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The Inevitable Downfall of Native Advertising

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I’d like to offer a word of caution for those who may be over-excited about native advertising. Native advertising works for a couple of reasons; audiences aren’t used to embedded corporate content, and these media forms are somewhat deceptive, and don’t appear as sponsored.

Those two factors create a bubble that will surely burst once readers and viewers get tricked enough times.

Just this past Monday a friend complained about a Buzzfeed article focusing on entertainment ideas that happneed to be sponsored by a potato chip company. The problem with the article its lack of disclosure, and every suggestion was followed by a push for X-brand chips.

I recently saw both SocialMedia.org CEO Andy Sernovitz and Edelman EVP Steve Rubel discuss the conundrums of native advertising. At both events, Andy and Steve discussed how important it was to clearly disclose paid sponsorship of any media promptly. Andy noted that many forms of native advertising are in violation of the FTC’s disclosure rules, and then coached attendees on best practices.

I’m not sure that’s going to happen without significant consequence. Though the FTC acts periodically, real impact will come in the form of decreasing results. This is inevitable as more and more consumers distrust content featuring brands, and the mastheads and social networks that publish questionable content.

The decline is already happening. Last year a study showed that most people view brands who engage in native advertising more negatively or not at all. I wonder how people feel now that we are almost done with 2013, and they have become more familiar with embedded promotions.

Like all advertising methods, a two percent yield will likely be enough to keep native promotions viable, but at the same time let’s not get crazy here.

As more brands move to blend content with ads, the impact will match every other tactic that becomes widely practiced by marketers. We can expect less consumer trust, lower yields, and a need for higher levels of quality to achieve success. Worse, rather than raising the tide of the overall marketing program, native advertising will negatively impact trust across all forms of digital advertisements.

Moving forward, contextual media will force media outlets and advertisers to get even more creative with their efforts to get in front of consumers. Intrusions will not be tolerated as openly as they are now. Perhaps the open sponsorship models of the 50s will take hold as brands pay to make relevant information available in exchange for a brief update. Who knows?

What do you think? Are we heading for a decline in native advertising success?

Featured image by the Altimeter Group.

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  • http://twitter.com/HowieGoldfarb HowieG

    The problem is Marketers jump on these hot flash catch phrases which are often repackaged from sometimes millennial old business practices, write books, give speeches, advise clients and just when it implodes they jump to the next one.

    F Commerce, Social Commerce, Join the Conversation, Facebook Store Fronts, Location Check Ins (though they maybe be coming back), and to bring Steve Rubel into this, Social Business (haven’t businesses been social since the first time sheep were bartered for cows in like 10,000BC?). All a bunch of hokey BS. Native is the same and by this time net year won’t hear a peep about that or Social Business.

    All of these I mentioned have significant flaws but made a lot of speakers and bloggers and agencies a lot of money while it lasted….but clients….not so lucrative. People are actually smarter than marketers even while there are many gullible people.

    A great example is before the law changed and celebs got paid for Tweeting about Brands but never disclosed this. Then the law changed and how fast did that end? People learned and moved on.

    • geofflivingston

      I think social business is pretty much out of the loop already, thank God. And I agree, it’s positioning for marketers to sell marketing. Same thing with context marketing, which to me means relevancy. Relevant communications, what a concept!!! LOL!

  • http://www.businessesgrow.com Mark W. Schaefer

    Agree 100%. I believe that radical honesty will win out

    • geofflivingston

      One can only hope. Perhaps radical honesty enforced by filters…

  • TheTysonReport

    Personally I doubt that the majority of consumers will spot ‘native advertising’, Geoff. No-one seems to think any less of big newspapers which are now almost entirely cobbled together by graduates out of press releases. What’s the difference?

    • geofflivingston

      LOL, I think customers are smart, they just ignore blindly and assume its a company marketing piece.

  • RebeccaLieb

    As the author of the Altimeter Group report cited above, here’s my two cents.

    Native advertising is indeed a buzz term. The reason we tackled the topic with research is that while the phrase is being freely bandied about, it hadn’t yet to date been defined. A definition of “native advertising” is difficult to arrive at because, given the context in which the term is used, it must apply both to “traditional” digital publishing models and social platforms – both very different animals.

    It’s critical to maintain objectivity and level-headedness when discussing native. Your post is peppered with terms such as “deceptive” and “bubble” and “tricked,” just as a (vendor-sponsored) survey you cite that purportedly indicates that native advertising is doomed to fail contains wording that indicates consumers were asked if they liked ads that are “disguised as content.” That’s tremendously flawed research methodology on quite a number of levels.

