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Here’s how native advertising plays out in the global media industry

Jesper Laursen, originally a journalist and now CEO of the Native Advertising Institute in Denmark, took to the stage on the second day of FIPP London to discuss his speciality.

Presenting research by the NativeAdvertising Institute and FIPP, Laursen outlined how they had collected data between April and May 2016, with 140 respondents from 39 countries - making it a truly global survey. They questioned both editorial and commercial executives, too. The full report will be available on the FIPP website in the coming weeks, but Laursen talked through some of the key findings so far:

Survey findings

Of those surveyed:

  • 52 per cent “already use” native advertising
  • 90 per cent find native advertising “important” or “very important” to their company

Furthermore, Laursen said, we should expect to see 33 per cent of all revenues coming from native advertising in 2018. Meanwhile native ad revenue from print will go down to 38 per cent by 2018, but this is expected, given that print revenue in general is reducing.

Organising native advertising

With regards to the organisation of native advertising, the results show that of those surveyed,

  • 76 per cent combine native advertising with other types of advertising
  • 67 per cent use editorial team to provide native advertising solutions

Challenges in delivering native advertising services

There are a couple of big challenges facing native advertising, Laursen highlighted. The biggest are:

  • Training the sales team (37 per cent have difficulties in the area)
  • Trouble convincing advertisers to tell real stories (37 per cent)
  • Creating effective strategies (29 per cent) - with native advertising, publishers often play a more active role in the strategy work, and this can be difficult
  • Explaining native advertising to advertisers (25 per cent) - because it’s often confused with content marketing, this presents a problem. To many brands, this is a very new idea, and agencies too are often unfamiliar with the concept; this makes it challenging to sell.

Threats to the growth of native advertising

Although it is growing, Laursen emphasised that there are threats to its progress which must be considered carefully. The main ones from the survey are:

  • Clarity - If it isn’t clear to the audience, there will be trouble. 45 per cent of respondents worry about lack of separation of the editorial and the commercial side of the business.
  • Poor labelling (29 per cent). Thirteen per cent of those surveyed do not label native advertising at all, which is interesting given that recent US Federal Trade Commission regulations have specified that native advertising “should be identifiable as advertising as consumers”, meaning non-labelling could lead to legal problems. The authorities are getting involved all over the world, in fact - if publishers don’t address this, Laursen warned, audiences could turn their back on native advertising as they did with banner ads, or even turn their back on publishers.
  • Involvement of editorial team - 67 per cent lets their editorial team get involved with native advertising but, as Laursen pointed out, this “makes it hard to maintain separation of church and state.”
  • Poor client understanding (40 per cent) - “Clients need to understand that NA is storytelling, not direct advertising” was one of the quotes from the survey. And native advertising is not effective if it doesn’t tell a good story. Trying to convince advertisers not to put in a commercial message, but to create good, valuable content for an audience, is key.

Opportunities ahead?

Laursen stressed that there are many opportunities ahead, and respondents think so too. “We’re in a changing ecosystem - a perfect storm is building for native advertising,” he said. “After all, audiences like native advertising, and the click-through rates are much higher than traditional ads.” What’s more, with traditional advertising not working as well any more - especially with the rise of ad blockers - this could be a huge opportunity for publishers.

He went on to say that from a brand perspective, organic reach on social media, especially Facebook, is down to something like 0.8 per cent - so it’s very low. So social media is clearly not the best way to reach people any more, and native advertising trends reflect this: 75 per cent of global marketing budgets were spent on traditional ads in 2015, and this is set to decrease to 50 per cent in 2020 - marking a definite shift towards native advertising and content marketing.

It’s all about content

To conclude, Laursen emphasised publishers’ strengths: editorial expertise, knowledge about audience preferences and behaviour, and an understanding of content that traditional agencies are yet to catch up on. “There’s an opp for publishers to position themselves in an active role in this ecosystem,” he added.

He made the point that the KPIs of publishers - engagement of audience, shares, etc. - differ greatly from those of brands. “What brands are really after is increased sales and brand awareness. Publishers need to be able to build a strategy for brands which reaches this end result for businesses.” Tangible goals needed - he used The Huffington Post as an example of a publisher with a very structured strategy which guides their customers through the process of native advertising.

“At the end of the day, other platforms are the way forward,” he said. Most publishers are getting very savvy about how to use social media - as Facebook Instant Articles and other platforms get more popular, publishers are more knowledgeable about how their content works on social media. The biggest successes in native advertising, therefore, come when publishers and advertisers leverage other platforms other than their own to reach more people.

Download Jesper Laursen's presentation at FIPP London

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