The rise of native advertising

By Leo D’Angelo Fisher
Sound Alliance’s Neil Ackland and Tim Duggan: native advertising saved his business, says Duggan.

For those who swear by the adage that there is nothing new under the sun, the controversy surrounding native advertising will prompt a wry smile. Native advertising is purportedly a creature of the internet, but that’s a view open to some scrutiny. Perhaps its most notorious feature, as far as purists are concerned at least, is that native advertising, editorial in style and content, is designed to blend into its surrounds.

The critics might pause to consider that the newspapers of the 18th and 19th centuries typically carried classified advertisements on their front pages that were indistinguishable from editorial content, be it news of a murder or the latest shipping arrivals.

Strictly speaking, there is nothing new about native advertising, although the name for the concept almost certainly is. In time, the antecedents of native advertising became unfashionable and unnecessary – but by no means did they disappear altogether.

Newspapers evolved and by the 20th century newspapers and magazines funded by generous streams of advertising revenue – the oft-quoted “rivers of gold” – made it possible to fund large teams of journalists whose journalism attracted the readerships that appealed to advertisers. The business model couldn’t have been simpler – or more profitable – and with it came the church and state relationship between editorial and advertising. It has always been an uneasy relationship, to be sure, but by and large, it held.

But with the digital revolution the rivers of gold dried up and the media became a considerably more complex business.

The digital revolution – and changing consumer behaviours – have issued a life-and-death challenge to traditional media proprietors.

In the US, grand newspaper mastheads such as the Washington Post, the Wall Street Journal and the New York Times, as well as prestigious magazines such as ForbesThe Atlantic and Fortune, adopted native advertising.

‘Customers want information. They want justification. They want value. They want proof.  And brands must sustain the ability to deliver on these needs every day.’

David Germano

Advertisers who were finding it much harder to reach increasingly fragmented audiences welcomed fresh avenues to reach consumers.

These audiences had become more demanding of brands. As the internet and social media broke down barriers between brands and their customers, brand loyalty was no longer a one-way street. Consumers insisted on greater engagement and interactivity. They expected brands to deliver satisfaction beyond the product or service they provided.

“Your brand narrative simply isn’t enough,” says David Germano, VP Content Marketing at US-based Magnetic Content Studios. “Customers want information. They want justification. They want value. They want proof.  And brands must sustain the ability to deliver on these needs every day.”

Brands understand that in the digital age loyalty is hard won and easily lost, and reputations only a viral backlash away from being unmade.

The need for advertising did not disappear with the impact of the internet on traditional media. In many respects it was heightened. The issue was what form that advertising would take in the 21st century.

The advent of “native advertising” – not entirely new in concept, but timely in its re-emergence – provided advertisers with a much more direct, and “meaningful”, connection with consumers.

But if that suggests common ground as to what constitutes native advertising, unfortunately that is a work in progress. Like its big brother, content marketing, native advertising is broadly understood but has yet to bed down a clearly defined concept.

‘The big difference between a crude ad and a content-based one is the storytelling dimension. Fact is: every company has great stories to tell about its products, strategy or vision.’

Frederic Filloux

“Native advertising is the politically correct term for advertorial. Or rather, it’s an upgrade, the digital version of an old practice dating back to the era of typewriters and lead printing presses,” blogs Paris-based board member of the Global Editors Network, Frederic Filloux, in

That might seem a cynical observation, but Filloux goes on to make the point that while he would “almost never” click on banners, if the subject matter appeals he will click on native ads or brand content.

“The big difference between a crude ad and a content-based one is the storytelling dimension. Fact is: every company has great stories to tell about its products, strategy or vision. And I don’t see why they shouldn’t be told resorting to the same storytelling tools news media use. As long as it’s done properly, with a label explaining the content’s origin.”

Felix Salmon, a New York-based Reuters blogger and senior editor with TV and digital network Fusion, makes this distinction between sponsored brand content and native advertising: the former is designed to be read, the latter to be read and shared.

“The distinction between sponsored content and native advertising is a bit squishy, but if you do need to make a distinction, then I’d say that sponsored content is material designed simply to convey information to the readership of the publication in question, while native content tends to aspire more to going viral and being actively shared by that readership.”

Despite its squishiness, it’s a definition that appeals to Tony Hallett, Managing Director of London content marketing agency Collective Content. Expanding on the theme: “When a publication such as BuzzFeed works with a brand like Virgin Mobile it isn’t just to create great native content that its loyal readers see; it is with a view to it going viral and being seen all over the web. Display advertising could never do that.”

Chelsea Wallis, a writer with Sydney-based content marketing agency Mahlab Media, says native advertising comes with many definitions, but she prefers this relatively simple one – albeit with a sting in the tail: “Native advertising is content paid for by an advertiser and created by a publisher to display the same voice and look as the rest of the content on the publisher’s platform – whether that platform be print or digital in nature. It’s similar to the advertorial, an ad that attempts to look like an article, and is often still mistaken for one.”

It’s the “blurred lines between advertising and content”, Wallis argues, that run the risk of “making the reader feel deceived”. Her advice: “Be true to your audience. Full stop,” which presumably applies to publishers as well as advertisers.

