As the company recently strongly hinted it would, Instagram today announced it will debut advertising on the platform early next month – native advertising, that is.  Aligned with the definition of the term in the research I recently published, the ad creative will be photos from the advertisers’ own Instagram accounts that appear in the feed, differentiated by a “Sponsored” notice in the upper right corner which users can tap on for deeper disclosure.

Just prior to today’s announcement, I discussed the launch with Instagram’s Emily White, director of business operations and Jeff Kanter, product manager. Their approach to monetizing the platform is so careful you could almost characterize it as curatorial. Ten brands were hand picked as launch advertisers based on the “great things” they’re already doing on Instagram: Adidas, Ben & Jerry’s, Burberry, GE, Lexus, Macy’s, Michael Kors, PayPal, and Starwood Hotels.

White says Instagrams’ users come to “be inspired,” and these brands maintain a level of quality that’s inspirational. Which is why the initial metrics for the campaigns will be heavily brand centric: recall, brand lift and awareness. “There’s a lot of value in impressions and views that may not be captured in likes or comments. Instagram will guarantee a certain number of impressions initially, which will vary by campaign. This is a premium brand advertising product. Success is brand lift over a longer period of time.”

The ads will initially appear in the feeds of U.S. users who are 18 and older with very minimal targeting by segment. No social data will be used in targeting, instead broader segments (e.g. male vs. female), “Somewhat like a magazine experience,” says White.

“We’re really focused on maintaining a high bar and will publish quality guidelines,” added Kanter, who explained that users can opt out of ads, Facebook style, on a case by case basis (but not opt out of the entire Instagram advertising experience).

While not having seen this in the wild (the ads don’t launch for another week or so), I’m impressed. We’ve mapped eight critical element for success, and Instagram is apparently conforming to each of them right out of the gate, from disclosure and transparency (that “Sponsored” link) to education (published quality guidelines for advertisers).

Next? Let’s hope we hear from the advertisers by the end of the year with a progress report, as well as lessons learned. This is new terrain not just for Instagram, but for the industry as a whole.

As a research analyst, I just completed a study of native advertising. The report, based on months of research and dozens of interviews, contains eight critical recommendations for successful native advertising campaigns.

We help our clients incorporate these recommendations in their native advertising strategies. What happens when best practices and tried-and-true practices are disregarded or ignored? That’s what iMedia’s editors asked me to share in this article. Not for the sake of schadenfreude really, but as a set of object lessons. So let’s take a look at a handful of native advertising fails and also map them to the whys of their shortcomings.

Best practices matter in native advertising a lot, and soon they’ll matter even more. Recently, 73 percent of Online Publishers Association members said they offer some form of digital advertising, a number that is swelling daily. Spending in the sector is expected to swell to $4.57 billion by 2017, though that’s a figure that bears some scrutiny, given “native advertising” does not yet bear the distinction of a formal, much less universally-agreed upon, definition.

Nonetheless, if we can agree that native advertising is a form of converged media (regardless of whether it appears on a publisher site or a social platform) that combines paid media (i.e., an ad) with owned media (i.e., content that isn’t “advertising-y” in nature), best practices and success elements do begin to emerge.

Trust and transparency

The Atlantic-Scientology debacle is the poster child of native advertising gone horribly — no, hideously — wrong. Under a small-ish “Sponsor Content” box, the site published a sunny and upbeat piece about the extremely controversial leader of the Church of Scientology: “David Miscavige Leads Scientology to Milestone Year.” An uproar ensued, causing the piece to be taken down in short order, and an apology was issued. In short order The Onion followed up with “SPONSORED: The Taliban Is A Vibrant And Thriving Political Movement.”

In a further apology issued the following day, The Atlantic stated, “We now realize that as we explored new forms of digital advertising, we failed to update the policies that must govern the decisions we make along the way.”

What’s a best practice in this area? Disclosure, transparency, and trust are non-negotiable. Period. And come on, we’ve danced this dance more than once: With search engine advertising, paid blogging, and word-of-mouth marketing. Do we really even need to have this conversation? Disclose to readers that it’s a paid placement. Link to the relevant editorial policy. Create a channel for inquiry.

