Native advertising weaves its way into every form of consumable content. It continues to be one of the most popular methods in which advertisers can engage with their audiences digitally. Last year, native advertising spend was more than any other form of display advertising and, in the first half of 2018, new advertisers began using native advertising every month.
Recently, however, it looks like the market is plateauing. Roughly 11% of online advertisers use native advertising formats now and brands that buy native ads only run them across 10% of the total number of sites that they advertise on. Why is this happening?
Here are 9 fast facts to keep in mind as you sell Custom Content:
1. Few media firms stand out when it comes to Native Content
MediaRadar CEO, Todd Krizelman, hosted two recent panels discussing native content. In both cases, the speakers agreed they should not differentiate their native advertising offerings by using a lower price. They use other differentiators like audience, brand safety, and creative execution to make their branded content stand out. Using key differentiators beyond price will win more business.
Some groups, like the Meredith Corporation, have uncovered at least one additional element that makes it unique. It has developed competency in making its content “shoppable.” For example, inside its online recipes would be a link to where a consumer could buy the ingredients. Publishers should aim to be more innovative like Meredith.
2. Measuring the performance and sustainability (with higher renewal rates) of Native Campaigns is difficult
As of now, the average renewal rate for brands to buy ads on a site two months after running a campaign is 40%.
Publishers find measuring campaign success with branded content isn’t just measured by impressions or clicks. Success doesn’t always come in a standard measurement across campaigns, but there will be metrics and a report card at the end of the flight. It’s important for content providers to get creative when proving their ROI.
For example, the marketing for Colin Kapernick led to increased store traffic and higher online sales. Barron’s reported that Nike saw a 31% increase in sales the week after the announcement (here). So yes, sales matter. There are also measures for gauging perception and awareness, before and after a campaign. MediaRadar has learned many companies are using Catalina or iRI for measuring CPG sales in supermarkets to help show the impact of native content.
3. Crafting Native Content takes a lot of time and effort
A great story and design require both time and talent to produce. Neither of these are areas that advertisers and content creators can afford to overlook. The actual process of crafting a native ad or campaign is a costly, multistep process, involving a lot of collaboration and rounds of review, done over a long period of time.
4. Native Advertising has the potential to be too discrete
Audiences don’t want to be disrupted by ads, but they also don’t want to be duped into believing that an advertisement is anything other than what it is. Consumers should only be exposed to online advertisements that are fair, clear, and engaging. To avoid the possibility that native advertising dupes its consumers, know how to spot native advertising. The FTC also generated a Native Advertising Guide. The manual instructs advertisers on how and when to use certain terminology and obvious labels in its ads to not deceive its viewers.
5. Custom Content is more trustworthy than Traditional Advertising
According to a Time Inc. study, 2 in 3 GenZ, Millennials, and GenX consumers trust branded content more than traditional advertising. As a group of more visually inclined individuals, GenZ is open to engaging with custom content because, compared with traditional ads, it’s more entertaining, thought-provoking, and leaves a lasting impression.
6. It is highly recommended among publishers that you pitch Native Content directly to the client and not to their agency
There is often a “much, much better understanding” of what business needs are when talking directly to a client. It is felt that agencies are time-strapped and less plugged-in when it comes to native advertising. Also, it makes a publisher look good when they take a Big Idea to the client to make sure it really was heard.
Success rates vary by publishing house, however. A national women’s publishing group reports that 60% of its business originates from the brand directly. A large regional newspaper shared with MediaRadar that their ratio was closer to 50/50 while a niche travel website and magazine reports that it wins the most business directly from clients (90%).
7. RFPs can be really important to a publisher’s Native Content business
RFPs are very important to a national consumer publisher’s business. Native advertising has proven not to be an exception, as publishers see up to 95% of their content business originates from an RFP. The RFP may originate from the brand, or the agency. This may be a surprise, since many write that the RFP is dying (here, here, here, and here).
Yet, while RFPs remain popular in the national consumer media space, it is felt that they are a poor fit for native advertising. Generally, publishers should respond within 24-72 hours from receiving the RFP. Since most branded content projects are quite custom & involved, having just 3 business days isn’t long enough to come up with a great pitch.
8. The number of firms receiving RFP’s for Native Content is decreasing
Recently, MediaRadar met with a dozen media buyers at major agencies. In this room of buyers, there was a refreshing and specific consensus surrounding the number of RFPs being submitted for native content. This group feels that the number of RFPs is not declining, but that the number of firms receiving them is.
Many agencies like to work with firms that can offer “1-Stop Shopping” for branded content. They want to work with a publisher who has the capacity to deliver a unified solution across media formats (desktop, mobile, email, experiential, etc.).
9. The consolidation of in-house studios seems inevitable
Branded content studios exist within publishing houses to help create native ads, branded content, traditional ad assets, editorial content with a twist, and more. But, with the boom in the number of in-house studios for advertisers to choose from, consolidation seems inevitable.
Publishers are bound to pool their creative resources together. In a recent Adweek panel, Chief Revenue Officer (CRO) of Buzzfeed, Lee Brown, predicted that “in the next 12 months, you’re going to see a massive amount of consolidation.”
Native advertising is still successful, despite its recent plateau. That’s why it’s important for publishers to identify opportunities with native in 2018 like finding more unique ways to produce native ads that will make them stand out from their competition and more.
To get an even more in-depth analysis of this native advertising trend, be sure to read our most recent trend report.