The Native Advertising Advantage: Build Authentic Content that Revolutionizes Digital Marketing and Drives Revenue Growth

The Native Advertising Advantage: Build Authentic Content that Revolutionizes Digital Marketing and Drives Revenue Growth

by Mike Smith

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Overview

An industry insider reveals the next generation of marketing—and provides the insight you need to use it to beat the competition

One of the hottest forms of advertising, native advertising is an extremely effective way to reach customers. Produced by marketers and featured alongside the main content, native advertising breaks down the traditional barrier between advertising and editorial. Industry insider and Hearst ad executive Mike Smith believes that native is not only here to stay, but is the future of marketing.

The Native Advertising Advantage reveals why native advertising is an effective tool in any company’s digital marketing strategy—and how to use it to build new revenue streams. Smith explains how native ads are blending in with their surrounding content to blur the traditional “church/state” divide of editorial versus advertising. He shows how publications as diverse as BuzzFeed, Forbes, Cosmopolitan, and The New York Times are attracting readers who are just as interested in the content of these native ads as they are of journalist-written editorial content

Gleaned from dozens of interviews with advertisers, marketers, software developers, journalists, and publishers, the book reveals how native advertising fits into the marketing strategies and advertising budgets of successful companies such as GE, Intel, HP, Red Bull, ConAgra Foods, Pepsi, and others.

Product Details

ISBN-13: 9781259835681
Publisher: McGraw-Hill Professional Publishing
Publication date: 05/23/2017
Edition description: Student
Pages: 224
Sales rank: 629,005
Product dimensions: 5.90(w) x 8.50(h) x 1.00(d)

About the Author

Mike Smith is Senior Vice-President of Revenue Platforms and Operations for Hearst Magazines Digital Media and Senior Vice-President of Advertising Platforms for Hearst's Core Audience. He is responsible for digital media revenue platforms, including the company’s programmatic sales engineering efforts through the Hearst Exchange, which is the company’s auction system for selling advertising on its hundreds of websites. His previous book Targeted was named one of the “Top 6 Business Books to Read” by Inc.com and won the Axiom Gold Metal Award for best advertising/marketing book for 2015.

Read an Excerpt

The Native Advertising Advantage

Build Authentic Content that Revolutionizes Digital Marketing and Drives Revenue Growth


By Mike Smith

McGraw-Hill Education

Copyright © 2017 Michael Smith
All rights reserved.
ISBN: 978-1-259-83569-8



CHAPTER 1

WHAT IS NATIVE ADVERTISING?


The first order of business in this book is to describe what native advertising is — and what it isn't. This is critical, because there's still considerable confusion regarding terminology. Native advertising is primarily thought of in digital form, though it's also seen in traditional print magazines and newspapers and even on TV. But online is where it's used most often.

In the earlier days of print journalism — which was not so long ago, because the world is changing at a furious pace — there was a "Chinese wall" between the editorial side of journalism and the advertising side. What that meant was that the journalists who were writing for the publication — whether it was a newspaper, magazine, or any other type of daily, weekly, monthly, or any other periodical publication — wrote articles about their subjects while, separately, salespeople sold advertising in those publications. The idea behind that Chinese wall was that "never the twain should meet." In other words, if there was a scandal brewing at XYZ company and a journalist at The Daily was writing about it, the fact that XYZ had bought a full-page ad from The Daily shouldn't affect what the journalist wrote about that scandal.

That Chinese wall still exists, but native advertising has made it harder to see. That's not just my opinion, though; take a look at some of the definitions I heard while researching this book:

• "Native advertising is basically content that is made to seem as though it is written by a journalist, but is not. It is written by a marketer or an advertiser and is displayed on a website as though it were, in fact, an editorial or a story."

• "Some people think native advertising means advertorials. Other people think it starts with advertorials, but it has a much wider range. Any ad that fits into the form and function of an application [is] a native ad."

• "The definition of native itself is so nebulous. It's not only sponsored content." Facebook, Twitter, Medium, Spotify, and many other online media companies have "figured out a way to include a brand message as a part of the content experience, and that experience is not always a sponsored content experience."

