NATIVE ADVERTISING, THE NEXT BIG THING? Part 2

December 15, 2014

Written By Thomas Roos

Part 2: Native Advertising Discussed 

Part one of this paper discussed the rise of native advertising and how it is a result of paradigm shifts in consumer culture as a whole, as well as of developments within the online marketing field. This part will further elaborate on how native advertising is practiced and eventually discuss native advertising in terms of its success, and its limitations. To conclude with I raise the question that I could not answer in this paper, but should be of interest of anyone that has genuine interest in the field of internet marketing and branding. 

Empirical data analysis: Native advertising.

The consumer annoyance and scepticism towards advertisements, advertisers and capitalist practices in general as described in part 1 have forced online marketers in a new direction: native marketing. Native advertising, as explained in this infographic about native advertising by Wasserman (2012), is the creation of high-quality content by brands which is placed “…into the organic experience of a given platform.’’ Perhaps a simpler definition of the concept was given by Keers (2013), on the Content Marketing Association blog: “…instead of a simple, same-everywhere ad, it is targeted content, sitting alongside the publisher's content, but produced by brands themselves.”

The essence of native advertising is that it answers the consumers’ demand for valuable content from brands, whether they are the targeted audience or not. Holt (2002) argues that in the post-postmodern paradigm, consumers will judge brands and their ads on how they add value to people when they are not customers. Samuel Johnson once said: “The true measure of a man is how he treats someone who can do him absolutely no good.’’, and this research provided reason to believe that the same mantra will define brand perception in the post-postmodern internet era. Native advertisements make a clear step into that direction, which is perhaps the reason why they work so well.

A second important strategic advantage of native advertising is that it offers value to both brands and publishers, as well as to different platforms. As Miller, the CEO of The Guardian Media Group (in this case: the platform) puts it: "There's an opportunity to work with advertisers on creating content that meets the editorial aspirations of ourselves and meets their need to get to consumers." {C}(Jackson, 2014){C}. What is being created is thus ‘branded content’ instead of simple advertisements.

{C}{C}{C}To illustrate this, an example is provided that came up during the empirical research online. The picture below shows a BuzzFeed article, and on the surface it seems like another entertaining BuzzFeed article (click on the image to view the full page). Who posted it? It was posted by Captain Morgan, and looking at the marked text in the description, its purpose is not just to entertain you{C} (Muniz & Schau, 2011){C}; it is there to educate consumers about the man behind the rum. On the side, we can find more ‘sponsored content’ from Captain Morgan. Evidently, the success of one such native ad is to create content that 1) enhances brand equity, 2) adds to the publisher’s / platform’s value, and most importantly; 3) is valuable for the audience that needs to be engaged.  

Figure 1 : Native Advertising in practice; Captain Morgan offering valuable content on Buzzfeed.

Native Marketing explained

Buzzfeed, Forbes, The Atlantic, Facebook, The New Yorker, etc; they all have developed a version of native advertising, called ‘sponsored content’, of which the above is an example. Buzzfeed runs completely on the gains from native advertising; not only do they encourage advertisers to settle in between the website contributors, (the regular visitors), but they also offer help to potential and existing advertisers to create content that is likely to be shared often by BuzzFeed users.

An overview of the main players in the native advertising field is provided in this map of native advertising platforms, and was taken from a 2013 article (Berry, 2013), and therefore not completely up to date. However, it accurately shows the division between different native advertising channels. Please note that more players joined this landscape since the map was made, however, the main players have remained more or less the same (Berry, 2013):

• Sponsored Posts and Articles: Facebook and BuzzFeed (and newspapers)
• Sponsored Video: YouTube and ShareThrough
• Sponsored Images: Imgur and TripleLift
• Sponsored Playlists: Pandora (mainly U.S) and Spotify (mainly Europe)
• Sponsored Links: Disqus and Zemanta (many more have emerged)
• Sponsored Listings: Uncrate and Yelp

Discussion.

