New age content publishers have warmed up to native advertising. Will mainstream publishers too bite?
Fourteen Things All Women Absolutely Have To Do Before Heading Out’ is a popular article on Scoopwhoop.com, a content website referred to as the Buzzfeed of India. The article dishes out make up tips, the last of which urges women to wear a dazzling smile. Turns out, the article is sponsored by oral care brand Colgate.
This is one of the many examples of native advertising. As the name suggests, the ad resembles editorial content masquerading in order to draw readers to it. Simply put, a native ad is an ad garbed as content, strategically placed on a publishing platform, for general consumption.
An evolved offshoot of content marketing, branded content and the ‘microsite approach’, native advertising has been around for almost a decade. Why then, is it being discussed now? Well, it’s probably because it has started permeating mainstream news sites and has, consequently, begun attracting the wrath of traditionalists. Publications, and the profession of journalism, are under scrutiny. Remember Forbes’ March issue that carried a native ad for Fidelity on its cover? The ad reads ‘Fidelity Voice: Revving Up Your Retirement’; the piece it refers is a native ad (an infographic) in the magazine, placed amid a larger set of articles on retirement.
In the larger scheme of things, native advertising is a very nascent concept. Even so, it is the perceived effectiveness of the format that is fuelling marketer investment in it. Sample this data: According to research firm BIA/Kelsey, the market for native advertising is expected to grow to $4.6 billion by 2017. In 2012, it was at $1.6 billion. Although, the overall digital ad spends are still under 30 per cent ($52.8 billion) of the estimated total advertising spend in the US which stand at nearly $187 billion, in 2015 as per Strategy Analytics’, a global research organisation.
On a publishing platform, a native ad would be text with images. On an online video network like The Viral Fever, it would be a video that entertains viewers while subtly weaving a story around a particular brand. On a mobile app, it can be an ad that fits the screen size and basic app feed.
Is it an advertorial? Not quite. An advertorial has been reduced to a boring hard sell piece on a brand, unlike a native ad, whose content is weaved around the consumer’s ‘passion points’, as experts call it.
He explains, “Unlike content marketing, where advertisers work with one publication at a time, native advertising gives online advertisers some much needed scalability. A bit like display ads, wherein a single creative is used across multiple platforms.” A piece titled ‘Top five investment tips’, for example, could be published as content seeded by a mutual fund brand, across several relevant financial platforms.
Native advertising has also become a means for brands to differentiate their product offering. While ad films and posters are quick to succumb to category codes, native ads offer a fresh platform. For example, regular display ads by two luxury real estate players may look awfully similar, but their native ads needn’t.
Kumar, who launched his online entertainment network in 2012, claims to have worked with 40 brands so far. He believes brands must always “put entertainment before themselves.” Avoid overdoing the branding, is a tip he is quick to dole out. Native ads ought to maintain a factual and rational tone and must either look to educate or entertain, not sell.
Gurmit Singh, VP and MD, Yahoo India, sees merit in re-visiting the basics: Brands absolutely must inform users about their (native) ads; consumers must be able to recognise an ad amid other content. “The ads on our platform are clearly labelled ‘Sponsored’,” he says.
Brands must not be rigid about flashing their identity – logo or product – in their native ads. Most of these ads comprise both text and image; the latter is believed to be more engaging and is believed to have a higher chance for virality. For example, a native ad with an image of a woman with shiny hair might work better than the brand logo of the shampoo being promoted.
Prashant Dixit, vice president, global data and supply partnerships, Vserv, a mobile marketing platform, says, “Selection of images and text is crucial. Do not plug the brand name in the headline or a logo in the cover picture. Maintain a balance between content and advertising. Give important and useful information to the consumer instead of filling the article with the features of the brand.”
Vserv recently launched Aqua Native, a native ad format which displays ads that are customised as per the environment, design and layout of the app/site. This leads to a higher average click-through rate (CTR) for the publisher. The company claims to works with nearly 150, 000 apps and 5, 000 sites, globally. In India, its clientele includes names like Disney, Hungama, TOI, Jagran, Malayala Manorama, NDTV, Unilever and Microsoft.
In fact, a lot of the native ads out there are focused on simplifying jargon. “I believe some of these ads do a service to the consumers by explaining things to them,” notes Ajit Balakrishnan, founder and CEO, Rediff.com.
Categories that are adopting native advertising at a rapid pace include FMCG, BFSI, automobile, consumer durables, technology, travel, fashion and lifestyle, and e-commerce. Emerging categories like real estate are following suit.
Fork Media’s Verma prefers taking a macro view; he divides the market not by category but by type of marketer – ‘evolved marketer’ versus ‘basic marketer’. While the latter grapples with digital media, the “evolved digital advertiser is already familiar with display and performance marketing.”
Unlike display ads, he argues, native advertising helps in the “need creation” process for brands, which is why brands use this format to push new product segments. The entire wearable technology segment, he reminds, is being promoted through native ads. Brands like Sony and Samsung lead this front.
The more banner ads become a “blind spot”, the more marketers will gravitate towards native advertising, feels Nimesh Shah, head, Windchimes Communications, a digital and social media agency. The sheer information they provide makes them valuable to consumers.
