Going native: the digital dilemma

Native advertising has the potential to be an important source of both new revenue and increased engagement. It also has the capacity the kill the goose that laid the golden egg. ELIZA GOETZE reports

Sometimes it takes a comedian to really hit home with hard truths. This was the case earlier this month, when a clip of John Oliver, the host of American talk show Last Week Tonight, went viral sending agencies and journalists into a pitched debate.

Oliver’s target was news and advertising – and the increasingly blurred lines between the two through a marriage of convenience called native advertising, a digital extension of what was known in the industry as advertorials – sponsored content that was more in tune with the demands of the advertiser than any news value.

Advertorials have appeared in newspapers as early as the 19th century. In the early 1950s, American news channel NBC aired a 15-minute segment called the Camel News Caravan which saw “Today’s news today” sponsored by the cigarette brand.

While such an antiquated example might seem surreal, Oliver argued that today’s incarnation could be just as dangerous to the health of the media industry.

Native advertising is not new, but it has exploded in the last 18 months – not only in number but in form. According to the Interactive Advertising Bureau, there are at least six types of ad units that can fall under the banner of native, thanks to the many and varied opportunities online – from widgets which offer reading recommendations such as Taboola and Outbrain, to the paid search units you see on Google, and perhaps the most ubiquitous and contentious format, the in-feed unit, commonly known as a “paid post” or “sponsored content”.

IAB board member and News Corp Australia general manager of national sales Neil Robinson says its prevalence is difficult to measure due to confusion over the varying definitions of the term – but native is undeniably bigger than ever before and it is dividing the journalism community. “The industry body hasn’t drawn a definitive line around native,” Mr Robinson says, “But there is growth and there’s a lot of talk.”

It’s not just talk, either: some of the world’s most respected and popular news outlets are walking the walk. Mastheads like The New York Times, The Guardian and The Atlantic to newer digital juggernauts like BuzzFeed and Vice have all established teams of staff dedicated to producing content commissioned by brands and typically housed alongside unsponsored editorial.

A piece by the Times’ branded content division, T Brand Studio, on the unique struggles faced by female prisoners in the US, Women Inmates: Why The Male Model Doesn’t Work (pictured below), has been hailed as a beacon of best practice. Far from a gushing write-up with a “paid post” banner, it features graphics, audio clips, video, photos and data. It has been praised as a piece of genuine, important long-form journalism that just also happens to be sponsored by Netflix, which distributes the show Orange Is The New Black (read an interview with journalist Melanie Deziel about how the piece came to life here).

Women Inmates

So, if it’s quality content that readers want to read, is there really a problem? Oliver argues that there is: “Sponsors aren’t always going to be as benign as Orange Is The New Black,” he observes scathingly. “Sometimes it’s going to be a company like Chevron, who recently sponsored an article in The New York Times about how ‘our energy needs are changing’.

“Spoiler alert: the notion that they’re changing because we f—ed up the earth thanks to companies like Chevron is not the conclusion of the article.”

In January 2013, The Atlantic was admonished for one of its first forays into sponsored content with a post paid for by the Church of Scientology, which praised the church’s leader, David Miscavige. It was removed after widespread outrage, with the masthead releasing a statement that began, “We screwed up…” and quickly authoring an official Advertising Guideline memo in a push to self-regulate.

Two key goals included:

–          “The Atlantic will not allow any relationship with an advertiser to compromise The Atlantic’s editorial integrity.

–          “All advertising content must be clearly distinguishable from editorial content. To that end, The Atlantic will label an advertisement with the word “Advertisement” when, in its opinion, this is necessary to make clear the distinction between editorial material and advertising.”

An IAB US press release from late July contends that brand familiarity, relevance, trust and subject matter authority are all ingredients for a successful native ad, according to new research by the IAB and Edelman Berland.

However, the study also found that when presented with mockup news pages, readers found it more difficult to distinguish ads from straight editorial – depending on the subject matter. In business and entertainment, areas in which readers perhaps could be more likely to expect to find sponsored content, 82 and 85 per cent of readers respectively felt that the native ads were easy to pick out. When it came to news, however, the number dropped to 41 per cent.

Incidents like The Atlantic’s have caused commentators like MediaPost editor and host of National Public Radio’s On The Media program, Bob Garfield, to dub native advertising “the worst thing that’s happened in advertising since I’ve been following it for 40 years”.

“I think it’s self-feeding, it’s a conspiracy of misrepresentation, and I think it will squander the very thing that it sells,” he says.

Mr Garfield favours an analogy of the tiny Micronesian island Nauru, which transformed from the most prosperous nation on earth to one of the poorest after running out of the valuable commodity its economy exclusively relied on – phosphate harvested from the deposits of the native birds.

