• by Andy Oakes  @andyoakes, November 8, 2013

One of the biggest buzz phrases around the digital industry this year has been native advertising. Publishers, perhaps slightly wearied by RTB and programmatic trading, leapt onto the band wagon in an effort to regain control of their assets, and many have done well and see the future as rosy. AOL, whose Huffington Post Media Group owns editorial brands including Engadget, Huffington Post and TechCrunch, forecasts that 40% of its online revenues will come from native ads next year, and further predicts such ad formats will surpass ‘traditional online ad formats’ by 2025.

For those who may have spent the year under a rock, native advertising is an ad model  where the advertiser tries to get share of voice by providing content  which matches both the form and function of the environment in which it is placed. There are many different methods out there including promoted videos, articles, music and examples might include promoted tweets, promoted stories on Facebook or sponsored top 20 Lists on BuzzFeed or HuffPo. Perennially late to the party, LinkedIn introduced  ‘Sponsored Updates’ back in July and this enabled brands to promote business content including video, presentations and product news in the newsfeeds of LinkedIn members.

However, the term is also used more broadly to describe branded digital content that looks and feels like editorial. Which those of us who have been around a bit might remember was called ‘advertorial’. Other versions of the model could also be called ‘sponsorship’. So what’s going on here? Is this really something new or have publishers just rediscovered some of the formats that served them well for years?  Well, it looks like that may be the case. This morning I read ‘State of Native Advertising 2014’ compiled by Hexagram and Spada. One of the stand-outs for me was that “Professionals consider a variety of advertising content to fall into the category of ‘native advertising’, with the most popular definition being ‘sponsored content’ (53%). 

I’m sorry, but this is exactly what I was doing in B2B publishing 20 years ago, albeit only in print. We faced exactly the same issues of ‘church and state’ and got round it by using the same tags being used today ‘Sponsored Section, Featured Content, ‘Bought to you by'. 

Paul Hood, Digital Director at London Publishers Archant and who I hope won’t mind me saying has also been around a while, concurs.

“Firstly, I have to agree the latest descriptions of 'content marketing' and 'native advertising' are perhaps a bit sensationalist. I think what we’re starting to see is a greater variety of online advertising formats – more imaginative, better integrated and more visually appealing. Publishers have offered print advertisers bespoke ways of associating their message with content brands for years, through executions like section sponsorship, cover-wraps, and advertorials. The revelation of online 'content marketing' seems to me to be a recognition by publishers that giving advertisers only the option of a very small rectangular, or square shaped box (Leaderboards and MPU’s)  in which to put their ad content, doesn't give much flexibility for advertisers to tell their story”.

I don’t want to get into a rant about nomenclature. I think we need to look at why publishers are so happy to go down this route again – and according to Hexagram and Spada it is the publishers who are driving current use, with 62% currently offering native advertising and another 16% planning to do so within the year. The study also states that publishers expect revenues from native advertising to increase by approximately 10% within a year: from an average of 20.4% of overall revenue today to 30.1% in one year’s time. Is it that, as stated earlier, they feel that this is the best way to regain control and start direct sponsorship conversations? Is it that they cannot make the numbers stack up just by selling banners or that their audiences are saying that they don’t even see the banners? Have we raced to the bottom too quickly using programmatic trading? 

I think there are a number of factors at play here. Firstly, publishers know how to do this. This is in their DNA but until recently they haven’t had the channels and platforms available to them to create word of mouth buzz. Secondly, we’ve seen brands become savvier about creating personality through content. What the publishers have realised is that brands could bypass them altogether if they just used social channels and so are happier than before to allow their audiences be accessed in this way.

Either way, I’m encouraged by the report. It’s got to be a good thing that publishers are thinking more openly about content and that brands are thinking more creatively about advertising. I hope that we see a study next year showing real success in the area and real money being spent.