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Why Are B2B Brands So Obsessed with Native Advertising?

As marketers continue to increase spend on native advertising, how can they ensure their campaigns don’t turn away their audience?

B2B publishers outperform all other verticals 4 to 1 on native advertising (Polar.me)

In a 2014 episode of his HBO series, Last Week Tonight, comedian John Oliver viciously rips apart native advertising and the brands that partake in it. He likens the rise in popularity of native advertising, thanks in part to new media models like Buzzfeed, which generates 100% of its revenue from sponsored posts, to the dissolution of freedom of the press in America. For a primer on the argument against native advertising, the rant is worth the 11 minute time stamp.

Oliver makes a lot of good points. Namely to the tune of, there’s no such thing as free speech when brands pay for it. So if native advertising is such a threatening media channel, why are brands so obsessed with it?

The Disappointing Truth About Display Ads

Today’s marketers face an expeditious decline of organic reach through online channels as search engines and social networks force brands into paid alternatives, which offer higher and more measurable results.

In Q1 2014, Facebook made a change to its Edgerank algorithm, which determines the content users see in their News Feeds, that slashed brands’ organic traffic in half. A new report from Simply Measured shows that the total engagement for the 10 most-followed brands on Facebook has declined by 40%–even though brands have increased the amount of content they post by 20.1%. Engagement per-post has also decreased by an astounding 50.4%.

In Q2 2014, Facebook reported revenue had jumped 61% on the strength of its mobile advertising product.

Paying for reach on social channels is no longer an option for brands; it’s an imperative.

However, this modern marketing paradigm challenges marketers to engage audiences through channels that offer some of the lowest historic engagement rates of any marketing channel, ever.

The average person is served over 1,700 banner ads per month (comScore), and the average clickthrough rate of standard media display ads hovers around 0.1% (Doubleclick). Solve Media calculates that you’re more likely to get full house in a game of poker than you are to click a display ad. If you’re a digital marketer held accountable for clicks and conversions, how likely will you be to bet the majority of your budget on display ads?

This is the online advertising landscape that drives marketers to native advertising. So how much better is native than display?

In 2014, we ran some paid advertising tests to generate leads for Radius.

The results offer an important insight into the difference between ads that look like ads and ads that look like organic posts:

  • 59% of leads came from LinkedIn sponsored posts
  • 23% of leads came from Adwords display ads for remarketing & keyword search
  • 8% of leads came from Bizo for look alike audience targeting
  • 5% of leads came from Facebook News Feed ads
  • 5% of leads came from Twitter ads]
  • 0% of leads came from LinkedIn display ads

As more marketers realize the dismal results display ads offer, native advertising becomes a higher priority channel.

The Connection Between Content Marketing and Native Advertising

In the past five years, content marketing has risen from an afterthought into a crucial marketing tactic, and for many brands, content marketing offers a gateway into native advertising.

91% of B2B marketers use content marketing (B2B Content Marketing Benchmarks, CMI & Marketing Profs, 2013).

Why? Content marketing allows marketers to build audience trust.

74% of consumers trust brands that provide useful info without trying to sell them something. (The Trust Factor, About.com, 2014).

The minute you add a product pitch to the end of an otherwise objective piece of content, trust deteriorates to just 45% (Kentico, 2014).

Both content marketing and native advertising allow marketers to build trust with audiences so that when they present pitch products to audiences, they are well received.

But what’s the difference between content marketing and native advertising?

Joe Pulizzi, Founder of Content Marketing Institute, describes it best:

Content marketing is a strategic marketing technique of creating and distributing valuable, relevant, and consistent content to attract and acquire a clearly defined audience – with the objective of driving profitable customer action.

“The goal of native advertising is to not disrupt the user experience…to offer information that is somewhat helpful and similar to the other information on the site so that users engage with content at a higher rate than, say, a banner ad” (Content Marketing Institute, 2014).

Native advertising is a type of content marketing, and it borrows from the principles of its parent category to build trust with a relevant audience. Brands that have grown comfortable with content marketing are likely to turn to native advertising as display results continue to plummet.

78% of CMOs see custom content as the future of marketing (Demandmetric). As faith in content marketing grows, so too will spend on native advertising.

The Evolution of Good Native Advertising

The B2B brands that create good native ads have a few things in common. Take a look at some of their work:

native advertising

SAP posts content on Forbes BrandVoice about business trends in specific industries, developing successful workforces, engaging customers, and more.

native advertising

Intuit publishes articles on Mashable’s Brandspeak to promote financial savvy amongst small business owners.

native advertising

American Express Open publishes sponsored content on Huffington Post to help small businesses grow.

In all of these examples, brands publish entire channels on media sites, rather than singular posts disguised as journalistic articles. Each of these publishers also abundantly clarifies that content is authored by brands, rather than journalists.

These samples also come from brands with well-oiled content marketing machines. American Express Open, for instance, has created Open Forum, where dozens of brands and influencers across the small business industry publish multiple articles a day.

Why Native Advertising is So Hot Right Now

It’s easy to see why brands flock to native advertising, but there’s perhaps one more reason brands have embraced this marketing trend: better data empowers better stories. With a richer understanding of customers, marketers can target messages very specifically to reach customers on topics that matter to them. A detailed understanding of the data points that define customers can color an entire marketing story. Are customers web savvy? Do they receive high online review ratings? The more you know about which data points make a difference, the better your marketing story – and native advertising is all about telling good marketing stories.

Untargeted messages ruin native advertising for everyone. The future of native advertising hinges on marketers’ ability to reach audiences with relevant messages, rather than unsolicited sales pitches. Whether you agree with Jon Oliver or not, you can’t argue with the science that tells us native advertising is better than display advertising when it comes to growing an audience. Native advertising has the potential to bring trust back into the marketing arena, but only if marketers use it with honesty and relevance.

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