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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
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1971
–197
2 19
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–197
4 19
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–197
6 19
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–197
8 19
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–198
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–198
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–198
4 19
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–198
6 19
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–198
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–199
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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!
