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Sponsored content is the holy grail of digital publishing. But does it work?


People feel deceived when they realize an article or video is sponsored by a brand, and believe it hurts the digital publisher’s credibility, according to a study.

In recent years, a debate has raged on among publishing and advertising industry insiders over “sponsored content”—more recently called “native advertising” and once known as “advertorial”—the sort of advertising that looks very much like editorial content but is, in fact, directly paid for by an advertiser.

The approach has been embraced by newer digital ventures such as BuzzFeed and new digital efforts for very old publications like Forbes and The Atlantic. Industry peers watched and discussed: Is it deceptive? Is it ethical? Does it even work?

Whatever the answers, there’s no denying that the approach is suddenly in vogue. Storied news organizations such as the Washington Post, Wall Street Journal and New York Times  NYT  have since taken the native plunge. (Fortune has also decided to engage in the practice.) Last year, advertisers spent $2.4 billion on native ads, a 77% jump over 2012. That same year, the Post’s CRO called native ads “a spiritual journey.” (Really.)

Native ads may be popular with publishers, but consumers are not in love, according to a new survey conducted by Contently, a startup that connects brands with writers who then create sponsored content. (Yes, the survey runs counter to Contently’s mission; more on that in a moment.)

Two-thirds of the survey’s respondents said they felt deceived when they realized an article or video was sponsored by a brand. Just over half said they didn’t trust branded content, regardless of what it was about. Fifty-nine percent said they believe that a news site that runs sponsored content loses credibility—although they also said they view branded content as slightly more trustworthy than Fox News.

Publishers and advertisers tend to respond to concerns of confusion or credibility with the same response: “It’s clearly labeled!” Simple disclosure solves all conflicts, they suggest. Readers are smart enough to figure it out, and critics don’t give them enough credit.

To wit: “They get the drill,” said Lewis Dvorkin, the True/Slant founder who led the massive expansion of the Forbes contributor network and its sponsored BrandVoice program, at an event last year. Likewise, Times publisher Arthur Sulzberger Jr. has said the native ads on the newspaper’s website are clearly labeled to ensure there are no doubts about “what is Times journalism and what is advertising.”

But Contently’s findings, based on a survey of 542 people, throw cold water on the notion that readers “get the drill.” According to the study, readers are confused about what “sponsored” even means: When they see the label “Sponsored Content,” half of them think it means that a sponsor paid for and influenced the article. One-fifth of them think the content is produced by an editorial team but “a sponsor’s money allowed it to happen.” Eighteen percent think the sponsor merely paid for its name to be next to the article. Thirteen percent think it means the sponsor actually wrote the article. Even the U.S. Federal Trade Commission is perplexed; a panel on native advertising last year “raised more questions than it answered.”

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Brandnew’s Back-Door Approach To Native Advertising


Everyone wants to get into native advertising, yet everyone has a different definition as to what exactly that entails. Social media sites have it easy because any sponsored post, automatically blending into the site design, can hitch a ride on the native bandwagon.

But while Facebook and Twitter are the current hotbeds of social advertising, Instagram and Pinterest are coming up fast. But unlike Facebook and Twitter, advertising around the two image-based interfaces revolves heavily around influencers, instead of traditional paid placements.

Berlin-based Brandnew IO, which began in early 2013, provides a platform and service designed to help brands reach influencers on Instagram and Pinterest.

“At that time we saw that more and more brands and agencies wanted to reach new consumers,” said Brandnew CEO Francis Trapp. “They wanted to target groups on platforms like Instagram and at the time there was no central way of doing it.”

At first, Brandnew identified influencers manually but it soon developed a platform designed to automate the process and handles campaign tracking. That being said, Brandnew’s staff still needs to vet the influencers for quality.

“We check to ensure these influential people are worth taking onboard,” Trapp said. “We determine if they have big enough accounts and real followers as opposed to fake followers. We ensure that the quality of their content is suitable for our brands.”

Trapp spoke with AdExchanger.

AdExchanger: Brandnew pushes brand-produced images out for influencers to share. Is that actually native advertising?

