The Internet is at a crossroads. After most digital media companies built a business model based around selling advertising in exchange for content, audiences are revolting.
Internet users believe brands aren’t holding up their end up the bargain by flooding pages with so many ads that they can barely access the actual content. Meanwhile, brands think audiences need to understand that advertising is the necessary toll to pay for an otherwise free Internet.
However, there might be a third option between an ad-free and ad-full internet: native advertising.
Native advertising isn’t anything new, but it has found a new home online and intrigued all parties. Is this the peace deal advertisers, publishers and readers need to move forward?
Keep reading to learn how ad blockers destroyed the publisher-reader relationship and how native ads can put it back together.
Saturation and Poor User Experiences Led to Ad Blockers
Often, publishers and advertisers play the victim when discussing ad blockers. From their point of view, everything was fine until evil developers created a way to steal bread from their tables.
However, brands need to remember that poor user experiences led to the rise of ad blockers because audiences were getting sick of overly saturated websites filled with advertisements.
“Advertising dollars are the lifeblood of the free Internet, fueling every site from social media titans to scrappy blogs,” says Patrick Kul, business writer for Mashable.
“But many ad-block users counter that websites brought this on themselves by flooding the Internet for years with obnoxious, and sometimes malicious ads with no regard for the toll it takes on loading speeds or screen clutter. The dozens of hidden trackers and cookies built in to most ad-supported websites only further justifies the need for blocking in their eyes.”
Just a few years ago, ad blockers were relatively unheard of outside of early adopters; however, their use continues to spread into the general population, proving that there’s enough demand in the market to ride webpages of disruptive experiences.
“As of 2014, more than 15 percent of internet users in the U.S. were using ad-blocking software,” says Adweek columnist Kimberlee Morrison. “This year , that number is expected to climb above 26 percent, and by 2017, almost a third of all internet users will be using some form of ad blocker.
“…Mostly users find ads intrusive, and since the launch of ad blocking software on mobile devices, they are able to spend more of their online time in an ad-free environment.”
For publishers, the effect of ad blockers on their business varies, and so do predictions about the global industry. For some, the revenue hit is an inconvenience that can be overcome. For others, it’s the end of the Internet as they know it.
“In terms of ad blockers’ potential impact on advertisers, opinions are mixed,” says Dan Shewan at WordStream. “[One] report by Adobe and PageFair estimates that the rise of ad blocking technology could cost advertisers a total of more than $40 billion by next year. However, other estimates are far more conservative, placing the potential economic damage at around $1 billion.”
Bloggers and content creators who rely on ad revenue to maintain their sites have the most to lose from ad blockers, but that also means they have the most to gain from native advertising.
Publishers Start Fighting Back Against the Plug-ins
The first instinct for publishers suffering from drops in ad revenue is to install anti-ad blockers. These plug-ins gate the content until the blocker is removed or ask users to pay to access an ad-free zone.
“For online ad sellers, the appeal of [anti-ad blockers] is clear,” Jack Marshall writes at the Wall Street Journal. “But some argue that forcing ads on users who have attempted to avoid them isn’t a long-term solution to the ad-blocking problem.”
Anti-ad blockers really just create a hostage situation where the reader has to pick their poison just to read an article or watch a video.
“They will either have to accept extremely annoying ads (which can also sometimes be harmful to computers), clutter up their email box with newsletters, or have to pay for content that was formerly free,” S. Kumar writes for Time Magazine.
“Ad blockers could also push up the price of anything subsidized by advertising. For example, Fandango.com imposes a service charge on the sale of movie tickets through its site but also carries advertising in order to supplement revenue. If the site is no longer able to monetize its ad space, it would likely raise ticket prices on consumers to make up for the lost profit.”
It wasn’t just banner ads that customers were revolting against. Advertising trust is at an all-time low, with audiences questioning the validity and truth in what the brand has to say.
“In our advertising-saturated world, consumers have become very savvy,” writes Matt Mansfield, tech editor at Small Business Trends. “They recognize advertising from a mile away and, except for Super Bowl ads, avoid it like the plague. Additionally, consumers tend to view the information imparted within ads skeptically. Since someone is paying to have something printed, said, or acted, who knows how much fact checking went into the project before it went live.”
All of these factors have led many publishers and brands to turn to something that is still an ad, but is acceptable enough in the eyes of audiences that it won’t likely get ignored or dismissed as spam.
This is when they turned to native advertising.
Ad Blockers Helped Native Advertising Evolve
What started as a novel trend a few years ago is now taken seriously as an alternative to traditional advertising.
“Native began to get a ton of attention in the second half of 2015 thanks to the importance of many other digital trends, everything from ad fraud and viewability to ad blocking,” Justin Choi, founder and CEO of Nativo tells eMarketer. “Our advertisers are actually starting to use words like ‘customer experience’ and being really mindful of ad executions that are less interruptive and more engagement-oriented.”
They did this by looking for ways to marry advertising with the product audiences actually want: content.