There. That wasn’t so bad now, was it?

Strange bedfellows

The Economist teamed up with Buzzfeed to create a promotional listicle entitled “Dare2GoDeep,” the stories behind the venerable publications’ serious hard news and policy coverage. The piece, and indeed, the pairing, was widely mocked as “inane” and “cringeworthy.” It is kind of hard to draw the line between one of the world’s most respected news magazines and a website known for its lists of all things LOL and feline.

Sales-y

At the heart of native advertising is content marketing, which is soft, not hard, sell. Last holiday season, “A Gift Guide for Surviving Your Family at Home This Holiday” on Gawker Media read more shill than article. The body copy doesn’t really deliver on the headline’s promise, which feels bait-and-switch.

Collaboration and earned media

I hate to single out Buzzfeed again (the publication does so much native advertising so very well), but last August the site was involved in an imbroglio that should have been nipped in the bud rather than allowed to spiral into scandal. A conservative anti-abortion group published its own listicle bashing Planned Parenthood in Buzzfeed’s then-new community section. The post violated Buzzfeed’s community guidelines, yet it wasn’t immediately taken down, causing a media, as well as social media, fallout. The Guardian followed up: “BuzzFeed is taking trolling to a new level by pandering to right-wing nuts.”

Please read the rest of this post on iMedia, where it originally published.

There’s one sure way of telling if a new form of digital marketing is becoming legit: the FTC decides to take a long, hard look at it. And that’s exactly what they have announced they’ll do with native advertising, holding public hearings in Washington on December 4.

We’ve danced this dance before. Back in 2003, I testified at the FTC’s Spam Forum, which led to the enactment of the CAN-SPAM act passed by Congress the following year. The previous year, the FTC published guidance on search engine advertising. In 2000, the FTC published its first guidance on .com Disclosures, aimed at eliminating deception in digital advertising. Guidelines governing endorsements and testimonials (and, by extension, word-of-mouth marketing practices), were published in 2009.

Having published the first independent research report on native advertising just days before the FTC called this public hearing, it’s pretty gratifying to see what was clearly inevitable happy with such alacrity. Almost synchronously with the FTC’s announcement of hearings, brands ranging from the hyper-established New Yorker to not-yet-monetized start-up Pinterest were announcing new native advertising plans and offerings, joining a host of other publisher and social media platforms.

The IAB, anticipating the FTC’s move, already has a native advertising task force at work (disclosure: I’m not an IAB member, but I am a taskforce member).

In December, the FTC hopes to begin to answer questions about maintaining editorial integrity in the face of new advertising products that look a lot like content. The hearings will examine how these messages are presented, differentiated and disclosed to consumers as sponsored content. I’m particularly interested in learning more about consumer perceptions of native advertising (so little research has been conducted in this very nascent discipline), and how disclosures will transfer when native ads are shared and amplified in social channels.

Doubtless much will emerge from the hearings, as well as in the coming months around industry self-regulation for native advertising. (It’s highly unlikely that actual legislation will emerge on the issue.) In the meantime, I’d like to share the recommendations we make in our report on the issues of transparency, disclosure and trust in native advertising:

Transparency, disclosure, and trust: We’ve been through this before, collectively as an industry. As with the early days of search advertising, when paid search results required clear delineation from organic ones, or word-of-mouth marketing and pay-for-play blogging, industry standards will emerge around the disclosure of what’s paid and what’s editorial content on a variety of media platforms in addition to individual publisher policies. In addition to overt disclosure on publisher and social media platforms, a code of ethics is required to maintain editorial objectivity and the boundaries between publisher and editorial work. Until industry self-regulation emerges (the IAB already has a taskforce at work on the issue), it is absolutely imperative all parties err on the side of caution: too much, rather than too little, disclosure.

1. Disclose that the placement is commercial in nature.
2. Link to policies that govern such placement.
3. Provide a channel for inquiry.

