Golden goose or fashion fad?
Although not clearly defined, "native advertising" is currently ubiquitous as a fashionable term - an attempt at an approximation together with the question of whether and how such things will ever exist in our country.
Until the summer of 2012, Google recorded no search queries for the term "native advertising," but from then on the trend curve shot upwards. In the English-speaking world, well-known titles such as Forbes, The Atlantic, and The Economist (cf. Werbewoche 21/2012, November 23, 2012, p. 31) have now jumped on this bandwagon. And when the New York Times unveiled its redesigned website on January 8, complete with Responsive Design and Native Advertising, the trend probably achieved its breakthrough, albeit with controversial commentary. In Switzerland, Ringier is betting on native advertising with the web portal for Blickamabend.ch, which went live last December. While it is clear what the latest advertising trend is called, what exactly is meant by it depends on whom you ask, and so definitions differ. Significantly, Wikipedia does not yet have an entry for it, at least in German. Instead of a definition of our own, we reproduce here some attempts at definitions that we encountered in the course of researching this article:
- Native advertising takes the form and format of the medium in which it appears.
- Native advertising is content that has been designed for a specific editorial message flow.
- Consumers should not recognize native advertising as an ad, but as valuable content. It's not about selling, but about providing useful content, entertainment or infotainment around the brand.
- Native advertising allows brands to engage with consumers according to their needs.
- Native advertising is intended to enable consumers to experience marketing messages in the way they are accustomed to using a medium.
- Native advertising is part of content marketing.
- The term comes from the Latin word "nativus" (congenital).
Adding to the confusion, native advertising by no means describes something fundamentally new. Such practices exist in online media, but also in electronic media and print. Newspapers and magazines, for example, have long featured advertorials with an editorial look. While in Germany the separation of advertising and editorial content on radio and TV is anchored in law (Art. 9 RTVG) and such activities are frowned upon as surreptitious advertising, in foreign markets there are true artists among presenters when it comes to transitioning as smoothly as possible from content to advertising messages, presenting these as their own messages and then switching smoothly back to the program. And online services already have a tradition of mixing their own content with paid content: Google has ads that match search results, Facebook and LinkedIn have sponsored stories, and Twitter has promoted tweets. Last June, for example, the Internet Advertising Board (IAB) set up a working group on native advertising, which published its first document on the subject (Native Advertising Playbook) in December. This identifies six categories (In-Feed Units, Paid Search Units, Recommendation Widgets, Promoted Listings, In-Ad with Native Element Units and Custom /Can't Be Contained). It is emphasized that clear and prominently placed disclosure of paid content is of "utmost importance." Finally, the IAB authors conclude that native advertising is "distinctively and overwhelmingly" a form of brand advertising, allowing marketers to better leverage digital marketing to meet the full spectrum of their communications needs from branding to direct marketing.
Solution of two hardships
The fact that the online advertising industry praises native advertising to the skies is understandable in view of the long since meager attention paid to conventional online advertising. Whereas display advertising received 9 percent of the attention in 2000, "banner blindness" has now taken hold, and the click-through rate is now in the region of 0.1 percent. Consumers loathe intrusive banner ads and have learned to ignore them. Native ads are less annoying and deliver more.
And for publishers, too, native advertising solves an increasingly pressing problem: It is becoming increasingly difficult to finance the production of high-quality content with advertising. Editorial departments are shrinking, while the staffs of corporate communications departments are growing. If they come up with good content and pay to publish it, it would be foolish not to take advantage of it. Especially since publishers are opening up further revenue opportunities: In many cases, they set up a parallel editorial team that, together with sales, not only acquires native advertising content, but also helps brand managers create it.
In the U.S., a service provider landscape has emerged around content marketing and native advertising. There is a new wave of digital publishers such as Buzzfeed, Vice or Quartz, where native advertising is a central component of the business model. Companies like Sharethrough or Outbrain specialize in distributing branded content on suitable websites. Storify and Storyful support content curation.
But not everyone thinks it's a good idea, and there are also cautionary voices advising publishers against entering the seemingly lucrative business of native advertising. The editor-in-chief of the Wall Street Journal, Gerard Baker, speaks of a "devil's pact: Paid content unsettles the audience as to whether a media title is still trustworthy at all - so the very reputation is lost that advertisers also rely on.
Broad debate for new rules of the game
When it comes to native advertising, we too have a lot in flux. Just a year ago, an Werbewoche survey (Werbewoche 03/2013, p. 29) at Ringier stated: "We produce our own editorial content and do not take over any content in this form" - only to jump on the bandwagon a few months later with Blickamabend.ch. So in 2014, the topic of native advertising will also fully arrive here and occupy minds and spirits. As with the issue of paywalls, some will see it as the solution to the problem of declining online revenues, while others will fear that the audience will not accept it because of the problems it entails. Critics will refer to established industry rules:
Code of Conduct: The Code of Ethics for Advertising, introduced seven years ago by publishers, journalists and advertisers, stipulates "without reservation the principle of full transparency vis-à-vis the public." It states that "advertisements must not, by their design, give the impression that they are an editorial part of the medium." Lauterkeitskommission: In the "Principles of Fairness in Commercial Communication " there is a "ban on coupling commercial communication with editorial contributions," and sponsorship of editorial contributions is described as "unfair" unless this is clearly recognizable to the consumer. (Principle No. 3.12).
But native advertising is all about distinguishing itself as little as possible from editorial contributions. Whether native advertising becomes a golden goose or is soon written off as a fashionable fad depends largely on whether an industry-wide, and indeed societal, discussion can be held in the coming months to define new rules of the game with which native advertising can be successfully implemented. A look at the U.S. shows what kind of altitude is required for this: There, the Federal Trade Commission, FTC, held a one-day expert hearing at the beginning of December. Publishers and corporate communicators alike need to implement the project professionally and consistently (e.g., with their own specialized editorial teams). If, on the other hand, the issue is tackled with half-baked attempts, the earnings potential for both brands and media companies risks being damaged in the long term.
Christoph J. Walther
