Native Advertising- An Analysis
A presentation discussing the increasingly popular trend of Native advertising. Written as though we're presenting on a panel for an agency. Done for Advanced Media Strategies in the TexasMedia Sequence at the University of Texas at Austin.
Published on: Mar 3, 2016
Transcripts - Native Advertising- An Analysis
A Presentation By Peach, Inc.
Will Shirey, Jane Skiles, Abbie Squier, Robert Svoboda
We here at Peach, Inc. intend to make it clear that native advertising is a
form of communication with unparalleled power to build positive brand/
consumer relationships. Given this power, failing to utilize native
advertising at our agency would be a grave mistake. However, native
advertising also holds the potential to destroy all consumer trust in
brands and publishers if abused. It is vital that this tool not be used with
the intention of merely disguising brand advertisements as relevant
content. The great positive potential, and the great danger, of native
advertising is hinged on advertisers being consistently transparent, and
only providing relevant, quality content. Native advertising allows brands
to provide value to the consumer in the form of entertainment or
information in exchange for brand loyalty.
Ultimately, the focus of native advertising should be on the consumer.
What is Native?
Paid, branded messages that ﬁt the look and feel of the media in which
they are placed. The advertiser attempts to engage the consumer by
providing content in the context of the user's experience.
The IAB recently split Native into six different formats1
Content is found within the normal feed of the
platform; can be endemic, linked, or embedded in-feed
units. (Ex: Facebook Sponsored Posts)
Paid Search Units:
Text ads related to your search terms that are placed
before the organic results. (Ex: Google’s AdWords)
Links to external pages with content related to current
page’s content. (Ex: Outbrain’s “From Around the Web”)
Found on sites without traditional editorial content, but
present products/services contextually targeted to current
page’s oﬀerings. (Ex: Etsy’s Sponsored Listings)
IAB Standard Ads With Native
Placed outside of the page’s normal stream, but with a
message relevant to the page’s content. (Ex: Banner ads
with relevant context)
Any kind of native advertising not ﬁtting into the
previous ﬁve formats. (Ex: Spotify’s Sponsored Playlists)
1IAB, December 4, 2013, http://www.iab.net/media/ﬁle/IAB-Native-Advertising-Playbook2.pdf
Examples of Six Formats
Paid Search Units Recommendation Widgets
IAB Standard Ads
IAB’s Native Evaluation Framework
In-Stream Out of Stream
Matches Function Doesn’t Match Function
Mirrors Page Content Behavior Introduces New Behaviors
Narrowly Targeted Placement Broadly Targeted Placement
Buying & Targeting
Brand Engagement Direct Response
Clear and Prominent Ambiguous
Along with IAB’s description of six formats of Native Advertising, they presented an evaluation
framework of six course dimensions to determine if a native unit ﬁts an advertisers’ objectives1. As a
general rule, true and eﬀective native advertising leans to the left of these continuums.
1IAB, December 4, 2013, http://www.iab.net/media/ﬁle/IAB-Native-Advertising-Playbook2.pdf
Why Does It Matter?
Offered By More Publishers2
• Spending on sponsored content is projected at $1.9 billion
for 2013, a 22% increase from 2012.
• By 2017, spending predictions for sponsored content is $3.1
• 73% of publishers surveyed oﬀer native advertising.
• 17% were considering oﬀering some type of native
advertising that year.
Increased CTR3 Increased Viewing4 Brand Affinity and Purchase Intent4
• The average CTR for display
advertising is 0.19%.
• A native advertising unit from GE
resulted in a CTR of 8%.
• Consumers look at native ads 25% more
than traditional banner ads.
• Consumers look at native ads 53% more
• Native advertisements create a 9% higher
lift in brand aﬃnity.
• Native ads create a 18% higher lift for
purchase intent than for banner ads.
