The rising popularity of native ad formats is boosting the potency of branded content, but it simultaneously blurs the line of responsibility between media owner and agency.
The issue was brought into sharp focus when The Drum spoke to experts from publishers and agencies off the back of Credos study onwhether native advertising works for the consumer. It is still a novel approach to many readers, they claimed, with different ad formats emerging as advertiser confidence grows in this particular form of content marketing’s ability to shift brand metrics.
However, native ads are still in their infancy and while generating significant buzz among publishers and agencies, it has yet to shift measurement conversations significantly away from the CPM rat race. Much of this rests on how effectively publishers recalibrate internally to produce content brands are willing to pay for, as well the quality of the talent agencies employ to ensure they’re thinking like an editor, rather than a marketer.
It would appear marketers are already on board. Given that more than 25 per cent of all brand communications spend now goes on content, most marketers have already adapted their internal processes and realigned their budget responsibilities to deliver this, said Sean King, chief executive of content marketing agency Seven.
“The real challenge is being faced by the media and advertising agencies and the media or platform owners who are having to work together in a different way to give the client what they want,” he added.
Conflicting business models
With the gap between editorial and advertising closing, attempts to bridge the two responsibly are hampered by contrasting business models of creative and media agencies. A recent Adyoulike report revealed a growing belief sweeping the industry that creative agencies aren’t set up correctly, whether its sign-off processes or remuneration models, to build effective, timely native creative.
“Branded content is most effective when there is an authentic partnership with the publisher,” said Anna Watkins, managing director of the Guardian’s in-house agency Guardian Labs. The creative shop launched over a year ago and despite seeing a shift from traditional advertorial mindsets among its advertisers in the period, is pushing for more of a strategic role in terms of how native campaigns are planned rather than just focusing on the execution.
“This is the unique proposition that Guardian Labs offers - bespoke content that utilises data and technology to create effective and unstoppable stories that truly engage our audiences, and are shared beyond our own platforms,” added Watkins. ”We know our audiences better than anyone else and have the credibility, and trust that enables these brand stories to truly resonate within our global community of progressive readers."
Of course, it’s more complicated to create content with a media owner than just buying advertising space but the need to scale, what are by their nature, custom ads is providing the impetus for greater collaboration. For publishers, native advertising gives them the chance to charge a premium to offset the declining CPMs on display, while the media agencies like it because it helps them get into content and brands are demanding it.
There is no question that native advertising works for the consumer, but only if it is relevant and either entertaining or informative. A Credos report published this month revealed that it was particularly welcomed in the lifestyle and entertainment sectors, whereas ads appearing alongside more serious topics like finance and health have to be relevant both in terms of the media channel and the individual as well as being totally transparent.
“Although at Credos we’re most interested in advertising’s value and its values – we did speak to experts across brands, media and agencies,” said Karen Fraser, director at Credos.
“Their headlines suggest a marketer’s biggest challenge is finding the time, and cost required to invest in great native content and building a compelling brand story that’s entertaining but still has relevance. We’re not expert in how they go about getting over those hurdles, but our public research suggests that top quality content that’s entertaining and relevant is indeed what all generations say they are after.”
One major bugbear for publisher and agency alike is measuring native ads. While return on investing can be difficult to track with any medium, it’s proving particularly testing with native due to much confusion over different types, the various platforms and what scale really means.
The truth is that no metrics are perfect, but we are seeing a move by some media owners – notably the FT - towards measuring time spent, attention and engagement rather than views. The other metric increasingly being associated with native advertising formats is shares.
Overall, native needs to be as accountable as other channels – so publishers and agencies need to measure and track engagement, sharing and reach within other media.
This is important otherwise we focus on a viral video and its 30 seconds of fame,” said Pippa Glucklich, co-chief executive of Starcom Mediavest Group (SMG) UK, which conducted the research for Credos.
“The future will see brands combining this knowledge with consumers’ data in real-time across screens, providing something genuinely bespoke. This convergence of big data, native advertising and the hundreds of thousands of different apps on the market has such potential, and this will be an exciting focus area for brands in the coming years,” she added.
Native advertising has a strong future. More than three quarters (76 per cent) of UK marketers are producing more content than they did a year ago, and 56 per cent plan to increase their content marketing budget throughout this year, according to SMG.
The marketers that get the most from this upsurge in such ad formats will be those that are mindful of how their agencies are adapting to work with publishers that are increasingly looking to build out their own expertise.