The worlds of advertising and technology – long friends in the name of innovation – are currently embroiled in an intense ideological debate over the subject of ad-blocking. Sparked by Apple’s controversial decision to include ad-blocking capabilities in their iOS 9 update, advertisers are stuck grappling with ways to reach consumers through technological outlets that are no longer friendly to them.
But advertising agencies and big brands aren’t the only ones thrown into turmoil thanks to ad-blocking. Publications, which have long struggled with monetizing their digital sites, are now having to contend with the possibilities of declining sales of banner ads.
While immediately distressing, the rise of ad-blockers could be a boon for digital publishers revenue streams. As with any other technological innovation, ad-blocking means that publishers that were previously dependent on display ads are going to have to establish new avenues for brands to advertise through.
Genesis of Native Advertising
Native advertising, a form where the advertising resembles the site’s content, is proving successful in this new media landscape. A big benefit, besides being highly relevant to the consumer and therefore much less annoying, is that it isn’t classed as advertising by browsers, so won’t be blocked. It tends to be sold in packages comprising of curated user-generated content, branded content and planned editorial.
FollowingBuzzfeed and Refinery29, The New York Times made waves late 2013by announcing that it would begin to sell branded content placement on it’s digital site, nearly a year after publiclyquestioning the practice. Now the T Brand Studio, the Times’ in-house branded content team, is expected to bring inroughly $30 million in revenue over the next year, thanks in part to large scale projects picked up by the likes ofAirBnB.
Raising Digital Revenue
When it comes to bringing in revenue, the potential of branded content blows old revenue models based on display ads out of the water. With click through ratesbelow 1%,and cost per click stagnant at a couple of dollars, display ads are more clutter than they’re worth. In comparison,large publications can bring in $100,000 through just a single branded content partnership.
But many publications still have a way to go when it comes efficiently deploying these native advertising tactics. The New York Timesfor example has 37 in-house brand strategists, copywriters and designers working to create this branded content – which is a massive amount of overhead.
Progressive media brands however are increasingly turning to technology to employ enterprise solutions that can rapidly deploy campaigns, boost virality and capture data that can integrate with other digital sources, such as email and subscriptions databases.
In fact, Scripps Interactive Networks and some divisions of Bauer Media are seeing digital revenues from sponsored promotions exceeding 25% of total digital revenues, when deployed through an enterprise-scale SaaS marketing solution.
The Next Frontier and User-Generated Content
The balance of power is rapidly shifting from brands and media owners towards their consumers. User generated content (UGC) and increased consumer engagement is an important feature of the new landscape.One in 10 consumers have submitted content to news websites or blogs,46% of social network users discuss news and events on social media, and63% of US consumers now look for content recommendations online.
Consumers are becoming the most persuasive and powerful influencers in the new digital economy. In fact,recent research from Ipsos suggests that purchase decisions among millennials are more influenced by user generated content than any other form of content or promotion. This is supported by findings that brand engagement is 28% higher when users are exposed to UGC and branded content and advertisers see25% better conversion rate when featuring Instagram images on websites versus branded content.
As a result, today’s savvy publishers are transforming their websites and other digital channels into immersive social hubs that feature the optimal mix of branded content and user generated content, alongside their regular editorial pieces. These hubs are engineered to maximize engagement, drive interaction and boost traffic to campaign and product pages.
A number of media outlets with notably successful user generated content strategies are Bauer Media, Yahoo! and Huffington Post. They regularly create social hubs, sponsored by brands, featuring reader opinions, branded content, interviews with celebrities and reactions around a subject or an event. For publishers, all this engagement means bigger but particularly better revenue.
Savyy brands and publications aren’t too concerned by the current obsession with ad-blocking. They’ve realized years ago that display ads actually intrude on the user experience and fail to engage consumers. Therefore, the rise of ad-blockers is merely an opportunity for brands to adopt a more sophisticated advertising strategy.
Native advertising, branded content and especially user generated content not only side-steps ad blockers, but help brands actually establish a meaningful and engaging connection with their audience. Digital publishers can, and should, be seizing this chance to highlight and improve their content offerings.
Consumers will always find display ads annoying. So why not provide them with better experience and the content they crave?
Richard Jones is the CEO and co-founder of EngageSciences