The Comprehensive Guide to Native Advertising\ guide

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The Comprehensive Guideto Native AdvertisingA Vocus eBook

The Comprehensive Guide to Native Advertising

The Comprehensive Guide to Native AdvertisingA Vocus eBook

Native advertising – the purchasing of sponsored content on social networks and online

websites – dominated digital marketing conversations the past year. Market research

company BIA/Kelsey estimates that U.S. native ad spending on social sites might have

reached $2.36 billion in 2013, or 38.9 percent of total U.S. paid social ad expenditures.

How can you effectively work native advertising into your marketing mix? This eBook

highlights some techniques brands are using to do just that. It will show you the rich

native advertising ecosystem of publishers, vendors, social networks and search engines

that help companies create, manage and track content.

Finally, we’ll show you the ethical issues to avoid with sponsored content. The Federal

Trade Commission (FTC) recently held a meeting with brands and publishers to discuss

native advertising – and while some issues were highlighted, others were raised. Your

brand can use this set of tools, as long as the ads disclose sponsorship so that consumers

are better informed.

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The Comprehensive Guide to Native Advertising

What is Native Advertising?

A survey from Online Publishers Asso-

ciation says native ads include “con-

tent integrated into the design of

the publishers site, living in the

same domain, as well as content

either provided by, produced in

conjunction with or created on

behalf of our advertisers that runs

within the editorial stream.” In

native ads, there is a clear delinea-

tion, labeling the unit as ad content.

The Interactive Advertising Bureau defines six types of native ad units in its must-

read, “Native Advertising Playbook”:

O Social media in-feed units (such as Facebook’s ads

with a social context)

O Paid search

O Recommendation widgets (often seen as “From

Around the Web”)

O Promoted listings

O Standard ads with native elements (banner or box

with text or placed at beginning of post)

O Custom campaigns created with the client

This graphic shows an “in-feed” example, from Forbes’

homepage. It looks like other articles, but is clearly called

out as a “Forbes BrandVoice.” The disclosure indicates spon-

sored content, in this case by Gyro, a B2B marketing firm.

In The New York Times example below, the post is clearly

labeled as “Paid For and Posted by Dell.”

And Buzzfeed integrates their native advertising in the

form of posts written by the brand, which is delineated as a

“BuzzFeed Partner.”

Edelman Public Relations’ Chief Content Strategist Steve

Rubel sums it up succinctly: “I’d define native advertis-

ing as taking that which is organic and flipping it around

into advertising.1”

Native ads aren’t unique to online publications like Forbes

or Mashable. Facebook’s ads (and, for now, their “sponsored

stories”2) and Twitter’s “Promoted Tweets” are examples of

sponsored content appearing in social networks. Unlike

the Facebook banner ads, content ads such as photo posts

1 Conversation with Steve Rubel, 1/2/142 Sponsored Stories will “sunset” on April 9th of 2014, http://allfacebook.com/sponsored-stories-sunset-april-9_b128224

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The Comprehensive Guide to Native Advertising

are paid promotions of actions that a user’s friends take on

the platform, including check-ins, “likes” or RSVPs. They

appear directly in the News Feed. Page owners can target

ads via Facebook’s ad manager.

A brand may have their own account on Twitter,

but much of their content is not seen because

most people are not on Twitter at any given

moment. A Promoted Tweet shows up

in the stream for users who follow that

account or are targeted based on the user’s

expressed interests, geography or device.

The Promoted Tweet is noted as “promot-

ed,” but appears natural within the user’s

stream, “integrated into the design” of the site.

Edelman PR’s Rubel says, “If you look at search content with

paid search results, that’s the model. If you look at Tweets

and Promoted Tweets, that’s the model. And it’s working.”

Content Marketing vs. Native Advertising

Currently, many firms are using “content marketing” to

reach customers. Native advertising has a lot in common

with content marketing; however, content marketing is

typically text, video or other media that is intended to

inform the customer, providing something of value.

Much of content marketing builds brand over time. This

paper itself is an example of content marketing - a neutral

point-of-view piece of content that is not selling a

specific service or product, but educates marketers as a

service from Vocus.