FRANCIS TRAPP: We see ourselves as a company that connects brands with influential people. Obviously we also need to consult brands on what works for them on these social channels. Sometimes our clients have a very clear idea of what the campaign should look like, but sometimes they have no idea.

One thing we have to ensure is that the campaigns we run are interesting for all parties involved. On one hand this means that the client should run a campaign with an image that really represents their brand. On the other hand, the influencer should make sure that image is distributed to the right accounts. Our influencers always tell us that they want to run campaigns that don’t annoy their followers. That’s the main hurdle to native advertising.

Sometimes we see that certain clients of ours view Instagram, Facebook and Pinterest as social media and nothing more. We are convinced that each platform has a unique DNA, and the way people use each one differs. Typical demographics of Pinterest users differ from Instagram users. This has to be reflected in the campaigns we launch for the brands we represent.

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Is Google getting into the native-advertising game?


Google may be on the verge of cracking the code to that elusive grail of native advertising: doing it at massive scale. The search giant is said to be running a small test with publishers of a widget that would include links to content and ads.

In so doing, Google could pose a considerable threat to widgets like Outbrain and Taboola that already live on hundreds of publishers’ sites under banners like “Promoted Stories” and “From the Web.”

Such content-recommendation engines have had their issues. They’ve been blasted for surfacing content that’s low quality or incongruent with the host site, and peddling misleading ads that can undermine readers’ trust. That has in turn driven the emergence of an alternate content exchanges that are ad-free and profess to only circulate premium content.

What’s more, publishers expose themselves to risks by putting such third-party plug-ins on their site, as Reuters learned last week when its Taboola widget was hacked.

But publishers continue to use them because they’re also an easy way for them to recycle their content with the goal of keeping people on their site longer. It’s easy money, too: Publishers get paid each time someone clicks on an external content or ad link in the widget.

For Google, the opportunity seems clear. Publishers need to make their websites work harder, especially as online CPMs decline and readers shift to the smaller mobile screen and increasingly come to websites through side doors, behavior that is associated with lower engagement. There’s a big land grab underway by ad tech companies that are trying to marry native advertising and scale.

But Google already has longstanding relationships with publishers through AdSense, and a content recommendation powered by Google’s extensive data and analytics would be a natural way for the search behemoth to expand its grip on publishers’ sites. (Google declined to comment for this story.)

“They have a huge amount of history,” said Rebecca Lieb, analyst at Altimeter. “They can slice and dice it a lot of ways.”

Not only that, Google is good at rooting out bad links and has its own content, on YouTube, that it could push out through a widget, speculated Steve Rubel, chief content strategist at Edelman. “Think about the retargeting options. A content-recommendation-slash-native-advertising offer would be low-hanging fruit for Google.”

A content exchange widget would fit squarely in Google’s efforts to get into other aspects of the digital business and expand its presence on publishers’ sites. It’s reportedly already developing a content management system for media companies. If Google can come up with a better way to surface content that solves the problems of existing link exchange plug-ins, it could have a win.

Still, Google’s success isn’t assured. It would have to offer publishers a better deal than they’re getting from other third parties. And, nobody wants to be too dependent on any one vendor. Many publishers already have multi-year agreements with Outbrain, for one, and might be reluctant to add another widget to their already-crowded sites.

“Publishers,” said Rubel, “don’t want all their eggs in one basket.”

Native Advertising Test: Does Your Campaign Make The Cut?

Media Post

For all the buzz about native advertising, the term lacks a real definition. Related article links, promoted post advertising on social channels and even display ads tucked in between paragraphs of a blog post have all been umbrellaed under the term “native advertising.”

It’s time for the industry to solidify a single definition for native advertising, before this powerful form of advertising slips deeper into marketing buzzword territory. Here are five key characteristics that pass the test of true native advertising.

1. Showcases content, not a display. Content, not banner! Sticking a banner ad in between the paragraphs of a blog post is not native advertising. One of the core tenet of a native ad is it should be native to the platform, which means a tweet on twitter, a post on Facebook or an article on a site is a true native ad that keeps user engaged and weaves brand’s message in user’s experience on the platform.

