Native advertising has become a very popular topic in the online advertising world. As publishers look for new ways to monetize their sites beyond straight ads, they’re turning to these deeply integrated advertorial executions to incorporate branded content that appeals to their visitors. Some major publishers, like Buzzfeed and Gawker, rely almost exclusively on native ad executions.

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But despite the growing popularity, native is not without controversy and confusion as publishers and advertisers look to identify what is a “native” ad execution, and what is not. An eMarketer report earlier this year earned the title “Native Advertising: Difficult to Define, but Definitely Growing,” encapsulating the eagerness of publishers and brands to invest in a tactic that lacks clear rules and boundaries. However, the most direct assault on native ads came this summer, not from a major brand or agency, but from a comedian, John Oliver.

Oliver’s rant, criticizing the insidious nature of the worst of the native ads, is largely for laughs, but there are enough kernels of truth to give marketers pause when considering native. Here’s an overview of what makes this innovative ad medium tick, how to avoid the bad, and how to identify the best native ad opportunities.

The marketer’s obligations
The heart of the matter is that consumers sometimes can’t distinguish between editorial journalism and paid advertising. Consumers are smart, yes, but the use of native requires that advertisers practice ethical advertising, employing some self-imposed rules and considerations that may not come into play with other ad types.

A large part of a publisher’s unwritten contract with its readers is that they will provide editorial content of real and consistent value in exchange for the reader’s loyal eyeballs. Because native ads transcend from the dedicated ad space to on-page real estate usually reserved for editorial content, this contractual obligation applies to the native ads as well. Ads that are out of context or devoid of genuine value turn readers off and put the publisher/user relationship in jeopardy. Even when the native ad content is appropriate, it’s incredibly important for publishers to present a clear disclosure of paid content. Readers are accustomed to source transparency in journalism. All content carries some bias but readers must know the source to understand the bias. This rule is particularly true for native ads.

Further to this point, a recent study by the IAB found that brand familiarity and trust are critical in driving consumer interest in sponsored content. Betraying that trust through deceptive presentation could be the difference between a good execution and one that damages not only the publisher, but also the brand’s reputation. Martin Sorrell, the CEO of WPP Group, the largest agency holding company in the world, and an expert on brand reputation agrees that transparency and clarity in native executions are paramount to brand value preservation.

Still, those criteria are hardly black and white, and brands can’t answer all of their questions about native by looking at transparency and trust. Organizations like the IAB have stepped in to define certain native terms and outline the considerations marketers must make while determining whether to employ a native ad unit.

Here are the IAB’s six marketplace considerations, taken from the organization’s Native Advertising Playbook (note that these guidelines mostly focus on context, clarity, and function, but do not address value to the reader).

Form — how does the ad fit with the overall page design? Is it in the viewer’s activity stream or not in-stream?
Function — does the ad function like the other elements on the page in which it is placed? Does it deliver the same type of content experience, or is it different?
Integration — how well do the ad unit’s behaviors match those of the surrounding content? Are they the same, or are new ones introduced?
Buying and targeting — is the ad placement guaranteed on a specific page, section, or site, or will it be delivered across a network of sites? What type of targeting is available?
Measurement — what metrics are typically used to judge success? Are marketers more likely to use top-of-the-funnel brand engagement metrics or bottom funnel ones?
Disclosure — how is this ad product identified as such?

Bad native
So how does a bad native ad differ from a good one? It’s often easy to identify the bad because of how hard it is to clearly identify as advertising. It fails to follow a reasonable code of ethics pertaining to disclosure and reader value and at its worst, it intentionally misleads the consumer. Good native contributes to the reader experience and is clearly delineated from the editorial content. Here are some examples of both bad and good native ads.

The Atlantic Scientology piece
Two years ago The Atlantic’s native ad for the Church of Scientology went online, then in response to significant reader backlash, it was quickly removed. The ad remains the most commonly cited example of how poorly executed native ads can create a PR firestorm.

