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Research / Insights on current and emerging industry topics

Native advertising and the news media

May 9, 2016 | By Research Team

An ever-growing number of publishers are offering native advertising as part of their digital advertising mix. By its nature, this sponsored content is designed to mimic the look and feel of the content around it. Michele McLellan undertook a study on native advertising for the Tow-Knight Center for Entrepreneurial Journalism. The Rise of Native Ads in Digital News Publications examines the native advertising offered by 14 U.S. news media organizations — ranging from prominent publishers such as Forbes and the The New York Times to community newspapers and digital news startups.

The study describes and evaluates the best practices that have emerged for producing native ads and attempts to measure the success (financial and otherwise) of native advertising programs. It also carefully examines how media organizations are dealing with concerns from government regulators that native ads sometimes deceive news audiences into thinking that the ads aren’t ads at all.

Among key findings of the study:

  • Creation and publication of native advertising has grown significantly in recent years as traditional display advertising comes under increasing pressure on a variety of fronts, including growing adoption of ad blockers.
  • While native revenue is expected to continue to grow, it accounts for a small fraction of revenue for many news publications. Most of the organizations in the study put it at 5 percent or less of total revenue. (Exceptions overall are young, born-on-the-web publications such as Buzzfeed and Quartz that have focused on native from the outset.)
  • News publishers in the study generally focus on creating sponsored stories rather than offering another native product – in-feed promotions that are more typically seen on social media platforms such as Twitter and Facebook.
  • Sponsored content is designed to mimic or blend in with editorial content and it takes as many forms as editorial. Examples range from sophisticated story packages to sponsor-written posts.  The publications use a variety of media, including text, interactives, videos and photos, and extend the reach of the content via social media and e-newsletter promotions.
  • Best practices for creating sponsored content include meeting craft standards that are consistent with editorial content and that is designed to be relevant, useful and/or entertaining to the publication’s readership, and avoiding an overly promotional pitch.
  • Clear labeling is also a best practice. However, a disconnect exists in labeling the content. While publishers have typically used labels such as “sponsored content” and “promoted post,” studies have found users do not always understand that this signifies paid content. The Federal Trade Commission issued guidelines in December that call for using the word “advertising” in the label.
  • Costs associated with creating and deploying content across digital and social platforms are higher than those for creating traditional advertising. Larger publications command rates in the five or six figures for sponsored campaigns while smaller organizations command much lower fees.
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