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In-feed ads: just because you can does not mean you should

March 21, 2016 | By Chris Rooke, SVP Strategy and Operations—Nativo

Quality over quantity is key to preserving the native greenfield opportunity

This year’s Industry Preview highlighted how far “in-feed monetization” has strayed from its “native advertising” origins, and the risks this practice poses to publishers. To the non-discerning eye, these two tactics might seem similar, either because they spawn from the same ad placement, or because in-feed providers exploit subtle nuances within the native advertising category.

Whatever the reason, publishers under pressure to make revenue goals must understand the differences and the long-term consequences of short-term compromises. By embracing and diligently applying a “quality over quantity” approach to what they permit into their editorial feed, publishers will safely navigate through an increasingly volatile digital ecosystem and watchful regulatory environment.

Defining and scaling native advertising versus in-feed monetization

NatphoneexampleNative Advertising: When marketers use publisher storytelling tools to promote and distribute custom brand content the same way site owners publish editorial. In this vein, native advertising is custom brand content promoted in-feed via “native ad units” and consumed on-site via integrated “content landing pages”. The New York Times supports this definition and further clarifies its perspective on true native here.

In-Feed Monetization: When publishers use native ad units to serve “better looking” banners and rich media experiences, or even memes and animated GIFs. In-feed ads use native slots to unexpectedly punt users off of the publisher site on click or rollover, open a new browser window, launch a lightbox ad over the site, autoplay a brand video or any other [Insert creative here] opportunity. IAB Deep Dive on In-Feed Ad Units covers a lot of these.

Scaling native advertising is about aggregating high quality brand content via the direct sales channel and trusted third party demand providers, and using the native canvas in the way it was always intended. As such, and like other hyper premium products, 100% fill is not a realistic expectation and, given today’s native market, is not possible without introducing severely damaging trade-offs.

In contrast, scaling in-feed monetization chases a wholly different definition of scale: achieve 100% fill by cramming in-feed inventory placements with as much paid ad demand as can be sourced. This is a recklessly aggressive monetization tactic that will pollute, and ultimately devalue and destroy the native opportunity for publishers and marketers. Continued in-feed CTR erosion for publishers, and consistently high bounce rates for marketers are clear evidence to this fact.

Considering today’s digital ecosystem and regulatory environment, plus the steep downside to mismanagement, it does not behoove publishers to favor the short-term, incremental revenue of in-feed-monetization without acknowledging the long-term costs.

Consumer experience, ad blocking and the economics of annoying your users

Digital publishers are in the midst of repairing a very broken relationship with consumers. You know things are bad when the Internet Advertising Bureau (IAB) issues an apology for a decade of forgetting the user, and allowing the business side to steamroll and create an unusable experience for online content consumers.

With consumers actively ignoring online ads since 2007, and global ad blocker adoption approaching 200MM monthly active users in June 2015, users are clearly exercising control over their online experience as a result of frustration. The importance of reinforcing user trust has never been more critical for media companies, content owners and ad providers. We can’t ignore the numbers, nor can we continue to degrade the digital experience.

Operators tempted by the promise of short-term in-feed revenue should consider this 2014 survey that reveals consumers distrust mismatched ad formats in the feed as much as they distrust banners, and the knock on effect erodes trust in surrounding editorial, or this Microsoft study that concludes user dropout and site abandonment resulting from annoying ads ends up costing publishers more money than they earn. The study urges publishers to consider the more subtle and long-term effects that annoying ads have on user retention and revenue. This sentiment is even more critical when it comes to content, the last piece of real estate on which consumers actually place value and willingly give their attention.

The Federal Trade Commission and risk of deceptive ads

The FTC doesn’t issue a policy statement and business guide without the full intention of enforcing it. No less than 3 months later we’ve seen our first perp walk, a settlement that could end up costing Lord & Taylor $800k (not to mention the damage that deceptive practices do to consumer trust). Safe to say unrestrained in-feed monetization practices easily qualify as a fast follower. So, before publishers contemplate the dangers of OpenRTB and programmatic native monetization, they first have to understand which types of in-feed ads expose them to risk and increase the likelihood of potential government scrutiny.

Quality over quantity as the way forward

Native advertising is a bright light of hope. It brings a return to solution selling for publishers, and unlocks a massively effectively brand storytelling solution for digital marketers. When properly administered, native allows publishers and marketers to authentically tap into the scarce reserve of consumer attention, which in turn drives amazing effectiveness and upholds premium pricing and packaging flexibility. Native is proven to uplift the entire digital ad portfolio and preserve long-term monetization integrity, rewarding marketers with superior engagement and meaningful consumer connection.

It’s imperative that publishers exercise patience as the supply of high quality native demand grows. They must withstand short-term revenue temptation from in-feed opportunities whose ad experience exports consumer trust with every click, exposes publishers to dangerous business risk and legal implication, and hacks away at the foundation of their entire digital business—the editorial feed. The solution is clear: publishers must adopt a quality over quantity strategy to protect authenticity and receptiveness to engage in the feed, preserve the user experience and reinforce trust. In doing so, they safeguard native’s greenfield opportunity and in large part their future.

Chris Rooke is Senior Vice President of Strategy and Operations at Nativo, a native advertising platform for brand advertisers and publishers. A 20 year digital media and ad technology veteran and thought leader, Chris has led significant innovations in digital marketing, consumer engagement, and publisher monetization. Prior to Nativo, Chris served as SVP Global Business Development at true[X], where he built and led teams responsible for programmatic and platform sales, publisher development, demand sales, and client services. And, before his tenure at true[X], Chris served as senior executive at CBS.


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