WHY GO NATIVE
Native advertising is gaining ground, thanks to its non-intrusive nature, and experts predict it will grow to 20-25% of the digital ads universe in India in the next 2-3 years By Samarpita Banerjee In the age of ad-blockers, diminishing attention spans, and discerning customers, what can marketers do to get their message across without being intrusive? Well, merge with the background and still manage to be seen and heard! Be it the ‘Jaago Re’ series of stories running on Hindustan Times’ digital platform in association with Tata Tea, L’Oreal’s make-up tutorials on the web, content around Dabur’s Brave & Beautiful campaign or Tata Sky’s series of articles and listicles around World Series Gomorrah, to name just a few, native advertising has played a critical role in helping brands reach out to their target audience, without being too blatant or intrusive about the brand messaging. It is also shaping up as a significant revenue earner for the platforms it runs on. Most recently, the English news channel Republic announced that it expects most of the revenue on its digital platform to come from native ads and sponsored content. Google has announced the launch of its native ad platform, AdSense, to include ads in-feed, in-article and by way of matched content. Meanwhile, digital ad solutions company Zirca, headed by Karan Gupta, is all set to launch a native advertising distribution platform this week, to run global content campaigns across multiple networks and platforms, in a field already busy with players such as Times Internet’s Colombia, Taboola and Outbrain. A WIN-WIN FOR BOTH BRANDS & PLATFORMS Why are both brands and platforms suddenly giving native advertising a push? Technically, any sponsored content that is presented in a form that is native to the publication or the platform it is being put up on can be called native advertising. In other words, it is a part of the broad world of branded content where you try to reach out to consumers by giving them the brand messaging through engaging content, which makes sure that consumers don’t reject the ads, like they do in the case of banner or display ads, and also increases the possibility of them sharing the content on various social media platforms. Experts feel that it is a win-win for all the parties involved, be it the publishers, the brands or consumers. The publishers are gaining big bucks, advertisers are getting a story to tell without being intrusive, and consumers are getting engaging content without in-your-face advertising. Native advertising is also important for advertisers, thanks to the rise of ad-blockers. Only recently, Google announced that it will go ahead with its ad-blocking plans and will add a feature to its Chrome browser that will block advertisements which do not meet company standards. Even Apple’s Safari browser will try to guard the user’s privacy by identifying and blocking data files that track them as they move from one website to another. In such a scenario, native becomes an efficient way of bypassing ad-blockers and reaching out to consumers. Moreover, its ability to reach a large audience has helped it grow extensively in the past few years. If Deloitte’s ‘Technology, Media & Telecommunications India Predictions 2016’ is to be believed, global spending on native ads will grow from $7.9 billion in 2016 to $21 billion in 2018. Moreover, according to a recent forecast by eMarketer, a market research company, native digital display ad spends in the US will grow 36.2% this year to reach $22.09 billion. It will then make up 52.9% of all display ad spending in the US. Closer home, experts predict that native advertising, which currently forms about 10% of the digital ads universe, has the potential to grow up to 20-25% in the next two to three years, if some of the challenges around it are met. MARKETERSPEAK: WHY BRANDS ARE GOING NATIVE “We adopted native advertising a few years back to market our healthcare products and it worked well. Hence we continued using native for other campaigns like Brave & Beautiful, Honey Diet and brand awareness activities. Native advertising makes the best sense of all available options backing search. It’s becoming the next big thing due to its non-intrusive nature even in mobile advertising.” Archan Banerjee “Native advertising enables us to expand on a brand or a product proposition which is usually curtailed in a 30-second ad. At this point, it’s not that large a part of our digital marketing mix. In some cases, we have seen native advertising along with influencer marketing have a huge impact. We are still experimenting with the right strategy and deployment of native ads.” Shalini Raghavan “Native advertising has become a part of Tata Sky’s thinking DNA. We have done loads of article-seeding and listicles such as World Series Gomorrah to bring urban OTT consumers to Tata Sky Music+ original music videos on Sound Cloud; an e-book on Spirituality for millennials and older people, etc. Also Facebook live sessions with targeted messaging where drone cameras were