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A Dummy's Guide to Native Advertising

By Satrajit Sen , afaqs!, New Delhi |
| August 21, 2014
In India, native advertising is still finding its feet and is mostly absent. But, what exactly is native advertising?

Harping about products and services in ads may not be passé, but marketers are looking beyond. In this new digital era, brand marketing has become ever so dynamic and marketers are now looking at creating the passion point for their audience and engage them with the brand. In doing so, new advertising terms are being coined everyday. Native advertising is one such.

Native advertising is much more than the new kid in the digital landscape and it represents a fundamental turning point in the evolution of digital advertising. It is expected to grow from a $1.6 billion market in 2012 to $4.6 billion by 2017, according to research firm BIA/Kelsey. In India, however, the concept of native advertising is still finding its feet and is mostly absent.

A Dummy's Guide to Native Advertising

Native advertisng done by IBM

Promoted Tweets on Twitter

Sponsored Posts on Facebook

Native Ads on Google

What exactly is this?

Native advertising is a relatively new approach to online advertising, wherein brands provide content based on what users are passionate about, as opposed to sponsor content, where brands push their marketing message. These ads are called 'native' because they don't appear to be ads, rather they seem to be belong to platform they are advertised on, appearing as a piece of content.

Native advertising is content marketing 2.0 where the basic principles of content marketing remain the same. Some advertisers misunderstand it to be advertorials. The objective of native advertising is to create engaging content around the target audience's interest areas or passion points and then seed their brand messaging or communication as part of that.

What do native ads look like?

The way native is being rendered in the current scenario is that it's content placement in the stream of the website or an app. It must clearly be demarcated as a sponsored content piece since the idea is not to deceive the consumer into believing that it is editorial content.

So if a user is coursing through his news feed on Facebook, a "sponsored story" appears like any other story/update that his friends or the pages he likes would share. Although it has prominent indications that it is promoted content, its appearance and interactive experience is in no way different from what a user would face on any other organic piece of content on Facebook.

What are the different forms of native advertising?

Native is really wide since it is about content and not about the form in which content is rendered. It could be text, images, video, info-graphics, apps or even full-blown microsites. Some common examples are promoted videos, images, articles and music. Examples are sponsored stories on Facebook, promoted tweets on Twitter, paid search results, pre-roll ads on YouTube and so on. On mobile, there is a variety of forms/layouts of native advertising such as content walls, app walls, chat list, news feed, content streams, which complement the design of different types of apps.

What is the difference between sponsored content and native advertising?

Prima facie there is really no difference between the two, just a thin line. In some scenarios, a plain sponsorship of existing editorial content in form of a logo presence may not be considered to be really native. Also, sponsored content isn't specific to a site whereas native advertising is.

To draw a parallel with food, it is like asking what the difference between biryani and the mutton in the biryani is? While the rice and other components are important, the crux of the meal is in the meat. And native advertising is the meat. Sponsored content is just what it sounds like, content made and presented by an advertiser. Native advertising, on the other hand, is tailor-made content for the right person at the right time, with the right presentation. Continuing with the food analogy, Native is like making Kashmiri biryani for a Kashmiri, with the right spices, a good décor, and the perfect presentation. So a Kashmiri sitting in Bangalore feels like he/she is getting home made food.

Sponsored content is content created by an advertiser. In a magazine, one can see 6-7 pages of sponsored content while, in a newspaper, it could be a pullout and so on. It looks like an article but it's actually written completely by the advertisers. Native advertising is different because it blends into the content stream but it's an ad with a clear advertiser and call to action.

Why should a brand consider native advertising?

Brands today have a big challenge when they are planning media on digital. To some extent digital too has got fragmented. A marketer is constantly grappling to create the right balance between the brand's short-term objectives of traffic, ROI and impact. Increasingly, more and more marketers are realising the significance of focusing on the longer-term objectives and the impact it can have in differentiating their brand in their respective categories. As the focus shifts, native advertising becomes an intrinsic part of the marketing mix. It is truly one of the best tools a marketer today has to build a solid differentiation for his brand.

Besides, advertisers also benefit in two ways -

Better ROI - Given the immersive user experience, engagement and conversion rates for native ads are higher
Increased reach - Apps that have historically stayed away from ads as a way of monetisation are encouraged by the immersive user experience and the success of other apps. These apps are opening up access to a larger user base making advertisers drive more ad dollars to marketing.

How much will it cost?

It varies depending on the approach one takes. The market offers a commodity approach, which is more like an external link being hosted on a publisher site with no guarantee of placement and then there are players that have taken a brand approach, with the content being hosted within the ecosystem of the publisher site and with complete clarity on placements.

An advertiser can also choose the platform to distribute content, something that the commodity approach doesn't offer. For the commodity approach, the buy happens on a cost per view model that could range between Rs 10-25 for a view. On the brand side of things, the buy happens on a cost per post model and it varies between Rs 25,000 and Rs 1.5 lakh for an article depending on the platform and the placement.

Native adevertising by Olay

IBM

IBM

For which product segments does native advertising work best?

Well there are no specific sectors that are better suited compared to others. The need to have a community and build engagement and have longer-term conversations is pretty much a must do for most brands today. Everyone with digital marketing budgets will find value in native advertising. Sectors like e-commerce, technology and consumer focused brands are more bullish on native advertising today.

When Germany beat Brazil 7-1 in the FIFA World Cup semi-final, social media was abuzz with people expressing their reactions and Red Bull (@redbull) tweeted, "Somebody give #BRA some wings! #justforkicks. Besides, during the IPL, Pepsi promoted its Tweet20 campaign video with many websites covering news on IPL matches.

How do publishers benefit?

It is common knowledge that display has been facing its fair share of challenges. Moreover, India faces additional challenges with CPMs having a really low benchmark and a huge focus on performance. Scaling up revenue has become a massive task for publishers. Traffic has increased manifold for most big publishers but revenue hasn't really followed the same trajectory. Amidst all of this, native advertising comes as a breath of fresh air for two reasons:

• It is truly alternative inventory, which doesn't cannibalise display.

• The measurement metric is more engagement driven in terms of views, virality and time spent.

Native also pushes mobile advertising to the next frontier. Since it protects the user experience and also raises monetization, the benefits are obvious. It's also very flexible - it can take many forms. Moreover if you combine the ad format benefit with the power of big data platforms, for improved targeting and performance optimization, it increases the value multifold.

How open are Indian publishers to the idea?

Publishers clearly recognise Native as a substantial and an alternative revenue stream. To begin with, most publishers wanted to have their own independent Native ad solutions but, over time, they realised that the only way Native would work for an advertiser is when there is scale and diversity of audiences. Advertisers don't necessarily see value in custom creating content for one platform only.

Although the US is the world's largest mobile advertising market, markets like Japan embrace Native in a big way. With mobile advertising growing faster than TV and/or print ads, publishers will embrace Native as a critical revenue stream.

Based on interviews with Samar Verma, founder and CEO, Fork Media; Rishi Jayesh Easwaramony, VP and GM, Asia Pacific, Middle East and Africa, InMobi; Rishi Pratim Mukherjee, ‎co-founder and COO, ScoopWhoop Media.

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