In a study that was published on February 12th 2014, The Media Briefing (Taylor, 2014) investigated the traffic around these native ads and provided this study with interesting data collected from 689 BuzzFeed native ads posted by 51 companies.

The results (average ad shares per social platform) are astonishing:

• 263 Facebook shares
• 36 Tweets
• 7 Google ‘plus one’s’
• 44 Pins
  
• 2 Linkedin shares

Additional outcomes of the study:

• Native advertising on BuzzFeed is likely to result in 4241 total social media interactions.
• Spotify’s native ad wins: 8530 Facebook shares, resulting in almost 50.000 Facebook interactions, including likes and comments.

According to The Media Briefing (2014), it can therefore be argued that BuzzFeed’s native advertising strategy is a tremendous success simply because advertisers love the idea that consumers will share an ad on their social network platforms. Why? It turns out that the earlier-mentioned Word of Mouth is of vital importance for gaining trustworthiness, and therefore is much more likely to lead to an increase in sales (see table 1 below). “That these services enable only the sharing of content on the Web is not important here. What is important is that they allow simultaneous sharing in reality.” (Akar & Topcu, 2011, p.39).

A 2012 study conducted by The Nielsen Company (2013) indicated advertising in the form of word-of-mouth recommendations from friends and family continued to be the strongest factor triggering action among 84% of 29.000 global respondents from 58 countries (table on the next page).

Table 1: Nielsen Global Survey of Trust in Advertising, Questionnaire 1-2013 (Nielsen, 2013)

Native Marketing explained

A brief Critique and suggestions for research.

Some critique is being raised about native advertising as a new form of online advertising.  Listed below are the most commonly raised issues:

• Many platforms may not have the capacity to handle the growing amount of native advertising, even though they say they can (Kantrowitz, 2013).
• It is generally hard to tell whether native advertising is more successful than conventional banner methods, as they are used at different scales.
• Joe McCambley, who helped creating the first banner ad, says that native advertising might destroy journalism, as “You are gambling with the contract you have with your readers,” and “How do I know who made the content I am looking at and what the value of the information is?” (Carr, 2013).
• There are ethical questions being raised about the extent to which for instance The New Yorker is fooling their audience and breaching the contract of offering valuable and trustworthy content.

The scope of this paper leaves no room for discussion of the above, therefore it is suggested that further research should be done towards the limitations of native advertising, in terms of scalability as well as in terms of ethical issues.

 

Conclusion.

Web 2.0 has made a significant impact on the power relations between brands and their audience, and native advertising is one answer to this paradigm shift. Online advertisers now find themselves on thin ice, as the “…web-based power struggles between marketer and consumer brand authors challenge accepted branding truths and paradigms: where short-term brands can trump long-term icons, where marketing looks more like public relations, where brand building gives way to brand protection, and brand value is driven by risk, not returns.” (Fournier & Avery, 2011, p.193). This paper confirms that advertisers will always be looking for better ways to reach their audiences, and that those who are most adaptive to change will always be upfront.

Bibliography

Akar, E. & Topcu, B., 2011. An Examination of the Factors Influencing Consumers’ Attitudes Toward Social Media Marketing. Journal of Internet Commerce, 10, pp.35-67.

Barwise, P. & Meehan, S., 2010. The One Thing You Must Get Right When Building a Brand. Harvard Business Review, December, pp.80-84.

Benway, J.P., 1998. Banner Blindness: The Irony of Attention Grabbing on the Word Wide Web. Proceedings of the Human Factors and Ergonomics Society 42nd Annua meeting, 1, pp.463-67.

Berry, E., 2013. The hottest companies in native advertising. [Online] Triplelift Available at: http://www.imediaconnection.com/images/content/07032013Berry-NativeAdvertisingLandscape-01-lg.png [Accessed 14 February 2014].