relaying the kite-flying festivities from Gujarat live on social media and live Twitter conversations from the MAMI Film Festival.” Malay Dikshit “We have just started exploring native advertising. Right now, we see mismatches at a brand delivery level. If I want to create a piece of content, I pick up a page which has a certain kind of content and a certain nature of its own following. Typically, brands end up being cut to their style rather than it being the other way round. So, it involves a big compromise.” Pushkar Jain Chief Marketing Officer, BlueStone WHAT IS GIVING NATIVE A PUSH? In a world that has predominantly become mobile-first, brands are left with no other option but to make the best use of mobile advertising and native ads are fast becoming a favourite for most brands to pass on their message to the consumer, via subtle branding. Native advertising has many advantages, according to most marketers and publishers using it, so much so that many of them are now creating teams to work exclusively on native content. Take for example platforms like ScoopWhoop, Little Black Book (LBB) and BuzzFeed, that thrive thanks to brands coming forward and experimenting with more and more native advertising. Rishi Pratim Mukherjee, Co-founder & Chief Operating Officer, ScoopWhoop Media that earns around 80% of its revenue from native advertising, says, “Native is inevitably the future of digital advertising. We have been partnering with various brands since the start of 2015 and today, a lot more brands are open to partnering with platforms like ours because we have a certain presence and influence on the web.” For LBB, that started off as a blog and has developed into a local recommendation platform, native ads were a seamless fit because brands could use the platform to position their products during a consumer’s experience without infringing upon it. Says Suchita Salwan, Founder & CEO, LBB, “When we started off, we didn’t have native advertising. However, we found that even though banner ads were performing well, the click-through rate (CTR) was fairly low because the experience of a banner is intrusive. This was when our traffic was low. Today, our traffic is exponentially higher, with two million unique monthly visitors, and we are growing at 30% QoQ. If a platform’s reach is small, banner ads don’t make sense as they function on a funnel of impressions, CTR and the final conversion on a platform and that funnel is very steep, unlike native content, where the funnel is much broader. Here, a brand wants to know how many people are consuming it through native content.” Salwan shares that most of LBB’s native ad content has impressions ranging from 50,000 to 2,00,000 over the course of three to 10 days. Commenting on what gives native advertising an edge, B Saikumar, Co-founder of Arré, a digital content platform, says, “There is increasing cognizance of the fact that pre-rolls/ads can be skipped or blocked or muted when they're pushed down a user’s timeline and feed, the century-long debate on the efficacy of the 30-second commercial continues to rage, and the traditional Print display ad’s effectiveness is anybody’s guess. Ergo, marketers and advertisers are engaging their brands with content that consumers actively seek out – therefore, it is more effective. They are also seeing the difference in user engagement with a 30-second pre-roll ad vs. longer-form content (5-30 mins) that is integrated well with the brand. In the last couple of years, we have seen a rising interest in investing in content-led solutions for the brand, which are platform-agnostic.” He says many of the brands that Arré has partnered with on branded content - including Gillette, Palo Alto Networks, Dell, Nissan, and Arunachal Pradesh Tourism - are advertisers who have made their first experiments with native content with them, and continue to partner with them. For publishing house Condé Nast, that has a special team for branded content, there’s been a steady growth in native advertising. Says, Gaurav Mishra, Digital Director, Condé Nast India, “Over the last year, native advertising has become an important and fast-growing part of Condé Nast India’s digital offering. We write 30-40 native stories per month across our four titles for advertisers at the premium end of categories like fashion, beauty, watches, jewellery, auto, alcohol, travel, design, e-commerce and real estate. We also do 1-2 longer term native sections per month, which consist of 10+ native stories and one or more videos around a theme. The Condé Nast Factory team consists of 20+ brand solutions managers, content strategists, writers, designers, creative producers, and audience development experts. We’re one of the first media companies in India to create a comprehensive native advertising offering that cuts across insights, content and distribution, through our sharply positioned titles in key lifestyle verticals: Vogue for women’s fashion and beauty, GQ for men’s lifestyle, CNT for luxury travel, and AD for beautiful homes.” Digital media company