Looking inside today’s digital advertising ecosystem, you could say that the banner ad has helped spawn a new offshoot in today’s display business. Known colloquially as "native advertising," advertisers, publishers and technology companies are looking for better ways to engage with the consumer beyond a 728x90 ad unit, for example.
Companies like Facebook, Twitter and BuzzFeed are among those leading the way in digital "native ads" as content becomes the ad.
Is this the new digital, branded entertaintment? Maybe.
AdExchanger spoke to Brian Monahan, Managing Partner, MAGNA Global Intelligence Practice, to discuss "native advertising" and its implications. Monahan began with a little history...
BRIAN MONAHAN: You could argue, historically, the most effective advertising has always been native to the environment in which it appears. On radio, a native ad is the live DJ 'read.' In the newspaper, the native ad looks like an article. In a magazine the native ad looks like a photographic spread. In television, I would argue that the native ad is the intermission break between programming.
It's been well-proven that advertising works better when it's native to the environment that it appears. At MAGNA, we talk a lot about fully-mediated consumers and how they're tuning out the bombardment of interruptive ads thrust upon them and allocating attention with intent – which means that if your ad is not native, it's going to be ignored, whether it's actively avoided or fast‑forwarded..
AdExchanger: Can you scale "native advertising" like you can display?
BRIAN MONAHAN: Well, the nice thing about the display unit is it scales across a variety of user experiences, of course. But, to be effective and stand out - and be "native" - it's not a one‑size‑fits‑all solution on web pages because the user is leaning forward. It's an interactive thing. Just from a pure user experience, the way people watch TV, the way people listen to radio, the way people read magazines, lends itself to a one‑size‑fits‑all native ad experience.
I don't think that's the case with websites. For example, they both appear on your PC screen or your mobile screen. But the Facebook website, the Twitter website, and the Google website all have a different user experience. All require a different native advertising experience.
When something becomes native, it's almost by definition custom in the digital world because the use cases are so different.
AdExchanger: It seems to me this is what used to be called integrated advertising.
BRIAN MONAHAN: Integrated advertising, sure. But with "Native" - I really like that label because we spend so much time at MAGNA and at the IPG Media Lab, literally, wiring consumers up and tracking where their eyeballs go. And, they're avoiding intrusive or adjacent advertising. "Integrated" always makes me nervous in that it sounds custom, small, and ultimately sounds like it doesn't communicate anything about my clients' products, like advertising does. But it's this weird balancing act.
At the end of the day, it's whoever's got scale. You can only invest so much time to create native advertising in so many places. Whoever has scale is going to win.
AdExchanger: The programmatic buying world uses data‑driven buying and selling. Is native advertising, in your opinion, data‑driven? What might be the difference between what's data‑driven in native versus programmatic?
BRIAN MONAHAN: I, perhaps close‑mindedly, think of programmatic buying as being about decision‑making and how you can manage these incredibly vast portfolios of where your ads actually show up. Make smarter decisions and do it at a scale and optimize in a way that no army of human beings could ever do. That decision‑making approach could be applied to native ads as well as commodity ads, presuming there's some sort of return path signal that helps you get a beat on the effectiveness. But I don't think it's an either/or. I don't think programmatic equals commodity. Programmatic is decision‑making that can be pointed at commodity ad stock or native ad stock.
AdExchanger: So, is "native advertising" the way that brand awareness or TV dollars come online?
BRIAN MONAHAN: When I think of brand advertising or my experience working on those types of brands and those types of campaigns, those businesses are looking to tell a story at scale with predictability, in terms of what it's going to do for their business.
Does native advertising help us tell a story at scale with predictability? Yes. It certainly gives you a better shot at that than commodity ad stock (i.e. banner ads) that's ignored. We've got a long way to go before we collectively build the system, talent and capability to use native advertising to tell a story at scale with predictability for what it's going to do for the advertiser.
AdExchanger: How do you think native advertising might get bought in the future?
BRIAN MONAHAN: Twitter is a little different, but Facebook is fundamentally a CPM model. That's the way Sharethrough basically sells their product. CPM is a helpful currency because it's a common currency. Would advertisers prefer to mitigate risk and pay for some sort of outcome ‑pay for engagement, pay for orders, pay for lists and brand perception? Absolutely. That pressure to move from paying for delivery of impressions to paying for a preferred outcome is ubiquitous across native advertising or commodity advertising.
Even in agencies like Mediabrands, we risk our compensation based on the outcome of the campaigns. We're not even talking commission or time of staff anymore. Everybody is feeling it.
AdExchanger: Do you think "native advertising" will overwhelm the standard display world? Or is there a place for the banner ad?
BRIAN MONAHAN: For digital media properties that have enough scale to impact an advertiser's business, native advertising experiences will trump commodity ad experiences. We've been doing some work that we're actually about to publish looking at how attention and eyeballs track and read web pages these days. What's interesting is the time spent on pages has been pretty consistent. If you put more editorial elements or content objects on that page, you will see eyeballs "ping pong ball" around versus if you actually put fewer ads on the page, eyes actually linger longer.
From my point of view, the way web sites are read, that user experience is not conducive to having a bunch of display ads because the user is looking at objects as controls or devices on how to navigate that screen.
Having a bunch of display ads is just "non‑native" and foreign to the web user experience - which I think is different than the television, radio and magazine models.
On the other hand, what guys like Sharethrough are trying to do is to take the display, the rectangles and boxes which scale so nicely, and enable functionality to be piped into those pieces of real estate that can then take on some of the attributes of that page.
You look at the IAB Rising Star units, or AOL’s Pictela (or Project Devil) platform. They are all trying to give marketers and publishers the ability to take those boxes and rectangles and do more interesting, "native‑like stuff" in them.
Commodity display ads are going have to take advantage of these technologies to deliver native‑like stuff, otherwise they're just going to be ignored.
AdExchanger: What’s in it for the creative – as in the human designer at the creative agency, for example – with "native advertising"?
BRIAN MONAHAN: You need a new breed of creative to tell stories in native environments. And, to do this at scale, you basically have to almost make an ad that's kind of like a giant algorithm. It's not just a pretty picture, it's a bunch of if/then statements that then manifests itself in some sort of thing that's supposed to look cool and be interesting.
Developing the creative muscles to take data feeds like pollen counts and traffic conditions and stock market...Building those into a compelling piece of advertising and a compelling piece of storytelling is really hard.
It is a great opportunity for a new breed of creatives to master a new palette.
By John Ebbert
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