Alternately, native advertising is material that is spon-

sored. While it may offer valuable content, it is still an ad

trying to offer a product, service or point of view. Often

times, native advertising is used to expand the reach of

content marketing – to get more eyes on the content

produced by a brand.

Forbes Chief Product Officer Lewis DVorkin reminds us

that what we consider “content” is often marketing in

disguise. The Michelin Guide for travel and accommo-

dations was started to encourage travel (and inevitable

tire replacement).

While debate on content marketing vs. advertising

can go on all day, the form is considered native

advertising, implying a payoff for the marketer as well as

the consumer.

How Does Native Advertising Fit Into the Marketing Mix?

Many brands struggle with how native ads should fit within

their larger marketing strategy. Native ads straddle several

tactics, including social engagement, owned media, and

of course, paid advertising. But how does it help a brand

achieve its objectives?

“When we think about the distribution, amplification and

ultimately, the engagement with content – that’s where

we think about our client’s goals,” says Edel-

man Digital’s Executive VP of Emerging

Media and Technology Adam Hirsch.

Hirsch notes ways in which native

advertising can assist a marketer

at the top of their funnel with

acquisition and brand aware-

ness, as well as ways to generate

leads and conversions.

Brand building and awareness

are at the top of the traditional

sales funnel. Creating articles that run

in relevant publications can help make

customers aware of your products, services and

offerings. Publishing content in a Forbes, The New York

Times, or BuzzFeed environment delivers lots of attention

and possibly perception change or consideration regarding

products or offerings.

Sponsored content can generate conversions and create

leads. For example, social media in-stream ads can have

similar targeting ability to email and marketing automa-

tion, according to Hirsch.

“Facebook amplification has been pretty great for us

because you can optimize for engagement or conversions

that you can track,” says Hirsch. “[Facebook offers] content

that you’re able to amplify in a segmented and personalized

The Comprehensive Guide to Native Advertising

way. Through first-party targeting with their ‘custom audi-

ences’3 product, through third party use of pixels or retar-

geting, Facebook is providing the ability to target users on

exclusive social segmentation sets based on what they’re

talking about or what their interests are.”

Native ads can also help your brand with bottom of the funnel

activity by converting existing and new customers. For

example, a brand can create sponsored content ads directed

specifically at Facebook users who are already customers.

You can also target via “look-alike” audiences who share

characteristics with your existing fans and customers.

The level of targeting is so sophisticated that, in Hirsch’s

words, “You have an opportunity to share an article about

your brand only to journalists who work at The New York

Times and Wall Street Journal or whatever stakeholder

audience you’re targeting.”

Facebook also allows retargeting via its Exchange product.

If someone has come to your website to view a prod-

uct or service, you can retarget them so that when they

return to Facebook they receive an offer or message in the

native News Feed stream. Many Facebook targeting func-

tions are offered in the updated advertising manager inter-

face, but some require working with third party Facebook

Exchange partners.

Twitter has similar offerings. The company announced

targeting based on interests in 2012 and recently launched

the ability to retarget users, and is expected to offer a custom

audience product similar to Facebook’s. For example, Twitter

empowers restaurants to automatically suggest themselves

to someone who is searching for dining recommendations.

How much should you be spending on native advertising?

According to Edelman Digital’s Hirsch, it’s important to

allocate a reasonable budget to test out and get the most

impact out of native advertising.

“When it comes to content amplification, start with a

$5,000-per-month budget minimum, no matter what size

company you are,” says Hirsch. “You need enough money

in the budget to start testing what’s working. So every

month, optimize between networks, test on the networks

themselves, and see what’s working to figure out your

optimal media mix.

“In ‘old school lead’ generation, depending on industry and

company, the cost of leads can range from a few dollars

to thousands of dollars,” says Hirsch. “With hyper-targeted

networks, psychographic targeting and retargeting, you can

bring your cost-per-lead down significantly.” Measuring

results and seeing what types of content resonate on which

networks and platforms is an absolute must in native adver-

tising, as “best practices” are not yet established.

The Ecosystem of Native Adver-tising Providers

The native ad ecosystem includes content creators, such as

companies, brands and agencies, who create the content

either alone or in conjunction with the publishers, as well as

the search and social networks and vendors offering adver-

tising space. This diagram shows how they work together.

