Call it the summer of the native ad.
The past few months have brought unending news about the format. In July it was reported that The New York Times saw a boost in digital revenue that countered its sinking print ad sales, largely thanks to native. “We are particularly encouraged by the growing success of Paid Posts,” the company’s chief executive (CEO) said. Meanwhile, Yahoo last week began distributing its native ads outside Yahoo-owned sites. Some have speculated it could be a first step toward becoming a native ad network.
Not all of the press was good. In June, Contently published the results of a survey that found 66 percent of consumers have felt “deceived” when they realized an article or video was brand-sponsored. More than 50 percent said they don’t trust sponsored content. Then in August, British political satirist John Oliver loudly expressed his distaste for native ads. His video generated more than 1.9 million YouTube views.
And yet, one could argue that Oliver’s rant wasn’t enough to overshadow the native ads themselves because this summer also delivered some of the most noteworthy sponsored posts we’ve seen yet. Netflix’s New York Times piece on women inmates, ultimately promoting the series Orange Is the New Black, had editors and journalists singing its praises. General Electric’s Supercompressor story commemorating the 45th anniversary of the moon landing made mainstream news, and thanks to the ad GE’s special edition “moon-landing” boots sold out in seven minutes.
For marketers operating in raucous periods of digital history such as this one, it can be hard to keep the focus on their campaigns. Still, native ads hold a lot of appeal – enough for brands to disregard some of the criticism. According to a recent study released by digital marketing consultancy 614 Group, 69 percent of marketers consider native advertising “interesting and valuable.” What’s more, 22 percent see it as “the future of digital advertising.”
As Oliver himself said in his public tongue-lashing, because consumers rarely click on banner ads, publishers “have struggled to attract advertisers.” Advertisers, in turn, must do what they can to reach their audience online. Increasingly, that means creating useful and engaging digital content that happens to be underwritten by a brand. What we’re currently seeing emerge from publisher-side branded content studios is high-quality branded journalism. And it’s only going to get better.
That said, the days when all brands are happy with their native ad campaigns are still a long way off. The 614 Group study found 54 percent of marketers aren’t satisfied with their current strategies. They face challenges that extend beyond the media hullabaloo. Take distribution: Among those marketers polled, 87 percent use owned media as a distribution channel, 80 percent use social networks, and 76 use organic search. Just 24 percent are currently using publisher-side native offerings, while only 18 percent are using the content discovery and recommendation platforms that could amplify a native ad and extend its reach.
Transparency, too, is a point of contention among both consumers and brands. Recently Yahoo, BuzzFeed, and The New York Times all altered the look of their sponsored posts in a way that some believe makes their native ads less obvious to consumers. Some are concerned that the changes are misleading. “Whether or not people enjoy a piece of content, I think they should understand if it’s an ad, not just be warned,” a journalist with TechCrunch said.
Another big issue is scale. Because native ads are, by definition, contextually relevant and deeply integrated into the publisher site, advertisers can be stuck creating a custom placement for each and every ad buy. That’s costly and time-consuming, and it doesn’t easily fit into the media buying process and mindset most brands adopted long ago.
After a summer like the one we’ve had, though, one has to wonder whether these pain points are as bad as all that. Yes, brands have been slow to adopt a paid distribution model for native ads, but will that last? Companies like Taboola, Outbrain, Nativo, and others are offering more tools than ever to get native ads the eyeballs brands seek. In the meantime, those who are seeing native ads are highly engaged. ClickZ reports native ads can have a click-through rate 15 to 45 times higher than display ads, and according to Yahoo CEO Marissa Mayer, those who view native ads are 3.6 times more likely to perform a branded search than viewers of banners.
Publisher-specific native ads may be tough to build, but isn’t it worth the trouble? It’s the bespoke, one-of-a-kind native ads – the Netflix-on-Wired campaigns of the world – that are the most memorable. Perhaps it’s worth spending more to present something no one is likely to forget.
When all was said and done, the summer of native ads may just have left the format looking stronger than ever – and the critics eating crow.