Nailing down a native advertising strategy that can pay off

“Once you get it right, the opportunity is massive,” Jesper Laursen, CEO of the Native Advertising Institute says of his institute’s namesake ad form.

by Brian Veseling | May 3, 2019

During a WAN-IFRA Webinar last week, Laursen, a former journalist who founded the Native Advertising Institute (NAI), offered insights into how native advertising is being embraced by publishers, the strategies they are implementing, and, ultimately, the revenues they are reaping.

Native advertising, which NAI defines as “paid advertising where the ad matches the form, feel, function and quality of the content of the media on which it appears,” has been around for decades, but publishers are increasingly turning to it as an integral source of revenues, he said.

While the various parts of the definition (form, feel, etc) are all equally important, “I think the quality is something that people sometimes tend to forget, so it needs to be just as good as the rest of the content of the media,” he said.

Much of Laursen’s takeaways were gleaned from the survey and research report, “Native Advertising Trends 2018,” published by WAN-IFRA and NAI late last year.

Firstly, the attitude of publishers towards using native advertising has been rapidly moving towards widespread acceptance.

For example, Laursen said:

  • 56 percent of those surveyed for the report are already using it (up from 51 percent the year before),
  • a further 11 percent said they are “most likely” to start using it,
  • and another 31 percent said they are “likely” to begin offering it.

“It is something that more and more publishers are putting on their plate,” he said. “We all need to find new revenues, and it’s something that publishers going into native advertising should have a clear strategy on.”

Also interesting is that nearly 90 percent of the C-level executives surveyed said their feelings towards native advertising are “positive” vs. only 2 percent who feel negatively about it. That’s up from 82 percent the previous year, he said.
Not surprisingly, historically, it has been a publisher’s editorial side that has been hesitant to embrace native advertising, Laursen said.

He added that while it is healthy to be aware of the potential negative effects that wrongly using native advertising can cause, as long as publishers “play by the rules” and are clear about labelling, NAI hasn’t seen any examples of anyone whose reputation has been hurt by using it.

However, he stressed, if publishers “start messing with their credibility and messing with the confidence of the audience, then they will punish you: No doubt about it.”

Pricing, sales teams and revenues

As for how publishers are pricing native advertising, Laursen said the vast majority (69 percent) are charging more for native than they do for their traditional ads, with 17 percent charging less and 14 percent saying they charge the same amount.

Asked whether they have a dedicated sales team for native advertising, only 24 percent of respondents said “yes.”

Laursen added that NAI sees all sorts of variations for sales teams for native, including some where the native advertising content creators are part of the sales team.

He also said they have seen a steady rise in the average native adversing share of total advertising revenues.

For example, survey respondents said that native ad revenues made up 11 percent of their total ad revenues in 2015. For 2016, that percentage jumped to 18, and moved up to 19.7 percent for the 2017.

Looking ahead, respondents said they expect 35 percent of their total ad revenues to come from native advertising in 2021.

“We’re already seeing some publishers that are getting 50, 60, 70 percent of their ad revenues from native advertising. But on average, by 2021, they’re expecting 35 percent to be native advertising. Those are decent numbers for sure. And just to have something to benchmark against, for the magazine industry it’s even higher, but we’re seeing the same trajectory.”

Success factors for working with native advertising

Laursen shared five keys to success when using native advertising:

  • Be strategic – Have buy-in and a sponsor at the C-level of your organisation
  • Be ambitious – This is probably one of the biggest opportunities the publishing industry has seen for decades
  • Be an agency – If you want to play this game, you will need to act like an agency in order to succeed in the long run
  • Be persistent – You can’t just put it on your product page. It’s growing, but it’s growing with publishers who are being serious about it – (this is a marathon – it takes time to train your sales people, it takes time to understand what kind of native advertising your audience reacts to, how do you sell this? It’s a new discipline for many publishers and it takes time to get it right, so you need to be persistent.
  • Be transparent – Most publishers have spent decades and decades building your trustworthiness with the audience, and it’s easy to jeopardise that, so labelling native advertising is very important.

Tips for getting started with native advertising

Keeping those five key factors in mind, Laursen said publishers who are interested in getting into native advertising, can start on a relatively small scale.

While noting that some have created large-scale agency style studios – Bonnier, for example, now has a 50-person team – he said a publisher really just needs a couple of people to get started: one sales person who really understands native advertising and the publisher’s goals for it, and one person on the content creation side.

From there, the work can be supported by using freelancers and growing the team’s size as the amount of native advertising the publisher sells and creates increases. But again, strategic support and buy-in from the senior level of the organisation is essential.

“If you want to have success with this, it can’t be a couple of junior sales people from somewhere in the organisation teaming up with an intern writer. That’s not going to work. It needs to be core.”

WAN-IFRA Members should be sure to download our recent report, “Native Advertising Trends 2018 – The News Media Industry,’ ” which was done in partnership with the Native Advertising Institute and published late last year.

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