Published on March 10, 2014
WELCOMETO.. ANEWAGEOFADVERTISING ANEWAGEOFJOURNALISM ANEWAGEOFINVENTION AREYOUREADYFOR..
THENATIVEAGE–HERE’S THESCIENCE • We conducted a consumer survey of 2,000 people with the aim of understanding current online behaviour, current engagement with brands online, key success factors of brand engagement online, and most importantly, the perception and appeal of native advertising versus traditional advertising through creative testing. KEYFINDINGS • We produced a clear deﬁnition of native advertising. • We discovered a generational shift in the way people respond to native advertising. • We identiﬁed what works – and what doesn’t. • We pinpointed key examples of best practice. • We developed a conclusive blueprint for successful native advertising. RESEARCHOBJECTIVES • To produce a deﬁnitive body of work giving a true insight into native advertising, present and future. • To help the industry move towards a clear deﬁnition of native advertising. • To clarify best practices in native advertising. • To produce guidelines on how to succeed in native advertising. CHALLENGES • There is a lack of knowledge about the subject – even within the industry. • There are wide and varied understandings of the term ‘native advertising’. • Different stakeholders are competing for ownership and have challenging viewpoints. • There is a need for collaboration – to bring together different skillsets. • The balance of power shifts as we identify the key primary skills. METHODOLOGY • We carried out a series of in-depth interviews with media owners, brand marketers, marketing directors, agency heads and opinion leaders. • We surveyed a range of experts - 20 media owners, editors and journalists, 20 brand marketers, marketing directors and CMOs, 20 agency heads and senior decision makers, and ﬁve bloggers.
LETUSINTRODUCEYOUTOTHE TOTHENATIVEAGE Here we will look to deﬁne Native Advertising? Is it a meaningful trend that's here to stay? Or simply the latest buzzword? Should you be doing it? And if so, how and why? Welcome to AOL UK's 'Native Age'. The separation of ‘Church’ and ‘State’ in the media world is a long held truth. The Church, that is, journalists, their opinions and stories, and The State, media entities and their advertising, co-exist in an arm’s length relationship; related, but divided. Today, we believe that metaphor is broken. Why? The emergence of Native Advertising. We believe the failing of the ‘old media’ metaphor of Church and State metaphor excludes you - the congregation. Historically people were on the outside looking in, a passive audience to be preached to whether by editor or advertiser. Today, on sites like the Hufﬁngton Post, and across the media spectrum, readers are taking an increasingly active role in ﬁnding, editing, writing and recommending their news and entertainment online. These new forces in storytelling and editorial are forcing media owners and marketers to rethink the old models, and deﬁne new ways in which the Church, State and Congregation can interact. As one of the leaders in this new paradigm of media, we have set out to deﬁne the new era of Native Advertising, with a particular focus on what it means for advertisers and marketers. • Listen to a key audience of media owners, brand marketers, marketing directors, agency heads and opinion leaders – and tap into their unique perspectives. • Take a look at our intriguing expert survey of 20 media owners, editors and journalists, 20 brand marketers, marketing directors and CMOs, 20 agency heads and senior decision makers, and ﬁve bloggers. • Examine the thought-provoking results of our consumer survey of 2,000 people, which gives us huge and valuable insights into the perception and appeal of native advertising versus traditional advertising. Delve into their current online behaviour, and their current engagement with brands online, and we’ll help you discover the key success factors of brand engagement online.
