Monday, December 17, 2012

The Rise of Native Advertising

Will something replace display ads?

As click thru rates for display ads continue to slide into the abyss - now estimated at less than 0.2% - advertisers and publishers are looking for alternative ways to take advantage of consumers' use of the web as a source of information.    

A recent (and probably welcome) trend is toward 'native advertising' something that Solve Media has defined as "a specific mode of monetization that aims to augment user experience by providing value through relevant content delivered in-stream."   In general, they're talking about custom content associated with the context and intent of the consumer - things like sponsored stories, web videos and interactive graphics.  

Given that these assets are delivered as part of the experience, as opposed to simply occupying the 65,520 pixels of a leader board, a lot more care and feeding in their creation and publication is required.  Bidding for eyeballs, whether in real-time or thru fixed line-item bids, typically focuses on impression attributes such as the characteristics and behaviors of the visitor along with page/section information and often has a short-term payback based on conversion. Since the highest-bidder wins, there is no guaranteed link between the subject of the ad and the consumer context.  (I still see ads for things that make no sense anymore - like a pressure cooker (got one) and an online MBA (don't need another one.))

So, while it is an interesting trend particularly in light of mobile and tablet usage, figuring out native advertising requires answering 3 questions:
  1. What content are different people or segments interested in?
  2. How do various content types impact sales?
  3. How do we optimize the creative and content mix across the journey?
The answers to those require a different approach to generating insights than applied historically.  To allocate budgets, we'll have to develop some set of 'content attributes' in order to answer them.  

In short, we need to figure out how content works.

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