Native advertising

1. WELCOMETO..
ANEWAGEOFADVERTISING
ANEWAGEOFJOURNALISM
ANEWAGEOFINVENTION
AREYOUREADYFOR..

2. THENATIVEAGE–HERE’S
THESCIENCE
• We conducted a consumer survey of
2,000 people with the aim of
understanding current online behaviour,
current engagement with brands online,
key success factors of brand engagement
online, and most importantly, the
perception and appeal of native advertising
versus traditional advertising through
creative testing.
KEYFINDINGS
• We produced a clear definition of native
advertising.
• We discovered a generational shift in the
way people respond to native advertising.
• We identified what works – and what
doesn’t.
• We pinpointed key examples of best
practice.
• We developed a conclusive blueprint for
successful native advertising.
RESEARCHOBJECTIVES
• To produce a definitive body of work
giving a true insight into native advertising,
present and future.
• To help the industry move towards a clear
definition of native advertising.
• To clarify best practices in native
advertising.
• To produce guidelines on how to
succeed in native advertising.
CHALLENGES
• There is a lack of knowledge about the
subject – even within the industry.
• There are wide and varied
understandings of the term ‘native
advertising’.
• Different stakeholders are competing for
ownership and have challenging
viewpoints.
• There is a need for collaboration – to
bring together different skillsets.
• The balance of power shifts as we identify
the key primary skills.
METHODOLOGY
• We carried out a series of in-depth
interviews with media owners, brand
marketers, marketing directors, agency
heads and opinion leaders.
• We surveyed a range of experts - 20
media owners, editors and journalists, 20
brand marketers, marketing directors and
CMOs, 20 agency heads and senior
decision makers, and five bloggers.

3. LETUSINTRODUCEYOUTOTHE
TOTHENATIVEAGE
Here we will look to define Native
Advertising? Is it a meaningful trend that's
here to stay? Or simply the latest
buzzword? Should you be doing it? And if
so, how and why?
Welcome to AOL UK's 'Native Age'.
The separation of ‘Church’ and ‘State’ in
the media world is a long held truth.
The Church, that is, journalists, their
opinions and stories, and The State, media
entities and their advertising, co-exist in an
arm’s length relationship; related, but
divided.
Today, we believe that metaphor is broken.
Why? The emergence of Native
Advertising.
We believe the failing of the ‘old media’
metaphor of Church and State metaphor
excludes you - the congregation.
Historically people were on the outside
looking in, a passive audience to be
preached to whether by editor or
advertiser.
Today, on sites like the Huffington Post,
and across the media spectrum, readers
are taking an increasingly active role in
finding, editing, writing and recommending
their news and entertainment online.
These new forces in storytelling and
editorial are forcing media owners and
marketers to rethink the old models, and
define new ways in which the Church,
State and Congregation can interact.
As one of the leaders in this new paradigm
of media, we have set out to define the
new era of Native Advertising, with a
particular focus on what it means for
advertisers and marketers.
• Listen to a key audience of media
owners, brand marketers, marketing
directors, agency heads and opinion
leaders – and tap into their unique
perspectives.
• Take a look at our intriguing expert
survey of 20 media owners, editors and
journalists, 20 brand marketers, marketing
directors and CMOs, 20 agency heads
and senior decision makers, and five
bloggers.
• Examine the thought-provoking results of
our consumer survey of 2,000 people,
which gives us huge and valuable insights
into the perception and appeal of native
advertising versus traditional advertising.
Delve into their current online behaviour,
and their current engagement with brands
online, and we’ll help you discover the key
success factors of brand engagement
online.

