Imagine McDonald’s displaying posters for Five Guys Burgers at their checkout. Or Kraft putting coupons on its macaroni and cheese boxes for a generic store brand. I know it sounds crazy for any industry, but this is actually happening today with many premium publishers.
How did publishers get to this place? The answer seems to be the desire for short-term money and a follow-the-crowd mentality. Take the recent content recommendation deal Time Inc. signed with Outbrain. I’m a long-time fan of Time magazine, and read it both online and in print. Now Time.com, as influential as it is, is lending its reputation to a third-party company by promoting and recommending lesser-known sites like Lonny Magazine and Brainjet to its trusting audience.
What could be the long-term of effect of this? Let’s take two different but common scenarios. First, let’s assume Time is recommending a high-quality but unknown publisher. That startup publisher obviously hopes that its site will be bookmarked by Time’s readers who will then continue to return, or sign up for its newsletter. If that happens, it will likely be at the expense of Time.com’s traffic volume.
The second scenario is that the startup is of poor quality. In that case, Time’s reputation will be damaged, because it will be seen to be recommending shoddy content to readers. But either way, the only benefit to Time is that it received the equivalent of a few pennies in return for its imprimatur.
There’s another reason why this practice is so disastrous for publishers. Many of these so-called outbound content recommendations are actually brand ads in disguise. So when a household name like CNN.com allows a third-party network to sell branded advertising to CNN’s audience at a $.15 CPC, why would a brand advertiser ever do a direct buy on the site on a CPM basis? The content recommendation unit will likely generate more clicks at a bargain rate.
That’s great for the advertiser, but a long-term problem for the publisher. If the direct sales CPMs start to drop as a result, that upfront advertising guarantee from the native content company doesn’t look quite as attractive.
Publishers are unknowingly relinquishing control of what native ads appear on their websites because of the way in which these deals are structured. Many of the ads that are appearing on their sites are driving traffic from their site to a potential future competitor’s website, even though it may be a third-tier one for the moment. This allows the competitor of tomorrow to benefit from the traffic that these publishers are working so hard for today.
There is a reason that native advertising has come to the forefront of digital advertising — because it works, for both publishers and advertiser — but it has to be done the right way.