    It’s early days for digital native advertising, but there are plenty of analog corollaries to the trend. There’s an undeniable shift toward content marketing in digital channels, and a wave of movement away from banner ads, which are rapidly diminishing in efficacy. Native has to potential to be a salvation for digital publishers – it’s already the #1 revenue source for Forbes.com. Yesterday, NYTimes.com announced they will debut native formats, as have close to 100 percent of the OPA’s membership. Twitter is going public with only native advertising offerings, at present at least.

    Damn the term, hate the buzz, and by all means shine a light on sneaky and deceptive practices. But don’t overlook the fact that there’s a real baby in all this bathwater.

    • geofflivingston

      Thank you for building the graph, it suited the post well!

      Let’s talk about the term deceptive since the FTC is pretty clear about it. It means the sponosred content needs to be clealry described as such within the first sentence. How many forms of native advertising are clear about that? I don’t think this something we can dance around.

      The history of analog advertorials is rich and dates back for decades so you are right there is plenty to gain, and for some publishers the sacifice might be worth it. But that sacrifice comes with a price. Just like Forbes blogs have deteriorated the masthead’s quality so will native ads. I am about as impressed with a Forbes post as I am with a Huffington Post piece.

      Look, 2% drives investment, it just hurts the other 98%, and though you can hide that behind the revenue number, disenfranchisement grows. If best prctices take hold, advertorial content, err, native ads will have their role in the media mix, but they will still lack the trust value of a true earned media hit.

  • http://brianvickery.com/ Brian Vickery

    They really aren’t a blip on my radar. I will scroll through my Facebook Feed and not even pause at the ads…much less click on them. Sure, they add “noise” to the experience, but I’m OK with it to use the free platform. I’m just not contributing to their coffers.

    Same goes for any sidebar ads in Facebook or Google, or sponsored posts on Twitter. Hey, if they are making money, good for them. Meanwhile, I’ll get back to finding the “good stuff”.

    Having said all of that, as a consumer, I’ve briefly considered promoted posts on Twitter/FB…and advertising on FB/LinkedIn…for our company (especially the social monitoring solution). I would still much rather generate those leads through Owned and Earned media, though. It simply carries more weight.

    • geofflivingston

      I don’t think promoted posts are updates are bad, so long as they are clearly that. I did have some success with apromoted tweet over the fall, and have had clients do well with some forms of Facebook ads.

      That being said, the consumer has trained their eye not to see these ads, and more and more people will ignore as they learn the telltale traits, from framing, to small non-obvious text that says sponsored (in hyroglyphics).

  • http://gearboxmagazine.com/ Brian Driggs

    The ironic thing is, this “sponsored content” thing is a powerful opportunity for organizations to really empower their customers and improve their bottom lines. Sadly, though, most still use it as another means to blast lead-gen crap at the masses because, let’s face it – business exists to make a profit, not a difference.

    I’ve mentioned this enough times already that I’m not sure if I’ve done so here, but I recently took a look at a popular car magazine. I won’t drop the name, but if you name the first three that come to mind, I’d bet money you include it.

    The single issue I looked at had 136 pages. 60 of those pages were advertising. That’s 57 full page ads and 3 full pages worth of half-, third-, and quarter-page ads. That’s 45% of the content.

    Checking their latest media kit, ad prices started at just over US$50k for single issue placement. Full-page or multi-page ad spots were far more expensive, but I based my average on this lowest possible number. Based on my math, each month, their 1MM+ subscribers are responsible for about US$1.2MM in revenue, but their advertisers – again, at the most conservative estimate I can muster – represent more like US$3MM.

    Personally, I think that’s disgusting. Subscribers and readers are not the customer – advertisers are. Their brand, household though it may be, is a facade in my book. When the value of your audience exceeds the value of your product (content), you’re a shill. And no amount of thinly veiled product placement is going to get you through the next 100 years.

    That said, I offer what might be considered “paid content,” through my “Official Partners” program. The catch is, these brands have to deliver substantive, empowering content to my readers in exchange for that exposure, and they have to do it consistently over time before they do any “selly-sell” in the piece.

    I’m not interested in puff. I don’t need an endless fire hose of baubles and sensation in order to psychologically trick the masses into loading more lowest-common-denominator ads. I don’t have tens of millions in overhead to fund and, honestly, don’t have a lot of sympathy for those who do. Put your customers first, make a meaningful difference in their lives with products and service genuinely worth owning, and you’ll find you don’t need advertising.