“They took their one resource and they shipped it away, and that’s exactly what publishers are doing with native advertising,” Garfield says. “They are taking that trust and they are exporting it, one boatload of crap at a time.”


Professor Jim Macnamara, UTS

According to former journalist, PR and ad man and professor of Public Communication at the University of Technology, Sydney, Jim Macnamara self-regulation is essential if the industry is to avoid selling out of its most valuable resource: trust. He describes native’s threat to integrity as “a double-edged sword”.

“The industry needs to tread carefully,” Macnamara says. “Push embedded promotional content too far and a media organisation and/or program risks destroying its credibility, and media companies may even incur the wrath of regulators.

“The media, advertising, and journalism, with good reason resist regulation. But I think thoughtful, responsible self-regulation is required here.”

The New York Times’ Meredith Levien “vigorously refutes” the idea that native ads could be eroding trust. “Good native advertising is not meant to be trickery – it’s publishers sharing their storytelling tools with the marketer,” she recently told an IAB annual leadership meeting.

PwC executive director Megan Brownlow shares a similar view. She edited the 2014-18 Entertainment and Media Outlook, which forecast a trend towards tighter partnerships between brands and content producers.

“Marketers are not just investing in their own channels but taking money out of paid media to spend on creating content and looking after their own channels, which brings us to a bit of an opportunity for some media companies,” Ms Brownlow says.

“Media owners need to diversify their business models and leverage the power of their strong mastheads, author brands and strong editorial voices, and look at monetising those in other ways.

“It also means potentially going direct to the advertiser and having a deeper, richer conversation with them that is not just the traditional sale of display advertising.”

It also means opportunities for journalists, albeit those happy to swing between the proverbial church and state. “You might end up working for a brand rather than a media company. But it does mean the future for people who can create compelling content, in a platform-agnostic way particularly, is very bright.”


The Newspaper Works CEO Mark Hollands

The Newspaper Works CEO Mark Hollands says there is a danger that native advertising will confuse readers or, worse, become insidiously camouflaged. However, done correctly, “by which I mean advertising or sponsorship is openly and obviously declared, I believe it is certainly a great opportunity to create revenue,” he says.

“Among publishers in Australia and New Zealand, I have a high confidence that this will be the case because executives are acutely aware that their businesses are built on credible, independent journalism. Destroy that in the eyes of our readers, and it’s game over for all of us.”

Yet just because it is an advertorial doesn’t mean it has to be less than any other journalism in the newspaper, Mr Hollands says, either in its quality of writing, design or commitment to tell the truth.

“The key, for me at least, is for the paper to be transparent and thus maintain the reader’s trust.” It is a line local publishers are keen to follow, inspired by the high calibre of content being produced internationally.

Bryce Johns, editorial director for APN’s Australian Regional Media, acknowledges that there is “absolutely a greying of the lines” – and he supports it. Mr Johns set up a content partnership team in his previous role at the New Zealand Herald.

“I think it’s vital for media companies in these challenging times to be doing new things for revenue, but there are ways you can do it that are extremely transparent,” he says.

Australian Regional Media’s native efforts are still in the early stages but they have proven very successful according to Mr Johns. A trial with fishing and camping store BCF saw a campaign across five different regional newspapers over six weeks, with dozens of editorial pieces.


Bryce Johns, Australian Regional Media

“We wrote a lot of engaging stories about things we knew our readers cared about – like the best places to go fishing, the best camping spots in our patch,” Johns explains, “And then you had BCF around those environments telling you what the best tent to go camping or the best fishing rod to take.”

It was “hugely successful; a win-win,” Mr Johns says. “Some of the posts were getting tens of thousands of responses on Facebook and online – so you know you’ve created a conversation that people want to be involved in.”

The campaign was executed by the regional publisher’s editorial team. “It was done in such a way that we really believed the material was of high reader value and BCF didn’t have sign-off rights on the story, they didn’t see the stories before they were published; so it was really on trust that we would get it right.”

Other campaigns, such as a series commissioned by the Defence Force on inspiring women aimed at encouraging click through to enrolments, were created using contract writers, and Mr Johns believes the success of that campaign was due to the quality of the content, drawing readers who were interested in the defence forces and therefore more likely to click through to an application.

Australian Regional Media also was careful to develop a series of rules to guarantee transparency to readers. “When you hover over Paid Post it shows you a link and takes you to a landing page which explains what it is,” Mr Johns explains. “In what we do, the biggest thing we have in our favour is transparency and with our readers, if they are fooled, that trust could be ruined.”

It’s a prospect News Corp Australia and Fairfax Media are conscious of as well. News’ Neil Robinson takes a case-by-case approach to native ads which news.com. au publishes frequently for the likes of Qantas, Foxtel and Samsung. The Samsung Note3 campaign saw content for fashion, technology and even a piece on how to buy art.

