Native advertising is good for everyone

Matchstick's Patrick Thoburn sees a better way for media and audiences

There is a current kerfuffle about digital newspaper “native” advertising, so-called because of its resemblance to editorial content. Observers from the high ground, like journalist Andrew Sullivan, consider it to be an ethical collapse by the media that will lead to its extinction. Defenders tend to point out that, well, newspapers have to do something.

But what critics and defenders alike do not acknowledge is that native advertising is actually a better commercial model for both traditional media companies and audiences.

Why it’s good for media companies

Native advertising is rolling out across traditional media sites in varying content models and standards of disclosure. It is performing well. That is, audiences are clicking, reading and sharing. For example, in May The New York Times’ advertising leader disclosed that readers are spending as much time on native ad posts as they are on editorial, and in some cases more time. This from a publication with significant disclosure around native ads. The growth of BuzzFeed and other sites built around the native model is well known. The conclusion to draw is that audiences don’t care who paid for it, as long as it is good content.

Another reason native advertising is good for media companies is that brands are paying for content, not just for distribution. A favourable turn of events in the past two years for the newspapers has been the advent of content marketing. The smart brand’s mantra today is “content, not advertising.” And who has been producing content for 150 years or more? The newspapers. Brands need their help.

And here is where it seems to get tricky for the newspapers. As portrayed so acutely by leaked The New York Times Innovation Report (ironically read by many, but not on The New York Times website), the “Wall” stands in the way of business model innovation, and does not necessarily serve anyone. Media companies must take down their Wall, and put their greatest strength – editorial content production – at the disposal of advertisers who will to pay for it. The purpose of the Wall can be taken care of by transparent disclosure of content sponsorship.

Why it’s good for audiences

At the start of my career, I worked on the editorial side of a lifestyle magazine. We were in the business of bringing pop culture to a young audience, and the magazine made its money from brand advertising. I loved the job. One of my favourite things, I’m a bit sheepish to admit, was the swag that flowed through the office. CDs, film passes, tech products and clothes were bestowed on us by attentive brand PR reps. Invariably, the products that found their way into our otherwise un-lined pockets also made their way into editorial. Just as invariably, the brands that advertised in our magazine made their way into editorial features like “Spring’s hottest looks” or “Must-see films.”

The quiet but weighty influence of “state” over “church” is likely held in check better at most media companies than in my magazine experience, but it exists, no matter what they say. This is not to criticize any advertisers’ intentions; it is simply to illustrate the maxim “follow the money.” Media is a business, not a religion. The historical quid pro quo between audiences and media companies – entertainment and information are exchanged for attention to advertising – has not always been out in the open.

Present-day native advertising, when done with proper disclosure – as it is by most including Canadian publishers like The Globe & Mail – allows readers to make their own informed assessment of commercial bias. This is not a moral imperative, but rather the law regulated and administered by the FTC in the U.S. and in Canada by the CRTC. Consumers have a legal right to know when they are being advertised to, and native advertising can be a mechanism for disclosure of commercial bias in editorial content.

What’s next for native?

Native advertising is nascent, and there are opportunities for traditional media organizations to use it to evolve and thrive. Perhaps most pressing is for native advertising to scale. Common wisdom holds that programmatic native will reduce engagement, undermining its greatest strength against digital banner advertising. Innovation in native and programmatic is the next frontier.

Native holds promise for helping traditional news publishers evolve into commercially successful digital content producers. It’s a win for audiences because it provides transparency around commercial bias and, if it succeeds in scaling, ensures some of our favourite titles will be with us for a while longer.

Patrick Thoburn is co-founder of Matchstick

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