Burke, M., Hornof, A., Nilsen, E. & Gorman, N., 2005. High-Cost Banner Blindness: Ads Increase Perceived Workload, Hinder Visual Search, And Are Forgotten. ACM Transactions on Computer-Human Interaction, 12(4), pp.423-45.

Buscher, G., Dumais, S.T. & Cutrell, E., 2010. The Good, The Bad, and The Random: an Eye-Tracking Study of Ad Quality in Web Search. Proceedings of the 33rd International ACM SIGIR Conference on Research and Development in Information Retrieval, pp.42-49.

Carr, D., 2013. Storytelling Ads may be Journalisms New Peril. [Online] Available at: http://www.nytimes.com/2013/09/16/business/media/storytelling-ads-may-be-journalisms-new-peril.html?ref=mediaequation&_r=4& [Accessed 10 February 2014].

Christodoulides, G., 2009. Branding in the post-internet era. Marketing Theory , 9(1), pp.141-44.

Deighton, J. & Kornfeld, L., 2009. Interactivity's Unanticipated Consequences for Marketers and Marketing. Journal of Interactive Marketing, 23, pp.4-10.

Firat, A.F. & Venkatesh, A., 1995. Liberatory Postmodernism and the Reenchangtment of Consumption. Journal of Consumer Research, 22, pp.239-66.

Fournier, S. & Avery, J., 2011. The Uninvited Brand. Business Horizons, 54(3), pp.193-207.

Holt, D.B., 2002. Why do Brands cause Trouble? Journal of Consumer Research, 29(1), pp.70-90.

Jackson, J., 2014. Guardian CEO: 'This is about following how people consume media in a digital world.'. [Online] Available at: http://www.themediabriefing.com/article/guardian-ceo-andrew-miller-open-advertising-known-membership [Accessed 9 February 2014].

Kantrowitz, A., 2013. Can Native Advertising Scale? These Networks Say It Can. [Online] Available at: http://adage.com/article/digital/native-advertising-scale-networks/243854/ [Accessed 14 February 2014].

Keers, P., 2013. Why Content Marketing Should be going Native. [Online] Available at: http://www.the-cma.com/news/why-content-marketing-should-be-going-native [Accessed 11 February 2014].

Levine, R., Locke, C., Searles, D. & Weinberger, D., 2001. The Cluetrain Manifesto: The End of Business as Usual. New York: Perseus Book Group.

Mick, D.G. & Buhl, C., 1992. A meaning-based Model of Advertising Experiences. Journal of Consumer Research, 19, pp.317-38.

Muniz, A.M. & Schau, H.J., 2011. How to inspire Value-Laden Collaborative Consumer Generated Content. Business Horizons, 54, pp.209-17.

Nielsen, 2013. Global Trust in Advertising and Brand Messages Report 2013. [Online] The Nielsen Company Available at: http://se.nielsen.com/site/documents/NielsenGlobalTrustinAdvertisingReportSeptember2013.pdf [Accessed 13 February 2014].

Palant, W., 2014. Adblock Plus. [Online] Available at: https://adblockplus.org/en/chrome [Accessed 14 February 2014].

Ritson, M. & Elliot, R., 1999. The Social Uses of Advertising: An Ethnographic Study of Adolescent Advertising Audiences. Journal of Consumer Research, 26, pp.260-77.

Rubleski, T., 2008. Mind Capture: How You Can Stand Out in the Age of Advertising Deficit Disorder. New York: Morgan James Publishing.

Salmon, F., 2013. The Disruptive Potential of Native Advertising. [Online] Available at: http://blogs.reuters.com/felix-salmon/2013/04/09/the-disruptive-potential-of-native-advertising/ [Accessed 12 February 2014].

Smith, P., 2013. The Media Briefing: Is it Time to Move on from Intrusive, Annoying Online Advertising? [Online] Available at: http://www.themediabriefing.com/article/is-it-time-to-move-on-from-intrusive-annoying-online-advertising [Accessed 14 February 2014].