On the other hand, connecting with an influencer who is a trusted source of content for your target audience, and working with them to create sponsored content, is native advertising.

Native advertising is branded content that pulls consumers in by telling a compelling story. Display ads gain impressions; native ads make an impression.

2. Share-friendly. A native ad unit should have an ability to go viral. It could be tweeted, liked, shared, pinned — you get the idea..  Which means delivering banner ads via a social media channel does not make content inherently social, it is just another form of display advertising. Effective native ads contain appealing content that draws target demographics to want to share. That means your content is emotionally or intellectually compelling.

People share content for a few key reasons. For example, an amusing video designed to entertain target consumers, or a well-written industry-specific blog post positioned as thought leadership, will be organically shared many more times than any display ad.

3. Comes from a trusted peer. It may be tempting to drive traffic or social audience growth with bots, but don’t count on this marketing tactic to get you very far. Rather, successful native advertising begins as word of mouth. Nielsen’s recent study on consumer behavior showed that 70% of consumers make purchasing decisions based on online consumer opinions and 84% make decisions based on the recommendations of family and friends.

Directing spend to peer-to-peer native advertising will be much more effective than filling social streams with posts shared or retweeted by marketing bots. Native advertising offers brands the opportunity to have their pitch come from the lips of an actual consumer. Remember, advice from a trusted friend is advice that will most likely spur action.

4. Multi-device-compatible. True native advertising can be consumed via desktop, tablet and mobile. If content is device-specific, whether it be mobile banners or in-app advertising, it is outside the definition of native ads. Content, whether it is in the form of a brand sponsored post, video and social shares, by influencer partners should be easily read, watched and shared from any device.

5. Nondisruptive. Abruptly pausing content with pre-roll, interstitials, related content links, or display ads is not native advertising. Well-crafted native advertising has branding interwoven into the fabric of the content to create a wholly immersive experience. Content that is disruptive to engagement is not only time consuming, but will also interrupt the viewer’s experience learning more about your brand.

Sponsored articles and blog posts have been considered “native ads” for a couple of years now; this marketing tactic has recently gathered momentum with the advent of social media and the ease of connecting with people. Native ads are one of the most effective marketing channels when done right. Advertisers, get it right!

How marketers are getting native advertising wrong

Mobile Marketer

While native advertising and content marketing are beginning to garner budgets and rival standard digital display, brands often misalign native campaigns with marketing objectives, which potentially can backfire and destroy credibility.

Native ad spend is expected to triple from 2013 to 2015, according to a new study on branding and performance by Purch. However, for native advertising to be effective, the messaging should have claim over its environment, speak its own language, and ultimately, belong there.

“Native is most effective when it’s truly native,” said Mike Kisseberth, COO, Purch, Lincoln Ogden, UT.

“That means it’s served within the context of the user experience and follows the natural form and function of the site it’s on.”

While the findings aren’t mobile-specific, 62 percent of advertisers surveyed reported that they will incorporate mobile campaigns in 2014, which speaks to the untapped potential of mobile native, thus far.

Brand lift 
New research commissioned by Purch examined native advertising and programmatic buying, two of the top trends in the advertising and marketing industry, defining their growth and identifying specific objectives and challenges for each.

The study was conducted in Q1 2014 among high level U.S. marketer and agency advertising decision makers, spending $1 million or more on digital advertising. The survey focused on their current use and future plans for native and sponsored content and programmatic digital advertising campaigns.

Though native spend is projected to triple by 2015, critical obstacles remain.

Insufficient reporting and ROI metrics at 46 percent are the biggest challenge to success, followed by misalignment between the campaign and marketing objectives, 38 percent; required time and resource commitment, 26 percent; and native programs being insufficiently turnkey, 24 percent.