Publishers

Publishers are considered the media sites that create online

content, with regular publication schedules and sizeable

audiences. Web properties such as The New York Times,

Forbes, The Huffington Post, BuzzFeed and Mashable all

have different ways of presenting and promoting native ad

content to their audiences. The New York Times states that

native ads will have a color bar and the words “Paid Post”

prominently displayed.

PublishersForbes, Mashable, BuzzFeed etc.

Native ads "In-Feed"

Content Platforms

Content Recommen-dation, Outbrain,

Taboola, AddThis and many others

Boxes under/near content.Titles like

"Content Fromaround the Web"

Content DistributionSharethrough, Nativo, others

Articles, Videos, placed in-feed on publishers' sites

SearchGoogle, Bing, Yahoo,

others

Sponsored Search results next to organic results

Social NetworksFacebook,Twitter, LinkedIn, Tumblr,

YouTube, etc.

Content showing inside the user's

main feed (FB Spon-sored stories Twitter

Promoted Tweets)

Content Creators

Brands themselves AgenciesPublisher studios (like Huff

Post Partner Studio)

3 See Vocus FB Guide for how to create custom audiences.

The Comprehensive Guide to Native Advertising

Forbes shows native ads under the branding “BrandVoice”

and the units can be seen on the lower portion of its home-

page. Forbes BrandVoice partners use the masthead’s tools

to publish content. Their headlines and their posts – the

native ad content – flow though the content management

system onto Forbes.com.

In anticipation of December 2013’s FTC hearing on

native advertising, Forbes published specific statistics on

its BrandVoice platform. DVorkin states, “1,100 total Brand-

Voice posts generated 821,000 social shares. Those actions

resulted in 565,000 social referrals to content [on the Forbes

site]. Search referrals generated an additional 1.1 million

visits.” Partners had as many as 13,500 views per post,

with up to 120,000 monthly unique visitors to the content

published on Forbes’ site.

How much does a native ad campaign cost? According to

a Digiday report from June 2013, campaigns can

range from as little as $5,000 for a post on

Business Insider to as much as $100,000

for five posts on BuzzFeed. For example,

The Huffington Post charges $40,000

for an article, but promotes it on their

site for four days. Such a promotion

would yield approximately 20 million

impressions. However, it is not known

how many audience members click

through and read the content, nor what

actions they take.

If publishing prices for top websites alarm you, there are

alternatives. “Consider working with ‘mid-shelf sites,’ with

publishers who are experimenting,” says Edelman PR’s Steve

Rubel. “There are sites in the ‘mid-tail,’ below the ComScore

1000, and you can experiment in everything from newslet-

ters to event co-branding.

“Webinars have a similar business model,” says Rubel. “If

you’re looking to experiment on big sites with a lower bud-

get, pick your spots with publishers that will drive some sort

of meaningful brand-building within that platform. If you

know that a BuzzFeed or Mashable is not going to cover you

at length, you could use budget to create a one-time boost

within that particular site.”

B2B and trade magazine sites are experimenting and you

can get a lot of value. Some of them even have “studios” that

will help you create content without the six-figure budget.

Content Platforms

Vendors are developing products to help brands place their

content adjacent to high quality editorials. An Altimeter

Group report on the native advertising landscape lists more

than 40 vendors, including Outbrain, Taboola, AddThis,

and Sharethrough.

There are two main types of content platforms – content

distribution and recommendation, and native feed insertion.

Content distribution and recommendation platforms tend

to show their content next to or below the main page con-

tent. They typically serve a widget that offers related con-

tent from within the site, as well as “From Around the Web.”

Users are targeted via cookies and other mechanisms, and

the content is personalized based on previous clicks and the

context of the current page. Marketers bid on a cost-per-

click basis and can analyze their traffic to optimize results.

Vendor Format Business Model

Outbrain “Additional Recom-

mended Content”

widgets on sites like

CNN, Time, and

Rolling Stone.

Personalized via

individual’s brows-

ing habits.

Real-time analytics.

Websites are paid

for referring traffic

outbound.

Marketers pay on a

cost-per-click basis,

with a $10 mini-

mum daily budget.

Taboola “Content You May

Like” widgets on

USA Today, TMZ

and more. Video

and text.

