Native advertising as we know it isn’t sustainable
It’s seen as an effective tool by brands and advertisers, garnering 4.1 times more views on average per session and improving purchase intent by 18 per cent compared to banner ads. And with spend forecasted to grow 33 per cent to US$5.7bn in 2016, it may seem like a very viable option for publishers.
Native is still in its infancy, though. While two-thirds of advertisers are increasing their native budgets, it still only accounts for less than 5 per cent of the average total ad spend. And many publishers pursuing this business model have come up against its flaws. Scale and cost of execution is one. Consumer trust is another – when editorial-looking content is controlled by a brand there can be backlash, as seen with The Atlantic’s sponsored content from the Church of Scientology lauding its leader David Miscavige.
I’ll dive a bit further into some of the reason why native – as we know it – may not be a sustainable in the long term.
Native content lacks scalability and measurable performance
When talking about native advertising, it is important to first define what we mean. The definition of native varies widely across the industry, depending on whom you ask. For our purposes, we bucket “native” into these two categories:
Native ads match the look of the media brand’s site or the social media brand’s posts. Native content has been written by or in partnership with the publisher/media brand. Ad blockers are a mounting problem for native ads, while, for the moment, native or sponsored content is immune.
Above all, for native content to be efficient, the content has to be interesting for the reader. While native content is increasingly popular with publishers, it requires significant resources for marketers. While they would prefer to leave control of native content production to publishers, marketers at both at the brand and agency level need to weigh in and go through lengthy approval process, making the costs of the content production hard to scale and, more importantly, making the content less relevant to the user. This creates a vicious cycle, where readership declines, resulting in decreased performance for marketers.
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