I’m entranced by the apparent inability of the publishing industry, especially newspapers, to see clearly why so-called ‘native advertising’ is a dead end — a passing fad in the slow demise of traditional advertising and a deceptive view of what’s really happening in digital media.
Nothing anyone has said so far has deterred US newspapers from grabbing onto the revenue from native ads like drowning men clutching at straws. Sadly, this new revenue source can’t keep them afloat for more than an eye-blink.
The press of Africa, especially South Africa, is fortunate to be able to see its future by watching the destructive contraction of ad dollars in the West. I urge you to watch closely and learn from America’s mistakes.
The entire native ad phenomenon springs from a fundamental misunderstanding of the massive ongoing transformation of marketing, content, audiences and publishing. It fails to comprehend who and what can and can’t command people’s attention and trust in a digital world.
Last year was almost over when the US Federal Trade Commission (FTC) held a day-long ‘workshop’ to figure out how to regulate so-called native advertising. Every corner of the media biz got involved — publishers (traditional and digital), journalists and bloggers, brands, ad agencies, lobbyists, lawyers, public advocates and so on.
Part of the FTC mission is to stop “deceptive acts or practices” by business. This clearly doesn’t include self-deception, however, because both the FTC and the publishers (from The New York Times to the avant-garde Buzzfeed) have talked themselves into believing that ‘native’ is the long-sought replacement for continually dwindling ad revenue.
It isn’t. For better or worse, it can’t be.
Here’s what the relatively new practice of content marketing has demonstrated so far: Brand storytelling with rich content is powerful because audiences — the people formerly known merely as “consumers” — pay attention to valuable content and reward brand-authors by sharing such content with friends and strangers on social platforms. This social sharing increases impact (by two to four times, studies show) and reach (up to nine times, mathematical models show), reducing media spend and boosting efficiency (by as much as 100 times).
What all the research shows is that brands simply don’t need publishers or broadcasters the way they used to need them.
Once, if a brand wanted an audience to see the brand’s messages, the only route was to rent real estate from a publisher or broadcaster on a page or a screen. In those long-gone days, an ad was defined as a paid message placed next to ‘editorial’ content on pages owned by a publisher—pages that were visited solely because the publisher’s editorial content attracted the audience.
Clinging to that 19th-century assumption, many advertisers and virtually all publishers somehow missed the moment more than a decade ago when the Internet allowed brands to publish their own content on the web and attract their own audiences to that content. Much of the media industry simply cannot see that the best ads now stand on their own, telling the brands’ stories and engaging the brand’s audiences very successfully with no help at all, thank you very much, from the traditional publishing industry.
Red Bull’s ‘Stratos‘ — the compelling story of a supersonic freefall from space — is the poster child for this sort of thing. A relative newcomer to the same space is America’s Mexican-style fast food chain Chipotle and it’s compelling story of the evils of agribusiness. (If you haven’t seen it, watch their animated attack on US factory farming, The Scarecrow.) Entertainers like Louis C.K., wielding their own impressive storytelling talents, are beginning to market their shows directly to the public without any help from publishers or broadcasters. Examples of advertising that needs and wants little or nothing from media companies extends to the horizon and beyond.
Media commentary on this phenomenon (like this piece in The New Yorker) tends to take us back to the birth of network TV in the late 1940s, when ad agencies produced the programming and broadcasters just sold time. Stressing the similarities between then and now, these slick history pieces ignore what’s actually important and different: Then, publishers and broadcasters had a virtual monopoly on access to audiences. Now, there is this thing called the Internet and it offers anyone and everyone virtually free access to a couple billion people across the planet.
What this all means is that fewer advertisers are willing to pay for real estate on a page or a screen with an audience attached. But it also means there is a growing premium on what really matters—the ability to create valuable content and tell entrancing stories that will attract, hold and engage audiences online.
I’ve been arguing for several years (in conversations, speeches and pieces like this old thing on Huffington Post) that publishers, especially newspapers, need to wake up and realize their future value to advertisers lies in selling more services and less space. The services to be sold are the skills and knowledge at the heart of publishing—the ability to know a good story when you see one and to tell that story accurately, authentically and engagingly to a particular audience. (Note to the old-line journalists now fuming at my suggestion: This does not mean inventing fake news about advertisers or engaging in the short-term nonsense called “native.” This means helping clients find and tell their own best stories on platforms that the advertisers, not the publishers, own.)
In the US, however, publishers keep rejecting reality and pressing onward in the belief that it’s still 1950 or 1960 or even 1990. And the drive by regulators at the FTC to define and rein in native ads is yet another example of this insistence on clinging to the past.
The regulators and the publishers both are wringing their hands over what they see as the danger that online publishers are selling their ‘credibility’ to brands by running “advertising that resembles editorial” or “content.” FTC Chairwoman Edith Ramirez has said her agency held its native ad workshop to define, pursue, prevent or punish the crime committed when brands deceptively “capitalise on the reputations of publishers.”
But just as publishers’ monopoly over audience access is going away, so are other advantages they used to enjoy more or less exclusively. The quality of being believed or having a special authority to publish, for example, is another old monopoly that is disappearing. These days, publishers can’t mislead the public too badly by selling their credibility because they have very little surplus credibility left to sell.
Gallup tells us that last year only 44% of Americans “trusted” mass media. At the same time, Nielsen tells us that 69% of the online audience trusts what it sees on brand websites. Brands, in other words, have more credibility than mass media. So they gain no credibility at all from placing their messages—deceptively or openly—in mass media.
As more brands learn to create content that engages directly with their own audiences, as more brands build on the public’s willingness to believe them so long as they embrace truthfulness and transparency, advertisers will end their unnecessary dependency on publishers and native ads will fade away like a bad dream on a bright morning.
Before all the ad revenue disappears, it’s critical for publishers and broadcasters to embrace their real strength—the one that cannot be disrupted by technology. It’s actually time for the real storytellers to take back storytelling.
Kirk Cheyfitz (@KirkCheyfitz) is Story Worldwide CEO, marketer, journalist, Detroit143 co-founder, politics junkie based in New York.
