Developing a Native Advertising Product

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Much (heated) debate has been placed recently on whether native ads that walk, act and quack like editorial content are misleading and bad for consumers. The philosophical debate is the wrong one; the focus should rather be on what is driving the disruption in the “traditional” interruptive ad format. Taking a look into the causes of this turbulence reflects the current zeitgeist and how a successful native ad product can come to life.

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Developing a Native Advertising Product

Jack Krawczyk !@jackk!!February 27, 2013!Native Advertising Summit!

How to Build Your Native Solution

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Become an Amateur Historian!

Evolve into an Amateur Economist!

Do No Harm!

Audience The people who watch or listen to a

television or radio program.!

Target Audience A specific group of people within the target market at which the marketing

message of a product is aimed at.!

Advertising Paying for the right of a brand to disrupt

the user experience. !

Native Advertising Paying for the right of a brand to become

a part of the user experience. !

Advertising Used to be Pretty Easy

1985

34%

19 reach among

US households!

average # of channels per home!

1995

21%

41 reach among

US households!

average # of channels per home!

2011

13%

135 reach among

US households!

average # of channels per home!

Audiences are Fragmenting

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40 19

70–1

971

1971

–197

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–197

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–197

6 19

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–197

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–198

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–198

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–198

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–199

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# of

com

mer

cial

TV

stat

ions

% re

ach

Reach of #1 TV Show in US vs Total # of TV Stations

% reach # of commercial TV stations

Source: Nielsen, TVB

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Become an Amateur Historian!

Evolve into an Amateur Economist!

Do No Harm!

How to Build Your Native Solution

Fragmenting audiences make advertising much

more expensive.

The Economics Say So

Content!Producer! Studio! Network!

Brand!

Audience!

Content!Producer! Studio! Network!

Brand!

Audience!With more channels, the cost of acquiring audiences increases.

Content!Producer! Studio! Network!

Brand!

Audience!Higher audience acquisition cost puts pricing pressure on content.

Content!Producer! Studio! Network!

Brand!

Audience!

GRP rates increase to offset audience & content costs.

Content!Producer! Studio! Network!

Brand!

Audience!Audience fragmentation leaves content producers earning less…

…and brands paying more to reach their target audience.

So Brands are Investing in Building Their Own

Audiences

Content!Producer! Studio!

Audience!

Brand!

Network!

Content!Producer! Studio!

Audience!

Brand!

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These brand-produced assets are becoming

increasingly portable.

Content!Producer! Studio!

Audience!

Brand!

Content!Producer! Studio!

Audience!

Brand!

Digital Properties!

It’s the same content.

Just repurposed for its native consumption.

Pandora -> Audio [stations]

Twitter -> Tweets Facebook -> Posts Pinterest -> Pins YouTube -> Videos [channels]

Content!Producer! Studio!

Audience!

Brand!

Digital Properties!

This is where native advertising lives.

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Become an Amateur Historian!

Evolve into an Amateur Economist!

Do No Harm!

How to Build Your Native Solution

Good User Experiences are Good Brand Experiences

Longer Session Length

=

Happy User!

Longer Session Length

=

Longer Brand Engagement!

Transitive Property of Native Advertising…

Happy User

=

Longer Brand Engagement!

Hold Native Ad Products to the Same Standards

as Core Products

What is the main user behavior on Pandora?

<- Branded Radio

What are the main drivers analyzed for consumer

success?

485,000+ Station

additions !

519,000+ Hours of total

listening!

96% Driven on

mobile!

Don’t just build things because brands will pay

you for them.

Metrics to Evaluate Your Native Ad Product

Retention!

Session!Length!

Latency!

Revenue!

Do no harm.

History + Economics - Harm =

Developing a Native Ad Product

Hit me up:! @jackk!

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