Native Advertising: How Marketing Tactics Work To Build Your Trust
What is Native Advertising?
Native Advertising is an online ad method in which advertisers attempt to gain attention by providing content in the context of the user’s experience. Native ad formats match both the form and the function of the user experience in which it is placed. The native method has become more of a movement in recent years to publish branded stories across destinations ranging from Facebook to The New York Times, and the practice is drawing both attention and ad dollars. For one-stop shop of the Internet’s best examples, visit the Native Advertising Leaderboard.
Market researcher BIA/Kelsey estimates U.S. native ad spending on social sites alone will reach $4.57 billion by 2017, almost triple the $1.6 billion spent in 2012. Nearly 75 percent of U.S. online publishers now offer native advertising, according to the Online Publishers Association and Radar Research. In November 2013, Hexagram published a report entitled “The State of Native Advertising 2014,” which included insight into adoption rates for 2014. By the end of the year, Hexagram forecasts that an additional 16% of publishers, 20% of brands and 12% of agencies will be making use of native advertising methods.
It’s hard to put your thumb on exactly what native advertising means, though. Is it similar or different from any of the other terms often used, such as corporate journalism, vendor content, brand publishing, or custom content? The concept is vague and seems to have countless definitions. Perhaps that is because what is “native” lies in the eye of the beholder.
Tony Hallett from The Guardian describes native advertising simply as a sub-set of the catch-all “content marketing,” meaning the practice of using content to build trust and engagement with would-be consumers. Reuters’ Felix Salmon has also tried taking a stab at drawing useful distinctions between buzzy terms with his native matrix.
Demian Farnworth from Copyblogger describes “good native ads as content that’s about the reader, watcher or listener. But ultimately, there’s an actionable goal for the advertiser, like opt-in to get a free report from New Rainmaker…” He likens native advertising to an “Advertorial. ” This is where an ad appears amongst editorial content and matches the context design. This working definition is more limiting and does not include sponsored posts in Facebook, promoted Tweets, or Google AdWords text ads. Exemplary video advertorials may be found on the Onion Labs YouTube channel. The Onion’s in-house creative agency uses their skill of reaching and influencing Millenials to create branded content and advertising to help brands grow through original commercials, viral videos, experiential marketing and social media mind control. Their comedic commercials include Gillette’s “Movember Train”, Home Depot’s “Buckets in the Wild,” and Internet Explorer’s “Uninstall.”
To Farnworth there is a distinct difference between native advertising and sponsored or branded content. The former contains a clear call to action – telling the reader to visit the sponsor’s website or check out a new product. Conversely, sponsored content serves as brand awareness – where a publisher creates the content and the brand pays for it, and there is no clear call to action. Branded content is similar, but is created by the brand for the publisher.
Not everyone agrees with that distinction, however. The majority view seems to include sponsored and branded content within the umbrella term of native advertising. In fact, the Interactive Advertising Bureau (IAB), which evaluates and recommends standards and practices on interactive advertising, has laid out six categories, which include such ad unit types. The IAB recognizes these six categories as types commonly deployed to achieve native objectives, and include In-Feed Units (e.g., Forbes, Yahoo and Facebook), Paid Search Units (e.g., Yahoo, Google, Bing), Recommendation Widgets (e.g., Outbrain, Tabooka, Disqus), Promoted Listings (e.g., Etsy, Amazon, Foursquare), In-Ad with Native Element Units (e.g., Appssavvy, Martini Media, Onespot), and Custom or “Can’t Be Contained” (e.g., Flipboard, Tumblr, Spotify). Sharethrough also provides some very clear visuals on distinguishing the myriad of native advertisements.
These terms are still confusing because there is no adopted advertising standard. That is exactly what the IAB tends to remedy, however, with its paper The Native Advertising Playbook. The IAB and its Native Advertising Task Force created the Playbook to provide the ad industry with a framework for thinking about and discussing current native advertising options with the goal of eliminating marketplace confusion and thereby helping sellers sell and buyers buy. The Playbook’s aspiration is to move the industry beyond the “native or not” discussion.
