An Ad by Any Other Name

Native advertising, branded content, sponsored content, paid programs, paid content, custom content, advertorials. Say one phrase, say them all. As Beth Egan, associate professor of advertising at Newhouse says, native advertising includes "everything but the kitchen sink." "A rose by any other name is native advertising," she says. "It's all a way of being transparent about the fact that somebody paid for that content presented in front of you."

According to Sharethrough, a tech and native advertisement company, the phrase "native advertising" sprouted from "native monetization." “Native monetization” was first used by venture capitalist Fred Wilson in 2011. He used “native monetization” to describe advertisements that are "consistent with the fabric of the product."

Egan, who has and continues to study native advertising, subscribes to the definition of native advertisement provided by Sharethrough CEO, Dan Greenberg.

Greenberg’s definition of native advertisements, listed on Sharethrough's website, is "a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed.”

The definition is further broken down into the requirements for its form and function. The form of the piece must "match the visual design of the experience they live within, and look and feel like natural content." The function of the content "must behave consistently with the native user experience, and function just like natural content."

Essentially, native advertisements are the anti-advertisement. They should not be obnoxious, loud or stick out from typical editorial content like a banner would. It must look, act and feel like organic editorial content.

Native advertisements are one of the several ways print publishers are trying to pick up revenue slack. Melanie Deziel, the native advertising Expert in Residence at media and tech investment firm, BRaVe Media Ventures. Deziel says after digital publications picked up, print publication sales dropped and took a gouge out of overall ad revenue.

"Most publishers," she says, "are still reeling from the shift from print to digital, as digital ads are much less expensive (and therefore produce less overall revenue) than print ads used to be." And now, with the rise of ad blockers, Deziel says publishers have had to get creative with how they bring in ad revenue.

According to a study by the International News Media Association and the Native Advertising Institute, and reported on by the INMA, native advertising's revenue is indeed on the rise. A survey of 156 publishers—most of which were newspapers—found that native advertisements currently account for 11 percent of ad revenue. That number is expected to rise to 25 percent in 2018. Deziel puts that into more specific terms: it is currently a $30 billion dollar industry and is expected to rise to a $60 billion industry over the next two years.

Folio: reported on another study released by the Native Advertising Institute in partnership with FIPP. Magazines, it appears, are taking the rise of native advertising seriously and are doing their best to capitalize on it.

"Despite being a relatively new format, 52 percent of respondents say they already offer native advertising, and 79 percent expect it to take up a higher share of overall advertising revenues this year than last," according to Folio:. This is the breakdown of how the magazines are creating the native advertisements:

Deziel says native advertisements account for a large amount of digital revenue for some magazines: 60 percent of The Atlantic's digital revenue and 35 percent of Forbes' revenue.

Some publications are expanding within the realm of native advertising to explore its potential. For instance, Bondi Digital is a company that helps magazines glean revenue from their archives, according to a Folio: interview with co-founders founders Murat Aktar and David Anthony. Magazines like Vogue, Esquire, Rolling Stone, and Playboy have enlisted their services to repurpose already-existing content.

“Articles and images can be combined with copy to create all-new digital experiences that tell the history of the brand, through articles and ads curated from the magazine,” Aktar and Anthony say.

While the benefits of native advertisements are obvious in the growing revenues, the level of engagement native ads get are less obvious.

"There is no industry-wide benchmark for native advertising engagement across different magazines, newspapers, and websites the way there might be for standard banner ads," Deziel says. The factors that may affect engagement, she says are the topic of the native piece, the format, the content's host, and how long the content is live and promoted.

However, Sharethrough claims a study they conducted with IPG Media labs showed that consumers looked at editorial content 2 percent more than they looked at editorial content and spent the time amount of time viewing both.

Jordan Hyman, executive director of content sales for WSJ Custom Studios, says factors like social media engagement, how long people stay on the page, and how many unique views the piece gets. He says the WSJ’s Cocainenomics native advertisement is one of several WSJ native pieces that have gotten “incredible” engagement (e.g., Cocainenomics had 200,000 unique viewers over three weeks).

Some of the most talked-about native advertisement pieces have come from the New York Times and the Wall Street Journal. Though they are newspapers, the success of these pieces illustrate the potential and versatility of native advertisements.

Sponsored by Netflix for their show Orange is the New Black, the Times produced Women Inmates: Why the Male Model Doesn't Work. The story explores the experiences of women in prison and the system in which they’re imprisoned. The package includes a feature, video interviews with inmates, photographs, and infographics. The feature and its treatments, though, are not obviously an ad for the Netflix series (except for the “Paid Post" and “T Brand Studio" with the Netflix and OITNB logo that follows the reader down the page).

Hyman says native ads like the WSJ's Cocainenomics (sponsored by Netflix and its show Narcos), is an example of what the best native ads look like. WSJ Custom Studios content follow the same mentality: “It's going to be something inspired by your brand or your product but it's not going to be blatantly about it,” Hyman says. “At least not up front." This is subtly a widespread goal among publications.

Sade Muhammad, digital strategist for branded content at Forbes, says that although Forbes' native advertisements are clearly marked as such, the content feels the same as editorial. "It fits the personality of Forbes," she says.

This seamless feel can give rise to ethical issues, though. Magazine professionals like Meghan Overdeep are wary of native advertisements. Overdeep is a current freelancer for InStyle, The Knot and HGTV Magazine. Previously an associate weddings editor at The Knot, Overdeep worked on The Knot's special publication, Gay Weddings. The publication was sponsored by the liqueur company, St. Germain.

"They wouldn't have been able to do [the publication] without the money," she says. "And also that limits what we could do. Because it all had to be approved by the sponsor."

In the bottom left corner of the cover, it says “PLUS chic cocktails from St. Germain.” The issue’s cover doesn’t say “paid program,” “sponsored content,” etc. This, perhaps, is a demonstration of how native advertising can be “sneaky,” as Overdeep describes it.

Egan, of Syracuse University, says native advertisements aren’t inherently misleading or even attempting to dupe the reader. To Egan, t’s just the opposite. “When I buy an ad in your publication, the only value to me of that is the relationship you have with your readers,” she says. “If I, as an advertiser, do anything to damage that relationship, then I've lost as much as you have.”

There are, as with any new venture, instances where native advertisements have gone wrong. For instance, in 2013, The Atlantic had to pull a native ad about David Miscavige, the leader of the Church of Scientology.

The article was pulled off the site and The Atlantic issued an apology. Egan says readers had a sense that something was “fishy.”

Business Insider described The Atlantic’s piece as “blatant propaganda.” The controversy turned the publication into, as Egan says, “the posterchild for bad native advertising.”

Because native advertising is so new, these ethical issues may continue to crop up as the industry evolves. “The FTC has provided some guidance, but it leaves a lot undefined,” Deziel, of BRaVe says. “So we’re all in the process of figuring out what works best to make sure readers are aware of who the sponsor is and never feels deceived,”

Hyman, of The Wall Street Journal, says it’s clear native advertising has proved its place in publications. “It also unlocked a lot of questions that different media entities are dealing with at different points in time,” he says, referring to both monetization and ethics. “It'll be fun to watch how this morphs, how it develops."

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