Native Advertising Has its Work Cut Out for it in 2015

Last year, over $3 billion was invested in branded content or native advertising, which ran not only as product placements in  TV shows like  Ellen ( where Ellen de Generes used a Samsung Galaxy Note 5 to take a selfie),  but as articles or video series  appearing in traditional news players like the Wall Street Journal and the New York Times. Brands looking to find new ways to meet customers, who are increasingly concerned about intrusive advertising,  began to produce content themselves and pay to have it appear where they believed they could find their targets without being annoying. Netflix, advertising its “Orange is the New Black” series, was one of the more successful native advertisers last year. But no one won a Grand Prix for content marketing at Cannes, which is the first time a category came up empty for a big winner in twenty years. The content marketing category is only three years old, and the judges couldn’t agree on a set definition for branded content.

Somehow that difficulty with definition hasn’t turned off advertisers. Next year, the budget number spent on the native category is expected to increase to $4.2 billion, even though only 51% of marketers think their investment was well-spent. This inability to measure ROI is typical of new ad formats; it took a while for marketers to find a way to measure social media marketing, too, and their initial efforts based on trolling for “likes” and followers never did pay off. Social media was finally understood to be a way of knowing the customer better, and a way of getting cross-channel campaigns shared. But first marketers had to find the right creative for the new medium.

That’s what is happening now with native, aka content marketing, sponsored content, branded content, or advertorial. Brands are still trying to figure out how to use native ads to further their marketing objectives, even as the category starts down from the peak of its hype cycle. Native advertising is not the slam-dunk both advertisers and publishers originally thought  it would be.

And it’s even worse for b-to-b marketers, never known for snappy creative. They are used to talking only about their features and benefits to customers who are already somewhat interested. Now they’ve got to learn that in a native ad environment, it’s all about the customer, not the company. Good native ads contain content that is engaging because it is helpful and informative. Most traditional b-2-b advertising is hardly engaging. For these marketers, execution of native ads must change;  the ads must talk about the customers’ problem, rather than the company’s offering. We predict more native ads coming to b-2-b, in the form of useful tools like downloadable white papers and case studies.

We think the biggest takeaways from 2014 for native advertising are that it is no miracle cure for either advertisers or publishers, and like any other form of advertising,  it relies on good creative.