October 2014

NATIVE ADVERTISING ROUNDUP

Native advertising, which some marketers, publishers and readers
see as little different than the old advertorial concept, is still nascent
enough that its difficult for many to defineand has different definitions
depending on who you ask. To help you stay on top of the latest trends in
native advertising, eMarketer has curated a roundup of some of our latest
coverage, including statistics, insights and interviews.

presented by

NATIVE ADVERTISING ROUNDUP

Overview
Native advertising, which some marketers,
publishers and readers see as little different than
the old advertorial concept, is still nascent
enough that its difficult for many to defineand
has different definitions depending on who
you ask.

US Native Ad Spending, 2013 & 2018

billions
$9.4

Market research firm Mintel defined native ads as paid

media where the ad experience follows that natural
form and function of the user experience in which it is
placed, and estimated that spending would rise more than
sevenfold between 2013 and 2018.
And media buyers agree: While nearly three-quarters
already employ native advertising, two-thirds said they
planned to use them more in the future. Just 7% of US
media buyers surveyed by TripleLift and Digital Media
Review said they would not be using native ads in
the future.

$1.3

2013

Note: defined as a form of paid media where the ad experience follows the
natural form and function of the user experience in which it is placed;
CAGR (2013-2018)=48.5%
Source: Mintel as cited in press release; eMarketer calculations, Aug 5,
2014
177800

www.eMarketer.com

Current vs. Future Plans to Employ Native Advertising

According to US Media Buyers, May 2014
% of respondents

About two in five of these media buyers also said they

thought it was possible to bid programmatically on native
advertising, though a majority were skeptical of this activity.
Respondents said their top priority when evaluating media
for native ads was the audience, and that editorial content,
followed by images and user-generated content, were the
most compelling content types to use for native ads.
The benefits of native advertising are clear to many
advertisers, and include, according to research from
Advertiser Perceptions and Purch, increased brand
awareness, the opportunity to tell a product story and
increased awareness of specific products or services.

2018

No
27%

Same
26%
Yes
73%

Currently employ

No
7%

Yes
67%

Plan to employ more

in the future

Source: TripleLift and Digital Media Review (DMR), "Digital Media Buyers Get
Native: How Agency Executives Are Leveraging Native Advertising to
Connect with Customers," June 23, 2014
178627

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But obstacles remain, and they can seem bigger than the
benefits. The same survey found that insufficient reporting
and ROI metrics were a problem for 46% of US advertising
decision-marketersfar more than the 31% who enjoyed
increased brand awareness. There were also problems
aligning campaigns with marketing objectives for 38% of
respondents. Just 13% said nothing was standing between
them and the perfect native ad campaign.

Native Advertising Roundup

Copyright 2014 eMarketer, Inc. All rights reserved. 2

Paid Social Ads Convert More Customers

Nearly nine in 10 social content interactions are in the middle of the path
to purchase
The digital marketing world has been abuzz
for months about Facebooks dialing-down of
organic brand content in the average users
newsfeedand the declining importance of
the like or page follow in its wake. But Q1
2014 research by Convertro and AOL Platforms
suggests that even if Facebook is doing what
it can to push brands from an earned into a
paid media model, paid ads on social networks
do have better conversion rates than
organic content.

Conversion Rates for Paid vs. Organic Social Network

Advertising Worldwide, by Site, Q1 2014
Twitter
3.9%
1.5%
Facebook
3.1%
3.0%
Pinterest
0.2%
1.1%
Total
2.8%
2.3%
Paid

On Facebook, the jump in conversion rates among

Convertro platform users worldwide was just 0.1
percentage point, but on Twitter, ads were more than twice
as likely as organic tweets to convert users. On Pinterest,
the situation was reversed, but overall, brands using
Convertro saw around a 25% lift in conversions with paid
social ads vs. organic social content.
For the most part, though, social media is not the last
or only touch for consumers on the path to purchase.
According to Convertros figures, 87% of interactions with
social content were a middle touch, while just over one
interaction in 10 was either the last or only touchpoint.
Still, some social venues are more geared toward
conversion than others. YouTube stood out in Convertro
and AOLs research as the most likely social media property
by far to turn a prospect immediately into a customer
likely because video content like that hosted on YouTube
can provide 100% of the information an online shopper
needs to make a purchase decision.

