Could Native Adver­tis­ing be a waste of money?

“…you may not want to tell any­one but if my client has a great sto­ry to tell or some­thing inter­est­ing to say we can get it placed with jour­nal­ists. If they don’t have any­thing inter­est­ing to say they shouldn’t be mak­ing con­tent in the first place” stat­ed Kyle Mon­son, Con­tent Strate­gist and Chief Exec­u­tive of Knock Twice, a NY based PR and Con­tent Agency.

Def­i­nite­ly a con­tro­ver­sial sub­ject at Paid­Con­tent Live, an event spon­sored by GigaOM, Native Adver­tis­ing, some­times called Brand Adver­tis­ing,  was despised by Andrew Sul­li­van, Edi­tor of The Dish, the recent­ly recre­at­ed online blog that eschewed adver­tis­ing to become a total­ly paid sub­scrip­tion based web publication.

Andrew had no prob­lem con­sid­er­ing run­ning tra­di­tion­al ad units such as ban­ner ads but his opin­ion of  Native Adver­tis­ing was less than enthu­si­as­tic: “Native Adver­tis­ing is an absolute betray­al of the core prin­ci­ples of journalism”

Accord­ing to Wikipedia “Native adver­tis­ing is a web adver­tis­ing method in which the adver­tis­er attempts to attract atten­tion by pro­vid­ing valu­able con­tent in the con­text of the user’s experience.”

Lewis D’Vorkin, Chief Prod­uct Offi­cer of Forbes defines Native Adver­tis­ing as “mar­ket­ing mes­sages that are part of the nat­ur­al flow of the way a read­er or view­er uses the product”

Buz­zFeed as a Poster Child for Native Advertising

If there was ever a “poster child” for native adver­tis­ing it is BuzzFeed.com that has built its entire busi­ness on non-tra­di­tion­al ad units.  Buz­zFeed prides itself in the blend­ing of adver­tis­ing into the con­tent.  Jon Stein­berg, Pres­i­dent of Buz­zFeed talked about the desire to avoid annoy­ing ban­ner ads and to design a prod­uct that where users enjoy inter­act­ing with the advertising.

Stein­berg defines a native ad as “when you take the func­tion­al unit of how the site oper­ates and make that into an ad prod­uct.  And inside native units you post brand­ed con­tent.  So actu­al­ly brand­ed con­tent flows into native units”

Accord­ing to D’Vorkin Forbes has had much suc­cess with the uti­liza­tion of Native Adver­tis­ing.  “Over the next 3 weeks we’ll prob­a­bly have 15 or 16 simul­ta­ne­ous mar­keters who are pub­lish­ing on Forbes.com”

The Fed­er­al Trade Com­mis­sion recent­ly released revised guide­lines regard­ing the label­ing of online adver­tis­ing.  The FTC not­ed the need to update the 2000 era “Dot­Com Dis­clo­sures” to account for the rise of Social Media.

But why should advertiser’s use native adver­tis­ing instead of reg­u­lar adver­tis­ing?  What is the com­pet­i­tive advan­tage for a site to offer native options?

Mon­son believes that the advertiser’s moti­va­tion  is to “pig­gy back on the cred­i­bil­i­ty of media part­ner­ships with their audience…I think that’s true today but I don’t know if that is true forever”

Stein­berg takes native adver­tis­ing quite seri­ous­ly.  Buz­zFeed approves and man­ages all native adver­tis­ing place­ments on Buz­zFeed.  “We know what the audi­ence likes and we pre­vent brands from putting con­tent on the site that we know the audi­ence will not like”.

The results speak for them­selves.  Buz­zFeed claims to achieve 2 — 3% click rates on their ads which are priced at the same CPMs as ban­ners, yet they achieve far greater response than the mea­ger click rates from ban­ner ads.

Affil­i­ate Mar­ket­ing which gen­er­ates busi­ness through reviews has been a con­tro­ver­sial sub­ject for a num­ber of years.  A sig­nif­i­cant effect of web­sites post­ing false reviews was spe­cif­ic FTC guide­lines on the use of reviews when relat­ed to the gen­er­a­tion of sales.

Crit­i­cism has been direct­ed towards Maria Popo­va, founder and writer of Brain Pick­ings, a high­ly suc­cess­ful per­son­al blog which does not take adver­tis­ing but does earn income from affil­i­ate links to books she reads and reviews.    Maria claims to fol­low Ama­zon and the FTC’s rules com­plete­ly and even offers an alter­nate link to the pub­lic library to obtain the book.  Yet she has weath­ered crit­i­cism over her inte­gra­tion of the Ama­zon book affil­i­ate links into her book reviews.

Is Native Adver­tis­ing just anoth­er Word for Advertorial?

While some brand native adver­tis­ing as a new type of ad unit oth­ers just call it anoth­er type of adver­to­r­i­al.  Once pan­elist cit­ed Mobil Oil’s ads on the New York Times Edi­to­r­i­al page from the 1970’s which were total­ly writ­ten by Mobil exec­u­tives,  clear­ly marked as spon­sored  yet the col­umn reg­u­lar­ly appeared with­in the NY Times Edi­to­r­i­al page.   He saw lit­tle dif­fer­ence between the Mobil ads and today’s native advertising.

But can site vis­i­tors tell the difference?

BuzzFeed’s Stein­berg believes con­sumers have no prob­lem telling the dif­fer­ence between native adver­tis­ing and site con­tent.  “This whole con­fu­sion argu­ment is basi­cal­ly a con­spir­a­cy put up by peo­ple that large­ly sell banners”

As Mon­son pos­tu­lates “there is kind of dis­rup­tion hap­pen­ing.  As PR folks get more savvy to that they’ll start talk­ing about how to lever­age their pow­er to get into the con­tent well (of journalists).

image: Jon Stein­berg, Buz­zFeed, Kyle Mon­son, Knock Twice, Lewis D’Vorkin, Forbes, Felix Salmon, Reuters