    We’re fast getting to the point where the people no longer need the corporations. We can generate our own electricity, collect our own water, grow our own food, build our own cars, and create our own content. Make a difference or make way, I say.

    /drops mic, kicks hole in speaker, jets :P

  • Mark Zohar

    Great article. Every couple of years, the industry goes into a frenzy and starts heralding a new(ish) form of advertising that is expected to yield higher engagement, build brand awareness and loyalty and drive higher conversions.

    However, like all the other forms of digital advertising the race to the bottom begins from Day 1. When everyone is doing native advertising no one is doing native advertising. It will quickly become white noise, lose consumer trust and attention and be avoided like the plague…or worse, like display ads.

    Keep in mind that all the publishers, brands and advertisers that are jumping on the native advertising bandwagon are the same folks that brought us display ads, interstitials, video ads and Facebook ads in years prior. Plus ca change, plus ca la meme chose.

    • http://geobrava.wordpress.com/ David H Deans

      Meanwhile, all the ‘practitioner’ marketers that have invested the time and effort to establish a credible online presence — by creating meaningful and substantive content — will reap the rewards of their labor.

      It’s all good… the native ad folks will just find another way to practice their legacy ‘media buyer’ skill set.

  • http://www.dknewmedia.com/ Marty Thompson

    It may be part of the marketing mix today, and it certainly drives advertising dollars. “My God, look at the CTRs we’re getting compared to those crappy old banner ads”, says the publisher. And with any sense of history, we see the slow demise of banner ads as a mirror image of what we’ll most certainly see with “native” advertising. Never mind the continued erosion of trust. The publisher, or the ad exec may not seriously give a damn about “trust”; it is a mere word, an artifact of the sell.
    When I watched the exchange between Andrew Sullivan and Ben Smith, the thing that just made my heart sink was the way the crowd looked at Sullivan, thinking to themselves “what a schmuck.”

    I’ve met so many folks in this business who really believe in the promise of trust, and want to be part of a revolutionary change in how marketers interact with the world. But we can’t wait for technology to do it for us. We have the tools, now, to do better.

    http://www.capitalnewyork.com/article/media/2013/02/7914184/ben-smith-sets-andrew-sullivans-orwell-bells-flatiron-fracas

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  • http://b2bdigital.net/ Eric Wittlake

    Geoff, I agree. And I actually think we are already seeing it. I’d like to add a couple points here.

    First, “native” has come to mean too many different things to be able to talk about it in a single breath. Here is how I’m starting to see Native break out into distinct categories.

    a) Native Publishing. The marketer is actually publishing under the media company’s masthead. Forbes’ BrandVoice program is a great example of this.

    b) Native Content Promotion. Links to content, often labeled recommended, similar, or from around the web. Outbrain and Taboola are a couple of the larger players here. In my view, there isn’t actually a lot that is native. They are ads promoting content running in something that isn’t banner space. I include Sharethrough and Nativo in this category even though the content keeps you on the page.

    c) Social Promotions. Promoting a status update to your own audience or a new/broader audience. LinkedIn, Facebook and Twitter are of course good examples.

    Second, it is declining. I recently went through recent articles from every Forbes BrandVoice marketer and compared them, based on pageviews, to articles written by Forbes staff. Marketers pageviews are 90% lower in my sample (300+ articles). (more stats here, including marketer-by-marketer averages: http://b2bdigital.net/2013/09/19/b2b-native-advertising-brandvoice/ )

    In a followup to the article, I had a chance to talk to one of the marketers using BrandVoice. One very important audience has already started to shun this content: Google. According to the individual I spoke with, Google is now treating these articles differently than core Forbes content and the change is impacting marketers.

  • http://www.wistex.com/ WisTex

    I don’t think it will die, because people want good content, regardless of the source. For example, If I am on a site about recipes, I don’t care if a recipe from Hershey’s that specifically says to use a Hershey’s chocolate bar appears with other content I am looking for. The paid content is relevant to what I am looking for (or even exactly what I am looking for).

    Hopefully what will happen is that there is more disclosure about sponsored content (per FTC requirements and to maintain the publisher’s reputation as a trusted source), and that as people become more aware of sponsored content, they will demand better content (i.e. is actually useful and/or entertaining content and not just a thinly veiled ad).

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