Organic

Note: represents data on the Convertro platform, broader industry metrics

may vary; among clients who have invested in paid social media
Source: Convertro and AOL Platforms, "Myth-Busting Social Media
Advertising," Sep 4, 2014
179163

Stage of the Path to Purchase During Which

Customers Worldwide Are Most Likely to Interact
with Social Network Advertising, by Site, Q1 2014
% of total among Convertro clients
YouTube
18%

Native Advertising Roundup

54%

Facebook
11%

14%
69%

14%

10%

10%
2%

LinkedIn
11%

86% 2%

Google+
7%

76%

10% 7%
2%

Pinterest
6%

83%

8%
1%

Tumblr
5%

89% 5%

Twitter
2%

92% 4%

First touch

The distance between a social touchpoint and a conversion

also depended on the type of product being purchased.
The research found that more impulsive purchasessuch as
subscriptions to services like Birchbox or Dollar Shave Club,
personal care items and local serviceswere more likely to
appear as social ads and lead immediately to a conversion,
as the last or only touchpoint on a consumers journey.

www.eMarketer.com

1%

Middle touch

Last touch

Only touch

Note: represents data on the Convertro platform, broader industry metrics

may vary; includes both paid and organic; numbers may not add up to
100% due to rounding
Source: Convertro and AOL Platforms, "Myth-Busting Social Media
Advertising," Sep 4, 2014
179161

www.eMarketer.com

Copyright 2014 eMarketer, Inc. All rights reserved. 3

Whats Next for Native Ads?

Social networks, media publishers see huge potential in native ads
Native advertising is flourishing across social
media, content portals, news properties, videosharing sites and streaming services. Increased
mobile use of these venues has fueled much
of the growth, since native ads work best in the
content streams that people tend to access on
smartphones and tablets, according to a new
eMarketer report, Native Advertising: Difficult to
Define, but Definitely Growing.
Perceptions about what constitutes native advertising are
as varied as the ads themselves and the places where they
appear. Theres still disagreement over basic terminology
such as native advertising, sponsored content and
branded content. Some make distinctions among those
terms, while others use them interchangeably.
However, perceived effectiveness is fueling marketer
investment in native advertising. In December 2013, BIA/
Kelsey estimated native ad spending on social media
alone would grow from $3.1 billion this year to $5.0 billion
in 2017. As a percentage of total social ad spending, it
projected native would rise from 38.8% in 2014 to 42.4%
in 2017.

included branding and brand affinity. Purchase intent and

lead generation were further down the scale, indicating
that native ads (at least on mobile) are more a branding
play than a direct-sales driver.
These findings are in line with what marketers and other
ad industry experts say is one of the qualities that makes
native advertising especially appealing: its ability to engage
the user.
US Social Media Ad Spending, by Type, 2012-2017
billions and % change
Display spending
% change

2012

2013

2014

2015

2016

$2.9

$4.3

$4.9

$5.5

$6.1

$6.8

48.3%

14.0%

12.2%

10.9%

11.5%

Native* spending
% change

$1.4
-

$2.4

$3.1

$3.7

$4.4

$5.0

71.4%

29.2%

19.4%

18.9%

13.6%

Note: includes desktop and mobile platforms and local and national
spending; excludes social marketing/measurement platforms and services,
social commerce and virtual currency; *branded content integrated
directly within a social network experience
Source: BIA/Kelsey, "Annual US Local Media Forecast: Social Local Media
2012-2017 (Mid-Year Update)"; eMarketer calculations, Dec 18, 2013
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Leading Marketing Objectives for Native Mobile Ads

According to US Digital Advertising Professionals,
Aug 2013
% of respondents
Awareness

For media publishers, native advertising represents an

opportunity to reverse the tide of flat or declining revenues.
eMarketer estimates US print ad spending will decline from
$32.16 billion in 2014 to $31.29 billion in 2018. Digital ad
spending on newspapers and magazines will increase to
$8.41 billion by 2018, from $7.48 billion in 2014, but these
gains will still leave the industry essentially flat for the
forecast period. With these numbers as a backdrop, its
easy to see why media companies are so eager to create
new revenue streams through native ads.