This column originally published in iMedia

Not since the legislative debate over spam back in the early part of the millennium has a digital marketing term been so riddled by obfuscation and misunderstanding as native advertising.

A quick search of the term on Google returns an impressive 219 million results, yet to date there’s been no real definition of what marketers, publishers, agencies, social media platforms, or any other players in the digital ecosystem mean when they bandy it about.

With so much discussion centered around native advertising, we felt it critical to define the term, assess the nascent landscape, and evaluate the advantages and disadvantages of this new-ish form of advertising. That is what we have done in research published today.

Based on over two dozen interviews with  publishers, social networks, brands, agencies, vendors and industry experts, Altimeter Group has arrived at the following definition of native advertising:

Native advertising is a form of converged media that combines paid and owned media into a form of commercial messaging that is fully integrated into, and often unique to, a specific delivery platform.

In other words, we believe native advertising lives at the intersection of paid and owned media, and is therefore a form of converged media. ‘Owned’ media is content that the brand or advertiser controls. Paid media is advertising: space or time that entails a media buy.

Does native advertising overlap with established forms of sponsored/branded/custom content? Advertorial? Indeed it does. Often differentiation can entail splitting hairs. Yet the evolution of so many unique platforms and technologies has made forms of advertising truly “native.” A sponsored tweet can be native only to Twitter, for example, just as a promoted Facebook post is native only to that one channel.

Native Advertising: The Pros and Cons

In addition to defining the term, our research looks at how native advertising can benefit the ecosystem players: technology vendors, agencies, social platforms, publishers, and of course, brands and advertisers. Overall, we see opportunities for all players, these being the chief advantages for each player:

For publishers: new forms of premium inventory.

For social platforms: new advertising products.

For brands: new opportunities for attention, engagement, and message syndication.

For agencies: benefits from creative and media opportunities.

For technology: new solutions facilitate and scale both the creative and delivery aspects of native advertising.

The disadvantages? Scale is an issue, and clearly there are (haven’t were been through this before) issues around disclosure and transparency.

As with all Altimeter Group reports, “Defining and Mapping the Native Advertising Landscape” is Open Research. Please feel free to read it, download it and share it.

Tell us what you think.

If you like it, we’ll create more.

Cross-posted from the Altimeter Group blog.

While working toward a definition of what native advertising is, it is equally important to focus on what native advertising is not.

The native part of native advertising is muddy — more on that in a moment. The advertising part is crystal clear. Advertising has always meant renting either time or space from a media company for a commercial message.

Time or space? The time part generally boils down to 15, 30, or 60 seconds (the most common units) from a broadcaster. The space part entails a square, rectangle, or an IAB unit, usually from a publisher — there are out-of-home opportunities for this as well. Advertising, simply, is renting time or space.

It was interesting, therefore, to attend a native advertising symposium as part of New York’s Internet Week and to find that at least half the sessions contained the term “content marketing.” Social media was discussed. Content marketing was discussed. But advertising — the renting time or space part — was hardly mentioned.

I’m willing to accept that content marketing is an enormous component of native advertising. Yet by definition, content marketing is not the advertising part of native advertising.  Here’s a variant definition of content marketing from my latest research report that I published on the subject:

“Content” is owned media created by the brand and published or distributed on media channels the brand controls. Content marketing is the practice of creating and publishing in owned media channels, as opposed to advertising, for which media is always rented time or space. A radical shift in marketing budgets is occurring as companies shift spend from a legacy focus on advertising to investments in content. The trend is toward “pull” rather than “push” marketing and has been greatly accelerated by an explosion of owned media channels — both those “fully owned” (e.g., websites and blogs) and social media channels in which brands largely control their presence and must continually feed with fresh content.

Content marketing, by definition, isn’t advertising. It’s owned media, not rented media. Native advertising, while difficult to differentiate semantically from banded, sponsored, or advertorial content, is a form of a union of paid advertising and owned content.

Where does the rubber hit the road? Disclosure.

Talk about meta: This recent article in The Guardian about content marketing appears to actually be native advertising. Or perhaps branded, sponsored, or advertorial content. It’s hard to say because there is zero information regarding whether or not money changed hands.

