Will the real native advertising please stand up?

By Matt Cooper , written on January 30, 2013

From The News Desk

Nearly 18 months ago, Fred Wilson gave a talk at OMMA. In it, he said, “We believe that each and every Web service we invest in should have a monetization system that is unique and native to the experience.” As prime examples, he cited Google paid search and promoted accounts on Twitter.

While Wilson’s talk held deep wisdom for Web services, it was the ad tech community that really sat up and took notice: Here, it seems, was a way to transcend our reputation for irrelevant, interruptive advertising and disappointing click-throughs.

And so the gold rush began. Since Fred Wilson’s fateful talk, native advertising has been hailed as the second (or third? or fourth? or eleventh?) coming of digital advertising. Some proponents have projected it to be a $10 billion market; by comparison, the entire display market was $9.5 billion in 2011. Native is being heralded as the nail in the coffin of banner advertising. Countless companies have sprung up to speculate on its rise, from ad networks to publishing platforms to creative agencies.

But in all the hubbub, we’ve lost sight of what being native really means, and what makes it so special. Some have gone so far as to replace one banner ad with three thumbnails, serve them up through an ad network, and call it "native." That’s not “unique and native” monetization. In fact, there’s nothing less convincing than a native who claims to be from everywhere.

True native advertising has a native land.

So what is “a monetization system that’s unique and native to the experience?” As the US Supreme Court once said of pornography, you know it when you see it: Facebook Sponsored Stories, Twitter Promoted Tweets, Promoted Videos on YouTube, Sponsored Posts on Gawker.

As Tumblr CEO David Karp says, “You’ve already seen the Tumblr native ad format; it’s a Tumblr post.”

Of course, one Native example trumps all others: Google AdWords. According to the IAB, search-based ads now account for 1 in every 2 dollars of online ad spend. Why does Google’s version of Native works so much better than anybody else’s? Gustav Von Sydow, the founder of a Stockholm-based business intelligence platform called Burt, sums it up: Google AdWords is “a format that supports the reason I visit Google in the first place: to find what I’m looking for. Advertising is native only when – and if – it aligns with our goals as a media consumer.”

By this standard, most other Native advertising doesn’t come close. As Sydow says, “I hire Facebook to share my thoughts and experiences and to see what my friends are up to. A sponsored story, in my case, does nothing toward helping me accomplish this goal.”

This is perhaps the most important thing to recognize about native advertising. Done right, native doesn’t merely fit into the stream of a publisher’s user experience in terms of design – it fits with the publisher’s value proposition in terms of content. As Wilson said in his talk, Specials on FourSquare make perfect sense in the course of the place-centric experience of the app. The closer this alignment, the more successful the ad. Wal-Mart’s misuse of Sponsored Stories on Facebook was a bruising example of what not to do. When the native-publisher alignment is off, two brands get damaged: the advertiser’s and the publisher’s.

This has big consequences for all of us in ad tech. Because different publishers have different value propositions, they require different native ads. Proponents of native’s scalability point to the ways in which inventory can be standardized: native advertising can be syndicated anywhere there are galleries, streams, or posts. Unfortunately, that’s about as native as Kim Kardashian in a headdress and a loincloth.

Content created to work on many different sites rarely serves any one publisher’s users in a native way. Plus, wanna-be natives can’t match an individual publisher’s style. A great, relevant Promoted Tweet doesn’t necessarily make a great, relevant Sponsored Story – even if the objective and messaging is identical, the way of writing and presenting the ad ought to be native to the publisher. As Wilson said, “You tailor your advertising through and in each of these systems, and your campaigns perform better.”

Some lands are better for native advertising than others.

If we agree that the best Native ads are truly native – that is, they’re uniquely crafted to integrate with the publisher’s design, content, and value proposition – then it stands to reason that some places are better suited to Native ads than others. What do Google, Facebook, Twitter and other native-friendly environments have in common?

  1. They have huge, loyal user bases. If you’re creating advertising that’s native to one publisher, then it helps for that publisher to have massive reach. For true Native, scale is limited by the scale of the publisher.
  2. They’re buffets of bite-sized content. There’s a reason that social and search-based platforms naturally lend themselves to Native. It’s because, among the continuous flow of user- or search-generated content – search results, posts, Tweets, uploads – it’s easy to plant a native in the crowd without disrupting the party.
  3. They have low barriers to Native ad production. The easier it is to create a Native ad that’s truly consistent with the publisher’s experience, the better. Google and Twitter are the gold standard here: just type in a few characters, pop in a link, and you’re done. There has been lots of talk about “video native,” but video is both expensive to produce and arguably harder to align with user needs. Of course, there will always be deep-pocketed advertisers who succeed in engaging users with great branded content; whether that content rises to the level of nativity depends on its fit with the publisher. (Promoted videos on YouTube? Absolutely. A syndicated video that pops up on unrelated blogs? Hmmmm...) For the vast majority of advertisers, Native will usually mean simple, short, and text- and photo- based content.
Every native is a citizen of the world.

Understanding what makes real native advertising puts the hype in perspective. True native ads aren’t scalable – and they shouldn’t be, if they’re to deliver on their promise. What they are, however, are highly valuable and engaging tools when used the right way. The key is to discover their unique place in the digital advertising mix.

Think about how this works in the offline world. Supermarkets are filled with native advertising: from the ads on your shopping cart, to those on endcaps, to coupons popping out of automated dispensers in the aisles, to the food separators at checkout, to the ads on the back of your receipt. These are all wonderful, powerful examples of native advertising, and they help drive both revenue and purchase. But even with all this great native, there are still bus shelters and billboards helping drive us to the store, and circulars sent to our home on Sunday mornings, and commercials on TV.

So: let’s embrace the promise of true native ads. Let’s use it to engage customers. Let’s advertise with those publishers who are best suited for it. But let’s not force it to be something it’s not. That’s like taking Tarzan out of the wild and parading him around the city. He’s not nearly as exciting.

[Original image courtesy Reigh LeBlanc]