• "In some ways, I don't even know what native advertising is ... and in other ways, it's a very old-school idea." This person felt that native ads were just the latest version of old-fashioned advertorials or matt features (articles written by PR folks to fit the dimensions of the newspapers the PR folks were targeting for those articles; in that way the newspaper editors could simply insert those features without having to edit or crop them in any way). "The execution is new, but frankly, a lot of my experiences as a consumer of native advertising have been very frustrating."

• "We define native as anything that looks and feels like it's a part of the page. It doesn't sit off to the side like a little billboard, like banner ads do."


I could list more, but you get the idea: everyone interviewed for this book had a definition of native advertising . . . but those definitions varied a lot.

Some people credit Fred Wilson for the first use of the term "native" in the context of advertising, in a speech he gave at an Online Media, Marketing, and Advertising conference. Wilson cofounded Union Square Ventures, a New York City-based venture capital firm that has invested in Twitter, Tumblr, Foursquare, and Kickstarter, among others. Wilson said something to the effect of "Companies are building their monetization strategies in a way that's native to their platform."

Wilson didn't specifically use the term "native advertising"; Dan Greenberg, founder and CEO of Sharethrough, is generally credited with "evangelizing" the concept. When interviewed for this book, Greenberg said, "For years, the way we described our company had been a mouthful: 'technology that powers noninterruptive, content-driven, integrated, respectful, choice-based ads that fit in.' When I heard Fred say the word 'native,' I e-mailed our executive staff that day and told them native advertising is the phrase we've been looking for. The next day, we aligned everything we did around the concept of native advertising. We bought the domain name, nativeadvertising.com, and our team has been publishing content there for years."

Greenberg went on to say that Sharethrough and BuzzFeed were the major players back in the early days of native. (I'll cover more about the origin, history, and growth of native advertising in Chapter 2, but I mention this here because it's relevant to getting to a universal definition of what native advertising really is.) BuzzFeed was the publisher that was publishing many of the early native ads, and Sharethrough was the ad tech company that powered native advertising for other publishers.

So what led to Sharethrough's definition? Greenberg explained, "Native advertising does not just mean sponsored (promoted) posts, though in 2013/2014, that's what people thought. Our original definition of native advertising was 'a form of paid media that follows the form and function of the site or user experience that it lives within.' I've been saying that phrase for years now, and was happy to see the Interactive Advertising Bureau adopt that as the guiding principle in the official native advertising guidelines that they published in 2013.'"

In case you're wondering what the difference is between native advertising and sponsored posts, here's an explanation that should make things a bit clearer: "[Sponsored] posts ... contain links that point to the home page or specific product pages of the website of the sponsor for which the blogger receives compensation in the form of money, products, services or in other ways."

Now that I had at least something basic to go on, I wanted to know more. Greenberg cochaired a task force that worked to codify what native advertising is; this task force operated under the auspices of the Interactive Advertising Bureau (IAB). So even before interviewing Greenberg for this book, I looked at the work the IAB did in this regard.

First, a little background. The IAB was founded in 1996 as a trade industry association that currently comprises more than 650 media and technology companies that sell most of the online advertising in the United States (86%, to be specific, according to the IAB website). In 2013, the IAB convened the task force that Greenberg was part of to clarify what native advertising is and to provide some guidelines on how native ads should be presented and disclosed. (FYI, we'll address disclosure guidelines further in Chapter 4, which covers ethics and legal issues as well as more regulated guidelines from the FTC, the United States' Federal Trade Commission.) The IAB task force included more than 100 companies. You can read the entire 19-page document yourself, but the gist of it is that the IAB identified and defined six major types of native advertising:

1. In-feed ad units. These are ads located within the website's normal content well. They may have been written by or in partnership with the website publisher's team. They are designed to match the surrounding stories. Here are a few examples of BuzzFeed's in-feed ad unit's sponsored articles:

• "9 Things That Have Changed in The Last 20 Years" (Brand: Motorola, published April 1, 2014)

• "13 Things You'll Miss Most from Your Twenties" (Brand: TV Land, published March 16, 2015)

• "10 Feelings All NYC Girls Have at Least Once" (Brand: HBO, published January 6, 2014)

• "15 Bands That Probably Wouldn't Exist Without Led Zeppelin" (Brand: Spotify, published December 30, 2013)


2. Search ads. These are ads usually found above the organic search results. They look just like the other results on the page, except they are identified as ads. For example, Google places the word "ad" adjacent to the web address of the paid post.