“Because it bypasses ad filtering systems by blurring the line between content and advertising, native advertising lets readers experience a less cluttered website and makes readers more likely to pay attention,” Mary Muller writes at the Victoria Advocate. “Ad-blocking technology is helping the digital landscape by forcing advertisers to try new techniques and create content and experiences that consumers actually want to engage with.”
While it’s entirely possible that native advertising would have grown on its own, ad blockers forced brands to come up with solutions immediately.
“Native advertising is estimated to reach around 75 percent of The Atlantic’s ad revenue this year, up 15 percent from 2015,” writes Yuyu Chen, brands reporter at Digiday.
“The publication is offering a spectrum of native ads, from video to infographics to text-based editorial pieces. Last year, readers spent nearly seven minutes on its two best-performing advertorials: Qualcomm’s ‘The Space Within’ and Boeing’s ‘A Century in the Sky,’ compared to the average time spent of four to five minutes for its sponsored content.”
While The Atlantic is just one success story, there is hope for brands that content done right can lead to several minutes of audience engagement, instead of the nanoseconds that traditional banner ads delivered.
Audience Behavior is Changing in 2016
Along with creating customer-centric content and advertising, brands and publishers are also having to contend with the fact that the way audiences use the Internet is evolving.
“Mobile will be a big driver of growth in native ad spending: native advertising will account for 63.2% of all global mobile display advertising by 2020, reaching $53.4 billion,” says Tobi Elkin at MediaPost. “The research found that while first-party in-app native ads will be the biggest revenue driver, third-party in-app native ads will account for 10.6% of all mobile display ads — or $8.9 billion — by 2020.”
While most content today is built with the mobile experience in mind, it’s harder for brands to decide how social media affects their traffic and how it can be fully utilized.
“Audiences have migrated away from news websites and toward Facebook and other social media destinations, which for a competitive price can provide advertisers access to larger and more targeted groups of people, challenging the value of a publisher’s own channels,” says John Herrman at the New York Times.
“With a weaker claim over audiences, publishers have been left to compete for advertising on different terms, leaning less on the size and demographics of their relationships, and more on the sorts of campaigns they can engineer for advertisers.”
This trepidation hasn’t stopped most media networks from investing in native advertising and even creating their own internal native ad departments.
“Media companies like BuzzFeed, The New York Times, The Wall Street Journal, and The Atlantic have all invested heavily in the creation and distribution of native advertisements on behalf of brands, with many charging over $100,000 for a native advertising campaign,” explains Joe Lazauskas, editor in-chief at Contently. “But with it has come controversy, with many debating whether native advertising is fundamentally misleading readers by cloaking an advertisement in the guise of a story.”
Despite their increase in technological skills, some brands find audiences aren’t as savvy as publishers claim they are. The FTC agrees, and both parties are trying to create guidelines to differentiate between organic content and native ads.
“Over 85% of native ad units contained only one disclosure term, but most incorporated two to three design elements — such as shading, a distinct border, or ‘info icons,’” says Theresa Cramer at Digital Content Next.
“Relying on your audience to understand that a slightly grayed out box, or a different color border means that a post is actually a native ad — and not just a design choice — is less than transparent. For those immersed in the world of digital media and marketing these may seem like clear indicators of native content, but to the average reader, they don’t mean much.”
Publishers are constantly trying to learn how their audiences use the Internet in order to find new ways to market and connect with them.
How Publishers Can Find Value in Native Advertising
For some, native advertising might seem like the Holy Grail alternative to banner ads, but there are still opportunities for abuse and ways publishers can execute it poorly.
“When you or your agency creates the content for the native ads, make sure it’s really grounded in the needs of your target audience,” says Pontus Staunstrup, writing for The Native Advertising Institute. “It’s far too common to come across native ads that have an inside-out perspective or tries to close a deal straight away. Neither works well in my experience.
“Rather, it’s the companies that are brave enough to really focus on what’s important to their target audience and does this consistently that really succeeds with their native campaigns.”
While brands should create top-of-funnel goals with their native ads, that doesn’t mean they shouldn’t track revenue and set ROI goals for their pieces.
“The question brands must ask (even though there is no simple answer) is: are we getting a positive return on the dollars being spent on native advertising?” Copyblogger’s Demian Farnworth writes.
“What I see happening is the price for native ads — particularly of the branded and sponsored content variety — coming down in line with market value. As we get smarter about what to measure, and develop the tools to measure it, we’ll get a fix on the ROI.”
As long as brands and publishers have the customer in mind, they should be able to create some amazing sponsored posts that resonate with readers. Once they have that down, they can start playing with flashier tools and opportunities.
“Native advertising has been around for some time now and so has programmatic ad buying, but so far, the two have existed more or less independent of each other,” Vishveshwar Jatain writes at AdPushUp.
“Since many instances of native advertising currently tend to be bespoke creatives made by the publishers in consultation with their advertisers, scaling and automation for the long term becomes a challenge and a problem that must be solved.”
Native advertising has been growing steadily for the past few years, and continued ad blocker use might finally turn it into a serious channel for connecting with audiences and customers.