Native advertising is the central digital-revenue stream for the publishing industry. It makes up some 60 percent of the market, or $32.9 billion, according to a 2018 forecast by market research firm eMarketer. Understanding why the trend has been enthusiastically embraced by numerous news organizations requires a fuller appreciation of the changes that shape our information environment.
My guide to native advertising for the Tow Center for Digital Journalism addresses how the relationship between publishers and advertisers shape what we see in our news sources. An abundance of media channels provide us with more choices, meaning producers of material published under a newsroom’s aegis—from journalists to advertisers—must work harder to secure the increasingly scarce resource of attention. News publishers compete for attention alongside everyone else. As a consequence of this newly widened media landscape, legacy news publishers are no longer able to exclusively capture ad revenue at the same scale, and with the same ease, as they were when print was their primary medium.
Native ads take on the appearance of real news stories, and are crafted by people inside news publications who want to create and spread commercial messages that don’t resemble traditional advertisements. This guide also outlines how news outlets produce native advertising, and how this practice borrows credibility from the newsroom in order to enhance the value of the ad created for clients.
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Before the explosion of digital platforms, marketers relied heavily on print newspapers. There were neither browser extensions to hide the ads nor “engagement metrics” to ostensibly guarantee that an ad had been “delivered” to a reader’s eyeballs. One print ad used to reach a large and captive audience: The New York Times passed the million-copy mark for its daily edition’s circulation in 1985; in 2015 the print edition hovered around 625,000.
As profits from traditional forms of advertising continue to shrink, digital “display” ad formats—the boxes of text, images, or video that sit at the top of a given page, called “banners,” and the boxes that cover content until you dismiss them, called “pop-ups”— have not replaced the lost revenue. According to Smart Insights, an advertising-measurement platform, these units have an average “click-through” rate of only .05 percent.
Worse, the number of times an ad has been shown to a potential customer—which retroactively determines the price of the ad— is often over-reported. Data suggest that people don’t view them, and that many of the clicks are accidental. The public also gets irritated by ads that pop up and auto-play video because they interrupt the reading experience. It’s no surprise that ad-blocking technology is extremely popular and effective; 30 percent of internet users are using some type of ad blocker.
Branded content—which attempts to engage its audience, rather than distract or irritate it—seemed like the perfect solution for advertisers hoping to combat the deficiencies of digital display ads. “Branded content” and “native advertising” are often used interchangeably, but they represent two different functions: “branded content” is the term used by the ad industry to describe the type of content they are either making or buying. Chris Rooke, senior vice president of strategy and operations at the native advertising production company Nativo, explained in an interview that branded content is made with the intent to affect “consumer perception, affinity, and consideration.”
What distinguishes branded content from traditional TV spots or print ads is that the “content” attempts to deliver something its target audience will recognize as valuable. This might take the form of original reporting on a news website, or a compelling narrative around a product, instead of placing a brand at the center of a story. In contrast to digital display ads, value in branded content is defined by its non-interruptive nature, and by the way it provides people with content they might choose to see because it is entertaining or informative.
Native advertising refers to the placement of branded content. When branded content appears in a form that mimics the appearance of where it is placed, it becomes native advertising. For example, a native ad that is published on a news publisher’s website will take on a visual aesthetic and writing tone similar to that of the news publication. It may use the same font as the publisher’s newsroom; it certainly shares the same URL; and, depending on the publisher, it may share imagery or pictures with the newsroom. Native advertising not only mimics news content in appearance, but it is also delivered through the same platform, and allows for the same interactive elements.
Branded content created by an advertiser and uploaded, for example, to that advertiser’s YouTube channel is not native. YouTube is not lending its logo to the advertiser, it is simply hosting another entity’s content. But if an advertiser pays a social-media influencer to create branded content on its behalf, then the content would be considered native advertising because it is in the influencer’s tone of voice, or mimics their aesthetic.
Over the past decade, numerous news publishers have created branded-content departments, which are tasked with selling original marketing to advertisers by guaranteeing reader engagement with content (text, video, podcasts, etc.). Engagement in this context is defined by time spent on page, video views, or scroll depth. The business model of selling native ads is so lucrative that many respected news publishers have invested in the trend. The New York Times opened T Brand Studio (disclosure: I worked in T Brand from the fall of 2015 to the spring of 2017); The Atlantic has Re:Think; BBC hosts Storyworks; and Condé Nast has tried to position 23 Stories as a stand-alone agency. Native advertising is predicated on a newspaper’s ability to translate the storytelling credibility of its newsroom to the publisher’s advertising department, even though it remains largely separate from the newsroom.
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Publishers are well-suited to making native ads; their newsrooms already create stories that millions of people read every day. A newspaper’s advertising department claims to be able to do the same thing for clients, especially if it has a branded-content studio. The New York Times‘s T Brand Studio marketed its services with the slogan “Stories that influence the influential.” The explainer video on T Brand’s website emphasizes the newsroom’s role in inspiring the studio’s branded content. The video features vignettes that shift back and forth between images of news articles—created by Times journalists—and images of native ads produced by T Brand for clients. The video was created to attract advertisers, not to explain how the Times actually creates native ads. Juxtaposed, those images make it nearly impossible to know which department created the content featured in the promotional reel. Native ads blend directly into the work produced by the newsroom.
Newspapers were once able to charge hundreds of thousands of dollars for a single full-page print ad, but as news readers abandoned their print subscriptions in favor of digital news, many advertisers realized they were no longer reaching the same large audiences in print. Meanwhile, new digital media began to flourish in the ad-supported digital ecosystem. The conventional banner, pre-roll, and pop-up advertising that could be measured for effectiveness was not always popular among readers. Many, notably AdAge, have reported that click-through rates on these ad units is abysmal.
The findings in this report are vital to assessing the health of newsrooms. Native advertising has been found to deceive readers. Journalists know this. Ultimately, the trust newsrooms work hard to secure may be jeopardized by the creation and dissemination of native advertisements. Before unpacking why the trend is troublesome, we have to understand why publishers were tempted to experiment with this ad format in the first place.