Developing a Native Advertising Product

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Much (heated) debate has been placed recently on whether native ads that walk, act and quack like editorial content are misleading and bad for consumers. The philosophical debate is the wrong one; the …

Much (heated) debate has been placed recently on whether native ads that walk, act and quack like editorial content are misleading and bad for consumers. The philosophical debate is the wrong one; the focus should rather be on what is driving the disruption in the “traditional” interruptive ad format. Taking a look into the causes of this turbulence reflects the current zeitgeist and how a successful native ad product can come to life.

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  • 1. Developing a Native Advertising ProductJack Krawczyk !@jackk!!February 27, 2013!Native Advertising Summit!
  • 2. How to Build Your Native Solution1 Become an Amateur Historian!2 Evolve into an Amateur Economist!3 Do No Harm!
  • 3. AudienceThe people who watch or listen to a television or radio program.!
  • 4. Target AudienceA specific group of people within thetarget market at which the marketing message of a product is aimed at.!
  • 5. AdvertisingPaying for the right of a brand to disrupt the user experience. !
  • 6. Native AdvertisingPaying for the right of a brand to become a part of the user experience. !
  • 7. Advertising Used to be Pretty Easy
  • 8. 1985 34% reach among US households! 19average # of channels per home!
  • 9. 1995 21% reach among US households! 41average # of channels per home!
  • 10. 2011 13% reach among US households! 135 average # of channels per home!
  • 11. Audiencesare Fragmenting
  • 12. % reach 0 5 10 15 20 25 30 35 40 1970–1971 1971–1972 1972–1973 1973–1974 1974–1975 1975–1976Source: Nielsen, TVB 1976–1977 1977–1978 1978–1979 1979–1980 1980–1981 1981–1982 1982–1983 1983–1984 1984–1985 1985–1986 1986–1987 % reach 1987–1988 1988–1989 1989–1990 1990–1991 1991–1992 1992–1993 1993–1994 1994–1995 1995–1996 1996–1997 1997–1998 1998–1999 # of commercial TV stations 1999–2000 2000–2001 2001–2002 2002–2003 2003–2004 2004–2005 2005–2006 Reach of #1 TV Show in US vs Total # of TV Stations 2006–2007 2007–2008 2008–2009 2009–2010 2010–2011 2011–2012 0 200 400 600 800 1000 1200 1400 1600 # of commercial TV stations
  • 13. How to Build Your Native Solution1 Become an Amateur Historian!2 Evolve into an Amateur Economist!3 Do No Harm!
  • 14. Fragmenting audiencesmake advertising much more expensive.
  • 15. The Economics Say So Audience!Content! Studio! Network!Producer! Brand!
  • 16. With more channels, the cost of Audience!acquiring audiences increases. Content! Studio! Network! Producer! Brand!
  • 17. Higher audience acquisition cost Audience!puts pricing pressure on content. Content! Studio! Network! Producer! Brand!
  • 18. Audience!Content! Studio! Network!Producer!GRP rates increase to offset Brand!audience & content costs.
  • 19. Audience fragmentation leaves Audience!content producers earning less… Content! Studio! Network! Producer! …and brands paying more to Brand! reach their target audience.
  • 20. So Brands are Investing in Building Their Own Audiences
  • 21. Audience!Content! Studio! Network!Producer! Brand!
  • 22. Audience!Content! Studio! Brand!Producer!
  • 23. 22
  • 24. 23
  • 25. 24
  • 26. 25
  • 27. These brand-produced assets are becomingincreasingly portable.
  • 28. Audience!Content! Studio! Brand!Producer!
  • 29. Audience! Digital Properties!Content! Studio! Brand!Producer!
  • 30. It’s the same content.Just repurposed for its native consumption.
  • 31. Pandora -> Audio [stations]Twitter -> TweetsFacebook -> PostsPinterest -> PinsYouTube -> Videos [channels]
  • 32. Audience! This is where native advertising lives. Digital Properties!Content! Studio! Brand!Producer!
  • 33. How to Build Your Native Solution1 Become an Amateur Historian!2 Evolve into an Amateur Economist!3 Do No Harm!
  • 34. Good User Experiences are Good Brand Experiences
  • 35. Longer Session Length 
 
 =
 
 Happy User!
  • 36. Longer Session Length 
 
 =
 
Longer Brand Engagement!
  • 37. Transitive Property of Native Advertising…
  • 38. Happy User 
 
 =
 
Longer Brand Engagement!
  • 39. Hold Native Ad Productsto the Same Standards as Core Products
  • 40. What is the main userbehavior on Pandora?
  • 41. <- Branded Radio
  • 42. What are the main drivers analyzed for consumer success?
  • 43. 485,000+ Station additions !
  • 44. 519,000+ Hours of total listening!
  • 45. 96%Driven on mobile!
  • 46. Don’t just build thingsbecause brands will pay you for them.
  • 47. Retention !Metrics to Session!Evaluate Your Length!Native Ad Latency !Product Revenue !
  • 48. Do no harm.
  • 49. History + Economics - Harm =Developing a Native Ad ProductHit me up:! @jackk!