In the past year we have looked at over 100 companies claiming to do native advertising. If you haven’t heard of native advertising you will soon, because it is the hottest trend in online advertising right now.
I figured it would help to clarify what native advertising actually means. I wouldn’t normally do this, but so many people who claim to do native advertising are definitively not doing native advertising. Someone needs to define this segment.
There are two components to native advertising:
Part I: Native advertising is an integrated ad unit on a publisher’s website. It is customized to fit into a consumer’s normal browsing behavior as defined by the publisher. This means it looks and feels like any other piece of content even though it is sponsored. The sponsorship is labelled, although it is often in small print.
But that is not all.
Part II: If a consumer clicks on a native ad, he or she must get the same action that results from clicking on any other piece of neighboring content from the publisher’s website. THIS IS THE MOST IMPORTANT PART OF NATIVE ADVERTISING. Otherwise you just have a rich media company.
Here are two examples in case this second point is confusing.
Example 1: Let’s say you go to the New York Times homepage and click on a story. That action always takes you to another page on the New York Times with the story. Similarly, clicking on a native ad on the homepage takes you to a deep link on The New York with the sponsored story. The landing page must look and feel exactly like any other page on the New York Times and it must be on the New York Times domain. In this context, a native ad does not hijack the consumer and take him or her off to another website.
Example 2: Let’s say you go to DrudgeReport, which has no proprietary content but is just a list of links to other websites. If you click on a story, Drudge opens a new browser tab and sends you to that website. A native ad would have exactly this same behavior.
Part of the problem is that agency RFPs are confusing the market because they do not differentiate between a rich media campaign (banner ads disguised to look like content) and true native advertising. I have seen a bunch of examples floating around. Hopefully this helps with the definition.
(Cover photo by Markus Spiske, licensed under CC BY)
Ian is a co-founder and partner at Greycroft Partners in New York City. He has been a venture capitalist since 2001.