2017

84.4%

Branding

67.5%

Brand affinity

53.2%

Purchase intent

16.9%
Loyalty

33.8%
24.7%

Customer acquisition

24.7%

Thought leadership

Lead generation

16.9%

Note: includes tablet ads

Source: Sharethrough, "2013 Native Media Survey Results," Sep 16, 2013
164444

www.eMarketer.com

Brand marketers and agencies do not have the same

urgency as publishers, but they are just as eager to gain an
edge over their competitorsand native offers a way to do
that. In an August 2013 Sharethrough study, awareness was
the top marketing objective for native mobile ads among
US digital marketing professionals. Other leading objectives

Native Advertising Roundup

Copyright 2014 eMarketer, Inc. All rights reserved. 4

Lenovo Joins Forces with NFL and The Onion for Video Series

Kevin Berman
Director, Advertising and Marketing Services
Lenovo

Having a clearly defined brand is essential for

marketing objectives, and digital video is no
exception. Kevin Berman, director of advertising
and marketing services at computer and
consumer electronics manufacturer Lenovo,
spoke to eMarketers Danielle Drolet about best
practices for digital video advertising.
eMarketer: What is Lenovos audience target for its
video advertising?
Kevin Berman: Lenovo defines itself as the brand
for those who do. We work to understand where our
audience is spending much of what we have defined as
their do timethe time that they spend on work, projects
and passions that are really important to them.

Berman: Fantasy football players are some of the biggest

doers out theretheyre incredibly passionate and
engaged about the sport. There were a couple of different
objectives here: to engage with as many millennials as
possible, but to also cast a wide net for audience. Also, to
increase Lenovo brand recognition and association as the
official computer sponsor of the NFL.

While the audience recognizes that

advertisers are going to pay to reach them,
you can do it in a way that feels more organic
to what content they normally consume.
Ultimately, the series was a success. The episodes and
additional social video content garnered over 13 million
views, and weve renewed it for season two.
eMarketer: What have you done for mid-to-lower funnel?
Berman: An example would be some of our product-led
videos. We use those videos when we run on comparisonshopping engines like CNET, PC World, etc., in addition to
Lenovo.com, email and our social channels.

For millennials, in particular, the work day is 9am to 5pm,

but their do time is often after that. Our objective is to
understand and reach people in those moments that
matter to them, and using video is at the heart of reaching
and engaging millennials during their do time.

In terms of best practices, you need to have well-thoughtout messaging and product strategy so that you can
dynamically update and refresh content ... in unison with
what your direct-response teams are doing. You dont want
there to be a disconnect in your brands voice.

eMarketer: What levels of the funnel do you focus on to

reach your audience?

eMarketer: What is most important when it comes to the

creative and storytelling in video ads?

Berman: We have different kinds of digital video programs

for different parts of the funnel.

Berman: When we created Tough Season with The

Onion, authenticity was the most important best practice.
If youre working with a publishing partner on your story,
you have to really think about the tone, and make sure that
it matches what the audience has come to expect from
that publisher.

In the fall of 2013, we launched a web series called Tough

Season in partnership with The Onion and DigitasLBi. It
was a mockumentary-style web series that was also a
love letter to fantasy football. It featured several prominent
NFL players as guest stars, and a never-before-seen level
of real-time social engagement between a brand, series
characters, NFL players and teams and fans. This was an
upper-funnel program.
eMarketer: What were the objectives of the campaign?

Native Advertising Roundup

Your content should feel native to that partner. That way,

while the audience recognizes that advertisers are going
to pay to reach them, you can do it in a way that feels
more organic to what content they normally consume.
And itll drive a higher likelihood of engagement and more
positive reception.

