Digiday reports on the latest problem with the native advertising strategy:
Digital ad sales intelligence platform MediaRadar said the average renewal rate for sponsor content this year is 21 percent. Meanwhile, native ad tech company Polar recently described renewal rates as “weak,” with 40 percent of the publishers it surveyed showing renewal rates below 50 percent.
Native advertising isn’t going to cure all our problems because:
1. The ROI is debatable. Says Digiday: “Behind the low renewal rates is the fact that advertisers are uncertain about the return they’re getting on native advertising.” This has been my worst fear. We give the advertisers what our standards and ethics forever forbade — confusing our readers about the source of content — and then the advertisers wake up and say, ‘Well, that was fun. But we’re bored with that. What can you sell us next?’ Except with badly done native advertising, we’ve already sold our brands, our souls, our seed corn. We have nothing left. Jack, you gave away our only means of support for what? Magic beans?
I have long wondered whether native advertising would do what advertising is supposed to do: drive sales. What is the efficacy of replacing five-word banners with 500-word stories? Perhaps we are beginning to find out.
2. Competition is rushing in. Digiday: “Three years ago, there were about 15 companies helping brands produce sponsored content, according to MediaRadar CEO Todd Krizelman. Today, there are more than 600, and the number is growing.” I have long said that in media need to compete with creative agencies but we can’t imagine that they won’t fight back. Content is a commodity. Anybody can make it. That is the key lesson of the internet for media. So we surely couldn’t believe we’d hold onto the business of “telling brand’s stories” for long.
3. It’s expensive. It takes a lot of resources to make content for finicky advertisers.
4. It’s no longer enough to write a “brand’s story” and put in in our editorial space (barely camouflaging it as an ad). Media’s audience is insufficient. So media has to spend money (a) placing ads elsewhere to drive traffic to our native ads, (b) placing the native ads we make at other media sites, and (c) trying to buy social traffic. That, too, is expensive.
So what is the profit margin on native advertising after we are left marketing our services to replace the clients who churn out, after spending a fortune on making native advertising, and after spending another fortune advertising the advertising? Native ad distributor Polar says it’s a high-margin business still and that’s good. But where do those trend-lines fall given the news above?
This is the moment where you say, “Goddamnit, Jarvis, you shoot down tablets, paywalls, and native advertising, not to mention programmatic advertising (because it commodifies media) so what do you expect us to do?”
Mind you, I am not against doing native advertising well. See Quartz, for example. I am in favor of media companies competing with ad agencies for both creative and media business. What I object to is the idea that this could have been our sole salvation, any more than our earlier magic beans, without embarking on the much harder work of reinventing ourselves.
Our only salvation will be to question *everything* about our mass-media business models as we enter a new reality, starting with the value of reach in an age of abundance and endless competition. Yes, reach matters but only if we have something of value to convert all those folks to. We have to shift from reach to relevance, volume to value. We have to rethink the essence of what news and media are. That’s why I wrote this: to begin questioning and exploring.
That’s also what I said to our incoming students at CUNY’s J-school last week. At the end of our week together, the students listened to voters about their needs in this election and their proposed solutions didn’t look like content-based mass media at all. They’re all journalists but they are learning to question their assumptions. We need to do the same with business people and reinvent what they do. Instead, we’re grabbing the deck chairs on the Titanic hoping they will act as flotation devices.
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Content.ly — a reputable native advertising company (with whom we are doing at study at CUNY) just released some further data on media’s behavior. 68% of publishers have editorial staff make native advertising. Nooooo! 45% think the biggest threat to native advertising is the lack of separation between church and state. Jeesh.
Edelman, the world’s largest PR firm, finds itself between a lump of coal and a hard place by working for old energy companies while it also tries to appeal to corporate responsibility clients.
And therein lies an object lesson for media companies getting into the business of making and publishing native content. For that work — “telling brands’ stories,” as we euphemistically put it — puts the media company into the business of a public relations or advertising agency. It forces us to ask: Whom do we serve? And what does our brand stand for?
In What Would Google Do? — inspired by ad genius Rishad Tobaccowala — I came to argue that public relations firms should take their title seriously and represent the public to the company rather than the company to the public. It necessarily follows that if a brand owner flouts the advice of such a public envoy, then the envoy needs to fire the client or it will lose its trust from the public.
Are public relations (or advertising) companies willing to do that? Judging by the evidence of the story pictured above, no. And that’s not at all surprising. PR companies exist to fall on their own swords for their clients.
But what of news companies? Will they be willing to fire a brand and give up the business of telling its story? Where are the lines? What if Shell Oil comes to your news organization, checkbook in hand, to tell its story, or that fracking company that advertises every Sunday morning wants you to make a video about the wonders they enable? Or a gun maker while you’re exposing deaths by firearms? Or a drug manufacturer when your newsroom is busy exposing how drug makers addict children to opioids? Is it one matter to publish their ads and another to make them?