Here’s the entirety of the disclosure:

Jonny Rose is product evangelist for idio. The copy on this page is provided by Jugglit, sponsors of the digital entertainment hub.

Did Jugglit pay for this piece or provide free copy? Clearly it sponsors something else — is this entertainment hub part of The Guardian? What is idio’s role in this possible transaction?

I want to know. Don’t you?

The post originally published on iMedia Connection

Transcript

JEFFREY BROWN: And we turn to the blockbuster deal announced today in the tech world: giant, but troubled Yahoo buying the popular blogging site Tumblr. The purchasing price: $1.1 billion dollars. The prize: a fast-growing social media site that features more than 100 million blogs in its network and reaches several hundred million people worldwide.

It was started just six years ago by David Karp, who dropped out of high school to work in the tech field. He will remain as head of Tumblr.

This is the biggest move yet by Yahoo CEO Marissa Mayer, who joined the company just 10 months ago from Google. Today, she wrote on a Tumblr post, “We promise not to screw it up.”

Rebecca Lieb is research analyst of digital advertising and media for the Altimeter Group and joins us now.

Welcome to you.

So, why does Yahoo want to buy Tumblr? What’s the appeal?

 

READ: 5 Questions: Why Yahoo Hopes Tumblr Will Expand Its ‘Coolness’

REBECCA LIEB, Altimeter Group: There are several appealing things about Tumblr. There’s certainly the size of the audience, as you just mentioned, but also, perhaps more than that, the demographics of Tumblr’s audience.

Yahoo has been losing users, losing eyeballs for years now. Tumblr represents the millennials, those 20-somethings who didn’t abandon Yahoo because they probably never aligned with the platform in the first place. This is a group that is incredibly important to the advertisers Yahoo is trying to attract.

JEFFREY BROWN: Explain for our non-Tumblr users in the audience what it is. How has it been able to rise so fast and appeal to so many people?

REBECCA LIEB: Tumblr is a blogging platform that is very, very image-centric. It’s very focused on users uploading photographs.

And this younger demographic is a very, very mobile demographic. These are people who have their smartphones with them at all times. And as anybody with a smartphone knows, it’s much easier to update your status with a quick photo of what you’re doing or what you’re eating or what you’re seeing than it is typing with your thumbs.

We saw a very recent move like this when Facebook acquired Instagram last year, also for a billion dollars, which raised some eyebrows at the time. And Facebook has subsequently redesigned its news stream to focus more on these images, as its users migrate to mobile platforms.

I believe that Yahoo is trying to do very much the same thing. And, in fact, since the announcement of the Tumblr acquisition, Yahoo has announced that they will be giving users substantially more free space on Flickr, also a Yahoo property.

So we’re seeing a big move towards images and a big move towards mobile on Yahoo’s part.

JEFFREY BROWN: In all of these new deals, and this one in particular, the question is still, how do you make money out of it, right? I mean, what would happen in this case? Is it likely we’d see money made through the advertising on Tumblr or what?

REBECCA LIEB: I think that this is a very interesting two-way street.

Yahoo, of course, is a traditional new media company, if you can — to coin a phrase. In other words, they have very interruptive display advertising, the “click here, buy this now” type. Tumblr has been experimenting with what’s called “content marketing” and forms of what’s known as “native advertising.”

This is — these are marketing messages, but they’re more subtly integrated into the interface. They don’t shout at the user. They don’t interrupt the user. They’re part of the stream and they’re meant to attract, rather than to interrupt.

Yahoo for the time being will leave Tumblr alone. If they slap these interactive ads up on Tumblr, the users will probably abandon the property. At the same time, Yahoo is going to learn from these Tumblr products and try and incorporate them into Yahoo’s more traditional properties.

JEFFREY BROWN: When you — go ahead.

REBECCA LIEB: At the same time, Yahoo can introduce Tumblr to larger brands and more traditional advertisers, the P&Gs of the world, the McDonald’s of the world. So, this does have the potential to benefit both parties monetarily.