Culture Machine too has a separate division for native advertising. Sameer Pitalwalla, CEO, Culture Machine, says that a substantial part of the revenue comes from native ads, and that the tool addresses one of the biggest problems faced by marketers today. “Native (advertising) has an edge in its ability to tell stories while still making sure that it addresses your business needs. It does not allow people to skip the ad,” he explains. Talking of the advantages of native advertising, Manish Maheshwari, CEO, Network18 Digital, says, “If you have a non-native ad unit, it sticks out. When you are reading a page and something is non-native, it appears out of place and the consumer gets irritated, they try to close it and curse the advertiser. On the other hand, if something is native, you don’t close the article because you expect content like that to be there. As a result, the CTR and response you get on a native ad is higher and you get a more relevant response, because the people who look at it are people for whom there is an alignment between the nature of the ad and the content. On our platforms like Moneycontrol, we are noticing higher CTR, which is encouraging more and more brands to work on native content.” Mainstream news platforms like Hindustan Times and The Indian Express too have been exploring native advertising to let brands tell their stories. Kaveri Jain, Head, HT Brand Studio & Digital Marketing Lead, says, “’Jaago Re’ is a massive content piece where we have created a micro-site for stories around social causes for Tata Tea. All the work is done in-house, hosted within the Hindustan Times domain, but the look and feel is more conducive to the brand campaign. This project is exciting because you have the freedom to help the brand do a lot more in terms of engaging content. The narrative is about people conversing, telling their stories and talking about issues. For us, the buzz around native content started about a year-and-a-half ago. But, the actual shift in budgets happened in the last 8-10 months. If a brand was spending ‘X’ on native ads till last year, they are spending ‘100X’ on it now.” THE ROI CONUNDRUM Measurement has always been a challenge for marketers in digital advertising, and this makes them wary of putting in money into marketing their offerings through native advertising too. According to Priyadarshi Banerjee, General Manager, Product Strategy, Worldwide Media, measurement of ROI, be it for native advertising, content marketing or branded content, is one of the biggest challenges, not just in our country but worldwide. “We have a consumer base of about 13 million and when we drive them to our websites to consume content, we generate an interest and help them develop the desire for a product. And then we have an action point which could be a back-link, a display banner, a video or some kind of interaction which forms the final leg of the marketing funnel. Through this entire journey, we go back to our advertisers giving them information about how many clicks and views the content has received. However, it’s not just ROI that is important but also return of influence,” he says. Rajiv Dingra, Founder and CEO, WATConsult, sees many brands looking at some form of native advertising for each campaign to achieve word-of-mouth publicity because most of the native content is high on shareability and reaches out to the content-reading target group. “Native advertising is an effective way for brands to expand beyond the classic formats of banner and video to move into a content space where they can tell stories and share information to get their messages across. One reason for an increase in such content is the increase in consumption of content on the Internet. Platforms such as Facebook and Twitter are constantly sharing content, and most of the content is linkbait, or viral content, that a lot of people read and share. Around content, the monetization that makes sense is native advertising.” The content marketing industry as a whole needs to work on the measurement of ROI issue, feels Mukherjee. “Big publishers and players in the field will have to come up with standardized metrics for brands. Our technology team comes up with advertiser dashboards to help clients measure the effectiveness of their spends on native advertising on Scoopwhoop. I hope other publishers do the same,” he says. However, Anurag Gupta, Founder and MD of digital media platform DGM India completely disagrees with the claim that it is difficult to calculate ROI. “I run a native ad unit and I know exactly how many people click on an ad. I know the engagement rates. Once they land on an intended page, I will know the exact number of hits, I will know exactly what they did on that website, from analytics. I’d also be able to tell if people actually filled up my lead form and became my customers after that.” The holy grail of native advertising is to create brand messaging that is not an interruption but flows naturally into the bosom of the story/scene, marrying brand and story objectives. This