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Why Luxury Brands Love Native: The Agency Perspective

Native advertising is one of the industry's hot topics right now, so we have introduced this three-part series to delve into the phenomenon from the perspective of a technology company and premium ad network (Martini Media), an agency (Morpheus Media), and a SaaS platform (Flite).

Native advertising may not be new, but it is a hot trend in the industry right now. Brand marketers -- particularly those for luxury brands -- find native advertising and the associated level of engagement are important to their marketing goals for a number of reasons. From the agency perspective, we understand their passion for native, and as interest continues to grow, we’re gaining a deeper understanding of its popularity.

1. First, luxury brands want to differentiate themselves from other advertisers and position themselves in the market as having a truly unique story to tell. In order to do this, they have to find ways within the landscape to distinctively stand out and effectively communicate their messaging. By incorporating their product within content, social posts and video, they are integrating and tailoring their brand message for the publisher’s audience without interrupting the experience.

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We have seen multiple executions of native advertising across our luxury fashion and beauty brands. One cosmetics advertiser partnered with a publisher that enabled them to work with influencers in highly populated DMAs. Working with these influencers, the advertiser was able to develop unique content that seamlessly integrated their lipstick line into the publisher’s site while telling a story that resonated with consumers in each locale. The editorial showcased DJs, musicians and bloggers, who spoke about popular hot spots in their respective cities, while also presenting looks that would be suitable for a night on the town. By sponsoring the content, the advertiser was able to endemically captivate their target audience and drive higher engagement with the brand.

2. Second, luxury brands seek to offer something new to the consumer that positions them positively in their target’s mindset while influencing brand perception.  By having brands “sponsor” in-stream content or stating that an offer or engaging content is “Brought to you by Brand X,” consumers will feel they are receiving some type of exclusivity or unique benefit within content they are already consuming. The end result is that brand perception is shifted and a connection is established, bringing the luxury brand closer to the consumer on a more personal level.  

3. Lastly, luxury brands seek to drive better user experience and create brand associations.  The more compelling the content our brands align with, the better the consumer experience. Advertisers are then able to attract new consumers while they continue to build brand loyalists. 

Although native advertising is the hot to market opportunity of the year, there are a few challenges in purchasing and measuring these ad units. With respect to standard pricing, there is none offered across publishers. The pricing can range from added value (“sponsored by” logo) to premium CPMs for custom advertorials. Heavy negotiations often have to occur in order to meet client expectations and remain efficient. Negotiating native ads is not as clean and simple as negotiating CPMs, as the discussions typically revolve around the production of this type of opportunity, including the staffing required for message customization. 

The turnaround in production may also vary. For example, if the advertiser was interested in deeply connecting with an audience and sponsoring a specific section on a site, edited content would have to be approved and vetted by multiple parties. A strong foundation and solid relationship must also be built with the publisher, since clients will need to trust and adapt their brand within the environment laid out for them.

Measurement for native advertising varies based on client KPIs. Depending on the campaign initiative, engagement metrics could range from social media likes, shares, video completion rates and time spent on the content provided. Thus far, across our luxury fashion and beauty brands, we have found that native advertising drives a higher CTR in comparison to standard display advertising. These brands have also received positive comments on native ads in their campaigns, in addition to social shares. However, while it has proven to be a successful advertising vehicle, there is no uniform way to measure native ads today.

Although it may be perceived as the "shiny new object," native advertising isn’t really new, but it is gaining traction across brands. Incorporating native in media buys empowers agencies to challenge publishers to innovate by creating unique opportunities, rather than relying on straightforward banners and CPM negotiations. As the digital landscape continues to grow and become more cluttered, new opportunities to integrate brands through native advertising will become more predominant in our marketing approach. 

This is part two of a three-part series on native ads.

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