1Ad Age, September 23, 2013, adage.com/article/media/publishers-sponsored-content-cash-fear-backlash/244276/?utm_source=daily_email&utm_medium=newsletter&utm_campaign=adage&ttl=1380515223
2eMarketer, July 22, 2013, www.emarketer.com/Article/How-Native-Ad-Campaigns-Shaping-Up/1010064#e0sI3dvvoK3zIUcm.99
3Beeby Clark + Meyler, 2013, www.beebyclarkmeyler.com/fetch_content.php?title=ge-native-advertising-case-study
4Sharethrough, May 3, 2013, www.sharethrough.com/2013/05/infographic-native-advertising-eﬀectiveness-study-by-ipg-media-labs/
The rapid growth of native advertising provides an
even greater opportunity for brands to reach and
Our Pillars of Native Advertising
TransparencyQuality Content Relevance
Motive- Advertisers should focus on
providing content that is not focused on
purely promoting a product or brand but
rather seeks to inform or entertain the
consumer with real information.
Journalistic Integrity- Publishers should
ensure that the content meets the
standards of their publication or
medium. Journalistic integrity should
still be upheld in this new landscape.
Consistency-Consumer trust is hard to
build but easy to destroy. Every post
should provide quality content because
all it takes is one bad post to erode trust
in the brand.
Consumer- Native advertising should
build a relationship with the consumer.
If the brand-created content doesn’t align
with the consumer’s needs and desires, it
will negatively aﬀect the target’s opinion
of the publisher and the brand due to
increased clutter in the media channel.
Medium- The advertiser should
understand the medium for which they
are creating their content and how this
medium relates to the consumer.
Brand- Content created by the brand
should be relevant to the brand’s overall
messaging strategy, reﬂecting an area in
which they have strong credibility.
Standard- If there is a standardized format
or disclaimer for paid-for content in each
published medium, consumers can easily
discern native advertisements from the
Content Accreditation- The connection
between the content and its creator should
be evident. The purpose is not to deceive
the consumer but rather to foster a
relationship based on that connection.
Ethical Imperative- Brands should produce
native advertising that is founded in clarity
and full disclosure of sponsorship. There is
a moral and ethical responsibility on the
part of the medium and the advertiser to
honestly interact with the consumer.
The AtlanticForbesAs a business publication, Forbes has a very
speciﬁc audience. They know who reads their
publication and what they want to see. Forbes exhibited
just this in their sponsored post “10 Leadership Lessons
I Wish I Learned in My 20’s1.” The article is sponsored
by SAP, a software corporation that makes software to
manage business operations. Because of this, the
advertiser, publisher, and readership all align
on an interest in the same type of content. In the end,
the sponsored post was a success with over 65,000
views, 3,000 shares on Facebook, and 1,700 shares on
The Atlantic is a publication that has content varying
from business to culture to health, and beyond. As a
magazine that touches on every topic, one might assume
that any sponsored content could ﬁnd relevancy to the
publication in one way or another. Yet this was not the case
with a sponsored post early last year from the Church of
Scientology, praising it’s leader David Miscavige. The post
received almost immediate backlash, and was removed later
that day with an apology from the publication2. The post was
not relevant to the publication’s voice,
and in turn was not accepted by its readership. Overall, the
Scientology post from the Atlantic was an obvious mistake
for the publication, but also a lesson learned on how native
advertising should be executed.
1Forbes, April 8, 2013, http://www.forbes.com/sites/sap/2013/04/08/10-leadership-lessons-i-wish-i-learned-in-my-20s/
2The Atlantic, February 22, 2013, http://www.theatlantic.com/national/archive/2013/02/on-the-atlantics-scientology-ad-and-aftermath/273447/
BuzzFeed prides itself on being a social news and entertainment website. The site brings in over 85
million monthly unique visitors and brought in a rumored $60 million in 2013 through it’s sponsored
content1. The site knows how to create content that attracts attention and begs to be shared, but that
doesn’t mean every Partnered post they create is a winner.
Sony partnered up with BuzzFeed for a post entitled
“10 Innovations That Are Changing How We Do Music1.”
The post features ten diﬀerent innovations with pictures,
descriptions, and sources, ending with a video of Sony’s latest
innovation, the underwater mp3 player. Not only is this
interesting content that is relevant to Sony and its image, but
it gives Sony credibility as an innovator in the ﬁeld of
Honey Nut Cheerios partnered up
with BuzzFeed for a post entitled “12
Grandmas Killing It On The Danceﬂoor2.” The post contains
12 diﬀerent GIFs of older women dancing, with unoriginal
captions for each. It connects the post to the brand with an
ending GIF of Honey Nut Cheerio’s mascot Buzz. However,
without scrolling all the way down, you might not even realize
that the post is sponsored, and if you do, it doesn’t bring
credibility to Honey Nut Cheerios as a content producer or
innovator, as the Sony post seems to do.
