Native Advertising is being fervently cited as the top marketing trend of the new year, and it's only being proven to be a large effort in digital marketing as The New York Times has announced that they will be using native advertising on their own website. This is a huge announcement, as the controversy around native advertising has been growing around the transparency of advertisers with internet users. Watch today's Daily Brown Bag to learn about why native advertising is being embraced by The New York Times, and why the general state of journalism is forcing publishers to use new approaches to generate revenue online.
Welcome to the Brown Bag. So, a redesign of the New York Times is not particularly front-page news, but the big headline here is that they’re going to be introducing native advertising, a new native advertising platform, into their newly re-launched website. So, this is probably a new term for a lot of folks, Chad. Native advertising, also called “branded content,” is content that has actually not been written by the public, but was actually written by a marketer and was paid to be placed. It looks similar to non-branded content and will appear side-by-side with other editorially-driven articles written by the New York Times. So, as you can imagine, this is causing quite a stir, because in the old days, there was perceived to be a big wall between editorial content and the advertisements, and here we see the line blurring with this native advertising. It’s not going to be in advertisement form, but it is sponsored, and it definitely has an angle. I guess this move should not be surprising to most, Chad.
We know that these traditional newspapers have really been struggling, and here’s a few stats from the Pew Research Center State of the News Media for 2013. Print advertising was down for the sixth year in a row last year. Digital advertising, while it’s been rising, only makes up for about 15% of total newspaper ad revenue, so it’s still not the lion’s share and in no way makes up for what they have lost. This is an interesting one. It’s from 2012, and I think it’s very relevant: 15 in print ad dollars lost for every digital ad dollar gained. So, while their digital ad revenue has been growing a bit, it’s still small at 15%, and for every dollar in, there’s been $15 out. As you can imagine, there’s been huge layoffs and this crazy flight to try and figure out how we can do this better. Times are definitely changing in the print industry, Chad.
Yeah, absolutely, and this is interesting. I think it’s not so much that the New York Times is the first to do this, because they certainly aren’t, but the big news is that the New York Times is doing this, because they have always been held up as the best example with the strictest guidelines and the biggest separation between editorial and advertising. Let’s talk a little about this native advertising and what it is, Adam. I think the whole idea behind it is that these traditional digital ad banners that newspapers have sold, as you said, just don’t make as much money as what they’re replacing in print. What native advertising is all about is actually having related content, so as you’re finishing reading an article, at the bottom, you might see a little section that says “related content” or “articles you might like.” A lot of times, what’s happening is that information and those articles will be actually paid content that’s related to what you just got done reading. What people have seen already is that the click-through rate that they’re getting on those native ads than the click-through rate on the display ads.
As a result, the newspapers can sell them for more and can make more money there, and that’s why we’re seeing this change here. A couple other things to mention is that the publisher of the New York Times did come out and say that there will continue to be very strict separation between editorial and native ads, and they’ve gone as far as saying that they’re going to be highlighted with a background of blue, so we’ll have to see what that looks like on the page when it rolls out. They’ve come out in the past, and their executive editor, Jill Abramson, has said, most recently at the Wire conference, that she was really concerned about confusing readers, so she said she’s going to watch this very carefully to make sure there’s no chance that things can get confused about what’s editorial and what’s advertising. So, it will be very interesting to see here, Adam. The New York Times is definitely going to increase the adoption rate for a lot of other people who thought they had a couple years to figure this out. Now that the New York Times is doing it, I think we’re going to see a much quicker spread across all other publications out there.
And probably just in the nick of time for some of these organizations that are financially struggling. That revenue has largely migrated to Google, and they’re struggling to figure out what they can do. It is interesting to watch them thread the needle and say, “Okay, we’re going to be very strict in how we label this stuff,” but you can see the progression here. It used to be a very clear separation, then there were advertorials that were sort of inserts, but they were printed differently and were very conspicuous because they were kind of looseleaf or different, and now we’re seeing native advertising. So, as you see this march over time, as the traditional revenue streams have been drying up and declining, they’re experimenting and moving more toward what the marketers really want, which probably is that the reader is a little confused and they take one of these sponsored pieces to be the truth, and it helps their customer out. So, it’s interesting to watch this power shift.
We’d definitely be interested in your opinions. If you’re on the marketing side, do you see this as a positive? If you picture yourself as a consumer, do you think your protections have been lost in that editorial guidance of the New York Times, which is the gold standard, is disappearing. Share your comments with us, and we hope you’ll subscribe so you’ll subscribe to our YouTube channel.