Most marketers prefer native programs that live directly in the hosting site’s content well. According to Purch’s findings, 47 percent are extremely likely to execute in-feed sponsored content that is consumed in an editorial-like environment on the hosting site. Only 28 percent are extremely likely to use in-feed campaigns that link to an off-site landing page.

Ostensibly, brands are taking their ads further into someone else’s editorial environment. While this seems practical, it deviates from true nativity as the advertising knows what is not, but also cannot define what it truly is.

Social promotion
Since entering the realm of social networks, brands have struggled on formulating best practices in advertisement with publishers and platforms to create content that fits seamlessly into a social stream, rather than alongside it.

Native advertisement on social media began as a way to promote brand image without essentially saying the content was being paid for and disseminated by a brand. The initial intentions behind this were to camouflage messages with non-branded content to exact trust from consumers.

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Should publishers tweet their native ads?


Native advertising presents a Catch 22 for publishers. The more the ad resembles the editorial that surrounds it, the more effective it’s likely to be — but also the more potentially confusing to readers. In one study, more than half of respondents didn’t know what “sponsored” meant.

That dilemma is all the more amplified on social channels, which are becoming ever more important to the distribution of native ads.

“It’s a critical component of any native advertising campaign,” said Kelly Andresen, director of ad innovations and product strategy at the Washington Post. “We’ve seen an increase in brands asking to measure success by measuring social shares. Brands want to know, how are you going to promote content beyond the site?”

The result is that publishers are all over the map in how they let advertisers access their social channels — just as they vary in how they charge for native ads, who they use to create them and how they label them on their sites.

Say Media, where the edit staff are involved in creating the native ads in the first place, has no qualms about using its sites’ social accounts to promote the ads. This tweet is (discreetly) labeled sponsored, but not all tweets and posts are.

More conservative brands like Bloomberg, Vox Media and the Harvard Business Review use their social feeds to distribute native ads, but loudly demarcate tweets with the word “sponsored,” as in this Bloomberg example.

Somewhat more cautious, Time buys paid tweets and posts for native clients rather than tweeting straight from its editorial account and uses Taboola to help advertisers meet performance guarantees.

“If it comes from the editorial handle, we still have to make it clear that it’s sponsored,” said Jed Hartman, Time Inc. group publisher with oversight for Time. “If someone signs up from an editorial perspective, there’s an assumption of who they’re following and what they’re getting. We have to make sure it’s completely transparent.”

Some publishers, like The Washington Post, BuzzFeed and The Huffington Post, push out native from separate accounts that are dedicated to branded content. At the Washington Post, it’s @WPBrandStudio.

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Close your comments; Build a community


Last week I learned that yet another news website would be closing their native commenting platform and switching to Facebook comments.

This isn’t breaking news. Last year, Popular Science decided to closed comments, citing studies that blamed them for the spread of misinformation. TechCrunch has changed platforms several times, to Livefyre, and back to Facebook comments. Indeed, there seems to be nothing notable in me pointing out this latest shuttering, except that this particular community is one that I built myself, as part of an amazing team, spending hours wading through audience development metrics, creating UGC programs and speaking with readers on the phone… and I agree with their decision to remove the comments.

The comments box is a cultural war. Writers are terrified of the criticism the bottom of the page holds, and so, they mentally close out any valid exchanges that might be taking place there. Readers understand that their thoughts are delegated to a small section beneath piles of ads, videos, banners, and slideshows. They feel that no one is listening, and so, they come in angry, flailing wildly, begging to be heard with outrageous statements in caps lock. It’s a Petri dish that grows trolls and frightens away those who actually want to contribute. At worst, an unmoderated comments section can contain threats and personal attacks, invalid criticisms and spam. At best, it’s a thread of off-topic arguments that add nothing to the conversation.

Moderation goes to great lengths to fix these problems. A moderator can ban dangerous trolls, protecting equitable commenters and increasing reply rates and time-on-site between those readers. They can pass along helpful corrections to authors, and respond to technical problems. Community managers encourage a registered base of active, civil users, the best focus group there is, I’d note from my own experience. However, these positions can also be very expensive and difficult to fill, and a tertiary requirement for organizations who need to put every precious resource toward reporting. Moderation is a slippery slope: your needs become greater as your community grows. Soon, you have to invest in overnight moderation, in weekend hours. You work on comment quality and need to keep track of banned users who try to come back with new IP addresses and handles, or you develop a smart program to keep track of users for you. All time consuming and pricey.