1BuzzFeed, January 23, 2014, http://www.buzzfeed.com/sonyelectronics/innovations-that-are-changing-how-we-do-music
2BuzzFeed, August 23, 2013, http://www.buzzfeed.com/honeynutcheerios/12-grandmas-killing-it-on-the-danceﬂoor
Twitter’s In-Feed promoted
tweets are an excellent example of
transparent and straightforward
native advertising. Not to be
confused with unoﬃcial celebrity
sponsored tweets with have no
promoted tweets are
clearly labeled as paid-for
content with an orange arrow and
advertiser name. This standard
allows for full disclosure to the
consumer and an immediate
connection to the brand.
In relation to Twitter’s promoted tweets symbol, online
publisher Cracked’s native ad with Virgin Mobile, entitled “5
Brain Hacks That Give You Mind-Blowing Powers1” seems
deceptive with no mention of a sponsor
until the very last line of the two-page post. Publishers should
clearly state that a post is a paid-for ad from the beginning.
Without this element of transparency, brands and publishers
alike take the risk of alienating consumer trust.
1Cracked, March 25, 2013, http://www.cracked.com/article_20166_5-brain-hacks-that-give-you-mind-blowing-powers.html
Where does it fit?
Where doesn’t it fit?
Although it may not be clear who exactly native will work for, there are a few areas where native advertising arguably won’t work.
• Clients and categories with their target audiences not actively online
• Although native advertising isn’t conﬁned to online spaces, it’s where the majority of the practice is currently happening.
Clients with less tech-savvy targets might have a harder time reaching them online, where they don’t spend as much as
much of their time. Native advertising might not be best ﬁt for brands with young children as an intended audience as
well, because they don’t actively consume online content as much as the average adult does.
• Ex: Mattel, Hasbro
• Clients and categories with touchy subjects
• Some topics are naturally taboo within certain cultures, and because of this, should be handled cautiously. Religion and
politics are topics that can risk oﬀending and alienating audiences. Similarly, alcohol and cigarette brands have been risky
subjects for advertising for decades, and require stronger regulation than most areas. Using native advertising to
showcase these types of categories could seem unethical or even like propaganda. It would be best for these categories to
implement native advertising cautiously, if at all.
• Ex: Marlboro, Budweiser, Church of Scientology
Because Native advertising is only now becoming widely adopted and discussed, many ground rules and best practices
have yet to be determined. In some cases there are brands or categories where Native makes sense, such as mobile apps or
retailers without terrestrial stores where the ad is placed directly in-stream and downloads are only a touch away. For other
brands, it isn’t so clear.
We believe that the success of each brand is on a case by case basis, and ultimately, this success is only limited to the
brand’s own creativity in crafting content that connects with their consumers.
Case Study: Red Bull
Red Bull oﬀers an extreme example of how
bringing value to your consumer in realms
adjacent to your brand message can work as a
promotional strategy without ever having to
hawk your product or brand speciﬁcally. The
Red Bull company started as simply an energy
drink but has evolved into a trusted content
creator in the realm of extreme sports.
Everything that the company does contributes
to the idea that Red Bull is a great lifestyle
choice ﬁrst, and an energy drink second.
Despite what might seem like a lack of focus
on their main product, Red Bull has managed
to lead the exploding energy drink product
category by a signiﬁcant margin since it
created it in the late 80’s1. By creating content
that is inherently interesting, especially to
their male 18-35 target1, the company doesn’t
place ads, it places entertainment.
What really makes Red Bull special, though, is
the fact that it is leveraging its status as a
widely trusted content provider to blur the
lines between brand and publisher. The
“beverage company” has it’s own publishing
company, Red Bull Media House, which acts as
the umbrella for the print, television, online
and feature ﬁlm productions that Red Bull
does in-house. This consolidation of roles
represents a bright and exciting future for
native advertising in which consumers go
directly to their favorite brands for the content
they seek rather than being subjected to
advertisements disguised as branded content
in their trusted publisher’s stream.