4. NATIVEADVERTISING–
WHATISIT?
Native advertising is:
sponsored content, which is relevant
to the consumer experience, which is
not interruptive, and which looks and
feels similar to its editorial
environment.
The quality of that content is key in the
Native Age - it has to be great content
that the consumer wants to read,
watch and share.
Sean King, CEO of Seven, an
award-winning content marketing agency,
says: “The content agenda is really massive
now… Everybody is talking about content.
Everybody. If you are a social media editor,
a digital agency, media editing, an ad
agency, a PR agency, they are all talking
about content.”
We believe transparency is also vital; native
advertising needs to be clearly signposted
so that users know the content is funded
by a brand. The Atlantic magazine’s
Scientology advertisement, the social
media backlash and the media’s
subsequent apology serves as just one
example of how readers expect this
transparency, and of how media owners
must recognise their responsibilities in this
space.
So we’ve given you a
definition – now we’re
going to show you
what to do with it.
It’s here already – but you may not
know it yet. You may not know what
it’s called. You may not know what it
looks like. But you’ve probably
experienced it. And that’s the beauty of
native advertising.
However, we believe a common definition
of Native Advertising will be crucial to its
future uptake and success across the
industry. A true definition will give
consumers, marketers and brands
confidence in the model.
As Phil Reay-Smith, Head of Media at
Ogilvy PR, says: “Native advertising is one
of those phrases that people use a lot, but
don’t always understand. So it does
demand defining.”
We conducted a series of fascinating
in-depth interviews with industry experts
and they all agreed it’s a commercial
buzzword that most consumers are not
aware of – even if they’re engaging with it.
Carla Buzasi, editor-in-chief of the
Huffington Post, says: “If you are logging
onto a website at the moment, chances
are at some stage you are going to come
across native advertising, you just don’t
know it. This is about a client’s wish to get
closer to and talk to <people> in a more
natural way than they have done in the
past.”
From our extensive research we can now
show the industry a clear definition of what
native is.

5. EXAMPLESOFGREATNATIVE
ADVERTISING
Brilliant native advertising is already here.
Here are three examples, one from
HuffPost, and two broader examples.
We believe all three work are powerful
because they successfully hit the
crossroads of readers’ interests and the
brand’s agenda – the core of great Native.
HUFFINGTONPOSTANDICELAND
Inspired by Iceland was a cross-platform
campaign launched by AOL in partnership
with the country’s tourism board, Promote
Iceland. The Huffington Post UK launched
an “Inspiration” section, which allowed
brands to communicate with consumers
through video, blogs and social media. We
pulled together a host of inspiring content –
editorial, features, videos, galleries, blogs –
creating a destination site where Iceland
could open its doors to the world with
superb content that people could really
connect with.
Key Results:
#1 Iceland’s appeal as a holiday
destination increased by 69%
#2 Consideration of Iceland as a
holiday destination increased by 130%
#3 Consideration of Iceland as the ‘trip
of a lifetime’ increased up 74%

6. EXAMPLESOFGREATNATIVE
ADVERTISING
THEATLANTICANDPORSCHE
Where Design Meets Technology was a
partnership between The Atlantic and
Porsche, aiming to illuminate the
intersection of contemporary design and
trailblazing technology. Sponsored photo
galleries, in-depth blogging and online
chats, which highlighted the innovation and
trends being developed.
REDBULLANDYOUTUBE
Red Bull’s Stratos Project is arguably the
poster child of content marketing and
Native Advertising, even if we don't all enjoy
similar stratospheric budgets. We all know
it was remarkably successful, with 8 million
views of skydiver Felix Baumgartner’s jump
from the edge of space. The brand helped
create and fund the mission which went
further than a normal marketing campaign;
it was a genuinely fascinating project in its
own right. This campaign took the idea of
quality content to a whole new level.

7. GENERATIONN–
THENATIVEGENERATION
• Crucially, published brand content is most
likely to have a positive impact on young
people’s relationship with a brand. More
than a quarter of 18-24s said published
brand content was most likely to make a
brand appeal to them, compared to an
11% average.
• The younger audience says the most
important thing in online advertising is
interesting and useful content (35%)
followed by entertaining and fun content
(28%).
• This age group is much more likely to
interact with brands online. Almost half of
18-24s interact with brands online
compared to only a quarter of the 64+ age
group.
• More than half of the younger audience
agreed that online ads could be interesting
and useful, compared to just one in five of
those aged 64+. Similarly half of those
aged 18-24 agreed that online ads could
be fun and entertaining – again falling to
one in five of those aged 64+.
• Almost a quarter (24%) of the 18-24 age
group said they would be most likely to
interact with Facebook sponsored stories,
compared to an average of 15%. The next
most popular among this age group was
published brand content (19%, compared
to a 9% average). This young age group
was less likely to interact with a standard
display ad (9%, compared with an average
of 15%).
The emergence of a new advertising
paradigm heralds the emergence of a
new generation of people who strongly
favour it.
They may not know the term “native
advertising” – but our research reveals
that young people love it. They see it,
they emotionally engage with it, and
they have a strong preference for
Native over traditional advertising.
Our study proves that this new native
generation - Generation N - actively
wants to interact and engage with
brands online.
With this report we can reveal a very strong
correlation between age, online behaviour
and the performance of native advertising.
Generation N perceives native advertising
as more appealing than traditional ads;
they get their news mainly online; social
media is hugely important to them; and
they see online advertising generally in a
much more positive light than older people.
Older consumers, raised in a pre-internet
world, still get their news mainly offline and
are not familiar with most social media
platforms.
They have less interest in interacting and
engaging with brands online, and perceive
online advertising in a more negative light
than younger people do. They prefer
traditional advertising over native ads.