“News.com.au is very respectful of its audience and [it’s important] to ensure transparency about what we are doing,” Mr Robinson says.

“Within the degrees of native at News there are different ways of ensuring we don’t erode that trust. At news.com. au we put “Feature Partner”, “Blogger”, “Association” on some of the blogs we do. Does that mean we’ll do that on every execution? It depends on the opportunity we have and how far we think the content is not eroding any trust. It’s horses for courses I think.”

But if, at the end of the day, the underlying purpose is an ad, how do publishers justify it and make it worthwhile for the reader? “That’s where the expertise of the journalists comes in,” Mr Robinson says. “Journalists understand what will engage and what will excite our consumers.”

Fairfax earlier this month embarked on one of its largest brand partnerships yet which would see liquor giant Dan Murphy’s take over the Good Food insert across all platforms, with wine recommendations and in-post purchase widgets – separate from, but adjacent to the existing editorial content – and aimed at moving perceptions of the brand away from big, cheap retailer to a “trusted drinks advisor”.

Ainslee O'Brien

Ainslee O’Brien, Fairfax Media

Head of FX and partnerships at Fairfax, Ainslee O’Brien, said the input of editorial staff at every step of the campaign’s development was paramount.

“If an idea surfaced that editorial weren’t comfortable with, it’s struck off the list,” she says.

“By having those internal stakeholders involved in the process from the ideation point, you ensure that as the content matures, that you’re on the right track and adhering to editorial guidelines and you’re also meeting the needs of the client.”

This kind of integrated solution was a big part of the future at Fairfax, she said.

“Advertisers want solutions that add real value – gone are the days where we just badge things.

“From a publisher’s point of view, we can bring really unique insights around what consumers are doing, what they’re reading and what they want more of. If we can marry that insight with what a brand is trying to do and who they’re trying to talk to, we can create solutions that add value and utility to a consumer’s life, rather than just putting a message in front of them.”

Bryce Johns believes rates for native ads are currently “undercooked” and agencies need educating. “I think ad agencies in particular have got a bit of thinking to do about what it means for their business and how they can engage with us to get the best results for their clients, because it really [requires] blue sky thinking from them as well,” he says.

Agencies are catching on. MediaCom was ahead of most, launching its Beyond Advertising section four years ago. At that time it was a team of one, founder Gemma Hunter. She now heads a national staff of 30 – but she says agencies still need to change.

“The way the agencies are set up has been in response to the way it used to be – you’d have a media plan and then creative made for the different channels,” she explains.

“People behave differently online to when they’re listening to the radio or watching TV. The reason there’s such a low click rate with banner ads is you can choose not to be interrupted by advertising; if you could fast forward every ad break on TV, you probably would.”

Ms Hunter believes a key obstacle is the very use of the term ‘advertising’. “It’s content,” she says. “You’ve got to have a story and it can be informing, inspiring or entertaining – beyond just trying to get your product message across.”

The Guardian’s recent editorial series on insurance sponsored by NRMA was a great example, according to Ms Hunter.

“What they did cleverly was use data that was provided by NRMA, because it has such a long and rich history. The organisation gave that information to journalists who used it like they would any normal piece of research to make a great story, and that’s when I think it’s done really well.

“When I think it’s done terribly is when a magazine has dressed up an advertorial – which is basically an ad – to try and look like a piece of editorial. You know, a toothpaste brand talking about why a smile is so important. It’s not really news, is it?”

Ms Hunter says a brand “needs to ask whether it has a right to be part of that conversation – have you got information the audience hasn’t got, authority, research, a point of view”. She said the question then was whether it could be made genuinely interesting for the audience.

Steve Allen, of Fusion Strategy, was impressed by comedian John Oliver’s jab at the industry. Media agencies are to blame for worshipping digital without thinking critically, he says.

Mr Allen said media agencies for the most part didn’t counsel clients as they used to, but looked at the quickest way to gain approval and make money. “If you put a million- dollar plan together for newspaper assets, it will take a month to get through a planning department and you’ll write umpteen justifications for it. If you put a million-dollar plan together for digital it will get approved in one meeting. There’s no questioning.”

He says more long-term, strategic thinking is required. “The sobering thinking is always, if I were the consumer, what would I want? Would I want to be conned in the guise of native? No. Will I trust that masthead the same way if they’ve conned me? No. Will I trust the brand that’s conned me? No.”

In the end it will be the readers who decide the right and wrongs in this digital divide and the impact on publishers – and in this case the jury is not yet out, but it is soon to retire to consider its verdict.

Read the August edition of The Bulletin here.

Orange Is The New Black Season Two airs Wednesdays at 8.30pm AEST on showcase.

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