Is native advertising a dead end?

Is native advertising a dead end for publishers and brands? Ad agency exec Kirk Cheyfitz believes so, calling native ads “a passing fad in the slow demise of traditional advertising.”

In an article for Chief Content Officer magazine, Cheyfitz, CEO and chief editorial officer of Story Worldwide, says that publishers “have talked themselves into believing that ‘native’ is the long-sought replacement for dwindling ad revenue.”

Cheyfitz argues that advertisers really don’t need publishers as part of their media mix and advocates that brands instead focus on their own websites or “neutral” sites like YouTube to distribute their content. In a digital world, he writes, “publishers and their audiences are not particularly valuable to advertisers” and cites research indicating that consumers trust brands more than they trust mass media:

Gallup tells us that last year only 44 percent of Americans trusted mass media. At the same time, Nielsen says that 69 percent of the global online audience trusts what they see on brand websites. In other words, Gallup and Nielsen find brands are roughly 1.6 times more trusted than publishers. So following the logic of the native ad argument, advertisers should be selling space on their brand websites for publishers to publish more credible news.

(For balance, Cheyfitz also could have cited a Forbes-commissioned study by IPG Media Lab, which found that consumers were 41% more likely to share branded content when they read it on Forbes.com vs. the brand’s own website. It’s all how you choose to spin it, I guess.)

Publishing brand content on a third-party media site, Cheyfitz writes, actually diminishes the value of the content:

Brand storytelling with rich content is powerful because audiences — the people formerly known merely as “consumers” — pay attention to valuable content and reward brand-authors by sharing such content with friends and strangers on social platforms. This social sharing increases impact (by two to four times, studies show) and reach (up to nine times, mathematical models show), reducing media spend and boosting efficiency (by as much as 100 times).

A story good enough to accomplish all that is actually rendered less effective (from the advertisers’ viewpoint) by appearing to be part of a publisher’s site. …  Why? A brand must be known as the provider of such content so audiences will see the brand as trusted ally, valued adviser, and inventive entertainer. No sane brand would spend money to create great content only to let some publisher or broadcaster get the credit.

Provocative, but Cheyfitz misses a couple of key points. First, a publisher doesn’t get “credit” for a native ad – the brand does. While much of the debate around how native ads should be labeled centers on ethics and disclosure from the publisher’s standpoint, clearly identifying the source of branded content also benefits the advertiser – by giving them proper credit for producing it.

Second, by painting all media with the same brush, Cheyfitz ignores niche publishers, which have cultivated audiences that advertisers most definitely want to reach. As publishers get better at using audience data to improve targeting tactics, their readers will become potentially even more valuable to brands.

Successful native advertising comes down to this: a collaboration that creates value for the brand, the publisher and, most importantly, the reader, by delivering high-quality, relevant, credible content.

Yes, brands have (re)discovered that storytelling is a powerful communications tool. They will continue to invest in content marketing as a way to make more engaging, direct connections with customers or prospects. But eliminating paid media as a distribution channel for branded content is shortsighted, because it ignores an important lesson that publishers and brands alike have learned over the past decade: that a good digital content strategy finds consumers where they are, not just where you want them to be.

Publisher sites – and the evolving native ad model – will continue to play an important role in the marketing mix for digital-savvy brands. The onus is on the publishers to convince brands that they offer enough added value – through their audience, their content development expertise or other services – to justify a paid program.

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