Today’s post is by Peppercomm president, Ted Birkhahn.
It’s Advertising Week so let’s talk advertising. One of the hottest topics sweeping the marketing industry is the recent proliferation of native advertising platforms. Some folks love it; others think it’s heresy. As with any new phenomenon, there’s a lot of hype and not enough fact so I figured it might help to break down the pros, cons and significant risks associated with putting sponsored content alongside earned media.
Here are the facts as I see them. Feel free to disagree:
• Publishers get to make more money. This is precisely why so many are practically tripping over themselves to create and sell space on native ad platforms. It feels a bit like the beginning of a gold rush. They know they’re onto something but haven’t quite assessed the risks that might come back to haunt them. For now, they’re testing the concept, enjoying early signs of success (mostly judged by quantitative metrics) and generating some much needed revenue along the way.
• Brands have a lot of potential upside here. Now they can tap into high-traffic web platforms as a vehicle to deliver the content they think their audiences want to read, share and discuss. Their challenge is to come up the content; good, hard-hitting content that is as relevant and interesting as the editorial coverage that it sits adjacent to on the platform. To do this consistently and credibly is not easy for many marketing departments. They must think and act like publishers, which is no simple feat.
• Readers are in a precarious position. On the one hand, native ad platforms should provide readers with supplemental content that will resonate with their interests. On the other hand, with the lines blurring between editorial and paid content, the risk of confusing the reader and eroding their trust in the publisher and advertiser is real, not to mention their perception of a brand who doesn’t get it right.
• Journalists lose. I’m not a reporter, but I know many of them and I have to think most are appalled at the concept of native advertising. It might help pay their salaries, but it flies in the face of the very purpose and mission of unbiased, no holds barred journalism. Many skeptics, including Gerard Baker, managing editor of The Wall Street Journal, support this notion. Jeff Jarvis recently railed against native advertisers and the publishing community while David Carr also jumped into the discussion. Their church and state lines are as bright as ever.
There’s got to be a happy balance. But to achieve one, each party must play a role. Publishers need to respect the separation of paid and earned media and not destroy the balance for the sake of near-term profits. Brands must be overtly transparent about where the content comes from and they owe it to the media ecosystem to produce strong content; marketing copy and self-serving copy won’t cut it here. Readers must police; they must monitor the publishing community and the brands that advertise and never hesitate to call them out when either begin to blur the lines. As for journalists, they need to do what they’ve always done: be a necessary thorn in their publishers’ sides by keeping them honest and ensuring the trust between the reader and reporter is never jeopardized.
And it wouldn’t be a party without the regulators. Last week, the Federal Trade Commission (FTC) announced it was beginning to explore the issue with a series of workshops later this year. Any rule changes or enforcement actions will take be slow in coming but it’s notable that in such a short amount of time the FTC has put this on their radar screen.
Where do you net out on this issue? Is native advertising generally good for the parties involved or inherently evil? It’s an evolving issue and we’d love to hear your thoughts.