Marketers have often found fault with display and banner advertising for its lack of measurability. Can the same metrics be used to evaluate the effectiveness of native ads? Perhaps not.
Rediff’s Balakrishnan believes the number of clicks is not the ideal parameter to evaluate the effectiveness of these ads. After all, the ads can be very effective in creating awareness and encouraging the basic intent to purchase. One may cite the AIDA – awareness, interest, desire (to make a purchase), action (final purchase decision) – model here.
Others argue that metrics like the number of clicks a creative generates cannot be applied to content at all. This is because the objective of a native ad is to generate engagement through its content, the onus of which is shared by the publisher and advertiser.
Similarly, the pricing of a native ad is contingent upon the platform it is published on, the kind of traffic it gets and the segment it targets. While standalone sites like Scoopwhoop have their own pricing model, larger websites owned by media companies like The Times of India or Dainik Bhaskar go for ‘bundled deals’ with agencies, wherein native ads are part of the overall inventory.
In general, native ads command a 50-80 per cent premium over normal banner ads rates. Within native ads, the rates are higher for video content.
The rate card of a leading online video content network, of course there are heavy discounts involved, reveals these prices: Rs 10 lakh to Rs 1 crore for a 10 minute-long video. A three to four month-long series, on the other hand, can cost a brand somewhere between Rs 1.5 crore to Rs 5 crore.
Native content links on large publications sell at Rs 7-12 per click.
Scoopwhoop, an India-focused entertainment media startup that creates and curates content, has its own pricing model: “We charge Rs 1.5 lakh per sponsored article,” says Nisha Chaudhary, senior manager, brand and media partnerships, Scoopwhoop Media. The rates will be revised as traffic to the platform grows. At present, Scoopwhoop publishes 35 brand stories a month.
Gyan Gupta, COO, Dainik Bhaskar Digital, admits that his group is closely monitoring New York Times, a mainline institution that has adopted the native advertising model. The group has recently started carrying native ads on its platform and is in the process of creating an internal checklist.
While Gupta concedes that going forward, this format will gain salience in the digital advertising ecosystem, he insists it is not the only option available to publishers. “Programmatic buying (automated buying, placement and optimisation of media inventory) will be big. Publishers need to constantly innovate as digital offers a lot of flexibility. One can have text, video, engagement and two-way interaction – things no other mediums offers,” he notes.
Regional publishing house Eenadu has a more conservative take on native advertising. The team doesn’t publish native ads on Eenadu.net. Why not? Doing so will hinder the user experience of its loyal readers, goes the argument. AJ Christopher, national head, marketing, Eenadu Newspaper, says, “We do not want to dilute our mother brand which is renowned for high journalistic ethics and news formats.” However, the company might just consider publishing native ads on its newer, niche online portals.
Christopher admits that it will take sometime for traditional media houses to adopt it. “Unlike television and print, an online user has a mind of his own while searching for a piece of information; if a intrusion comes along, they will discard you immediately. While native ads can draw people to your platform they can also take users away from it,” he cautions.
Expressing reservation towards creating intrusive content as native ads, Ashish Bhasin, chairman and CEO South Asia, Dentsu Aegis Network, says, “As a custodian of my clients’ money I would never recommend slapping a brand’s identity and producing intrusive content even if it is getting premium placement.”
Whether native advertising will go beyond the hype remains to be seen. Publishers are drawn to it because banner ad rates are so poor. As long as native ad rates are significantly higher, its chances of growth remain good.
A Note From the Editor
If you know a medium with more jargon than online publishing, I'd love to hear about it. A new term doing the rounds is 'native advertising', which was virtually unheard of until last year. It is a form of content marketing (that is, the use of content to talk to or engage with brand consumers). What makes it different is that native advertising on a publishing platform resembles the content around it.
Native advertising has its origins in the 'advertorial', which, by the way, is at least 50 years old. The idea then was to create flowing text that was more akin to editorial than advertising. Native advertising goes one step further in that the ad resembles the content – something print publishers wouldn't allow. And, as in the advertorial, the idea is to engage readers or visitors with a subject that interests them rather than talk about the brand.
At a broader level, it is a clash between two approaches to advertising. The traditional method is to interrupt people when they are consuming media and hit them on the head with the brand message. The newer view is that consumers must be engaged, especially online, because they don't take kindly to interruption.
Put another way, native advertising is being advocated because of unhappiness with the ad banner. Advertisers are frustrated because banners are proving less effective; publishers grumble because banners don't pay enough. The clamour against it has been rising, compelling the Internet Advertising Bureau about a year ago to recommend 'Rising Stars Ad Units' – basically, very large format ads. But if banners are less effective than before, will even large banners solve the problem?
Votaries of engagement think not, and that is why they argue for content marketing and, now, native advertising. This form of advertising is still small but the industry is trying to find ways to scale it. Just last week, the Mobile Marketing Association announced guidelines to standardise native ad formats.
Not everyone swears by native advertising – some swear at it as a development which will allow advertising to pass off as editorial without full disclosure to readers. Some months ago, comedian John Oliver raised a ruckus in the US when he tore into native advertising on HBO saying that it amounted to cheating readers and viewers.
If native advertising is to grow, it certainly can't be at the cost of credibility.