NATIVEADVERTISING– WHATISIT? Native advertising is: sponsored content, which is relevant to the consumer experience, which is not interruptive, and which looks and feels similar to its editorial environment. The quality of that content is key in the Native Age - it has to be great content that the consumer wants to read, watch and share. Sean King, CEO of Seven, an award-winning content marketing agency, says: “The content agenda is really massive now… Everybody is talking about content. Everybody. If you are a social media editor, a digital agency, media editing, an ad agency, a PR agency, they are all talking about content.” We believe transparency is also vital; native advertising needs to be clearly signposted so that users know the content is funded by a brand. The Atlantic magazine’s Scientology advertisement, the social media backlash and the media’s subsequent apology serves as just one example of how readers expect this transparency, and of how media owners must recognise their responsibilities in this space. So we’ve given you a deﬁnition – now we’re going to show you what to do with it. It’s here already – but you may not know it yet. You may not know what it’s called. You may not know what it looks like. But you’ve probably experienced it. And that’s the beauty of native advertising. However, we believe a common deﬁnition of Native Advertising will be crucial to its future uptake and success across the industry. A true deﬁnition will give consumers, marketers and brands conﬁdence in the model. As Phil Reay-Smith, Head of Media at Ogilvy PR, says: “Native advertising is one of those phrases that people use a lot, but don’t always understand. So it does demand deﬁning.” We conducted a series of fascinating in-depth interviews with industry experts and they all agreed it’s a commercial buzzword that most consumers are not aware of – even if they’re engaging with it. Carla Buzasi, editor-in-chief of the Hufﬁngton Post, says: “If you are logging onto a website at the moment, chances are at some stage you are going to come across native advertising, you just don’t know it. This is about a client’s wish to get closer to and talk to <people> in a more natural way than they have done in the past.” From our extensive research we can now show the industry a clear deﬁnition of what native is.
EXAMPLESOFGREATNATIVE ADVERTISING Brilliant native advertising is already here. Here are three examples, one from HuffPost, and two broader examples. We believe all three work are powerful because they successfully hit the crossroads of readers’ interests and the brand’s agenda – the core of great Native. HUFFINGTONPOSTANDICELAND Inspired by Iceland was a cross-platform campaign launched by AOL in partnership with the country’s tourism board, Promote Iceland. The Hufﬁngton Post UK launched an “Inspiration” section, which allowed brands to communicate with consumers through video, blogs and social media. We pulled together a host of inspiring content – editorial, features, videos, galleries, blogs – creating a destination site where Iceland could open its doors to the world with superb content that people could really connect with. Key Results: #1 Iceland’s appeal as a holiday destination increased by 69% #2 Consideration of Iceland as a holiday destination increased by 130% #3 Consideration of Iceland as the ‘trip of a lifetime’ increased up 74%
EXAMPLESOFGREATNATIVE ADVERTISING THEATLANTICANDPORSCHE Where Design Meets Technology was a partnership between The Atlantic and Porsche, aiming to illuminate the intersection of contemporary design and trailblazing technology. Sponsored photo galleries, in-depth blogging and online chats, which highlighted the innovation and trends being developed. REDBULLANDYOUTUBE Red Bull’s Stratos Project is arguably the poster child of content marketing and Native Advertising, even if we don't all enjoy similar stratospheric budgets. We all know it was remarkably successful, with 8 million views of skydiver Felix Baumgartner’s jump from the edge of space. The brand helped create and fund the mission which went further than a normal marketing campaign; it was a genuinely fascinating project in its own right. This campaign took the idea of quality content to a whole new level.
GENERATIONN– THENATIVEGENERATION • Crucially, published brand content is most likely to have a positive impact on young people’s relationship with a brand. More than a quarter of 18-24s said published brand content was most likely to make a brand appeal to them, compared to an 11% average. • The younger audience says the most important thing in online advertising is interesting and useful content (35%) followed by entertaining and fun content (28%). • This age group is much more likely to interact with brands online. Almost half of 18-24s interact with brands online compared to only a quarter of the 64+ age group. • More than half of the younger audience agreed that online ads could be interesting and useful, compared to just one in ﬁve of those aged 64+. Similarly half of those aged 18-24 agreed that online ads could be fun and entertaining – again falling to one in ﬁve of those aged 64+. • Almost a quarter (24%) of the 18-24 age group said they would be most likely to interact with Facebook sponsored stories, compared to an average of 15%. The next most popular among this age group was published brand content (19%, compared to a 9% average). This young age group was less likely to interact with a standard display ad (9%, compared with an average of 15%). The emergence of a new advertising paradigm heralds the emergence of a new generation of people who strongly favour it. They may not know the term “native advertising” – but our research reveals that young people love it. They see it, they emotionally engage with it, and they have a strong preference for Native over traditional advertising. Our study proves that this new native generation - Generation N - actively wants to interact and engage with brands online. With this report we can reveal a very strong correlation between age, online behaviour and the performance of native advertising. Generation N perceives native advertising as more appealing than traditional ads; they get their news mainly online; social media is hugely important to them; and they see online advertising generally in a much more positive light than older people. Older consumers, raised in a pre-internet world, still get their news mainly ofﬂine and are not familiar with most social media platforms. They have less interest in interacting and engaging with brands online, and perceive online advertising in a more negative light than younger people do. They prefer traditional advertising over native ads.