JEFFREY BROWN: I was thinking, when you were referring to the possibility of users migrating or leaving, apparently, there’s reports that already some of that is happening. But that just shows how fragile this whole system is, right, this ecosystem of companies and where users go.

REBECCA LIEB: Absolutely.

You know, we have seen companies like Yahoo stumble and lose their luster, AOL, MySpace, in periods of times that are less than a decade. It took companies like Pan American Airlines or Ford Motor companies perhaps a century to rise to ascendance and then to lose their luster.

Internet companies can do it seemingly overnight. Marissa Mayer is trying to bring Yahoo back from the brink, as her former Google colleague Tim Armstrong is similarly trying over at AOL.

JEFFREY BROWN: And just briefly, when she writes that post, “We won’t screw it up,” she is writing that because she knows a lot of people remember Yahoo apparently just — doing just that, right, with other acquisitions.

REBECCA LIEB: Not on Marissa Mayer’s watch.

JEFFREY BROWN: Right.

REBECCA LIEB: She is relatively new at the company. She’s been there less than a year.

But, indeed, Yahoo has made acquisitions and screwed them up. So did News Corp. when it acquired MySpace. One of Yahoo’s real challenges is going to be how to keep Tumblr cool when it’s owned by what is very easily perceived by its very young, very hip user base to be a corporate overlord.

JEFFREY BROWN: Rebecca Lieb, thanks so much.

Watch Yahoo Makes Bid for Reboot With $1.1 Billion Deal for Tumblr on PBS.

Native advertising.

Everyone’s talking about it, but what is it, exactly? It has something to do with ads that don’t look like ads, but rather provide a degree of value in terms of being content. In that sense, native advertising is certainly a form of converged media as it combines paid media (advertising) with owned media (content) – often with the goal of generating earned media (social interaction, UGC, etc.).

Yet brands have been paying publishers to run their own content since forever. Does that mean “native advertising” simply a neologism for what we used to call advertorial? Or branded content? Maybe it’s sponsored content?

If native advertising somehow differs from older models of advertorial, sponsored or branded content, where are the lines drawn? Does “native” necessitate some sort of technological framework to carry and/or distribute the content in question (à la products offered by The New York Times, or tech start-ups such as OneSpot or inPowered)? Does it mean a publisher’s in-house agency (think Buzzfeed, Gawker Media) was commissioned to come up with the creative?

Bottom line: The term “native advertising” raises more questions than it does answers.

The value proposition of native advertising is, however, clear in a digital environment of banner blindness and plunging clickthrough rates. Pre-roll ads are skipped or ignored, email subscriber rates are eroding. Given any kind of choice, consumers are saying a clear “no” to interruptive advertising.

Native advertising lies somewhere in bridging the divide between content marketing – a pull strategy – and plain, old fashioned advertising, which is interruptive. Somewhere in its definition is probably the fact of paying for space or time (the “advertising” part) is a fashion that’s “native,” i.e. organic, conducive to the user experience, non-salesy, and offers some sort of value in and of itself as an ad (entertainment, education, utility, for example).

Native advertising’s promise, therefore, is better performing ads – but only if metrics are defined that are “native” to “native.” DM goals likely don’t apply in this case. Highly customized ad solutions mean more revenue for publishers (and boy, can they use it now). Also, deeper creative engagements for agencies, and hopefully, a better user experience for consumers.

The fly in the ointment is that without a real definition of native advertising, it means anything you want it to mean. Or anything whoever’s trying to sell it to you wants it to mean. Confusion in the marketplace is not a good thing (though it can benefit certain constituents).

This is why, as a research analyst, my next project will be to define native advertising, as well as to map the landscape of products and technologies related to the practice. (I’m also part of an IAB taskforce that will work to define the term – it’s therefore important to note the research will be my own work, not that of a committee.)

As this project is just kicking off, I’d love to invite your input. What do you believe native advertising is? Isn’t? What are the important companies in the space? Please let me know, either via email or in the comments section.

I’ll report back soon. Watch this space!

A version of this post originally published on iMedia Connection

Image credit: www.bydewey.com