Ads Disguised as Content are Hot New Marketing Trend

Since the dawn of the Internet, the challenge for online content providers and businesses around the world has been to get users to click on ads. More ad clicks equals more revenue, but the banner ad model was hardly effective for computer screens and virtually impossible in the newer mobile age. Now more advertisers are beginning to embrace a different approach, one that uses sponsored content that looks like real stories but are in fact ads that carry a brand name. And that has some people questioning whether the blurring of lines between legitimate news and sponsored ads is actually a good idea.

The latest marketing tool is called native advertising, basically ads that closely match the style of the site on which they show up. A good example of this can be found in BuzzFeed, a self-styled media site that combines serious editorial content with crazy videos and quizzes. Sprinkled throughout the BuzzFeed home page are stories that look like all the others with headlines such as “11 Things You’ll Understand If You Go To College in the Northeast” or “Meet 6 Women Who Are Winning The Gaming Game.” The first was prepared and sponsored by Xfinity and the second story was delivered courtesy of Intel, a big player in the gaming technology market.

BuzzFeed is becoming comfortably profitable with reports of tripling revenues in the past two years and this has not gone unnoticed by other content providers in the online world. Yahoo’s acquisition of Polyvore just two weeks ago is widely viewed as a way that the company can offer another platform for retail marketers to use native ads. It is also being used by lots of different brands, from Nike to Adidas to Oakley sunglasses, and even a hallowed bastion of American journalism – The New York Times – has announced plans to begin using native ads on their mobile website.

Whether this move towards ads disguised as content is a positive trend or not has generated debate in the public relations and marketing community. At the PR Summit in San Francisco last week, a panel of industry experts offered a wide range of opinions in this regard.

“What we’re finding with native is that it all comes back to content,” said Jeremiah Glodoveza, senior director for communications at Avaya. His firm has been creating native ads for another well-respected media brand – The Economist – and Glodoveza expressed concern that if a user feels this form of advertising is simply designed to get them to part with their money then “this is going to be a very short trend.”

However Amanda Sklad, a senior vice president with Edelman (the largest independent public relations firm by revenue worldwide), expressed a belief that “if you can create rewarding, interesting content, then people may not actually care.”

The overriding reason for moving to native ads is that the marketing world needs to find an alternative to the widely-despised, ineffective banner advertisement – images that popup suddenly on your computer screen or take up more than half the page of a website when you are trying to read the content. As Peyman Nilforoush, CEO of inPowered, put it at the PR Summit last week, “You are much more likely to survive a plane crash than click on a banner ad.”

The native ad, if it can deliver on its promise to generate more brand awareness and sales particularly in the mobile world, could indeed become the “killer app” that marketers have long sought. That’s why none other than Yahoo CEO Marissa Mayer recently described native advertising as “on a torrid growth pace” during a recent earnings call.

The move away from the banner and more strongly into native is part of a subtle, yet clear shift among advertisers to woo an increasingly e-savvy consumer. At last week’s Summit, Joe Sanchis (CEO of Queue Technologies), described how his business is now focused on “pre-tail,” a careful online dance to create interest in a new product among potential buyers long before a direct sales pitch is even made. The native ad fits this new strategy nicely, by telling a story to generate engagement without looking like an advertisement at all.

“It’s kind of like you’re dating an audience here,” Sanchis said.

What remains to be seen is whether the consumer will warmly embrace this new advertising approach or coldly walk away from yet another misguided attempt to make the Internet the largest sales channel in the world.