8. GENERATIONN–
THENATIVEGENERATION
Carla Buzasi, editor-in-chief of the Huffington Post, says this young audience is
clearly crucial and brands need to find new ways of reaching out; and that’s why
native advertising is already working for the HuffPost.
“There are actually brands out there who want to reach that young audience and cannot find
them anywhere else,” she says.
“But they can find them on Huffington Post. So you bring that brand to that audience around
something, a theme that they are passionate about and that is when you create magic.”
Generation N is a digital generation, with a whole new set of habits, passions and a
completely different way of life to that which has gone before. Generation N demands
something new – something Native.

9. THENATIVEAGEISHERE
TOSTAY
So native advertising is crucial today for reaching
our often elusive younger audience. And as this
generation grows up and keeps its media
preferences, Native is set to grow and grow.
According to George Bryant, MD of content
agency Brooklyn Brothers, the best is yet to come:
“Those people who are creating the best native
marketing recognise that the best hasn’t been
done yet.”
Carla Busazi, editor-in-chief of the Huffington Post,
says: “I think Native is working well for the brands
that are prepared to experiment and I think that
every brand has that capacity but a lot of them
aren’t doing that yet, because they are nervous.
“But if they continue with that tried and tested way
and everyone else has moved on, including
consumers, they are going to get left behind.”
Brands must join the Native Age before they get left
behind. Marketers need to seek out those with
editorial skills who can help them cross the divide,
and media organisations need to stop seeing
native advertising as the “dark side” and embrace it
as their saviour.
Just as today we all hold on to many of our
media habits developed around the
emergence of television as a mainstream
channel of communication in the 40s, 50s
and 60s, so today’s teenagers, 20- and
30-somethings will take their predilection
for Native advertising into their later life.
They are not going to suddenly revert to
preferring banner ads. We believe this
audience’s preference for Native
Advertising is here to stay; and when you
factor in natural demographic forces and
progress, this is an audience and a
preference that will continue to grow.
Preference for Native is not about age
per se; it’s about a generational shift
which has only just begun – and it’s set
to have long-lasting effects.

10. GREATNATIVEADVERTISING–THE
FOUNDATIONSOFANEWEMPIRE
Experts and consumers are
completely agreed on the key success
factors of native advertising – and we
can now share them with you.
1. Tell a great story – be interesting and
engaging
2. Be entertaining – Generation N is
crying out for entertainment
3. Align with consumers’ interests –
tap into their passion points
4. Be relevant to current online activity
– don’t interrupt
5. Be clearly signposted – don’t try to
fool anybody!
• At the heart of native advertising is
fantastic content that people want to
consume, want to read, to share, to
comment on, to interact with. This is where
editorial skills can rise head and shoulders
above the traditional story telling skills of an
advertising creative. Journalists know what
makes a great story and how to tell it right.
They can produce content that makes
consumers feel inspired and entertained.
Content that engages consumers on an
emotional level. What matters to readers?
What is going to make them smile? What is
going to make them think? What will they
share with their network? These are
questions journalists ask themselves
hundreds of times every day.
Let’s remind ourselves of our definition:
Native advertising is:
sponsored content, which is relevant
to the consumer experience, which is
not interruptive, and which looks and
feels similar to its editorial
environment.
And let’s also accept it has an emerging
and crucial role for a younger audience
today, and a growing audience tomorrow.
We know what it is, and we know why it's
so important to the future of marketing.
But how do we do it?
Media agencies and creative agencies
need to brace themselves for a new
challenge. Our research clearly indicates
an 'EDITORIAL FIRST' approach where the
story telling skills required are those of a
journalist, not a copywriter or script-writer.
The editorial skill set is vital for success.
Ask yourselves - do you have it?
Every media agency should be asking
themselves – where are our journalists?
Where are our editors? Where is our news
sense coming from?
With unique insights from our research, we
can now create a blueprint for the best
native advertising.