Are there any baseline benefits? If you maintain growth, there are many. Mathew Ingram, who often speaks about digital communities on GigaOm, says, “It boils down to giving your readers and your community an easy way to interact with you, both positively and negatively. Sure, they can post their thoughts to Twitter and Facebook and so on, but those are third-party networks and not everyone is going to see those comments.”

Readers who comment natively on your site may bookmark your homepage or author pages, visiting several times a day, and tend to be more eager to contribute when you request photos or stories. But, even though these users can spend longer hours on-site than casual readers, it’s difficult to justify that expense and time, and so, more often than not, we end up with the comments box.

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“Native” Ad Labelling is a Work in Progress

The Wall Street Journal

“Native” advertising, or advertising content designed to blend in with editorial content, is all the rage. But publishers and marketers are still figuring out how to label it clearly without repelling consumers.

In the latest sign of the debate, BuzzFeed is preparing to overhaul the way it discloses sponsored content to its users. Until now it has typically referred to paid posts as being “presented by” a sponsor when they appear as links on its homepage, and the paid posts themselves have carried the name of the advertiser above a “BuzzFeed partner” label.

By the end of this week, the company says it plans to replace those phrases with “promoted by” and “brand publisher” instead. It’s also removing the yellow shading that appears around sponsor posts on its homepage, which was initially modeled after the way ads were presented on Google’s search results pages, and making its “promoted by” label yellow instead.

“It’s early days for social advertising, but as a technology-driven media company, we are always testing and iterating our ad product to create the best experience for our readers and best product for our clients,” said Chris Johanesen, BuzzFeed’s vice president of product.

BuzzFeed’s changes may seem like small ones, but they reflect the fact that marketers, publishers, “content marketing” companies, and indeed regulators are still figuring out how best to balance the interests of advertisers and consumers when it comes to labelling native ad placements.

Just last week, content recommendation service Taboola, which provides some paid links to content, was called out by the National Advertising Division for its labelling practices. The NAD, a marketing industry self-regulatory body administered by the Council of Better Business Bureaus, recommended Taboola make its disclosure larger and more clear in order to comply with guidance previously issued by the Federal Trade Commission.

Taboola said it welcomes the NAD’s opinion, and was “more than happy to make the changes” sought. But the firm argued other companies do less to flag paid placements to consumers.

“My hope is that other companies that compete with us will make their [paid links] clearer, because some companies do nothing,” said Adam Singolda, Taboola CEO.

Mr. Singolda pointed to Taboola competitor Outbrain, which doesn’t always disclose that some of the links it places on publishers’ sites are paid unless users click an Outbrain logo that appears alongside them. According to Outbrain, it’s up to its publisher clients to decide whether to disclose sponsored links or not.

“We strongly believe that the fundamental currency of our business is user trust, and therefore we think explicit labeling of the paid links is the best route to go. That is what we advise publishers do as best practice, but each publisher can choose how to label things on their pages at their own discretion,” said Outbrain’s vice president of marketing, Lisa LaCour.

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Mobile social helps drive unprecedented jump in social media ad revenues: report

Mobile Marketer

Growth in mobile social and social native advertising are driving the largest year-over-year jump in social media ad revenues, with the total spend expected to be $8.4 billion in 2014, according to a new report out today from BIA/Kelsey.

In its latest U.S. Social Local Media Forecast, BIA/Kelsey forecasts that social media advertising revenues will reach $15 billion in 2018 for a compound annual growth rate of 24 percent. The growth rate is expected to be higher for native social advertising revenues, coming in at 38.6 percent; for social mobile, coming in at 38.3 percent, and for locally targeted social advertising, coming in at 31.6 percent.