Though the content was marked as “Sponsor Content” via a bright yellow banner above the headline, the article was blatantly favorable towards the church.

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The piece looked like an Atlantic article and was placed where a lead editorial article would usually run, but the lack of journalistic integrity in the content was obvious and out of line with the rest of the site. As the Washington Post points out, that distinct editorial voice around a controversial institution, combined with issues like a tighter comment policy, really angered readers. At the end of the day, this execution actually did more damage to the publisher than to the brand itself.

“Content-like” ads
In an attempt to keep consumers on their sites for longer periods of time, many publishers have added “recommended content” modules to the bottom of their article pages. These modules often take readers to other articles on the site similar in subject matter to the piece they just finished. But there’s a growing trend of sprinkling advertising among these recommendation modules, resulting in reader confusion.

The price of these units is either very low or they are bought on a cost-per-click basis, which attracts a disproportionate volume of bottom-of-the-barrel advertisers. In an effort to attract clicks to what are usually unattractive offers, the creative executions frequently employ nonsensical or inappropriate imagery — scantily clad women are one popular creative strategy. For some reason, President Obama is a popular image in these ads as well, likely because his image makes it seem that the ad is an important news article.

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These publishers further complicate matters by using language like “from around the web” or “promoted stories,” which confuses the consumer on whether these are pieces of content from a reputable site or just a ruse created by disreputable advertisers. If a consumer can’t tell the difference between editorial content and advertising, then it’s safe to say that they’ll have a negative reaction to the brand messaging. The publishers shouldn’t allow it, and in most cases reputable brands won’t buy it. But at this stage the rules of native advertising are self-policed, so it is up to the ad community to raise and maintain an ethical standard.

Good native
Lincoln and the L.A. Times
If you need a hint of the delicate balancing act in native advertising, all you need to do is read the headline of this re/code article: “Another Native Ad You Might Actually Want to See.

The referenced ad comes from Lincoln, and was featured prominently on the Los Angeles Times’ homepage. Consumers who clicked a banner ad were taken to a page that housed a Lincoln video featuring the singer Aloe Blacc. The ad, distributed by the native company, DistroScale, looked just like an L.A. Times article, but declared itself an advertisement in very clear text across the top. It also gave the reader an experience worth watching.

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This is a terrific example of a brand using native to distribute content that lives elsewhere. As re/code points out, consumers can watch the same video spot on Lincoln’s YouTube page, but this native execution on the Times’ homepage opened it up to a new audience.

Prudential and Entrepreneur
This is a great example of content blending in with the editorial tone and style of a publication. A teaser for Prudential’s native ad comes within the main column of content on Entrepreneur’s homepage and is clearly marked as “Sponsor Provided Content,” along with a brand logo and the explanation that it is presented by Prudential.

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After clicking through to the page where the content lives, consumers can watch a video and complete a short interactive survey to find out how much they’ll need to save to retire in the location of their choice. The teaser and page, executed by the native ad platform Nativo, combine interactive elements with contextual content and features that appeal to the publications’ audience.

Entrepreneur has run similar ads for other brands, including Northwestern Mutual. Clearly, financial institutions want to cultivate real connection with the site’s entrepreneurial audience, and are choosing to develop interactive content to raise brand awareness, deepen engagement, and generate investment leads.

Conclusion
Native advertising carries very clear benefits for publishers and advertisers. For the publishers, native represents a growing revenue opportunity, something that can help them employ talented writers and continue to produce the kind of journalism that attracts readers.

For advertisers, native is a canvas that allows for elaborate creative executions and new ways to define the brand in the digital space. Successful executions may win a brand accolades from the media and advertising communities, but most importantly, they attract consumers’ attention.

It’s this final piece — the consumer’s trust and attention — that can make native advertising a high-wire act. Getting that attention is the first part of the equation, but maintaining that trust and providing some value back to the receptive audience is the only way for brands to succeed through native.

David U. Simon is chief marketing officer at PointRoll.

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Original Article: http://www.imediaconnection.com/content/37337.asp#singleview