NaTivE aDvErTiSiNg - The Nunatak Group

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this year − mainly on online editorial platforms and social networks.1. Native Ads can be ... blog or newsletter. Main
uPDaTE april 2014

www.nunatak.com

issue 3

NaTivE aDvErTiSiNg Sum m ary Advertisers are looking for alternatives to conventional display advertising campaigns as consumers become more immune to them and click-through rates decrease. Thus, publishers are increasingly offering Native Advertising formats which seamlessly integrate with a website’s original content. Critics see this as a threat to editorial independence. Nonetheless, 78 % of publishers and 61 % of brands worldwide plan to use Native Advertising 1

Native Ads can be displayed easily on small mobile screens, which further increases their relevance.

DEfiNiTioN The term Native advertising describes high-value content created or commissioned by brands, which is integrated into a website’s look and feel. Platforms such as Buzzfeed rely solely on Native advertising. Lately, an increasing number of traditional publishers have jumped on the bandwagon and started selling Native ads (e.g. NyT, WSJ, forbes).

Promoted links in search results

Content sponsored by companies for newsletters addressing a niche topic

Promoted posts in social media, integrated into the newsfeed

2004

2006

2011

1929

First print ads made to look like articles in the Hawaiian Star Advertiser 2

2005

2009

Promoted product listings in search results

Stories on general interest topics produced by companies blend with other content

Sources: 1Hexagam/Spada (2013), 2The Awl (2013)

2013

Ads in form of online articles

Ex a mPLES o f N aT i v E

1.3 m

53 %

73 %

The brand MINI reached 1.3 m social actions with the most successful Native Advertising campaign to date 4

of U.S. consumers notice Native Ads more frequently than traditional banner ads 5

of publishers in the United States offer Native Advertising on their platforms 6

aDS

Sponsored videos

78 61 46 34

Expected worldwide use of Native advertising: 2013 vs. 20143 (in percent)

62

41

2013 2014

Video recommendations in search results

Sponsored playlists Playlists’ cover photos can be linked to URLs, playlists can be created by companies

Sponsored posts

agencies

Brands

Publishers

Posts produced by companies blend into original content

Difference to Content marketing Sponsored listings

Native advertising

Ads corresponding to look & feel of third party website

Which formats are used?

Third party publisher sites like Buzzfeed or on social media

Where is the content hosted?

Sponsored posts in text, picture and video formats

What do these ads look like?

Content creation and advertising space on third party website

How do costs for advertisers occur?

Agencies, publishers and perhaps companies themselves

Who creates these ads?

Content marketing

Advertised listings are shown in search results

Content posted on company’s own web properties

Sponsored stories

Brand’s own website, blog or newsletter

Mainly text with pictures, videos or charts

Stories produced by companies mix with other content

Sponsored links Promoted links appear within search results

Content creation, hosting, administration

Companies and brands, agencies

Sources: 3 Hexagram/Spada (2013): sample size > 1000, 4 Native Advertising Leaderboard (2013), 5 Sharethrough (2013), 6 Online Publisher Association (2013)

Publisher

Newcomers and traditional media BuzzfEED

furTHEr Ex a mPLES

>Revenues solely from Native Advertising >CTRa is at 1.5 %, therefore up to 16 times higher than traditional banner ads 7 >Cost of a month-long ad campaign on Buzzfeed: approximately USD 100,000 (167 advertising partners in 2013)7 Elite Daily was among offer Native Advertising

Promoted content is highlighted in yellow

N E W yo r k T i m E S (N y T) >Dell is the first partner publishing Native Ads on the NYT-website, paying a six-figure dollar sum for a three-month campaign 8 >Dell produces the content itself and carries editorial responsibility >Published articles are not deleted upon end of campaign, the reader can find them in the site’s archive

Post’s approach to engage brands with consumers

Forbes created "Branded Voice" in order to run Native Ads for brands

The New York Times offers different kinds of Native Ads

Brand

Native ads for image building T- m o B i L E >As a Buzzfeed partner, T-Mobile publishes content on lifestyle topics >Buzzfeed team creates content on behalf of T-Mobile >T-Mobile is only mentioned with their logo and at the end of an article

Sources: 7 Forbes (2014), 8AdAge (2014), a CTR = Click-Through-Rate

Buzzfeed partner

Nestlé produces high quality video ads for Facebook

Platform

marketplaces for publishers and brands Adaptly is a start up which advertises Native Ads in social networks

SHarETHrougH >An online marketplace which allows publishers to sell their Native Ads >Sharethrough’s software automatically transforms regular advertising into Native Ads >More than 200 m final users reached 9 >Customers: Pepsi and Nestlé

Mopub creates social Native Ads for mobile apps (belongs to Twitter)

Nativo is an automated platform producing Native Ads

outlook for Native advertising oPPorTuNiTiES

riSkS

>Unique, informative or entertaining content is less intrusive and can increase customer interest

>Cost-intensive and time-consuming measure: Since ads are produced for single platforms, they can only be used once

Relevant for Platform Brand

Publisher

>70 % of U.S. users prefer to learn about a company or a product through content than traditional print or banner ads10 Platform

Brand

Brand

Publisher

>Development of jurisdiction (e.g. FTC regulation in USA) still uncertain Platform

Brand

Publisher

Publisher

>Service providers such as Contently also start to offer content for Native Ad formats Platform

Relevant for Platform Brand

>Ad-blockers can be used to successfully block Native Ads Platform

Brand

Publisher

Publisher

>57 % of venture capitalists, business angels and private equity firms in the U.S. will probably invest in companies that sell Native Advertising 11

>If customers get used to the new advertising format they may start ignoring it

Platform

Platform

Brand

Publisher

Brand

Projects related to Native advertising: Establishment of a multimedia content services group

Supervision and implementation of a content strategy for a global consumer brand

Positioning and development of a content service provider, which offers creation of Native Advertising formats

Publisher

The Nunatak group is a digital strategy consultancy based in munich. our focus is on mobile media, Social media, growth Strategy, Digital Coaching and investment Support for companies in growth industries. The Nunatak Group GmbH | Managing Partners: Robert Jacobi, Rupert Schäfer | www.nunatak.com | [email protected]

Sources: 9 Sharethrough (2013),

10

MandLoys (2014), 11news.solvemedia.com (2013)