GENERATIONN– THENATIVEGENERATION Carla Buzasi, editor-in-chief of the Hufﬁngton Post, says this young audience is clearly crucial and brands need to ﬁnd new ways of reaching out; and that’s why native advertising is already working for the HuffPost. “There are actually brands out there who want to reach that young audience and cannot ﬁnd them anywhere else,” she says. “But they can ﬁnd them on Hufﬁngton Post. So you bring that brand to that audience around something, a theme that they are passionate about and that is when you create magic.” Generation N is a digital generation, with a whole new set of habits, passions and a completely different way of life to that which has gone before. Generation N demands something new – something Native.
THENATIVEAGEISHERE TOSTAY So native advertising is crucial today for reaching our often elusive younger audience. And as this generation grows up and keeps its media preferences, Native is set to grow and grow. According to George Bryant, MD of content agency Brooklyn Brothers, the best is yet to come: “Those people who are creating the best native marketing recognise that the best hasn’t been done yet.” Carla Busazi, editor-in-chief of the Hufﬁngton Post, says: “I think Native is working well for the brands that are prepared to experiment and I think that every brand has that capacity but a lot of them aren’t doing that yet, because they are nervous. “But if they continue with that tried and tested way and everyone else has moved on, including consumers, they are going to get left behind.” Brands must join the Native Age before they get left behind. Marketers need to seek out those with editorial skills who can help them cross the divide, and media organisations need to stop seeing native advertising as the “dark side” and embrace it as their saviour. Just as today we all hold on to many of our media habits developed around the emergence of television as a mainstream channel of communication in the 40s, 50s and 60s, so today’s teenagers, 20- and 30-somethings will take their predilection for Native advertising into their later life. They are not going to suddenly revert to preferring banner ads. We believe this audience’s preference for Native Advertising is here to stay; and when you factor in natural demographic forces and progress, this is an audience and a preference that will continue to grow. Preference for Native is not about age per se; it’s about a generational shift which has only just begun – and it’s set to have long-lasting effects.
GREATNATIVEADVERTISING–THE FOUNDATIONSOFANEWEMPIRE Experts and consumers are completely agreed on the key success factors of native advertising – and we can now share them with you. 1. Tell a great story – be interesting and engaging 2. Be entertaining – Generation N is crying out for entertainment 3. Align with consumers’ interests – tap into their passion points 4. Be relevant to current online activity – don’t interrupt 5. Be clearly signposted – don’t try to fool anybody! • At the heart of native advertising is fantastic content that people want to consume, want to read, to share, to comment on, to interact with. This is where editorial skills can rise head and shoulders above the traditional story telling skills of an advertising creative. Journalists know what makes a great story and how to tell it right. They can produce content that makes consumers feel inspired and entertained. Content that engages consumers on an emotional level. What matters to readers? What is going to make them smile? What is going to make them think? What will they share with their network? These are questions journalists ask themselves hundreds of times every day. Let’s remind ourselves of our deﬁnition: Native advertising is: sponsored content, which is relevant to the consumer experience, which is not interruptive, and which looks and feels similar to its editorial environment. And let’s also accept it has an emerging and crucial role for a younger audience today, and a growing audience tomorrow. We know what it is, and we know why it's so important to the future of marketing. But how do we do it? Media agencies and creative agencies need to brace themselves for a new challenge. Our research clearly indicates an 'EDITORIAL FIRST' approach where the story telling skills required are those of a journalist, not a copywriter or script-writer. The editorial skill set is vital for success. Ask yourselves - do you have it? Every media agency should be asking themselves – where are our journalists? Where are our editors? Where is our news sense coming from? With unique insights from our research, we can now create a blueprint for the best native advertising.