The Guardian asked me to turn a series of tweets about the new New York Times site design into a review:
A web-site redesign is often an expensive, time-consuming, over-hyped exercise in media navel-gazing: an expression of institutional ego over user need. So I will confess a preemptive shrug at news of the newest New York Times online.
But I retract my shrug. As I explored the new site and tweeted my reaction, I quickly warmed to this new haircut on an old friend. It’s neither revolutionary nor terribly disruptive and leaves me feeling as if the paper online has tried to pay tribute to the paper as paper (why did they feel the need to resurrect the mix of italic and roman headlines that was de rigueur a half-century ago?). Still, The Times does much right.
The redesign kills the irritating news-site habit of cutting stories into multiple parts. In print, we newspaper folk called that “jumping” from, say, the front page to one inside, and every reader survey ever performed told editors that their customers hated that. Newspapers continued to do it online not because scarce space forced us to but instead because we wanted to pump up our pageviews: The more pages you viewed, the more ads you saw, the more money we made — or so went the myth of old mass media carried over to online. That is also the economic genesis of sites’ slideshow disease.
The Times now lets us scroll through a story without clicking. But there could be an economic rationale for that, too. Web analytics company Chartbeat found that readers tend to let their eyes skip right past the banners atop pages — usually sold as the most valuable ads — and end up spending more time exposed to the ads embedded down within longer tomes. Time engaged can build greater value than pages clicked.
In an effort to increase said engagement, The Times has tried to make it as easy as licking your finger and turning the page to move to the next story … and the next. There’s an arrow on the right of every story that moves the reader to the following story displayed in a horizontal menu above. Once I figured the system out — I’ll confess it took me a few clicks to associate the arrow with the preview in the bar — I found it, well, engaging. But I also found this feature, like the ability to read today’s paper — that is, the stories as packaged in the physical artifact — a bit too nostalgic for the idea of editorial presentation and control.
Nonetheless, I salute The Times for putting less effort into its home page (which on The Times attracts more than half of its readers in a day but on many news sites draws as few as 10 percent) than into creating a satisfying experience around the meat of the matter: the article.
I’m also relieved that The Times did not follow the example of its much-ballyhooed — and so-often-aped — “snowfall” format, injecting animations and videos and sound and every manner of media into a simple text tale. There’s no digital Rococo in sight.
The new Times uses what geeks call the “hamburger button” (three parallel lines — two sandwiching the third) to get rid of the time-worn left-hand navigation bar. Speaking from experience running news sites, the nav bar became the basis of political turf wars, with editorial and commercial departments battling for more signage. With all that obvious information tucked away, there’s more room for what should be in a news site: news.
I’ll quibble that once one does mouse-over the hamburger (oh, what has become of our language?) the resulting menu is three layers wide (e.g., arts to books to best sellers) and can require the manual dexterity of a pianist to play it. But as I confessed, I quibble.
One other important change in this redesign is The Times’ ability to accommodate the next supposed media messiah after the pay wall: native advertising, which is code for fooling readers into thinking that marketing messages are actual content. We used to call these things advertorials — you know, those things you skipped past. Now media mythology has it that every brand should be media and all media need content. But the real question is: Do you find value in reading an opus from Dell about “Reaching Across the Office from Marketing to IT“? I don’t. I go to Dell to buy hardware, not words. As I recently warned a roomful of PR people itching to advertise natively: Content is a shitty business. Stay away! I predict that the fad will soon lose its luster.
But in the meantime, let’s at least give credit to The Times for doing native advertising right — that is, for being scrupulous about labeling it for what it is. “Paid for and posted by Dell,” says the warning atop every piece. “Written by Dell,” it says at the byline. “More paid posts from Dell,” it says to the right. Short of using the A-word — advertising — it can’t get much clearer than that. Now the question is: Will readers click and care? Will a 13-paragraph essay asking, “Can the Government Become Entrepreneurial?” sell more computers than a well-targeted coupon?
As former Times wunderkind Brian Stelter writes at CNN.com, much of the import of The Times redesign occurs behind the scenes in a new content management system that the paper says will make it easier to iterate with new technologies, obsoleting not the present site but instead the concept of the redesign. I argue that CMSes — like redesigns — are another expression of editorial ego. I’ll be egotistical enough to quote what I blogged on the topic:
It’s all about us, about our content, about how we want to make it, how we want to present it to you, how we organize it, how we make money on it, how we protect it. What we should be doing instead is turning our attention outward, from the content we make (surely after 600 years, we know how to do that) to our relationship with the public we serve and the ecosystems in which we operate.