1Mashable, December 19, 2012, http://mashable.com/2012/12/19/red-bull-content-marketing/
1Forbes, December 7, 2012, http://www.forbes.com/sites/aliciajessop/2012/12/07/the-secret-behind-red-bulls-action-sports-success/
Case Study: Virgin Mobile
Virgin Mobile has been using native advertising tactics
successfully since late 20121–one post has even received almost
715,000 social actions. Although their native ads have garnered
success across the web, there is disconnect between the
content of their native ads and the Virgin Mobile brand.
Rather than Virgin Mobile producing
content related to technology or
telecommunications, their posts generally
contain lists of Internet-quips, GIFs, and
pictures. Without the explicit Virgin
Mobile logo at the top of their post, it is
no diﬀerent than any other trite BuzzFeed
article. We feel that their content should
tie back to their identity as a wireless
communications company. Without the
direct connection between content and
brand identity, the message is lost and
forgotten as online clutter.
1The Native Ad Leaderboard, 2013, http://nativeadvertising.com/#/leaderboard/Virgin%20Mobile%2B%2B%2Bsocial_actions
The Content Marketplace
With an increased demand for content from marketers, supply will take time to catch up. The chasm between
supply and demand has become a breeding ground for entrepreneurship. This newly formed real estate in the
content marketplace has become a blank slate for innovators who have noticed the disparity in equilibrium.
To ﬁll this creative void start-ups like Contently, OutBrain, Sharethrough, and Triple Lift have developed
platforms for advertisers, publishers, and freelance journalists to connect and create relevant content. These
revolutionary tools will take native advertising to the next level, providing economic beneﬁt to both the coﬀee
shop journalist and the corporate board room. This provides a terriﬁc opportunity for advertisers to engage
outside sources for creative content and opportunities.
Contently is a startup founded 4 years ago that provides a platform for advertisers to ﬁnd creative content
written by freelance journalists. The company just recently garnered media attention after receiving $9 million
in venture capital funding. Following the FTC’s consent for native advertising, Contently has seen an
explosion in transactions and increased funding due to the predicted expansion of native advertising eﬀorts in
the year to come. It would be wise for agencies, advertisers, publishers, and consumers to take note of this
revolutionary tool, and look out for the companies that are taking part in this movement.
• Native ads have to be custom tailored to each medium they
occupy, making native advertising more tedious than one
banner ad created for many diﬀerent sites.
• To work eﬀectively, native advertising needs to be executed
carefully by professionals. Creation of quality content cannot
be outsourced to a computer or formula, which will most
likely keep this form of advertising as a niche1.
• The placement of native advertising with careful targeting
means that the advertiser has less say where exactly their ad
shows up and when, assuming it shows up at all. Speciﬁcally
tailored content may have less opportunity to be displayed
• Native units must be restrained, especially at this emergent
stage. Publishers risk diminishing their own voice and
losing consumers’ interest if they allow their current
substance to be overgrown with sponsored content3.
1Mashable, September 25, 2013, http://mashable.com/2013/09/25/native-advertising-porn/
2AdWeek, December 9, 2013, www.adweek.com/news/advertising-branding/6-companies-are-trying-solve-native-ad-scaling-issue-154374
3CPC Strategy Blog, December 17, 2013, http://www.cpcstrategy.com/blog/2013/12/native-advertising-experts/
4Forbes, September 10, 2013, http://www.forbes.com/sites/benjaminboxer/2013/09/10/
• There is no set universal pricing
system for native advertising. Each
publisher does it their own way.
• Native advertising is a unique
product that can currently be sold
at a premium price, opposite of
the current display ad4.
• “As a scarce resource, native units
are therefore naturally going to
increase in price as more sell – the
reverse eﬀect from display3”
Business Development Executive,
(That we shouldn’t forget!)
Long-Term Potential Issues
New Frontier Economic Uncertainty
Consumer Conditioning Regulation and
Paid Flow of Information
Data Mining by Publishers
• It will take time for the category of native
advertising to develop and deﬁne itself. Some
of the battle will be in determining what
truly falls under the umbrella of Native
• Such a wide open arena. The internet is the
wild west. How do you reign in all the
information, messaging, and individual
freedom that comes as a side eﬀect of the
• Demand and Supply are not yet at
equilibrium. Short term determination will
set the bar for pricing long term. Pricing will
ﬂuctuate, but the standard will be set1.