Copyright 2014 eMarketer, Inc. All rights reserved. 5

Lenovo Joins Forces with NFL and The Onion for Video Series (continued)
eMarketer: How do you decide whether to develop new
content or use repurposed TV creative?

eMarketer: How do you target? By context or by

targeting audiences?

Berman: When youre creating a new campaign, you

need new creative to help complete the story. Otherwise
youre force-fitting for your program. We dont subscribe
to matching luggagewe subscribe to the notion of
original storytelling, and the role that creative plays in that.
Unfortunately, if youre trying to be unique and original in
the digital space, repurposing TV creative could potentially
come across as force-fitting.

Berman: There isnt just one silver bullet for targetingits

not an either/or dynamic. We balance who were buying
against, figuring out how to reach them where they are
and what their behavior is. That way we can optimize
our programs based on engagement, response, sharing
and more.

When youre creating a new campaign,

you need new creative to help complete
the story. Otherwise youre force-fitting for
your program.
The best practice is to create a custom original program
with custom creative. That said, there are a lot of
challenges there in regards to time, budget and resources.
Its a lot more work to do around orchestrating and
collaborating with your client team, partner/publisher team
and agency team to create a well-thought-out program
from launch to completion.

Native Advertising Roundup

For example, well work with partners like Google,

AOL, TubeMogul, and others to buy against our target
audiencemillennials. Meanwhile, we work with partners
like BuzzFeed and CNET on contextual targeting. Its a
combination method.
And we leverage retargeting in video to drive sales,
working closely with our ecommerce team to integrate our
in-market activity and capitalize on brand opportunity.

Copyright 2014 eMarketer, Inc. All rights reserved. 6

Media and Entertainment Ad Spending 2014: CBS on Its Interactive

Native Ad Program

Christy Tanner
Senior Vice President and GM,
Media Group
CBS Interactive

Content and brand marketing helps CBS

Interactive advertisers create more curated
experiences for consumers. Christy Tanner, senior
vice president and general manager of Media
Group at CBS Interactive, spoke with eMarketers
Rimma Kats about the rise of native advertising
and what marketing channels its advertisers tend
to choose.
eMarketer: How does native advertising and content
marketing fit into the media and entertainment ad mix?
Christy Tanner: I see native advertising and content
marketing as two different things. One of the challenges
we face in the industry right now is that the definitions
of those terms are different from company to company
and brand to brand. The brands that I oversee are mostly
entertainment-related, and in the entertainment space,
the line between what is content and what is advertising is
inherently blurred.

add television shows, movies, sports teams or actors to a

favorites list that we call the Watch List. We sold over 200
Watch List native ad campaigns in the last two years and
we have resold them to the same advertisers because
theyre very effective ads for those marketers.
The dollar that the marketers spend on a Watch List native
ad unit is a dollar that they will see a return on for the life of
that movie or TV show. When somebody has a call to action
to add that show to their Watch List, it will stay on their
Watch List until they take it off.
eMarketer: What is the mix between branding and direct
response advertising in media and entertainment?
Tanner: Most of the campaigns within CBS Interactive fall
more in the category of branding than direct response, and
we certainly have tons of data throughout the company
that demonstrates how those branded campaigns
drive sales.
eMarketer: In terms of mobile, are advertisers turning to
smartphones more than tablets to run their campaigns?
Tanner: Our users are increasingly on multiple devices.
The percentage breakdown of smartphones to tablet to
website is pretty similar to what were seeing on the wider
industry trend.

Content marketing has always been part of the ad mix in

the entertainment space and what were seeing now is
that something thats an organic and integral part of the
entertainment industry is expanding to other verticals.

A soda brand that wants to target 18- to

24-year-olds can curate a channel of TV
shows and full episodes that appeal to
that demographic.

We sold over 200 Watch List native ad

campaigns in the last two years and we
have resold them to the same advertisers
because theyre very effective ads for
those marketers.