Taylor, H., 2014. The Media Briefing: BuzzFeed's native advertising: really making ads you want to share? [Online] Available at: http://www.themediabriefing.com/article/buzzfeed-native-ad-social-sharing [Accessed 13 February 2014].

Varadarajan, R. & Yadav, M.S., 2009. Marketing Strategy in an Internet-Enabled Environment:A Retrospective on the First Ten Years of JIM and a Prospective on the Next Ten Years. Journal of Interactive Marketing , 23, pp.11-22.

Vargo, S.L. & Lusch, R.F., 2004. Evolving to a New Dominant Logic for Marketing. Journal of Marketing, 68(1), pp.1-17.

Wasserman, T., 2012. Mashable: This Infographic Explains What Native Advertising Is.. [Online] Available at: http://mashable.com/2012/12/13/infographic-native-advertising/ [Accessed 10 February 2014].

Wind, Y., 2008. A Plan to Invent the Marketing We Need Today. MITSloan Management Review, 49(4), pp.20-28.

Winer, R.S., 2009. New Communications Approaches in Marketing: Issues and. Journal of Interactive Marketing, 23, pp.108-17.

Xiang, Z. & Gretzel, U., 2010. Role of social media in online travel information search. Tourism Management, 31, pp.179-88.

NATIVE ADVERTISING, THE NEXT BIG THING? Part 1

December 11, 2014

Written By Thomas Roos

Part 1: How Web 2.0 gave consumers endless power

An introduction to native advertising.

Native advertising is a new phenomenon within the online advertising field and by some people is referred to as the new disruptive online advertising strategy (Salmon, 2013). Native advertising has received wide-spread attention within the online marketing field, especially among content marketers, but seem to be poorly understood by too many stakeholders. (The average monthly Google searches of the term ‘native advertising’ has gone from 800 January 2013 to 4000 in 2014.) Native advertising includes ads that ‘blend in’ with the content that surrounds them, but are actually branded and paid for. Evidently, the success of one such native ad is to create content that 1) enhances brand equity, 2) adds to the publisher’s / platform’s value, and most importantly; 3) is valuable for the audience that needs to be engaged.

The nature of this paper and the reason for writing.

This article will merely reflect upon my interpretations of the information that was collected and processed, and it is written to provide deeper understanding of native advertising. But most importantly; it tries to identify native advertising’s place in the existing marketing paradigm and to relate it to current movements within consumer culture.

After reflecting back upon the recent paradigm shifts in society and in internet marketing that are relevant to the rise of native advertising practices, I will display the findings from a literature search, highlighting authors that made future predictions in regards to the development of (internet) marketing and advertising. In the second part, the empirical data resulting from an explorative study using netnographic methods and secondary data sources will be analysed and discussed. After illustrating the essence of native advertising and how native advertising has developed to what it is now, I will provide the reader with an argument that explains the success of native advertising for brands. The paper will conclude with a discussion of native advertising and how its success might be predicting the future form of advertising in Web 3.0

Consumer resistance to online advertising.

Online advertisements are everywhere. It seems that there is no way to escape them, even though we were fairly quick to adapt our cognitive efforts to the overwhelming amount of stimuli; nowadays 90% of the banners is selected out by our brain and does not even reach our conscious mind (Benway, 1998) (Burke et al., 2005) (Buscher et al., 2010).

Digital advertisements have become more and more intrusive, some colourful, some beautifully simple; but they all annoy us to a certain degree. Certainly, advertisers and marketing agents have become better and better at drawing the online wanderer’s attention along the way, using a variety of methods (Winer, 2009, p.110).

‘’The early part of the 21st century has witnessed an explosion in new media utilized by marketing managers to reach their customers’’ (Winer, 2009, p.119). Not solely through visual attractions, no, a fine-tuned mix of audio-visual materials is often used to facilitate a desperate call for attention. Think of the time you were listening to your favourite playlist on Spotify, rudely being interrupted by an audio advertisement in your native language, along with a screen-size billboard popping up on your screen. Think of the times you were distracted by extravagant banners on the side of the news article you were trying to read. Think of that, and you’re thinking of the post-modern internet era, an era of ‘advertising deficit disorder’ (Rubleski, 2008).

