns due to its relevance to the there’s hell to pay. Forbes readers. “Once abused, consumer confidence can If a system can be created to share native be severely knocked,” wrote DrumWorks MD advertising in a way that is consistent with and IAB Content Marketing Council mem- each publication’s brand, publishers are ready ber Justin Pearse. “I’d even argue that native/ to jump on the bandwagon: Three-quarters content marketing is more at risk [than all of publishers participating in the previously other forms of digital marketing]. Consumers mentioned E&P survey said that if native ads today are far more forgiving of blurred lines can be shared in the same way as other digital between editorial and commercial content. ads and content, they might be interested in But the lines must be there, clearly marked partnering with other publishers to create con- out. What people will never forgive is being tent/ad networks rather than have no network hoodwinked, lied to or deceived.” or working with third parties like Google. When consumers feel hoodwinked, lied to or deceived, they don’t take it lying down. What about results? Cloud contact centre New Voice Media found Done right, native advertising works spectac- disturbing results of bad consumer experienc- ularly — high traffic, high engagement, high es in a late 2013 study: CPMs. Do it wrong, and you’ve got a cockup of • 58 per cent of consumers never use that enormous proportion. company again Readers are increasingly ready and will- • Half tell their friends and colleagues not to ing to give native ads a chance. A 2014 Share- use that business through study found readers much more open • A third exact revenge on social media with to clicking on native ads than banner ads (by a bad review or complaint 25 per cent) and found readers do not have the • With 25-34 year olds, that social media re- same “banner blindness” that afflicts banner venge behaviour soars to nearly 60 per cent ads, saying they noticed native ads 53 per cent more often. Measuring results Trusting readers will give publishers the As with pricing and labelling, there is no con- benefit of the doubt. They expect relevant, sensus on how to measure native advertising high-quality content from an authoritative, campaign results. M P innovation in magazine media 2015-2016 18 ADVERTISING: native A N

Engagement (time spent) is the most fre- plosive growth of native advertising use and quently used measure, but still by only 57 per revenue, we will see: cent of publishers surveyed by the Online Publishers Association in 2014... The second 1. Increased standardisation of native adver- most frequent measure was traffic (43 per tising formats. Three of the six formats in cent), followed by social media (33 per cent), the IAB “Native Ad Playbook” (Dec. 2013) comments (19 per cent), and cost per view or — content recommendation, in-feed, and click (10 per cent). in-ad — are becoming standard. There are Contently did a survey of more than 300 still too many, but 2015 should see a paring agencies and found “a crisis of confidence.” down as publishers discover what works Of those surveyed, 91 per cent were not “very and what doesn’t. confident” in the metrics they use to measure 2. A battle with brands over content creation native advertising effectiveness. and placement as brands are tempted to The agencies said that page views and become publishers in their own right. To unique visitors were the top measurements (69 preserve our relationship with advertis- per cent) followed closely by social likes and ers, we must establish ourselves as experts shares (65 per cent). The next three measure- in story-telling and marketing, and help ments were more than 20 percentage points them both create the content and run the lower, with time on site (43 per cent), followers campaigns on our sites as well as on other (43 per cent), and conversions and sales (43 per appropriate venues. cent). Incredibly, seven per cent admitted to 3. The placement of native advertising will be measuring nothing. done more and more through programmatic If they could measure what they want to means (see our chapter on programmatic measure, marketers would choose: attention advertising). Global market intelligence paid (60 per cent), impact on brand perception firm IDC projected that by 2018 native pro- (55 per cent), effect on awareness (49 per cent), grammatic will exceed US$5 billion, nearly effect on sales (48 per cent), and purchase in- matching programmatic television adver- tent (42 per cent). tising. The ease, laser-targeting, and mea- surability inherent in programmatic make So what’s next? its use with native advertising inevitable. In 2015, in addition to the aforementioned ex- As a result, publishers must gear up during 2015 for programmatic, hiring experts and/ or training their staff to be ready to take ad- vantage of this next step in the evolution of Five principles advertising. 4. Big data will be put to use in native adver- of great native tising to improve its relevance and measure advertising: results. Now, first and third party data will be put into play in native advertising plan- Integrity, ning and pivoting. Transparency, Bottom line: If you are not using native Proportionality, advertising yet, get your act together and get Relevancy, and started. If you are, now is the time to continue train- Appropriate ing your ad staff, hiring top-notch writers and placement. editors, educating your advertisers, pitching, launching and measuring campaigns, and Assoc. of Online Publishers & Vibrant monitoring the leaders in the field to stay on Media 2014 Roundtable of leading UK top of best practices. publishers No pressure: It’s just your future that’s at stake. innovation in magazine media 2015-2016 M P A N ADVERTISING: native 19

