More industry consolidation will lead to native advertising success

Native advertising means one thing to Brits and another thing to a Chinese audience. Europeans consume content differently than Americans. For native content to truly go native, understanding and working with cultural differences is pivotal.

As a German company with established markets around the world, we must take a number of challenges into account when entering new markets. Native formats are shaped by a diverse set of influences in different territories, from the technology that underpins advertising infrastructure to the cultural differences that shape consumer attitudes. In the US, programmatic advertising, mobile and video are growing; in China mobile internet traffic, and e-commerce in particular, has overtaken desktop.

Cultural differences are equally important; crossing barriers can be tricky, and widely different consumers demand widely different things from online and mobile. As a result, there are many different formats for advertisers to negotiate and challenges to overcome.

By establishing a more consolidated industry through partnerships between native advertising companies and standardising native ad formats, native advertising can fulfil its global potential and become a universal language for brands across the world.

One of the biggest challenges in every market we operate is that advertisers are not as ready as they could be to take full advantage of plista’s native offering. Publishers are embracing native, and are looking into ways to make the shift on a wider scale. They understand that classic display banners are not the future and are looking for new, more sustainable ways to monetise their sites and increase visitor loyalty. While advertisers have content and can tell great stories, they are notoriously bad at promoting it. As a result, potential remains untapped. Bridging the gap between producing content and becoming a true storyteller is still a challenge.

Making a bottom-line impact

Content to conversion needs to be a bigger focus. This is a specific way of selling a product by storytelling. As an example, a national tourism agency can promote a destination, producing content such as ‘the 10 most interesting places to visit in…”. At the end of the article they might give recommendations for booking hotels or trips, to create conversions. The idea is to advise, educate, inspire or entertain the consumer to then create a conversion through high quality content. Five or six years ago the trend was to advertise the ‘best offer’ for something; now it’s more about conversions through ‘you might be interested in this?’ It’s a much more implicit, unobtrusive sell based on providing true value for the user.

But the stories alone are not enough. Storytellers need data to be able to tell their story to the right people at the right time, and to effectively apply data is crucial for this. We need to find out what kind of data the advertisers – as well as publishers – need for successful marketing.

In this context, a huge challenge for the industry is consolidating data and insight, and moving from ‘big data’ to ‘smart data’. Brands need to read the data they collect in a more effective way and make it part of the advertising strategy. A different KPI is required because so much valuable insight about the consumer – what people read, how long a story should be and where it should placed – still remains unused.

Standardise formats

At the APEC (the Asia-Pacific Economic Cooperation forum), meeting with agencies and publishers in China highlighted to us their vastly different way of doing things. User behaviour in China is different not least because desktop is becoming non-existent. In 2015, 71% of urban online shoppers used mobile phones to shop online, according to Nielsen. In Europe we might read or search for something on mobile but the majority of us still make our purchases on desktop. The Chinese site Alibaba is a way of life over there; it’s a completely different online behaviour.

We need to have a standard online and mobile native format across territories. To become programmatic you need to be standardised. There are very different rules in terms of labelling native content. At the moment, native is a lot of different things for a lot of different people. Consolidation will need to happen. IAB’s definition of six core native ad formats was the first step in this direction.

Plista positions itself as a one-stop solution to offer formats that work for your individual needs as an advertiser, so we must customise to the needs of every market. We watch and listen to what individual advertisers need to reach their target groups. For example, in Germany we don’t have so many in-feed publishers, but for the Chinese market we developed an in-feed format that was also rolled-out globally. But, wherever in the world we are, to tell our stories we clearly mark everything as advertising or sponsored content. We always show where someone has paid for content. It’s about being trustful and transparent for everyone – users, advertisers and publishers.

By talking to a large network of international experts, you can learn differences and explain local ways of doing things. It’s a case of understanding carefully and doing your homework, and not putting our German way of doing things onto everything. The huge success of plista confirms we are on the right track.

There have been companies like plista in the market for seven or eight years, but during that time nobody has talked about native advertising… now we have lots of native advertising companies offering many small steps in the native advertising daisy chain. In the next few years, a lot of these providers will find themselves partnering together because the space won’t be big enough for as many companies as we have in it right now. This development will also boost the standardisation of formats and consolidation of data and native advertising can become full circle.

A huge explosion in mobile and programmatic is coming. We have video, we do mobile, we are programmatic and native – as a one-stop native programmatic provider we cover all the disciplines from a single source.

Originally featured in Camapign as part of the road to DMEXCO series:

Author: Lucie Feldt