GREATNATIVEADVERTISING–THE FOUNDATIONSOFANEWEMPIRE • Marketing Directors – get used to your brand agenda not being the starting point you’re your campaign. Fernando Machado, Global Brand VP for Dove, says: “It’s about developing content that people choose to watch and share. Not developing content that you simply broadcast to brainwash people or to persuade them to do something.” • Consumers need to be able to relate to this content – it has to resonate with them. Brands have to identify the audience which will ﬁnd their brand relevant, rather than picking an audience and diluting their message to ﬁt. They need to interact with consumers in an area of interest to them; an area both brand and reader are passionate about. When we asked our experts to identify their top three guidelines for producing successful native advertising campaigns, an overwhelming 71% chose “Be relevant to the audience”. • You need to be entertaining – and that means creativity. The challenge is to get creative minds working together to create something new, something that creates talkability and publicity. Something that will entertain, amuse and create a different experience for consumers. Here again the need to bring in a new, editorial skillset comes to the fore. In our expert survey, we asked respondents to tick their top three best practices that were most relevant for successful native advertising. Top answers were: Be creative (43%); Be innovative (29%); Be authentic to the tone and values of the brand (26%); Tell a great story (23%); and Be authentic to the tone and values of the media owner (23%). • Content is not just king, it’s queen, prince, princess, corgi, and all the subjects of the realm. Editorial skills are becoming more and more valuable, and the distinction between journalism skills and advertising skills is blurring. High quality content leads to engagement, which leads to scale. Everyone is falling over themselves to produce great content – and that’s where a whole new skillset is evolving. Phil Reay-Smith, Head of Media at Ogilvy PR, says: “Where the magic can happen is for it to be interesting. And so if a consumer sees a sponsored post and actually just wants to read it for the sake of reading it because it's interesting, that's when you actually get more engagement than you ever would with a banner advert or any form of interrupted advertising. This is advertising that draws you in.”
GREATNATIVEADVERTISING–THE FOUNDATIONSOFANEWEMPIRE Paul Wilson, managing partner at media agency SMV, says native advertising without engaging, entertaining, informative content will fall ﬂat on its face. “If you are distracting somebody or you’re encouraging somebody to click on something to go to another place and then you’re not delivering on that promise then that’s frustrating. People want better quality or more instant content.” Sean King, CEO of content marketing agency Seven, says this is the present and the future and it’s about time brands realise it. “The action is where the content is, that is where you interact with the customers, where you engage with them, where you collect data from them, where you give back value to those people,” he says. “That is where it's at and I think if brands don't realise that now, they will.” There is a huge appetite for content in the Native Age – and advertising needs to look outside its own world, climb over the walls and reach out to those with the experience and knowledge to deliver. Advertising needs to seek out editorial experts – trained, experienced journalists who can help capture hearts and minds in a Native Age. Great journalists have their ﬁngers on the pulse of the news agenda and have an outstanding instinct for the information people need and want.
KINGPINSOFTHE NATIVEAGE Creative/media/content agencies Agencies think they own native advertising. They don’t. Most agencies don’t have the skillset to produce great native advertising on their own. They need to let go and accept that native advertising must be associated with quality editorial content – and be prepared to invest. There is also a danger that agencies will rush for scale, losing the impact of native advertising; they need to create new business models for the Native Age where volume is not necessarily the master. Brands Brand owners need to learn more about native advertising and how to make a solid business case for it. They must be prepared to take risks, invest in experimentation and let go a little control. There is a danger that brands want to maintain too much control over their commercial message – hampering creativity and innovation. However they do need to ensure relevance to their brand. Perhaps the second most common question asked by media land after ‘What is Native’ is the question of ownership. Creative agency, media agency, media owner, and of course brand. Who owns the space and who leads? It may surprise some to hear us say “everyone”. This is not a space that can be dominated by the media owners’ wishes, media agencies’ budgets, or the creative power of creative agencies. Fundamentally, Native requires a collaborative approach. A recognition that only by satisfying all agendas will a truly successful Native result be realised, for reader, media owner, brand and its agencies. Here we explore the different skillsets, collaboration requirements and opportunities. Media owners There is a huge opportunity here for media owners to ﬁnd ways to increase revenues. They can uniquely offer that crucial editorial skillset to clients and agencies and optimise this major revenue opportunity. They also need to choose partners carefully – the content will carry the trust and reputation of their media brand. Sponsorship needs to be ﬂagged clearly and an environment created to foster interaction between consumer and brand.
