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Native Advertising (The Nunatak Group)

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Native Advertising is one of the emerging ad format which has been used by more and more brands, publishers and agencies. This Native Advertising Paper will also focus on how this form of advertising …

Native Advertising is one of the emerging ad format which has been used by more and more brands, publishers and agencies. This Native Advertising Paper will also focus on how this form of advertising is changing the whole landscape of branding and how different start-ups are emerging in order to cater the needs of big brands wanting to advertise the "native" way.

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  • 1. S u m m a r y Advertisers are looking for alternatives to conventional display advertising campaigns as consumers become more immune to them and click-through rates decrease. Thus, publishers are increasingly offering Native Advertising formats which seamlessly integrate with a website’s original content. Critics see this as a threat to editorial independence. Nonetheless, 78 % of publishers and 61 % of brands worldwide plan to use Native Advertising 1 Native Ads can be displayed easily on small mobile screens, which further increases their relevance. uPDaTE NaTivE aDvErTiSiNg www.nunatak.com issue 3 Sources: 1 Hexagam/Spada (2013), 2 The Awl (2013) april 2014 D E f i N i T i o N The term Native advertising describes high-value content created or commissioned by brands, which is integrated into a website’s look and feel. Platforms such as Buzzfeed rely solely on Native advertising. Lately, an increasing number of traditional publishers have jumped on the bandwagon and started selling Native ads (e.g. NyT, WSJ, forbes). Promoted links in search results Content sponsored by companies for newsletters addressing a niche topic Stories on general interest topics produced by companies blend with other content Ads in form of online articles Promoted posts in social media, integrated into the newsfeed 1929 2004 2005 2006 2009 2011 2013 First print ads made to look like articles in the Hawaiian Star Advertiser2 Promoted product listings in search results
  • 2. Posts produced by companies blend into original content Sponsored videos Sponsored playlists Sponsored posts Sponsored listings Sponsored stories Sponsored links Video recommendations in search results Playlists’ cover photos can be linked to URLs, playlists can be created by companies Stories produced by companies mix with other content Advertised listings are shown in search results Promoted links appear within search results E x a m P L E S o f N aT i v E a D S Sources: 3 Hexagram/Spada (2013): sample size > 1000, 4 Native Advertising Leaderboard (2013), 5 Sharethrough (2013), 6 Online Publisher Association (2013) Ads corresponding to look & feel of third party website Third party publisher sites like Buzzfeed or on social media Sponsored posts in text, picture and video formats Content creation and advertising space on third party website Agencies, publishers and perhaps companies themselves Content posted on company’s own web properties Brand’s own website, blog or newsletter Mainly text with pictures, videos or charts Content creation, hosting, administration Companies and brands, agencies Difference to Content marketing Native advertising Content marketing How do costs for advertisers occur? What do these ads look like? Where is the content hosted? Which formats are used? Who creates these ads? 34 46 41 61 78 62 agencies Brands Publishers Expected worldwide use of Native advertising: 2013 vs. 20143 (in percent) 2013 2014 The brand MINI reached 1.3 m social actions with the most successful Native Advertising campaign to date4 of U.S. consumers notice Native Ads more frequently than traditional banner ads5 of publishers in the United States offer Native Advertising on their platforms6 73 %53 %1.3 m
  • 3. Publisher Newcomers and traditional media Brand Native ads for image building >Revenues solely from Native Advertising >CTRa is at 1.5 %, therefore up to 16 times higher than traditional banner ads7 >Cost of a month-long ad campaign on Buzzfeed: approximately USD 100,000 (167 advertising partners in 2013)7 >As a Buzzfeed partner, T-Mobile publishes content on lifestyle topics >Buzzfeed team creates content on behalf of T-Mobile >T-Mobile is only mentioned with their logo and at the end of an article B u z z f E E D T- m o B i L E f u r T H E r E x a m P L E S Sources: 7 Forbes (2014), 8 AdAge (2014), a CTR = Click-Through-Rate Promoted content is highlighted in yellow >Dell is the first partner publishing Native Ads on the NYT-website, paying a six-figure dollar sum for a three-month campaign8 >Dell produces the content itself and carries editorial responsibility >Published articles are not deleted upon end of campaign, the reader can find them in the site’s archive N E W yo r k T i m E S (N y T ) The New York Times offers different kinds of Native Ads Elite Daily was among offer Native Advertising Post’s approach to engage brands with consumers Forbes created "Branded Voice" in order to run Native Ads for brands Buzzfeed partner Nestlé produces high quality video ads for Facebook
  • 4. Sources: 9 Sharethrough (2013), 10 MandLoys (2014), 11 news.solvemedia.com (2013) The Nunatak group is a digital strategy consultancy based in munich. our focus is on mobile media, Social media, growth Strategy, Digital Coaching and investment Support for companies in growth industries. The Nunatak Group GmbH | Managing Partners: Robert Jacobi, Rupert Schäfer | www.nunatak.com | info@nunatak.com o P P o r T u N i T i E S r i S k S outlook for Native advertising >Unique, informative or entertaining content is less intrusive and can increase customer interest Relevant for Platform Brand Publisher >70 % of U.S. users prefer to learn about a company or a product through content than traditional print or banner ads10 Platform Brand Publisher >Service providers such as Contently also start to offer content for Native Ad formats Platform Brand Publisher >57 % of venture capitalists, business angels and private equity firms in the U.S. will probably invest in companies that sell Native Advertising11 Platform Brand Publisher >Cost-intensive and time-consuming measure: Since ads are produced for single platforms, they can only be used once Relevant for Platform Brand Publisher >Development of jurisdiction (e.g. FTC regulation in USA) still uncertain Platform Brand Publisher >Ad-blockers can be used to success- fully block Native Ads Platform Brand Publisher >If customers get used to the new advertising format they may start ignoring it Platform Brand Publisher Adaptly is a start up which advertises Native Ads in social networks Mopub creates social Native Ads for mobile apps (belongs to Twitter) Nativo is an automated platform producing Native Ads Platform marketplaces for publishers and brands >An online marketplace which allows publishers to sell their Native Ads >Sharethrough’s software automatically transforms regular advertising into Native Ads >More than 200 m final users reached9 >Customers: Pepsi and Nestlé S H a r E T H r o u g H Projects related to Native advertising: Establishment of a multimedia content services group Supervision and implementation of a content strategy for a global consumer brand Positioning and development of a content service provider, which offers creation of Native Advertising formats