11. GREATNATIVEADVERTISING–THE
FOUNDATIONSOFANEWEMPIRE
• Marketing Directors – get used to your
brand agenda not being the starting point
you’re your campaign. Fernando Machado,
Global Brand VP for Dove, says: “It’s about
developing content that people choose to
watch and share. Not developing content
that you simply broadcast to brainwash
people or to persuade them to do
something.”
• Consumers need to be able to relate to
this content – it has to resonate with them.
Brands have to identify the audience which
will find their brand relevant, rather than
picking an audience and diluting their
message to fit. They need to interact with
consumers in an area of interest to them;
an area both brand and reader are
passionate about. When we asked our
experts to identify their top three guidelines
for producing successful native advertising
campaigns, an overwhelming 71% chose
“Be relevant to the audience”.
• You need to be entertaining – and that
means creativity. The challenge is to get
creative minds working together to create
something new, something that creates
talkability and publicity. Something that will
entertain, amuse and create a different
experience for consumers. Here again the
need to bring in a new, editorial skillset
comes to the fore. In our expert survey, we
asked respondents to tick their top three
best practices that were most relevant for
successful native advertising. Top answers
were: Be creative (43%); Be innovative
(29%); Be authentic to the tone and values
of the brand (26%); Tell a great story (23%);
and Be authentic to the tone and values of
the media owner (23%).
• Content is not just king, it’s queen, prince,
princess, corgi, and all the subjects of the
realm. Editorial skills are becoming more
and more valuable, and the distinction
between journalism skills and advertising
skills is blurring. High quality content leads
to engagement, which leads to scale.
Everyone is falling over themselves to
produce great content – and that’s where a
whole new skillset is evolving. Phil
Reay-Smith, Head of Media at Ogilvy PR,
says: “Where the magic can happen is for it
to be interesting. And so if a consumer
sees a sponsored post and actually just
wants to read it for the sake of reading it
because it's interesting, that's when you
actually get more engagement than you
ever would with a banner advert or any
form of interrupted advertising. This is
advertising that draws you in.”

12. GREATNATIVEADVERTISING–THE
FOUNDATIONSOFANEWEMPIRE
Paul Wilson, managing partner at media
agency SMV, says native advertising
without engaging, entertaining, informative
content will fall flat on its face. “If you are
distracting somebody or you’re
encouraging somebody to click on
something to go to another place and then
you’re not delivering on that promise then
that’s frustrating. People want better
quality or more instant content.”
Sean King, CEO of content marketing
agency Seven, says this is the present and
the future and it’s about time brands realise
it. “The action is where the content is, that
is where you interact with the customers,
where you engage with them, where you
collect data from them, where you give
back value to those people,” he says. “That
is where it's at and I think if brands don't
realise that now, they will.”
There is a huge appetite for content in the
Native Age – and advertising needs to
look outside its own world, climb over the
walls and reach out to those with the
experience and knowledge to deliver.
Advertising needs to seek out editorial
experts – trained, experienced journalists
who can help capture hearts and minds in
a Native Age. Great journalists have their
fingers on the pulse of the news agenda
and have an outstanding instinct for the
information people need and want.

13. KINGPINSOFTHE
NATIVEAGE
Creative/media/content agencies
Agencies think they own native advertising.
They don’t. Most agencies don’t have the
skillset to produce great native advertising
on their own. They need to let go and
accept that native advertising must be
associated with quality editorial content –
and be prepared to invest. There is also a
danger that agencies will rush for scale,
losing the impact of native advertising; they
need to create new business models for
the Native Age where volume is not
necessarily the master.
Brands
Brand owners need to learn more about
native advertising and how to make a solid
business case for it. They must be
prepared to take risks, invest in
experimentation and let go a little control.
There is a danger that brands want to
maintain too much control over their
commercial message – hampering
creativity and innovation. However they do
need to ensure relevance to their brand.
Perhaps the second most common
question asked by media land after ‘What
is Native’ is the question of ownership.
Creative agency, media agency, media
owner, and of course brand. Who owns
the space and who leads?
It may surprise some to hear us say
“everyone”. This is not a space that can be
dominated by the media owners’ wishes,
media agencies’ budgets, or the creative
power of creative agencies.
Fundamentally, Native requires a
collaborative approach. A recognition that
only by satisfying all agendas will a truly
successful Native result be realised, for
reader, media owner, brand and its
agencies.
Here we explore the different skillsets,
collaboration requirements and
opportunities.
Media owners
There is a huge opportunity here for media
owners to find ways to increase revenues.
They can uniquely offer that crucial editorial
skillset to clients and agencies and
optimise this major revenue opportunity.
They also need to choose partners carefully
– the content will carry the trust and
reputation of their media brand.
Sponsorship needs to be flagged clearly
and an environment created to foster
interaction between consumer and brand.