Nigel Gwilliam, head of digital at IPA (Institute for Practitioners in Advertising), makes a clear distinction between “publisher-led native” and “social-led native”. “I do sense there is a fairly signiﬁcant difference between publisher-led native and social-led native,” he says. “I think social platforms of a scale, most notably Facebook and Twitter, are new kinds of environments that are understandably looking to ﬁnd advertising that best suits something that they offer which hasn’t really been offered before.” Social media has tremendous power, but our ﬁndings challenge the idea that current advertising on platforms such as Facebook and Twitter ﬁt into the category of native advertising. Twitter’s purchase of MoPub, the automated trading company, shows it is attempting to take advantage of improving online targeting technology, and it believes this will improve its claim to host native advertising. However this remains to be seen. Facebook, Twitter et al are still searching for a form of native advertising – but they haven’t found it yet. These ads are native to their environment but not native to the reader / user. SOCIALMEDIAISVITAL BUTISITNATIVE? Social media is a leader in Native. Right? Perhaps, but we would argue that social media cannot be truly native. It’s a wannabe – but it can’t be. By deﬁnition, Native must be tailored to the environment it is being shown in. And with all of our social feeds absolutely unique to us, it’s impossible for brands to create unique Native ads that are tailored to individual feeds. Sponsored tweets and sponsored Facebook posts reach a wide audience and enjoy high engagement, but it’s an interruptive experience for most users. As they are not selected or individually tailored, these posts and tweets stand out to users – and they engage with them differently from the way they engage with native advertising. In the overall context of a native advertising campaign, social is of course crucial. It can deliver scale, it needs editorial skills; and it can produce a high level of engagement if done correctly. Social media can work alongside native to engage consumers with brands. Social media feeds can even be integrated effectively into native advertising campaigns, widening reach across platforms.
CONCLUSIONS.. HUFFINGTONPOST.CO.UK /NEWS/NATIVE @HUFFPOSTUK #NATIVEAGE
THENATIVEAGE:ADVERTISING ANDJOURNALISM–ABIGBANG Native advertising could not simply be the future for paid advertising; it could also be the future for journalism. To keep journalism alive, advertising needs to succeed. Phil Reay-Smith, Head of Media at Oglivy PR, says: “Will native advertising be responsible for the decline of journalism? It might be the thing that keeps it alive. I mean right now there's no question that journalism is facing a serious test. Old models of affording journalism are dying out, as in charging people for newspapers or even advertisers sponsoring television news. The revenues are shrinking… Journalism is in a ﬁght for its future.” Media, brands, marketers – we’re all in a ﬁght to capture the hearts and minds of a young, tech-savvy, super-smart audience. Carla Buzasi, editor-in-chief at the Hufﬁngton Post, says: “There is this huge appetite for content and that means that we have to up our game; it means every media has to up their game. It means there is a huge amount of choice out there and the audience gets smarter and smarter about the kind of content they want to consume and where they want to consume it from.” Are you ready to up your game? Are you ready for the Native Age? Our conclusion? Native advertising might well be the latest advertising buzzword, quoted at every conference and blogged and tweeted by many. At AOL UK, we believe that's with good reason. Our research has proven that this emerging advertising channel has the potential to bridge the gap between editorial and advertising, between a brand’s agenda and the audience’s agenda. As a result, we believe Native will soon graduate from buzzword to a force to be reckoned with; a highly effective channel for clients, and a growing revenue stream for the media owners willing to adapt and embrace it. What is needed is a fresh approach – a new relationship forged between editorial skills and marketing. Media owners are in an ideal position to lead the way forward. They can offer a huge editorial skillset to clients and agencies. Brands, marketers and media organisations need to seize the day. Brands are increasingly looking to establish a dialogue with consumers online. Those who are brave and willing to experiment are already seeing the greatest beneﬁts of native advertising. Agencies need to be persuaded that native advertising has to be associated with quality, and brand owners need to be able to make a strong business case for native advertising; we hope our research advances both of these cases.
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