The one thing missing from The Times redesign is me — or to put that less egotistically, you. I wish a news site would move away from its mass-production roots and devote just some proportion of its presentation to personal relevance, reducing noise and increasing engagement not through user interfaces but through delivering value. I’d like The Times to learn that I never read sports and often read about movies and devour media news and live in New Jersey and thus give me more relevance. Netflix knows what I like but my newspaper does not. Google knows where I live and work but my newspaper does not. Shouldn’t it?
This shift won’t require a redesign of pages and pixels or systems. It will require a rethinking of newsroom culture and commercial business models to emphasize service over content, outcomes over presentation, relationships over mass.
Oh, be warned: The Guardian is working on its own new systems and redesign.
We used to know what ads were. They had borders around them — black lines in print, a rare millisecond of dead air on TV, the moment when the radio host’s voice became even friendlier, letting us know he was now being paid to peddle.
When I started Entertainment Weekly, a sage editor sat me down and summarized in one sentence the magazine industry’s voluminous rules about labeling what we then called “advertorials”: “The reader must never be confused about the source of content.”
Confusing the audience is clearly the goal of native-sponsored-brand-content-voice-advertising. And the result has to be a dilution of the value of news brands.
Some say those brands are diminishing anyway. So sponsored content is just another way to milk the old cows as they die. Lately I’ve been shocked to hear some executives at news organizations, as well as some journalism students and even teachers, shrug at the risk. If I’m the guy who argues that news must find new paths to profitability, then what’s my problem?
Well, I fear that in the end we all become the Times of India, where paid advertising and news content are allegedly mixed so smoothly in some areas that readers can’t tell one from the other. Worse, at some news organizations, editorial staff do the work of writing this sponsored content. They become copywriters.
At the same time, many of these news organizations are using their brands as candy to attract legions of new contributors, which can drastically lower the cost of content. Mind you, I’ve applauded that spirit of openness and collaboration as well as that newfound efficiency.
But here’s the issue: Some media properties have taught me to pause before following a link to them. Sometimes, I’ll find good information from a staffer or one of many contributors who brings real reporting or expertise. Sometimes, I’ll find a weak contributor — or staff — piece that adds no reporting or insight; it merely regurgitates what others have written when a link would be better. (Beware headlines that start with “how” or “why” or include the words “future of” or “death of” or end with a question mark; chances are, they add nothing.) And then sometimes I’ll find one of those sponsor-brand-native pieces only vaguely labeled to let me know its source.
My problems with these trends in news media:
Inconsistency. I no longer know what to expect from news organizations that do this. Yes, I’ve heard editors claim that they work with both contributors and sponsors to improve the quality of their submissions — but apparently, not enough.
Brands used to be selective both because the scarcity of paper or time forced them to be and because that became key to their value. Now they want more and more content. Making content to chase unique users and their page views rewards volume over value.
Conflict of interest. First, let me say that I think we in news became haughty and fetishistic about our church/state walls. The reason I teach entrepreneurial journalism is so that students learn about the business of journalism so they can become more responsible stewards of it. I argue that editors, too, must understand the business value and thus sustainability of what they produce.
That said, I worry about journalists who spend one day writing to serve the public and the next writing to serve sponsors. News organizations should never do that with staff, but I’m sorry to say that today, a few do. Freelance journalists are also turning to making sponsored content to pay the bills.
Thus, I hear of some journalism educators who wonder whether they should be teaching their students to write for brands. Please, no. My journalism school doesn’t do that. Others schools already include courses in PR and advertising, so I suppose the leap isn’t so far. In any case, brands will hire our students because of the media skills we teach them and we need to prepare them for the ethical challenge that brings.
Brand value. Some news companies are exchanging their brand equity for free or cheap content of questionable quality and advertising dollars of questionable intent. As someone who champions disruption in the news industry, you’d think I wouldn’t care about dying legacy media brands. But I do. I see how legacy news companies can bring value to the growing news ecosystem around them through sharing content and audience and someday soon, I hope, revenue. If the legacy institutions lose their value — their trust, their audience, their advertisers — then they have less to give, and if they die, there’s more to replace.
Now here’s the funny part: Brands are chasing the wrong goal. Marketers shouldn’t want to make content. Don’t they know that content is a lousybusiness? As adman Rishad Tobaccowala said to me in an email, content is not scalable for advertisers, either. He says the future of marketing isn’t advertising but utilities and services. I say the same for news: It is a service.
I’ve been arguing to news organizations that they should stop thinking of themselves as content businesses and start understanding that they are in a relationship business.
News organizations should not treat people as a mass now that they — like Google, Amazon, and Facebook — can learn to serve them as individuals. Can’t the same be said of the brands that are now rushing to make content? They’re listening to too many tweeted media aphorisms: that content is king, that brands are media. Bull.