• Demand for native content could outstrip
the supply of creative talent. As a result,
most native experiences could be
unremarkable editorial clutter.
• With IAB’s Native Ad Playbook and FTC’s
discussion of the practice, there will be
continued standardization of native ads
and native ad serving, especially in the
areas of disclosure and transparency2.
• Regulation will adapt and change as Native
• Native could saturate the market with
content that consumers then become
conditioned to ignore.
• A movement away from informative
content to content with purely
promotional purpose could emerge as
time goes on and advertisers get lazy.
• Emergence of “Native Product,” a
combination of business, journalism,
and advertising in the form of content
that combines digital, video, web, and
• In an eﬀort to more carefully describe and
deﬁne the demographics of their audience,
publishers could begin to introduce more
methods of data collection. This includes, but
isn’t limited to, connecting proﬁles with
Facebook and twitter, and providing opt-in
• Data mining risks a loss of privacy for
consumers, which is especially a problem
when they’re not aware of the depth of
information they’re giving out.
• Currently there are 7 major media
conglomerates through which a majority
of all information is channeled. There is a
potential for brands to become the
producers of content for these media
outlets. Instead of the brand supporting
the media source as distantly as they do
now, the information would be directly
developed and channeled through paid
sources. Ultimately, the consumer has the
power in deciding whether the line
should be drawn.
1Ad Week, December 22, 2013, http://www.adweek.com/news/advertising-branding/how-native-advertising-will-change-2014-154589
2IAB, December 4, 2013, http://www.iab.net/media/ﬁle/IAB-Native-Advertising-Playbook2.pdf
Where We’re Going
Billboards already have the ability
to evaluate the key demographics in
traﬃc by tracking the radio stations
being listened to by the vehicles passing
by. By utilizing the increased ability to
track people via their mobile devices and
taking the wants and needs of drivers
into consideration, billboards can
become an even more viable means of
reaching people with branded content.
• Advanced traﬃc reports to
common destinations of the
people in traﬃc
• Interactive social media displays
• Relevant breaking news headlines
We have only recently reached the point where brands can process data fast enough and cost eﬃciently enough to
provide high levels of relevance and targeting to key customers. As this asset is further perfected and paired with
developing personal delivery technologies, a whole world of windshield moments will emerge.
Smart Billboards1: Google Glass2:
The Holy Grail of Native Advertising
Google Glass could allow brand interactions with consumers in their normal
stream of consciousness at the most relevant times possible. For example Google
Glass could target you by…
• Knowing you get coﬀee in the morning and promoting a special deal at a
coﬀee shop near your normal route
• Providing loyalty points for frequent visits to a store
• Retargeting ads that a consumer concentrates on
by providing further video and branded content
The successful of this form of native would be dependent
on brand’s ability to fulﬁll consumers’ wants or needs
in a timely manner, while also promoting their brand.
1SFGate, December 22, 2002, http://www.sfgate.com/bayarea/article/High-tech-billboards-tune-in-to-drivers-tastes-2744204.php
2Contently, October 9t, 2013, http://contently.com/strategist/2013/10/09/how-google-glass-will-bring-native-ads-to-the-physical-world/#!tUZK8
The End Beginning 17
Just like any other investment, native advertising has its risks. There is an element of
uncertainty in how this form of communication will play out in the markets and in the
ever-changing media landscape. That being said, the reward from native advertising far
outweighs the risk. In order to achieve a signiﬁcant return on investment, the advertiser
must assess ethical implications and follow a consumer-centric approach in producing
This new form of advertising leaves the door wide open for where the industry can
go from here. While the future may be unlocked for advertisers, brands still shouldn’t
walk through the door without knocking. In taking this leap, advertisers and publishers
need to take responsibility for protecting brand value and preventing consumer
confusion. By following the framework we have laid out, native advertising can achieve
an ethical, beneﬁcial, and organic communication strategy that can build a strong brand
and an informed, loyal consumer.
It’s time for our agency to walk through the door.
The End Beginning