approach is reflected in the engagement in our content and the impact and buzz it has generated for the brand. The challenge is to manage this marriage across volume of content and brands, which the team at Arré excels at. B Saikumar Native advertising is not just an answer to ad-blocking; it’s an answer to a generation that has attention deficiency. It is probably the most effective way to reach out to millennials. It’s almost like a new form of creative which mixes not just the content along with relevancy in terms of things that consumers like, but also marries it with things that will work for advertisers. Sameer Pitalwalla When you are reading a page and something is non-native, it appears out of place and the consumer gets irritated; they try to close it and curse the advertiser. On the other hand, if something is native, you don’t close the article because you expect content like that to be there. Manish Maheshwari Philosophically, marketers see the value of more content marketing, but their teams may not be skilled enough to create the right kind of content, or understand the distribution vehicle. If we can reach at least 10,000 digital marketers this year and teach them great content marketing skills, then we can really grow native advertising, as an industry. Virginia Sharma Spending on native advertising is still in the 8-10% (of digital spends) range right now. But if you look at figures from the past few years, it would probably have been in the 2-3% range. So, it’s growing really fast. There is scope for the market to go up to 20-25% in the next two to three years, if we get the reporting and tracking right. Gulshan Verma Chief Revenue Officer, Times Internet WAY TO BYPASS AD-BLOCKERS The primary reason for the growth of native advertising of late is the emergence of ad-blockers. With a lot of native platforms white-listed by ad-blockers, experts feel the way to reach out to consumers is through engaging content while also bypassing ad-blockers. Sandeep Balani, Head of India, Outbrain, a content discovery platform, says, “Research shows that people dislike ads – almost two-thirds of them use ad-blocking software to strip their online experience of disruptive ads. Native ads bypass this by appearing in a form that is native to the platform the user is on; for example, an Instagram ad resembles a regular Instagram post. People are a lot more receptive to native ads for this reason.” Ashish Shah, Founder and CEO of programmatic company Vertoz agrees. “Ad-blockers are used by premium users and such users can easily be targeted with native content, thanks to its non-intrusive nature. Publishers are not affected in the area of user experience and brands are able to reach out to their target audience,” he says. Native advertising is into the video format too. THE WAY AHEAD While native advertising is expected to grow at a faster rate than the overall digital ecosystem in the next few years, Virginia Sharma, Director, Marketing Solutions, LinkedIn India feels the battle is only half won unless some of the big challenges are met. For example, she cites making good content available at a price that brands are ready to pay. Also, Sharma feels that there is a need to educate brands about the benefits of content marketing and native advertising, to help them reap the results. “Linkedin has been organizing quarterly master classes to talk to marketers about content marketing. We find that philosophically, marketers see the value of more content marketing, but their teams may not be skilled enough to create the right kind of content, or understand the distribution vehicle. If we can reach at least 10,000 digital marketers this year and teach them great content marketing skills, then we can really grow native advertising, as an industry,” Sharma says. Talking about why native is here to stay, B Saikumar says, “With time, as display and pre-roll advertising gets more commoditized with an inevitable dilution in their effectiveness, advertisers will seek out differentiated and innovative ways to reach their audiences, making native advertising a very lucrative monetizing opportunity for publishers in India. I see this stream becoming a legitimate marketing and advertising budget item among advertisers sooner than later.” Times Internet’s marketing technology arm Colombia, that has a consumer base of close to 200 million, pegs the native ads market in India at around 10-12% of the total digital ad spends. Gulshan Verma, ?Chief Revenue Officer, Times Internet, says, “We have close to 1,500 advertisers on our Colombia platform today. The market has the potential to go up to 20-25% if some of the most compelling challenges like measurement, transparency and norms are met.” @ FEEDBACK
Head of Digital Marketing, Dabur India Ltd
CMO, Consumer Products Division, L’Oréal India
Chief Communication Officer, Tata Sky
Co-founder, Arre
CEO, Culture Machine
CEO, Network18 Digital
Director, Marketing Solutions, LinkedIn India
samarpita.banerjee@exchange4media.com
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