Targets users with

content, uses A/B

testing to improve

ROI.

Websites generate

revenue by hosting

sponsored content.

Cost-per-click

model, plus more

premium platform

with dedicated sales

team.

The Comprehensive Guide to Native Advertising

Native-feed insertion companies like Nativo and Share-

through let marketers place content right in the organic

areas of the website, in the feed or on the main page of

a site.

Share-through

Self-service ads

show “in-feed” on

mobile. Full service

model guarantees

impressions, on

desktop and mobile.

Targeting via DMA

and Zip Geographic,

behavioral/lifestyle,

and contextual in

verticals like busi-

ness or entertain-

ment.

No minimum for

self-service, CPM

basis.

Full service is a

minimum $20,000

spend.

Nativo Self-service model.

Targeting includes

geography and

device, control over

placement, real time

monitoring of time

spent with content.

Placement into

many major pubs,

on desktop, mobile

and within mobile

apps.

Works with limited

number of premium

brands, primarily

through agencies.

Cost-per-thousand

buying, with a min-

imum spend around

$20K. Includes en-

gagement analytics.

Text, images, slide-

shows and video

content.

These networks put content right into partners’ site feeds.

Sharethrough’s Tom Channick, senior communications

manager, claims this is the most effective way to reach

people, especially on mobile. He suggests testing targeting

with different pieces of content, and monitoring results

to see what content works. The Sharethrough team has to

approve all content, since Channick says the company

doesn’t want their distribution platform to be sharing “belly

fat” and “lower mortgage” ads.

Nativo President Justin Choi says, “Native [ads] typically

focus on the top of the funnel. There are great mechanisms

on the Web for the bottom half of the funnel, but there aren’t

great mechanisms for the top of the funnel, both in terms of

creative that has impact and that’s scalable, and also is mea-

surable.” Nativo offers the ability to drop a retargeting pixel,

so companies can use their existing bottom-funnel mech-

anisms. Both vendors note that direct response can work

if the content shared has a specific response call-to-action.

Search and Social

In addition to the platforms that help brands put their mes-

sages adjacent to or within the context of a publishing site,

search engines and social networking sites provide a way

to put brand content in the main context of the user expe-

rience. Most web users are already familiar with the spon-

sored search results that appear on the top and right sides

of Google, Bing and Yahoo! search results pages. This is

probably one of the earliest and most ubiquitous examples

of native ads, as it appears “integrated into the design of the

publishers site.”

Social networks have followed suit. From Facebook, Insta-

gram and Twitter to LinkedIn, most of the major social net-

works have figured out a way to offer content from advertisers

where users previously expected content from friends.

Platform and Con-tent Unit

How It Works Cost Model

Facebook

ads with

a social

context

(formerly

“sponsored

stories”)

• Page owner

promotes a fan’s

actions taken on a

page to amplify with

the action-taker’s

friends.

• Works with likes,

check-ins, use of a

game, RSVP’ing to

an event, or posting

on page.

• Extensive target-

ing.

Self-service via ad

manager.

The Comprehensive Guide to Native Advertising

Platform and Con-tent Unit

How It Works Cost Model

Instagram • Shows as a spon-

sored picture within

the native stream.

Initially working

only with brands

that have exten-

sive followings.

See Burberry and

Michael Kors as

examples.

Twitter

Promoted

Tweets

• Regular tweets,

boosted to the top of

stream, marked as

promoted.

• Recommended

follows.

• Targeted via inter-

est, gender, geog-

raphy, by device,

and via audience

similarity to existing

followers.

Self-service via ad management

interface.

LinkedIn Sponsored Updates and con-tent ads

• Promotes content

shared via a

company page to

a wider audience,

extensive targeting

capabilities.

Via ad manager.

Rubel states, “For the social networks and search, this is their

entire business model. It’s no longer display. Their model is

effectively to integrate – to take the organic structure and

flip it around to an ad.”

“LinkedIn is a huge opportunity, especially for specific types

of companies or specific types of messages from those com-

panies, whether it’s for a B2B or B2C audience,” says Hirsch.

“There are a lot of key audiences you can target directly from

LinkedIn for content amplification from company pages. Its

usage is dramatically increasing across Edelman, with the

product out only for the last three months or so. It’s a new

‘owned’ media channel for content amplification.”