The five principals of great native advertisements

Native advertising, unlike banner advertising placed in the market?” which is loaded with formats and metrics, is like A group of publishing executives, assembled by the frontier: Very little order and no sheriffs! the Association of Online Publishers and native “It can’t just be the Wild West with ranges of advertising firm Vibrant Media spent a day trying inconsistencies,” digital agency LiquidThread to cobble together an outline of the essential president Brent Poer told Ad Age. “Then it just principles of responsible native advertising. becomes an internal version of the Hunger Games The group was able to agree on five essential — who will change more to win the dollars that are principles:

Integrity Dennis Publishing effort. The resulting within the content is a The group did not head of digital sales guideline was mostly key part of a native ad call for editorial Gary Rayneau told common sense: Don’t being relevant to what creation of native Vibrant Media. “If we overdo it. the user is looking 1content, nor for the get it right, it benefits “Clearly any site that at and doing at that complete separation everyone: It benefits completely bombards time,” said Condé of editorial and publishers by keeping the user with Nast programmatic advertising, but for them commercially commercial messages sales director collaboration between viable; it benefits users is doing it at an Malcolm Attwells. the two departments as we can create inappropriate level,” “Native advertising to ensure the content interesting content.” said Immediate Media needs to be relevant meets the content commercial director within the context standards of the Transparency Duncan Tickell. of the content. The brand. The editors are Clear labelling “It depends on the placement has to guardians of the brand is not only the readers, their age make sense.” values that create right thing to and the media title, consumer trust. The 2do, it is also the smart but if publishers Appropriate editorial department thing to do. get the proportion placement should be involved Labelling must be done wrong it can have a Native ads must from the beginning to in a way that makes devastating impact on not only be ensure that marketing it clear to readers their relationship with 5relevant, well-labelled, partners share the that native ads are their readers,” said and appropriately title’s brand values commercial messages. AOL head of planning, placed, but they throughout to ensure Consumers should insight and research must also match the that the content also be offered the Steve Payne. form and function of matches the quality opportunity to learn the title as well as level of the editorial more about native Relevancy function well on every content around it. advertising. To be possible device used “Working on a native “If you aren’t overt and compelling by consumers. deal with someone you aren’t transparent, and successful “On mobile phones, who doesn’t share your you will get negative 4(and not irritate consumers want title’s brand values is user feedback” The readers), the content something that is going to antagonise Guardian’s head of native advertising relevant to that phone, readers and drive of investment Rob must be relevant to at that signal, at that them away, which is Smallwood said. the consumer, the time,” said media not in the publication’s “Actually, our initial surrounding content, agency network interest or in the testing shows that and the brand. The MEC’s managing advertiser’s interest,” labelling ads as ads ads must enhance the director Justin Taylor. Debrief editor Hattie improves response consumer’s editorial ”On tablets, they Brett said. rates.” experience. want something that’s “Done correctly, And it’s not just the more in-depth. On the done with integrity, Proportionality content, but it is desktop, they want to native advertising is This guideline also the placement be able to follow links a really positive thing was the group’s that contributes to to more information.” for the industry,” 3 least successful relevancy. “How it sits