“Looking at the overall social advertising forecast, we have raised that in total,” said Jed Williams, a senior analyst at BIA/Kelsey, Chantilly, VA. “Where we have raised that the most is in the out years of the forecast – we’ve raised it fairly significantly in 2017 and 2018 and we raised it slightly in 2014.

“The motive behind is that if you look at Facebook as a proxy to the overall social advertising marketplace, we have been encouraged and it has been eye-opening for us how they have continued to grow advertising revenue particularly U.S. advertising revenue, and what the drivers of that have been, particularly native and mobile,” he said.

“We still think there is a lot of growth there not just for Facebook in both of those areas and we see those areas as real drivers of growth across social media advertising. That growth is already occurring and it is occurring faster than we had anticipated six months of twelve months ago.”

Native advertising takes off
There has been a surge in native social advertising, driven by Facebook’s News Feed ads and Twitter’s Promoted Tweets. As a result, BIA/Kelsey predicts native social advertising will eclipse social display for the first time in 2015.

According to the forecast, social display ad revenues will grow from $3.3 billion in 2013 to $5.6 billion in 2018.

During the same period, native social advertising will surge to $9.4 billion in 2018, up from $1.8 billion in 2013.

On mobile, social ad revenues topped $1.5 billion in 2013 and will reach $7.6 billion by 2018, surpassing social desktop for the first time.

The report also forecasts that locally targeted social advertising will grow from $1.3 billion in 2013 to $5.2 billion in 2018.

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New Responsible Native Advertising Principles for Publishers

Association of Online Publishers

The top leaders of the UK publishing industry – including The Guardian, ESI Media and Dennis – were brought together by digital advertising company Vibrant Media, in partnership with the Association of Online Publishers, to determine the key principles of responsible, revenue generating native advertising. The roundtable was moderated by esteemed media industry journalist and commentator, Ray Snoddy.

Tom Pepper, UK Managing Director of Vibrant Media said, “Rather than debating whether or not various ad units are native the industry should be focussing on higher level discussions such as responsible native advertising that will bring the media industry together in collaboration to achieve the best user experience. As Vibrant Media has been placing ads within digital content since 2001 we are well placed to step up to that challenge. We are really pleased that we have been able to facilitate this conversation with like-minded leaders in the industry. The 5 key principles we have agreed to achieve responsible revenue generating native advertising are: Integrity; Transparency; Proportionality; Relevancy; and Appropriate Placement.”

Tim Cain, Managing Director at the Association of Online Publishers said:
“We are proud to have partnered with Vibrant Media who have brought together the key players in the publishing industry. Today is a great achievement surfacing the 5 key principles in responsible native advertising. Creating focused roundtables like these shows progressive thinking and thought leadership. We have definitely given the industry more focus today and I look forward to our continued success with Vibrant.”

1) INTEGRITY – Editorial and advertising teams should collaborate
As editorial teams’ focus is on developing content that captivates consumers, they have key insight into the brand values that establish trust in their media titles’ content. Native advertising should be supported by editorial teams. Editorial, ad sales, marketing, creative and tech teams should collaborate on native ad campaigns.

Hattie Brett, Editor of The Debrief said, “My editorial integrity is very important to me. I see it as protecting the reader. Being involved in the native ad deals gives me a certain sense of control to make sure that we’re working with likeminded partners who share our brand values and understand that we know how to talk to our readers. Working on a native deal with someone who doesn’t share your title’s brand values is going to antagonise readers and drive them away, which is not in the publication’s interest or in the advertiser’s interest.”

Gary Rayneau, Head of Digital Sales at Dennis Publishing said, “Done correctly, done with integrity, native advertising is a really positive thing for the industry. If we get it right it benefits everyone: it benefits publishers by keeping them commercially viable; it benefits users as we can create interesting content.”

2) TRANSPARENCY – Be clear with consumersOvert labelling and clear signals should communicate to consumers that native ads are marketing messages. Media literacy is important. Publishers and advertisers should provide consumers with accessible explanations about the native ads displayed within their publications.

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