Anyone can create ads on social networks, but smart brands

leverage their existing presence. For example, don’t jump

on Twitter and start promoting your Tweets if you have

no followers. Sponsored stories can help grow a brand’s

likes and followers, but only when the content resonates

with users.

A sponsored story promoting a post that has little organic

traction will probably do poorly. Promoting content that

is already being shared to a wider audience is a recipe

for success.4

Content is Still King

Native advertising requires quality content.

Studies show that if sponsored con-

tent delivers context, people gladly

embrace it as something worth-

while and useful. Furthermore,

publications hold sponsored

content to strict editorial stan-

dards. Not every message can

be a textual article featured on

Forbes or Mashable, and creat-

ing content for both properties

can cost a significant amount.

At the same time, creating singular

Cadillac pieces also exposes companies

to risk of must-succeed situations.

“Instead of creating one gigantic piece of content, try several;

use a PR post, link an article, post a Vine video, run them

through the platform and see what works,” says Share-

through’s Channick.

The media type also greatly affects how it is presented.

“[Producers] put a can of Diet Coke on ‘American Idol’ and no

one complains,” says Rubel. “Or a radio DJ gives away tickets

to a concert and plugs it, no one complains. The closer you

are to entertainment-based or lifestyle content, the more

the lines get blurry and the deeper the topic can be inte-

grated, provided it’s not a product review type of post.”

“I think that’s giving BuzzFeed the ability to really do that in

earnest because a lot of the ways they integrate brands is

through lifestyle content,” says Rubel. “Native ads get most

disruptive the closer they are to being straight up advertorial

in nature, and interruptive as opposed to additive. The

efficacy of that remains to be seen.”

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4 http://images.prsoftware.vocus.com/Web/Vocus/%7Bca91784d-8997-494c-8237-8e77fad39d39%7D_Vocus_-_New_Facebook_Guide.pdf

The Comprehensive Guide to Native Advertising

Creating great amounts of content often isn’t “native” to

midsized companies or smaller brands. They may be used

to creating brochures, posting blog posts or even sharing

content on networks. But some of these new formats, along

with the corresponding content types and targeting, will

be unfamiliar.

Rebecca Lieb notes in the Altimeter Group report5 that

education and training will be required. Marketers need to

apply skillsets like strategy, content, media buying and a

social component. For companies that don’t have the staff

to handle content creation or who wish to outsource it,

publishers like The Huffington Post provide “studios” to

create content on behalf of advertisers. The company has

staff separate from the journalists and video creators who

work with brands and agencies.

“The native advertising space relies on catchy headlines, and

it’s important [to] write content that people really want to

access,” says Tom Chernaik, CEO of CMP.LY, a monitoring,

measurement and insight tool company. Chernaik is also

co-chair of the Member’s Ethics Advisory Panel at the Word

of Mouth Marketing Association. “What’s driving all of this

is that content gets shared by people. You want to make

sure that it’s clear where the content comes from.”

Adding a social dimension of amplification to the content

that’s being shared natively is another point made by Lieb,

Rubel and Hirsch. Having content seen once is a benefit.

Having it shared many times can reduce your overall cost

of customer acquisition.

Disclosure and Challenges

“Consumers, overall, are responding very well to native

ads, and that’s why it’s such an appealing area for

advertisers,” says Chernaik. However, the FTC

is asking questions to protect consumers.

The commission held a meeting in

Washington, D.C. last December to

explore these issues. “How clear do you

need to make it, and when do you need

to make it clear that something is actu-

ally sponsored content?” asks Chernaik.

“Since there’s no standard way to disclose

it, or to present the information, it becomes

challenging to know how much they need to disclose, and

for consumers to understand how much an advertiser has

played a role in presenting content to them.”

Some publications clearly denote content is sponsored.

Other sites are less forthcoming. Another challenge, claims

Chernaik, is that people use different words to describe

the ad units, such as “sponsored” or “promoted” when they

really mean “advertisement.” “The industry needs to step up,

or a regulator needs to say ‘This is what we expect,’ and it’s

often better if the industry steps up,” adds Chernaik.