14. Nigel Gwilliam, head of digital at IPA
(Institute for Practitioners in Advertising),
makes a clear distinction between
“publisher-led native” and “social-led
native”. “I do sense there is a fairly
significant difference between publisher-led
native and social-led native,” he says. “I
think social platforms of a scale, most
notably Facebook and Twitter, are new
kinds of environments that are
understandably looking to find advertising
that best suits something that they offer
which hasn’t really been offered before.”
Social media has tremendous power,
but our findings challenge the idea that
current advertising on platforms such
as Facebook and Twitter fit into the
category of native advertising.
Twitter’s purchase of MoPub, the
automated trading company, shows it is
attempting to take advantage of improving
online targeting technology, and it believes
this will improve its claim to host native
advertising. However this remains to be
seen.
Facebook, Twitter et al are still searching for
a form of native advertising – but they
haven’t found it yet. These ads are native to
their environment but not native to the
reader / user.
SOCIALMEDIAISVITAL
BUTISITNATIVE?
Social media is a leader in Native. Right?
Perhaps, but we would argue that social
media cannot be truly native. It’s a
wannabe – but it can’t be.
By definition, Native must be tailored to the
environment it is being shown in. And with
all of our social feeds absolutely unique to
us, it’s impossible for brands to create
unique Native ads that are tailored to
individual feeds.
Sponsored tweets and sponsored
Facebook posts reach a wide audience
and enjoy high engagement, but it’s an
interruptive experience for most users. As
they are not selected or individually tailored,
these posts and tweets stand out to users
– and they engage with them differently
from the way they engage with native
advertising.
In the overall context of a native advertising
campaign, social is of course crucial.
It can deliver scale, it needs editorial skills;
and it can produce a high level of
engagement if done correctly.
Social media can work alongside native to
engage consumers with brands. Social
media feeds can even be integrated
effectively into native advertising
campaigns, widening reach across
platforms.

15. CONCLUSIONS..
HUFFINGTONPOST.CO.UK
/NEWS/NATIVE
@HUFFPOSTUK
#NATIVEAGE

16. THENATIVEAGE:ADVERTISING
ANDJOURNALISM–ABIGBANG
Native advertising could not simply be the
future for paid advertising; it could also be the
future for journalism. To keep journalism alive,
advertising needs to succeed.
Phil Reay-Smith, Head of Media at Oglivy
PR, says: “Will native advertising be
responsible for the decline of journalism? It
might be the thing that keeps it alive. I mean
right now there's no question that journalism is
facing a serious test. Old models of affording
journalism are dying out, as in charging people
for newspapers or even advertisers sponsoring
television news. The revenues are shrinking…
Journalism is in a fight for its future.”
Media, brands, marketers – we’re all in a fight
to capture the hearts and minds of a young,
tech-savvy, super-smart audience.
Carla Buzasi, editor-in-chief at the Huffington
Post, says: “There is this huge appetite for
content and that means that we have to up our
game; it means every media has to up their
game. It means there is a huge amount of
choice out there and the audience gets
smarter and smarter about the kind of content
they want to consume and where they want to
consume it from.”
Are you ready to up your game? Are you
ready for the Native Age?
Our conclusion? Native advertising might well
be the latest advertising buzzword, quoted at
every conference and blogged and tweeted by
many.
At AOL UK, we believe that's with good
reason.
Our research has proven that this emerging
advertising channel has the potential to bridge
the gap between editorial and advertising,
between a brand’s agenda and the audience’s
agenda.
As a result, we believe Native will soon
graduate from buzzword to a force to be
reckoned with; a highly effective channel for
clients, and a growing revenue stream for the
media owners willing to adapt and embrace it.
What is needed is a fresh approach – a new
relationship forged between editorial skills and
marketing.
Media owners are in an ideal position to lead
the way forward. They can offer a huge
editorial skillset to clients and agencies.
Brands, marketers and media organisations
need to seize the day. Brands are increasingly
looking to establish a dialogue with consumers
online. Those who are brave and willing to
experiment are already seeing the greatest
benefits of native advertising.
Agencies need to be persuaded that native
advertising has to be associated with quality,
and brand owners need to be able to make a
strong business case for native advertising; we
hope our research advances both of these
cases.