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The New York Times Introduces Native Ads, Industry Pros Weigh In

The New York Times has officially embraced native ads. Last week, on Jan. 8, the paper joined the rank of publishers who have already adopted the practice, including Buzzfeed, The Washington Post, USA Today and Forbes.

“I think they were fairly late to the game,” said reporter Michael Sebastian, who covered the story for Advertising Age.

The Times’ first play in the native ad game is a post by Dell. The piece, which takes a look at the millennial generation, was developed in partnership with members of the Times staff, but not anyone from the newsroom – the paper is very clear about that. When both parties approved of the concept, a freelancer brought it to life, thus integrating advertorial content and the reader’s experience.

Native advertising, also called branded content, has become more common in digital media, but many questions still float about its long-term impact on journalism and the advertising industry.

The Interactive Advertising Bureau, or IAB, recently tried to address some of these questions by issuing a native advertising “playbook.” The IAB is made up of more than 500 leading media and technology companies, and is considered an authority in laying down industry standards and best practices.

Peter Minnium, head of digital brand initiatives at IAB, described the project as “a task force to move the industry beyond arguing over the definition of native, and to lay down some fundamental principles so the market can develop.” He also cited a number of companies that participated, a “who’s who of folks” that included, among others, Google, Facebook, Hearst, Pandora, Twitter and yes, The New York Times.

The concept of native advertising isn’t new, but its presence in digital space is. Minnium describes the practice as “placing advertisements squarely into the consumer’s activity stream” – something television and print outlets have been doing for many years. Traditionally, advertisers have depended upon digital ads like banners, which are clearly separate from the host’s editorial content. Native ads attempt to mimic editorial content and can appear in a variety of places, such as news and e-commerce sites, social feeds and mobile platforms. They can also take different forms, like narrative pieces, video or graphics. In all cases, they’re meant to harmonize with the whole of a user’s experience.

One potential danger is trying to strike harmony but falling flat. If native ads attempt to integrate advertorial and editorial content, they need to do it seamlessly. This means the content’s quality must match that of the publishers selling ad space.

As Minnium puts it, “If I’m used to reading The Washington Post and I understand that ten out of ten articles are going to be insightful, well-written and newsy, but suddenly I see two native ads that don’t live up to high standard that I’ve come to expect, I’m going to train myself to be disappointed repeatedly.”

In other words, users might train themselves to ignore native ads like many already ignore banner ads. The Times’ has mostly received praise for sustaining its high editorial standards in the Dell piece.

On the other hand, advertisers might blend their ads a little too well, potentially leading users to believe the content is produced by the host site. This raises ethical questions for many. The Federal Trade Commission held a conference in December 2013 where it addressed this issue and warned against misleading users.

In order to avoid this, Minnium stressed that native ads have to maintain an absolute “church and state” divide. They can mingle with editorial content but must be clearly distinguishable. Otherwise, consumer trust could be lost.

Other concerns center on whether native ads will harm the integrity of well-respected publishers. Gerard Baker, managing editor in chief of The Wall Street Journal, is resistant: He compared the practice to a Faustian pact, a deal with the devil.

With this in mind, the Times took a steadied approach to its Dell post compared to what its competitors have done. Sites like Buzzfeed, The Washington Post and Yahoo have woven native ads into their streams, but the Dell post is placed off to the side, surrounded by a blue border and with a disclaimer reading “Paid Post.” Sebastian even describes it as “extreme.” In any case, nobody is likely to mistake it for a Times article. The newspaper has even created a separate sub-domain for native ads, paidpost.nytimes.com, further isolating it from the rest of the site.

Another concern is whether or not native ads will scale. To be successful, their quality must keep up with increasing demand, but they require custom content creation that is time consuming and expensive; the Dell initiative is said to have cost into six-figures. Sebastian predicted that “quality will probably worsen a little bit, because as more people jump into it, there are going to be shoddier people calling the shots.” One thing is for sure: demand is on the rise.

Despite its potential drawbacks, native ads show enough promise to keep publishers interested. Social sites derive a great deal of their earnings from native ads, and now outlets like the Times get to share some of that market, which is huge. Social native ad spending could grow to $4.57 billion by 2017. That’s a 93 percent increase.

Moreover, native ads represent an ideal opportunity for brands to communicate with audiences in a way that feels organic. Jonah Peretti, Buzzfeed’s co-founder, echoes this sentiment. He also sees this as an opportunity for Buzzfeed and other online media to enrich their websites with advertisements that are less interruptive and more interactive. The Holy Grail for advertisers will be creative content with enough user engagement to go viral.

Native ads also offer a chance for brands to display thought leadership in their industry through live events and webinars, as Forbes’ Bret Gleeson points out. This could help elevate brands’ authority and credibility among consumers.

As the practice becomes more commonplace, advertisers will have to decide exactly how to measure success. Minnium believes a holistic approach is preferable to a reliance on easy metrics.

“Brand advertising needs to be measured by ‘engagement,’ but more specifically, the amount of time people spend with the content,” he said. “In other words, it would be a shame if native advertising falls to the lowest common denominator of measurement, which is just impressions and clicks.”

To help advertisers navigate such issues in the coming year, the IAB is organizing a series of native advertising workshops, beginning in March 2014. The workshops will flesh out important concepts from the playbook, including measurement, ethics and consumer perception.

Many questions remain to be answered about the efficacy, scalability and ethics of native ads. But despite these uncertainties, the practice will continue evolving as it ropes in other publishers. Who’s next?  We’ll have to wait and see.

Contact Information:

Michael Sebastian
Advertising Age

Peter Minnium
Interactive Advertising Bureau

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