Consider Forbes’ “BrandVoice,” which

is marked at the top of articles and

has a disclosure link that states,

“Forbes BrandVoice™ allows

marketers to connect directly

with the Forbes audience by

enabling them to create con-

tent – and participate in the

conversation – on the Forbes

digital publishing platform.”

Will the FTC accept the phrasing

“Connecting marketers to the

Forbes audience” instead of “spon-

sored content?” It remains to be seen.

The previously mentioned “IAB Native Advertising Play-

book” takes some of the first steps towards industry self-reg-

ulation by publishing disclosure principles, which state that

“The disclosure must use language that conveys that the

advertising has been paid for.” The FTC also states advertise-

ments “must be large and visible enough for the consumer to

notice it in the context of a given page and/or relative to the

device the ad is being viewed on.”

Consumers should be able to distinguish between paid

advertising and editorial content. The problems can extend

to content when it leaves the publisher’s site.

Chernaik noted that if something is showing on a page,

there may be disclosures, but in a feed or on someone’s

timeline, it may not be clear to consumers, which is where

the FTC may step in. He warns, “People are focusing on it as

an ad medium, and you get tripped up when you look at it

as ads. The component that makes it so compelling isn’t the

ad component, it’s the word-of-mouth component. That

5 Chart on Page 11, http://www.altimetergroup.com/2013/09/new-research-defining-and-mapping-the-native-advertising-landscape.html

The Comprehensive Guide to Native Advertising

wasn’t addressed in the FTC workshop. It’s the buzz that

builds around the content that drives native advertising, not

the content presentation.”

The FTC has not taken formal action yet, but since

they’ve previously issued guidance on making

blog and celebrity endorsements more clear,

it is reasonable to think they will monitor the

native ad ecosystem with similar vigilance.

“The real question,” says Edelman’s Rubel, “is

‘What does the reader want?’ I know what the

technology vendors, publishers, and advertisers

want from native advertising. I don’t necessarily

know what the audience wants from this yet.”

Research shows the efficacy of native ads. According to

a study by Interpublic Group’s IPG Media Lab and Share-

through, consumers looked at sponsored content 52 per-

cent more frequently than banner ads. Native ads generated

9 percent higher brand affinity lift and 18 percent higher

purchase intent response than banners.

Conclusion

Consider how you can apply native ads to your larger

marketing stream. Ask the right questions: Will they help

convert sales? Or will you use them to amplify and build

social brand and content marketing activities?

Once you decide, consider your options from the increas-

ingly rich world of native advertising providers. Search

and social networks may be the easiest entry points into

sponsored content for brands. Many of these choices, from

Facebook’s ads and Twitter’s Promoted Tweets to Linke-

dIn’s Sponsored Updates are self-service offerings. These

social networks offer guides and case studies that explain

best practices and walk marketers through the steps needed

to execute a campaign. Native units are most helpful to

brands that already have a presence on the networks and

who know how their users respond to content.

Working with publishers can be a potentially expensive

endeavor unless you find a site that’s willing to work with a

smaller brand. Look for more midrange sites to offer spon-

sored content opportunities to attract first-time buyers.

Most publications have or are planning an offering on their

digital site.

Services like Outbrain, AddThis and others offer self-service

ways to promote content in the context of large publisher’s

sites without having to directly deal with the publishers and

their budget minimums. Bid-based marketplaces encour-

age experimentation and give marketers a chance to hone

their messages and content types while controlling spend.

These services can help make an already popular post more

widely shareable. Nativo, Sharethrough and others put

brand content right into the feed on multiple publishers’

sites, with targeting and analytics to measure the results.

Using analytics and setting key performance indicators

(KPIs) will help you evaluate all the offerings discussed.

As a marketer, it will be more important than ever to test

multiple content formats. Will native advertising result in

the promised payoff of higher engagement and interaction

– as much as 39 percent higher in some cases? Only your

own tests, metrics and KPIs will answer that question.

One thing is for sure – 2014 is definitely the year to try

native advertising.

About Vocus

Marketing can be hard. To help you succeed and generate

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We help you attract and engage prospects on social media,

search engines and in the news. We get your message in

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Our suite includes a social CRM to manage the activity of

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discover what drives likes, shares, opens, click-throughs

and conversions.

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