Last week I presented on native advertising and how it has revolutionized the way companies can target consumers. I want to delve deeper into the benefits and costs it presents as well as how companies can look to learn from past examples of native ads at work. So what is native advertising again?
Native advertising 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.
Basically when a Tweet of a company you might not follow or a Facebook post from a brand you’ve never heard of appears right in the middle of your browsing experience, that is native advertising at work! The intent is to blend seamlessly into the user interface, refusing to stand out as traditional advertising. Below you can see how Jet Blue’s Promoted Tweet and Levi’s Promoted Account appear within the stream or everyday function of the site itself. These brands will pay media platforms in order to give their content a boost and guarantee views by a certain target audience.
A multitude of online platforms are offering this new form of advertising. Whether its images on Google, videos on YouTube, posts on BuzzFeed or playlists on Pandora, brands have an incredible span of options by which they can promote content. Therefore, it is no surprise that by 2017 native ad spend on social sites is predicted to account for 41.7% of companies’ total social budget, or $4.57 billion.
Benefits & Costs
The benefits of native advertising are tremendous, for it consistently outperforms traditional advertising across all engagement benchmarks. 25% more people look at native ads over static banner displays, and it has proven to lift purchase intent and increase brand affinity. Additionally, consumers have been shown more likely to identify with a company because valuable content, instead of an unoriginal call-to-action, was offered.
On the other hand, high costs can be a major obstacle for companies hoping to get a foot in the native door. While the price of traditional advertising has been averaged at around $3.50 for every thousand impressions, native ads come with a much larger price tag. Exact costs are not widely available yet, as each publisher is establishing their own standards. However, here are a few projected estimates:
- Facebook: $4.58 CPM
- BuzzFeed: $5.40 CPM
- Pinterest: $30-$40 CPM
- Instagram: $350,000 – $1,000,000 per month
- Promoted trend on Twitter: $200,000 per day
Since publishers are offering a unique product that allows advertisements to blend in with the site, they are able to charge such a premium price. However, as many platforms continue to shift towards charging on cost-per-engagement rather than cost-per-view, these prices offer realistic targeting opportunities and native will become more appealing for companies.
Another obstacle companies face in adopting native advertising is its potential risk of diminishing user trust. People have been turned off by this new tactic, for they feel as though they are being tricked into viewing ads they didn’t want to click on. In a recent survey done by Contently, two-thirds of respondents had felt deceived when they realized an article or video was sponsored by a brand. Therefore, brands have to ensure that their content adds value and remains relevant to their target in order to effectively capitalize on native advertising.
After exploring Twitter in my individual presentation, I would like to take a closer look at how brands are weighing these benefits and costs with other Internet platforms.
While Instagram is still using native advertising in beta, they have released early performance results of the test group of advertisers, shedding light on its effectiveness.
In 2013, Ben & Jerry’s wanted to drive awareness of their fun loving ice cream brand as well as for its new flavor “Scotchy Scotch Scotch.” Turning to sponsored posts on Instagram, they enticed users with tempting images and witty tag-lines. The campaign reached 9.8 million users and 33% of those who saw more than one ad remembered Ben & Jerry’s.
Michael Kors, looking to heighten their branding initiatives, also invested in a native advertising approach with Instagram. After uploading a sponsored image similar to that of their traditional stylish pictures, they garnered a 370% increase in likes compared to what they usually see. Additionally, the Michael Kors Instagram account gained 33,985 new followers, 16 times more than those gained on average!
Both of these examples, show how content must not only stay true to the brand’s personality, but also strike an empathetic cord with the consumer to truly garner engagement.
HBO’s Game of Thrones, in promoting the launch of their fourth season, partnered up with BuzzFeed. They sponsored a smart quiz on the site that would answer the question “How Would You Die in Game of Thrones?” Quizzes are ubiquitous to BuzzFeed’s site, but this post was viewed more than one million times and shared over 75,000 times on Facebook. Here is an example of how content must not only align with brand themes, but stay authentic to the platform it is served.
Several brands are also partnering with news websites, such as the New York Times, Forbes, and The Atlantic, to run native content. In 2013, the Atlantic published a sponsored article from the Church of Scientology. Readers were outraged to see such a controversial organization appear on the home page, and to know their beloved Atlantic was monetizing on this deal. This instance teaches the lesson that native advertising must remain true to the integrity of the site in order to avoid massive backlash.
So Why Go Native?
An increasing number of companies are attempting to leverage the pull capabilities that social media offers, instead of pushing masses of meaningless content in front of consumers. As users become more involved in brand conversations, they do not want to be talked at but rather engaged with. Native advertising offers these capabilities and when it is done well, the benefits far outweigh the costs. All in all, it is a new form of brand promotion that can have an extremely positive impact on marketing goals.