A simple, but effective way to deal with these annoying banners and ads, is simply to install so-called ad-blocking plug-ins such as Adblock, that claims to have been downloaded over 200 million times (Palant, 2014). When companies started blocking Adblock users with software called Adblockblock, activists invented Adblockblockblock to avoid that (Smith, 2013), indicating an endless cat and mouse play.

Literature study: Are we witnessing the maturation of Web 2.0?

Even though the past decade has shown us numerous examples of brands that successfully drew the attention of their target audience, it seems like the ‘traditional ways’ of online marketing (Winer, 2009, p.110) are getting out of fashion. More specialized online marketing such as interactive methods have emerged in the past years, indicating a possible maturation of the online marketing paradigm as we know it (Wind, 2008) (Varadarajan & Yadav, 2009, p.20). 

This maturation of internet marketing goes along with shift in society as a whole. The paradigm shifts that have taken place in consumer culture naturally have their effect on marketing. In the current postmodern consumer culture, brands are used primarily for identity building projects. A growing body of literature from a more consumer culture perspective deals with how advertisements are perceived by consumers nowadays. Slightly older, but still very relevant contributions to this body of literature were made by Mick and Buhl (1992) and by Ritson and Elliot (1999). The former argue that ads function considerably as carriers of social meanings and are actively being used for identity building and creation. The latter argue that ‘’advertising can form the basis of for a wide variety of social interactions’’ (p.273). Firat and Venkatesh (1995) argue, - in their rather elaborative description of the postmodern condition of consumer society-, that “...it is not to brands that consumers will be loyal, but to images and symbols...’’ (p.251). Deighton and Kornfeld (2009, p.9) therefore argue that of their five possible strategies for interaction with online consumers, the one that facilitates people’s identity projects and that contributes to a collective sense-making will be the most successful.

{C}{C}{C}{C}In Why do brands cause trouble? (2002), Holt predicted a paradigm shift from postmodernism to what he calls ‘post-postmodernism’. He provides evidence for the impact that contemporary anti-branding movements will have on marketing as whole, and based upon the exploratory research that was conducted, this paper suggests that these predictions are to a large extend applicable to the online marketing paradigm as well. The recent changes in consumer attitude towards brands show that branding has become a fine art and is now subject to growing consumer scepticism of brands, producers and capitalist systems in general (Holt, 2002) (Barwise & Meehan, 2010). The well-awake and self-educated brand critics that we used to call consumers are now questioning the authenticity of each branded article, advertisement, blog or other content they come across. Advertising online is subject to a changing power balance between producer and consumer, and brands will be valued as long as they allow interaction from both sides and can be used to create meaning (Vargo & Lusch, 2004). As Christodoulides (2009) argued already 4 years ago: “Post-internet branding is about facilitating conversations around the brand” (p.142).

The empowerment of the consumer is enhanced in the numerous user-generated content (UGC) platforms: “…whether the news is good or bad, they will tell everyone.” (Levine et al., 2001). Recent examples of consumer empowerment include single Youtube videos posted by one single individual, resulting in substantial losses (or gains) in brand equity when going viral, and proving why Word Of Mouth (WOM) is one of the strongest means through which a brand can gain exposure. Later on WOM will be discussed further. 

Consumers have turned to UGC to inform themselves and others about brands and products, rather than listening to companies (Xiang & Gretzel, 2010, p.180). Now the companies seem to have their answer: settle in between the audience through native advertising.

Part 2 of this paper will take the above into consideration when discussing empirical examples of native advertising as an answer to this changing power balance, as well as its successes and limitations. It will offer visual aid while explaining the essence of native advertising.