3. Recommendation widgets. Although the ad is part of the site's content, it doesn't look like the editorial content. It is delivered through a content link or widget. It is generally recognizable by words like "you might also like" or "elsewhere from around the web" or "you may have missed" or "recommended for you." A typical recommendation widget can be found on the right-hand side and/or bottom of articles on publisher websites under the heading "You May Like." Taboola and Outbrain are two of the major providers of this type of native advertisement.

4. Promoted listings. Websites that carry these ads are typically not content based; usually they are e-commerce sites. Promoted listings appear identical to the products or services offered on that site. Amazon, for example, labels its promoted listings as "Sponsored Products Related to This Item"; they may appear on Amazon search results, related product detail pages, and elsewhere on the site. Shoppers click through to product pages where they can find information about (and buy) those products.

5. In-ad (IAB standard). This "is an ad in a standard IAB container [for example, 300 x 250 or 300 x 600 pixel banners and other display ads] that contains contextually relevant content [information related to the content on that page] within the ad, links to an offsite page, has been sold with a guaranteed placement, and is measured on brand metrics (interaction and brand lift)." For example, an ad promoting Target on allrecipes.com might alert viewers that all the ingredients can be found at their neighborhood store.

6. Custom/can't be contained. These are native ads that don't fit in the other categories because they are designed specifically for the particular platform on which they appear. "Examples include Spotify and Pandora's sponsored playlists, as well as Flipboard's signature native ads."


The IAB Task Force provides a framework for evaluating whether something conforms to one of these six categories. And it provides examples from a variety of websites, including (of course) Facebook, Google, YouTube, Twitter, LinkedIn, BuzzFeed, The Huffington Post, Instagram, Amazon, and others. My favorite comment in the entire report is in the Introduction: " 'What is native advertising?' is a question that the industry has, almost frantically, been looking to answer since the term was first coined." And the report's most telling point is that "to a large extent, native is in the eye of the beholder," with the caveat of "depending on where one sits in the ecosystem and the strategic and media objectives of the marketer." It does, however, offer a definition:

[P] aid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behavior that the viewer simply feels that they belong.


However, I'm still not sure that definition suffices.

WHAT'S THE DIFFERENCE BETWEEN "NATIVE ADVERTISING" AND "SPONSORED POSTS"?

As mentioned, Dan Greenberg of Sharethrough was one of the people who worked with Susan Borst, senior director of industry initiatives for the IAB, and others at the IAB on the organization's white paper that describes what native advertising is. As he put it, "I was happy to see the industry come together and put a flag in the ground around what is and what is not native."

Greenberg and his cofounder Rob Fan started Sharethrough in 2008 with the premise that "ads should fit in." The team looked at a variety of advertisements that were appearing on different sites and recognized that the highest-performing ads were the ones that fit in naturally. Early native ad formats included promoted videos on YouTube, promoted tweets on Twitter, and in-feed ads on Facebook, among other types. Greenberg believes Sharethrough was the first company to tie all the various types of ads together because, as he put it, "We realized that these weren't 10 different, disparate ad strategies, but in fact, a theme had emerged, which was that all these ad formats are native to the platform that they live on." In the end, Greenberg believes that, while there may be differences among the six types of native ads, they share the same basic characteristics. It's one format, one form of native ad, thus, only ads that are presented in media formats and are bought and sold as media and fit the form and function of the site or user experience and are created by the publisher site can be considered native ads.

Greenberg says a promoted tweet (a Twitter post advertising a third party's product or service) or a promoted playlist on Spotify are, in fact, native ads because they match the form and function of the sites and advertisers pay to promote them. Similarly, an in-feed ad that clicks to a video is native and not a sponsored post.

According to Greenberg, a sponsored post is a piece of content that becomes an ad when some entity pays to promote that post; it becomes a native ad only if it meets all the requirements of a native ad format.