Beyond defining terms, it’s also important to leave room to discuss both sides of the native advertising story.
The biggest benefit of native advertising is that it affords an enormous opportunity for brands to engage with audiences in an authentic way. As a result, the potential for brand marketers and their agencies – both PR and advertising – is huge. Native advertising is powerful, because it helps the story stick; storytelling outperforms ad displays and banners in terms of viral potential and social influence. According to research from IPG media lab, native ads are viewed for the same amount of time as editorial content and is much more likely to be shared than a banner ad (32% versus 19% of respondents said they would do so).
Take for example Chipotle’s animated short called “The Scarecrow.” The commercial film follows a scarecrow about his day of work that mirrors Chipotle’s own journey to cultivate a better world. The message is that Chipotle is not only tasty, but also virtuous. “The Scarecrow” has been praised as an innovative piece of marketing and applauded for its anti-factory-farming message. 
The Lego Movie, which has received nearly universal critical acclaim, has been tagged as a native advertisement on an epic scale.  The film is loaded with brand messages about the transformative power of Lego and the power of creativity. So far, the movie has grossed over $460 million dollars worldwide. As far as the Lego toys themselves, there’s no telling how much sale profits have increased.
The upside of the native method is also its downside. A native advertisement is so indistinguishably weaved into the narrative of the content, that it’s hard to extricate the marketing message from the storyline. The line is very much blurred, and a lack of boundaries could be to the disadvantage of consumers. Paid content masquerading as editorially driven content serves the interests of the advertiser and the publisher, but the consumer may be unduly influenced and duped into making decisions they would not have made had their ‘ad-radar’ been on.
Consider BuzzFeed. Once known mostly for Internet memes and cute animal posts, the media darling has grown into a full-out news organization. Last year, Andrew Sullivan wrote the article “Guess Which BuzzFeed Piece is an Ad.” There, Sullivan discusses a Sony sponsored article entitled “ The Only Post You Need to Read About the PlayStation 4” and the staffer-written article “11 Things You Didn’t Know About the PlayStation.” The two posts were published a day apart and are very similar in form and content. So, what’s the difference? Sullivan reports that he doesn’t see an ethical line being crossed – just deliberately left very fuzzy.
Essentially, there is a high potential for native advertisers to breach consumers’ trust. As the line between pure journalism and sponsored content becomes more blurred, these breaches will only become increasingly repetitive as long as the industry remains without some sort of regulation or standard best practices.
David Rodnitsky, of Marketing Land, asserts that native advertising goes so far as to violate the Federal Trade Commission’s rules on deceptive advertising. The FTC defines an action as deceptive, “if it is likely to mislead consumers who are acting reasonably under the circumstances and if it would be material to their decision to buy or use the product.” Thus, if the answer to either of those definitive questions is “yes,” then like all other ads, there needs to be disclosures. The FTC has even created a PDF on the subject: .com Disclosures: How to Make Effective Disclosures in Digital Advertising.
Though the current regulatory landscape is foggy, the FTC and IAB will most likely be carrying the torch in defining boundaries for native content.
 Bourdon, Bill. “4 Tools and 5 Tips for Making the Most of Native Advertising.” VentureBeat. June 3, 2014. http://venturebeat.com/2014/06/03/4-tools-and-5-tips-for-making-the-most-of-native-advertising/
 Weiss, Elizabeth. “What does The Scarecrow tell us about Chipotle?” The New Yorker. Sept. 23, 2013. http://www.newyorker.com/online/blogs/currency/2013/09/chipotle-mexican-restaurants-animated-film-sustainable-food-marketing.html
 Robinson, James. “The Lego Movie is native advertising on the grandest scale ever attempted.” PandoDaily. Feb. 26, 2014. http://pando.com/2014/02/26/the-lego-movie-is-native-advertising-on-the-grandest-scale-ever-attempted/