Our smartphone and tablet apps are very similar products,

and the ad mix, in terms of the mix between native ad
offerings and more standard or rich media offerings, is
more or less the same between smartphones and tablets.

eMarketer: Is CBS Interactive investing in

native advertising?
Tanner: We offer native advertising on TV Guide, including
on our mobile apps. The native ad units allow users to

Native Advertising Roundup

eMarketer: What video advertising opportunities do you

offer advertisers?
Tanner: TV Guide has produced a mix of editorial videos
for years and we allow advertisers to buy pre-roll on TV

Copyright 2014 eMarketer, Inc. All rights reserved. 7

Media and Entertainment Ad Spending 2014: CBS on Its Interactive Native Ad

Program (continued)
Guide-produced videos, but we also allow advertisers to
curate channels within TV Guide.
For example, a soda brand that wants to target 18- to
24-year-olds can curate a channel of TV shows and full
episodes that appeal to that demographic. We also curate a
channel of a marketers own branded content. Weve done
a curated channel for AT&T, which features ads starring
Will Arnett.

Native Advertising Roundup

There are other ways to do it as well. State Farm Insurance

wanted to sponsor movie trailers for Oscar-nominated
movies and we created a channel of Oscar-nominated
movie trailers sponsored and brought to you by State
Farm. There are lots of ways that weve incorporated
advertisers into the mix and upgraded organic, entertaining
experiences for consumers in doing so.

Copyright 2014 eMarketer, Inc. All rights reserved. 8

MEDIA VOICES: HuffPost Offers Unique Mix of Native Formats

for Partners

Tessa Gould
Director of Native Advertising and
HuffPost Partner Studio
The Huffington Post Media Group

To AOLs Huffington Post, native advertising

is the next generation of content marketing.
Tessa Gould, director of native ad product for
The Huffington Post Media Group, spoke to
eMarketers Danielle Drolet about the online
publications variety of ad units, and natives
advantage over display.
eMarketer: Youve been involved in native advertising for
some time. How did it start?
Tessa Gould: Before I joined the team, back in 2010,
Huffington Post launched a dedicated hub in partnership
with IBM called Smarter Ideas. We still have that
partnership with IBM, where we feature relevant editorial
content on breaking developments in technology. In
addition, we supplement that hub with custom native ads
that we create for IBM, allowing them to align themselves
more directly with the topics of interest. This can be blogs
from thought leaders at IBM or their partners on cloud
computing, healthcare, green initiatives, etc.
eMarketer: Whats your approach today?
Gould: The core of our approach to native remains
unchanged, that is, to create quality content experiences
that are brand-aligned, fit with our editorial voice and
resonate with our readers. We have innovated along
the way, adding new formats and enhanced targeting
capabilities, and expanding the team. Earlier this year, we
rolled out a cross-platform offering to ensure that not only
the sponsors native content, but also their surrounding
ads, reach the relevant readers across all screens.
eMarketer: In what ways is your native ad program
different from your competitors?

Native Advertising Roundup

Gould: One of our key points of differentiation is our

diverse product suite. We have 15 native content formats
available for advertisers and will work with brands directly
to determine the best format to convey the particular
storybe it an interactive infographic, a feature article, a
quiz, a debate or a commerce-driven LookBookthe list
goes on.
Technology is another major point of differentiation. Unlike
many of our competitors, we serve our native content
through our ad server. This means were better able to
control delivery and ensure that the content reaches
its intended audience by applying the same targeting
capabilities that we utilize for our display ads to our native
content. Ultimately this leads to better engagement.
We also pair our native content with display. Not because
we have to, but because we have found that the
combination of native content and display ads (from the
relevant sponsor) on the same page leads to much greater
lifts, 2 to 3.5 times higher for key brand metrics such as
brand recall, favorability and intent to purchase vs. native
content alone or display alone.
eMarketer: Who produces the native advertising content
that runs on your platform?
Gould: The HuffPost Partner Studio is a mix of content
strategists and ad people with editorial backgroundsa
number of them have come directly from The Huffington
Post newsroom. We also have social media strategists and
are currently looking for a dedicated marketing specialist.
We have a designer and are looking to add a video expert.
Theyre all creative. Were essentially an in-house creative
agency, geared to help brands play on that platform.
eMarketer: By what metrics are your advertisers gauging
the success of native ad campaigns on your properties?
Gould: The No. 1 [key performance indicator] that were
looking for with the native content is engagement. Many
engagement metrics that we use are the very same
metrics that generalists in our newsroom use in their
own content.

