Understanding Native Advertising

While many people both in and out of the entertainment industry have heard the term “native advertising,” most do not really understand what it is and how it works. For celebrities or brands engaging in native advertising, there are a few things you should know.

So what is it? Native advertising is sponsored content which is often well disguised as organic content, but is actually paid for by an advertiser and used to promote a product or service. Examples include in-feed native ads (where an ad pops up in your newsfeed or timeline), search and promoted listings (ads populated by your recent search analytics), recommendation widgets (ads that pop up with a heading such as “You may also like …”), and influencer ads (these are branded content ads where celebrities or influencers are paid to promote a product to their followers).

How does it work? Advertisers work with publishers to create advertising campaigns based on branding and demographics to target certain audiences. The key for advertisers is to create content that’s valuable, interesting, and shareable and then decide the proper applicable platform for presentation.

Why it works? It works because click through rates are high for native ads since consumers (especially millennials) are much more likely to respond to native ads then traditional ads. According to Shareaholic (a leading content amplification software), 70 percent of people want to learn about products through content, rather than through traditional advertising. Furthermore, people view native ads 53 percent more often than banner ads.

What brands and celebrities should know? If you are engaging in native advertising, you should know that the rules have tightened a bit. As part of its branded content rules, Facebook requires celebrities, publishers, and companies to tag posts that are paid for by a sponsor with that advertiser’s name to make the relationship clear. According to the FTC (which regulates deceptive practices in advertising), advertisements or promotional messages are deceptive if they convey to consumers expressly or by implication that they’re independent, impartial, or from a source other than the sponsoring advertiser – in other words, that they’re something other than ads. For all natives ads you must clearly label sponsored content as advertising. The most commonly accepted labels for native ads as approved by the Interactive Advertising Bureau (IAB) are as follows:
“Advertisement” or “AD” (Google, YouTube)
“Promoted” or “Promoted by [brand]”
“Sponsored” or “Sponsored by [brand]” or “Sponsored Content”
“Presented by [brand]” and “Featured Partner”

In conclusion: As brands increasingly invest marketing dollars in native advertising, the digital landscape will continue to evolve. While the future isn’t crystal clear as of yet, the horizon looks to be one that is more transparent, user-friendly, and fluid and which benefits both the advertisers, brands, and the consumers.