For example, he explained, if you pay Forbes to create a post, but then don't actually promote it anywhere, it's not really an ad. It's as if Forbes was acting as a creative advertising agency. The ad exists, but you never actually did anything with it, so it's not really an ad until you pay to promote it. Once you pay Forbes to promote it on its site, it's a native ad. The creation of the sponsored post is not the ad; it's the promotion of the ad. And the magic of native advertising is that the advertiser's story doesn't get relegated to the corner of the page, and therefore perceived as a foreign object, but rather, their story gets presented naturally in the feed of other content, and is treated with the same attention and respect as the surrounding stories.


WHAT'S THE DIFFERENCE BETWEEN "NATIVE ADVERTISING," "CONTENT MARKETING," AND "BRANDED CONTENT"?

There is also confusion pertaining to the name "native advertising." Is it the same as "sponsored content"? As "branded content"? As "content marketing"? To answer those questions, I first wanted to see how Wikipedia defined these terms. Here's what I found:

"Native advertising is ... disguised advertising ... that matches the form and function of the platform upon which it appears. In many cases, ... an article or video."

"Branded content is a form of advertising that uses the generating of content as a way to promote the particular brand which funds the content's production. ... BMW sponsored "The Hire," a series of short films ... BMW was the real star."

Sponsored content is not yet defined on Wikipedia. The term redirects you to "native advertising."

Content marketing "is ... the creation and sharing of media and publishing content in order to acquire and retain customers ... news, video, white papers, ebooks, infographics, case studies, how-to guides, question and answer articles, photos, etc."


What then of the difference between branded content and native advertising? Several of the people interviewed for this book felt that native advertising refers specifically to the placement of the material, not the material itself, which is actually the branded content.

On the other hand, Todd Haskell, SVP and chief revenue officer for Hearst Magazines Digital Media, sees the terms as interchangeable, but prefers the term branded content to native advertising because "branded content is trying to deliver an advertiser's message and key value proposition in a manner that is consistent with [the publisher's] own journalistic standards. [With branded content], we use everything we know about how to engage with millions of readers every month, and we leverage those on behalf of an advertiser."

Meredith Levien, the EVP and chief revenue officer of The New York Times Company, sees it differently: "Native advertising is just advertising that follows the form of the surrounding environment and uses the basic capabilities of the surrounding environment, the same way other providers of content use those capabilities. ... Branded content is marketers' storytelling or other forms of expression that go beyond traditional campaign advertising: they're two different things. Native advertising is a format, and branded content is one of the things that can go into that format."

Adam Shlachter, president, VM1 at Zenith Media, agrees that branded content is a form of native advertising. To him, native advertising is advertising that fits into a unique format specific to the environment or the platform on which it is placed. It could be a "promoted offer that you would find in something like Foursquare ... or [a] personalized search result that you find in Google"; "it can be a mobile [app] for video ... [or a] piece of content ... that runs inside Forbes platform. The way I see it, native advertising [is] something that's created to reach people in a distinct way that's unique to the platform [on which] they're consuming it."

Steve Piluso, an advertising executive who has held positions in several global media and digital marketing communications companies, perhaps summed up these perspectives when he said, "There are so many different definitions of what this stuff is, and so many points of view ... if you show something to 10 people, you'll get an equal distribution of people who refer to it as 'native advertising' and people who refer to it as 'brand' or 'branded content.' I think that's where a lot of the confusion comes in."


(Continues...)

Excerpted from The Native Advertising Advantage by Mike Smith. Copyright © 2017 Michael Smith. Excerpted by permission of McGraw-Hill Education.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents

Foreword vii

Introduction xi

Chapter 1 What is Native Advertising? 1

Chapter 2 Native Advertising: Where It Began, Where It's Going 25

Chapter 3 When is Native Advertising Ok, And When Is It Not Ok? 51

Chapter 4 The Essentials You Need to Know About Native Advertising Disclosures, Regulatory Compliance, and Potential Legal Issues 67

Chapter 5 How Journalists Are Adapting 91

Chapter 6 A Look at Brands That Have Gone Native 105

Chapter 7 Consumer Reaction 151

Chapter 8 Best Practices and Recommendations 163

Acknowledgments 185

Notes 189

Index 195

Customer Reviews