Adrienne LaFrance, Washington DC-based senior associate editor at The Atlantic magazine, believes it’s time to come to terms with the role of native advertising in the modern media.

It’s also important, she argues, to acknowledge, as she documents in her article for The Awl opinion site, that the media has not been as pure as its nostalgic adherents suggest: The New York Times offered op-ed space to paid advertisers in the 1960s; The New Yorker, in a 1959 edition, ran two cartoons drawn in the classic New Yorker style but which were advertisements; more recently, in 2005, The New Yorker sold ad space in one of its issues to a single advertiser, Target, which filled the magazine’s pages with its red and white target logo, including on the cover.

“News curmudgeons relish blaming the internet for things they don’t like, a pastime that is maddening, a little sad, and just ironic. These people who fetishise print media’s past are often selective in their memories of it,” she writes. “Posturing that native advertising is a product of the internet age is not only wrong, it obfuscates essential and constructive conversations about the practice.”

LaFrance agrees that sponsored content raises “plenty of valid concerns among those committed to journalistic independence” and the use of advertorials should be debated. But nostalgia has no place in the debate, firstly because it is misplaced, and secondly because “the 20th-century journalism model is busted”.

There is also the issue of transparency, which most observers of native advertising, critics and supporters alike, agree upon. “It’s crucial that readers discern advertising from editorial content, but it’s equally important that publishers talk about how to distinguish between open-platform publishing and stories subject to editorial scrutiny.”

The State of Native Advertising 2014 report – based on a global survey of 1000 publishers, brands and agencies, but primarily in the US (73 per cent), and produced by native advertising technology platform Hexagram and communications group Spada – found that 79 per cent of publishers clearly label native advertising campaigns to distinguish them from editorial content.

The most popular ways of indicating ad content were “Sponsored” (64 per cent) and “Brought to you by” (34 per cent).

The survey found that native advertising is well entrenched, with plenty of room to grow: 62 per cent of publishers currently offer native advertising and 41 per cent of brands currently use it.

Tim Duggan, Content Director of independent online publisher Sound Alliance, frankly admits that native advertising saved his business.

Native advertising’s share of revenue at Sydney-based Sound Alliance has grown from about 20 per cent of advertising revenue in 2013 to 30 per cent in 2014. Duggan believes that points to native advertising being better understood and more accepted by clients than is generally believed.

‘Lots of brands are moving beyond just trying native and actually starting to look at measurement and effectiveness and how to really make it work for them.’

Tim Duggan

In October 2014, Sound Alliance launched a dedicated six-person native advertising unit, which it calls the Native Studio, comprising two native advertising editors, a social media manager, an account manager, a designer and a creative director.

“We’ve now seen the market move on now from trying to define what native advertising is and explain it to clients,” he told AdNews. “So now, lots of brands are moving beyond just trying native and actually starting to look at measurement and effectiveness and how to really make it work for them. The category is maturing a bit more now.”

That confidence is shared by Fairfax Media, which launched Brand Discover, its native advertising product arm, in 2013.

A survey by research house Mindshare, commissioned by Fairfax, shows growing acceptance of native advertising by readers. The survey of 1700 Australian consumers found that 56 per cent were attracted to branded articles.

Felix Krueger, who heads up Brand Discover, says that by the end of 2014 38 clients have had branded content published.

Krueger insists that native advertising has not altered the traditional “church and state” relationship between editorial and advertising at Fairfax. “There is zero editorial/advertising crossover. This is something which is strictly maintained.”

The launch partner for Brand Discover was Commonwealth Bank, which saw Fairfax run a series of articles carrying Commonwealth Bank branding and covering topics such as innovation in the 21st Century and gender disparity in financial investment.

More recently, Fairfax has run a series of articles for Connoisseur gourmet ice-cream, ranging from the history of frozen desserts (you’ll be surprised how old they are) to how childhood aromas inspire top chefs’ personal creations.

Fairfax consulted with newspapers and other media groups from around the world, particularly The New York Times, prior to the launch of its native advertising product in 2013. A particular focus of those consultations was how best to label native advertising content to ensure full transparency.

“Our brands are built on reader trust, we’ve worked for over 100 years to gain that and it’s very important for us to maintain it,” Krueger says. “We decided to very clearly label native advertising and make sure that labelling is carried at every stage of the user journey.”

Krueger says engagement levels for branded articles are comparable with editorial content. The Mindshare survey found that average recall from native advertising was 35 per cent. “The key finding for us was that people know what native advertising is and people still enjoy content that offers value to them, as long as the content is informative and entertaining,” he says.

In other words, consumers are willing to come on board, but only if native advertisers stick to their side of the bargain. Outbrain agrees that it’s now up to native advertisers to cement consumer trust.

In its Year in Review: The Best Native Ads of 2014, Outbrain concludes that “for the most part, the overall quality of the content improved between 2013 in 2014”.

“But authenticity, transparency and editorial value continue to be areas for improvement, with quite a few native ads coming up a little short in at least one of those departments,” Outbrain says. “Questions over its definition and standardisation aside, there were still a number of impressive native advertising experiences to hit the web this year.

“The jury’s still out on whether audiences en masse believe native delivers on the hype, but they may yet come around with exposure to more experiences like the ones that made our list.”

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