A brand is a relationship. It signifies trust and value. Advertising and public relations disintermediated the relationship that commercial enterprises used to have with customers over the cracker barrel. Mass media helped them bring scale to marketing. But now the net enables brands to return to having direct relationships with customers. That’s what we see happening on Twitter. Smart companies are using it not to make content but to talk one-on-one with customers.
Here’s where I fear this lands: As news brands continue to believe in their content imperative, they dilute their equity by using cheap-content tricks to build volume and by handing their brand value to advertisers to replace lost ad revenue. Marketers help publishers milk those brands. And the public? We’re smarter than they think we are. We’ll understand when news organizations become paid shills. We understand that marketers would still rather force-feed us their messages than simply serve us.
What to do? The reflex in my industries — journalism and education — is to convene august groups to compose rules. But rules are made to be pushed, stretched, and broken. That is why that wise Time Inc. editor over me at Entertainment Weekly (as opposed to the oily ones who tried to force me to force my critics to write nicer reviews) summed up those rules as a statement of ethics. Again: “The reader must never be confused about the source of content.”
Well, if we’re not in the content business, then what is the ethic by which we should operate now? I think it’s even simpler: “We serve the public.”
If we’re doing what we do to fool the public, to sell them crappy content or a shill’s swill, to prioritize paying customers’ interests over readers’, then we will cannibalize whatever credibility, trust, and value our brands have until they dry up.
So am I merely drawing a black rule around advertising again? Don’t we hear contributors to a hundred news sites rewrite the same story every day — that advertising is dead? Well, yes, advertising as one-way messaging is as outmoded as one-way media. Oh, we in media will milk advertising as long as advertisers are willing to pay for it. But we know where this is headed.
Then do media companies have any commercial connection with brands? Can we still get money from them to support news? I think it’s possible for media companies to help brands understand how to use the net to build honest, open relationships with people as individuals. But we can teach them that only if we first learn how to do it ourselves.
Some will accuse me of chronic Google fanboyism for suggesting this, but we can learn that lesson from Google. It makes 98% of its fortune from advertising but it does so by serving us, each of us, first. It addresses its obvious conflict with the admonition, “Don’t be evil.” (When Google has failed to live up to that ethic — and it has — its fall came not from taking advertisers’ dollars but instead from seeking growth with the help of malevolent telcos or tyrannical governments.) Note well that Google sees the danger of sponsored content, which is why it has banned such content from Google News.
Whether you like Google or you don’t, know well that it provides service over content, enabling it to build relationships with each of us as individuals while also serving advertisers without creating confusion. Google is taking over huge swaths of the ad market by providing service to users and sharing risk with advertisers, not by selling its soul in exchange for this quarter’s revenue, as some news organizations are doing.
My advice to news organizations: Move out of the content — and sponsored content — business and get into the service business, where content is just one of your tools to serve the public.
Brands (read: advertisers) are following media down the wrong path, deciding that they, too, are media now and that they, too, should make content to draw customers to their messages (thereby, by the way, getting rid of that middleman, media).
I’ve been arguing that media should build their futures around relationships, using content as a tool to that end. I’d say that is even more true of brands.
Yesterday, Samir Arora, CEO of Glam (where — full disclosure — I’ve been an adviser), tweeted a link to Marc Andreessen arguing that Ning, the company he cofounded and sold to Glam, is about to come into its own as it is remade for brands. That got me thinking about brands’ direction.
Whatever platform they use — Ning, Facebook, Google+, Twitter, blogs or all of the above — is less the issue than the culture that enables its brands and its employees — every one — to talk with and build relationships of value and trust with customers.
We’ve all seen this happen on Twitter when we get pissed off at some unfair or unrighteous action by a company; we appeal to sanity; an employee — sometimes the official tweeter, sometimes just a decent soul — rescues us; our relationship with the company is redeemed.
That is the model for brands online. I thought we’d learned that years go. Apparently not quite. Today not only are brands making content in their own domains but they now want to make content in media’s space; we used to call that an advertorial but now that is apparently called — in jargon that appeared from nowhere — “native advertising.” WTF does that mean?
Mind you, brands should indeed create content and make it available — about their products so we can find every question we have answered. But that’s utility. That’s not what brands talk about when they become media. They make this:
Huh? How is that really any different from slapping a banner onto content? Oh, yes, it’s supposed to make us associate the Droid Razr Maxx HD with exotic locales and long battery life. But Motorola would do better to finally produce a decent phone, in which case, we the users would advertise it. I do hope that’s a lesson Google teaches them. Google understands the value of building relationships with individuals and using knowledge about them to deliver relevance and value. Isn’t that the wise future of media … and marketing?