Native advertising is evolving, and with it, the pricing model.
When The New York Times and The Wall Street Journal churn out campaigns consisting of elaborately designed infographics and articles, they charge for the content creation as well as the media. But many others, like BuzzFeed and The Huffington Post, just charge for the media and include the cost of the content in the fee. Native is the new value-add.
For the Times and the Journal, the approach is consistent with the sophistication of the campaigns and their well-staffed content studios. Those in the latter camp often have lower cost structures and are cognizant of the need to stay competitive with the growing number of players selling native ads. But if native was supposed to be a high-priced product to help publishers make up for low display ad rates, there are concerns that pricing it this way cheapens its value.
“It’s a primary product,” said Ian Schafer, founder and CEO of digital agency Deep Focus. “But it will become second-class if it continues to be given away as a cost of selling the inventory (which by definition, has a price that will always have a downward trajectory).”
Agencies are driving this media model. Agencies were tapped by 76 percent of marketers, according to an ANA survey, making them by far the most commonly used outside resource to manage native advertising. Media agencies are accustomed to buying inventory. Publishers who charge for native on a media basis say they’re just charging the way agencies are used to buying.
“People like buying in simplified fashions,” said Jon Steinberg, CEO of Daily Mail North America. “The reason publishers price like this is because every other industry prices like that.”
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