native advertising (the nunatak group)

S u m m a r y

Advertisers are looking for alternatives to conventional display advertising campaigns as

consumers become more immune to them and click-through rates decrease.

Thus, publishers are increasingly offering Native Advertising formats which seamlessly integrate

with a website’s original content. Critics see this as a threat to editorial independence.

Nonetheless, 78 % of publishers and 61 % of brands worldwide plan to use Native Advertising

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Native Ads can be displayed easily on small mobile screens, which further increases their

relevance.

uPDaTENaTivE aDvErTiSiNg

www.nunatak.com issue 3

Sources: 1Hexagam/Spada (2013), 2The Awl (2013)

april 2014

D E f i N i T i o N

The term Native advertising describes high-value content created or commissioned by brands, which is integrated into a website’s look and feel. Platforms such as Buzzfeed rely

solely on Native advertising. Lately, an increasing number of traditional publishers have jumped on the bandwagon and started selling Native ads (e.g. NyT, WSJ, forbes).

Promoted links in

search results

Content sponsored by

companies for newsletters

addressing a niche topic

Stories on general interest topics produced by companies

blend with other content

Ads in form of

online articles

Promoted posts in

social media, integrated

into the newsfeed

1929

2004

2005

2006

2009

2011

2013

First print ads made to

look like articles in the

Hawaiian Star Advertiser2 Promoted product listings in search results

Posts produced by

companies blend

into original content

Sponsored videos

Sponsored playlists

Sponsored posts

Sponsored listings

Sponsored stories

Sponsored links

Video recommendations

in search results

Playlists’ cover photos

can be linked to URLs,

playlists can be created

by companies

Stories produced by

companies mix

with other content

Advertised listings are

shown in search results

Promoted links appear

within search results

E x a m P L E S

o f N aT i v E

a D S

Sources: 3Hexagram/Spada (2013): sample size > 1000, 4Native Advertising Leaderboard (2013), 5Sharethrough (2013), 6Online Publisher Association (2013)

Ads corresponding

to look & feel of third

party website

Third party publisher

sites like Buzzfeed or on

social media

Sponsored posts in

text, picture and video

formats

Content creation

and advertising space on

third party website

Agencies, publishers

and perhaps companies

themselves

Content posted on

company’s own web

properties

Brand’s own website,

blog or newsletter

Mainly text with pictures,

videos or charts

Content creation, hosting,

administration

Companies and brands,

agencies

Difference to Content marketing

Native advertising Content marketing

How do costs foradvertisers occur?

What do these adslook like?

Where is the content hosted?

Which formats are used?

Who creates these ads?

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3446 41

61

78

62

agencies Brands Publishers

Expected worldwide use of Native advertising: 2013 vs. 20143

(in percent)

2013

2014

The brand MINI reached

1.3 m social actions with the

most successful Native

Advertising campaign to date4

of U.S. consumers notice

Native Ads more

frequently than traditional

banner ads5

of publishers in the United

States offer Native Advertising

on their platforms6

73 %53 %1.3 m

Publisher î Newcomers and traditional media

Brand î Native ads for image building

>Revenues solely from Native Advertising

>CTRa is at 1.5 %, therefore up to 16

times higher than traditional banner ads7

>Cost of a month-long ad campaign

on Buzzfeed: approximately USD 100,000

(167 advertising partners in 2013)7

>As a Buzzfeed partner, T-Mobile

publishes content on lifestyle topics

>Buzzfeed team creates content on

behalf of T-Mobile

>T-Mobile is only mentioned with

their logo and at the end of an article

B uz z f E E D

T- m o B i L E

f u r T H E r

E x a m P L E S

Sources: 7Forbes (2014), 8AdAge (2014), aCTR = Click-Through-Rate

Promoted content is highlighted in yellow

>Dell is the first partner publishing

Native Ads on the NYT-website, paying a

six-figure dollar sum for a three-month

campaign8

>Dell produces the content itself and

carries editorial responsibility

>Published articles are not deleted

upon end of campaign, the reader can

find them in the site’s archive

N E W yo r k T i m E S (N y T )

The New York Times offers different kinds of Native Ads

Elite Daily was among

WKH�ÀUVW�SODWIRUPV�WR�offer Native Advertising

1DWLYH�$GV�DUH�+XIÀQJWRQ�Post’s approach to engage

brands with consumers

Forbes created "Branded

Voice" in order to

run Native Ads for brands

&RFD�&ROD�LV�DQ�RIÀFLDO�Buzzfeed partner

Nestlé produces

high quality video ads

for Facebook

Sources: 9Sharethrough (2013), 10MandLoys (2014), 11news.solvemedia.com (2013)

The Nunatak group is a digital strategy consultancy based in munich. our focus is on mobile media, Social media, growth Strategy, Digital Coaching and

investment Support for companies in growth industries.

The Nunatak Group GmbH | Managing Partners: Robert Jacobi, Rupert Schäfer | www.nunatak.com | [email protected]

o P P o r T u N i T i E S r i S k S

outlook for Native advertising

>Unique, informative or entertaining

content is less intrusive and

can increase customer interest

Relevant forPlatform Brand Publisher

>70 % of U.S. users prefer to learn

about a company or a product through

content than traditional print or

banner ads10

Platform Brand Publisher

>Service providers such as Contently

also start to offer content for Native

Ad formats


>57 % of venture capitalists, business

angels and private equity firms in the

U.S. will probably invest in companies

that sell Native Advertising11


>Cost-intensive and time-consuming

measure: Since ads are produced

for single platforms, they can only be

used once

Relevant forPlatform Brand Publisher

>Development of jurisdiction (e.g. FTC

regulation in USA) still uncertain


>Ad-blockers can be used to success-

fully block Native Ads


>If customers get used to the new

advertising format they may start

ignoring it


Adaptly is a start up

which advertises Native

Ads in social networks

Mopub creates social

Native Ads for mobile apps

(belongs to Twitter)

Nativo is an automated

platform producing

Native Ads

Platform î marketplaces for publishers and brands

>An online marketplace which allows

publishers to sell their Native Ads

>Sharethrough’s software automatically

transforms regular advertising into

Native Ads

>More than 200 m final users reached9

>Customers: Pepsi and Nestlé

S H a r E T H r o u g H

Projects related to Native advertising:

Establishment of a

multimedia content

WHDP�IRU�D�ÀQDQFLDO�services group

Supervision

and implementation

of a content

GLYHUVLÀFDWLRQ�strategy for a global

consumer brand

Positioning and

development

of a content service

provider, which

offers creation of

Native Advertising

formats

native advertising (the nunatak group)

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