Copyright 2014 eMarketer, Inc. All rights reserved. 9

MEDIA VOICES: HuffPost Offers Unique Mix of Native Formats for Partners
(continued)
The best-case scenario is that you want someone to read
the copy and then take it into multiple social actions.
Some people share content without reading it. But, for the
advertiser to really see improvements in brand favorability,
the reader needs to be actually reading and consuming the
content, as well as sharing it.

The HuffPost Partner Studio is a mix of

content strategists and ad people with
editorial backgroundsa number of them
have come directly from The Huffington
Post newsroom.
eMarketer: In December, you estimated that native
advertising revenue in 2013 would rise by 47% over 2012.
Did you hit the target?
Gould: We did hit that target. Q4 actually ended up being
our largest quarter since we launched native in 2010. Not
only did we see growth in revenue, but we also witnessed
strong growth in both the average deal size and the
number of native campaigns soldup 63% year over year.
eMarketer: Many people have expressed skepticism
about native advertising because it blurs the lines between
advertising and editorial. Whats your take on this so-called
slippery slope?
Gould: This highlights the importance of labeling and
disclosure because that protects both the brand and the
publisher, and combats against this so-called slippery slope.
Ultimately, at the end of the day, if the content is labeled
and disclosed and its good, people are going to consume
it like they would any other content. The fact that its
sponsored should hopefully not make a difference.

Post and many others in the industry are clearly disclosing

this, not only for legal reasons, but to maintain the trust
and editorial integrity.
The industry has been doing a great job at setting forth its
own native advertising guidelines, including the Interactive
Advertising Bureaus native advertising playbook. Today,
the industry is in a really great position to know what works
for its platforms and for users, while the FTC has a really
important role in regulating advertising.

The FTCs focus has been on making sure

that the native ad is clearly disclosed
and labeled.
I attended the FTC native ad workshop in December
2013, and it was a great forum for discussing the issues
surrounding native advertising. The FTC is doing its job, but
its not sure whether additional guidance in this area would
be helpful. Its a bit of a wait-and-see area, but publications
and players are taking responsibility for their own content.
eMarketer: What wording do you use in your native ads to
convey that theyre not editorial content?
Gould: With our promotional or article preview units we
will say, Presented by, such as Presented by Chipotle,
Presented by Chanel or Presented by Bravo.
Then, when you click into the article page, that same
language appears at the top of the article. The advertisers
ads will appear around the content, and then, depending
on the content or the advertiser, there may be additional
messagingeither within the content or perhaps in a
social wayand we may integrate a campaign hashtag
or brand.

eMarketer: The US Federal Trade Commission (FTC) is

looking into the possibility of regulating native advertising
to avoid misleading consumers. What do you make of
this effort, and in general of the role of the government in
regulating advertising?
Gould: The FTCs focus has been on making sure that the
native ad is clearly disclosed and labeled. The Huffington

Native Advertising Roundup

Copyright 2014 eMarketer, Inc. All rights reserved. 10

SAP Sees Native Ad Space as the Industrys Kumbaya Moment

Tim Clark
Head of Brand Journalism
SAP

After three years and more than six million

page views, software firm SAP maintains that
its dive into the native advertising space
through the Forbes BrandVoice content-sharing
platformhas been worthwhile. Tim Clark, head
of brand journalism at SAP, spoke to eMarketers
Danielle Drolet about its pairing with Forbes,
key metrics to track and just how involved with
native advertising he thinks the US Federal Trade
Commission (FTC) needs to be.
eMarketer: How do you define native advertising?
Tim Clark: It means a lot of different things to a lot of
different people. We look at it as an opportunity to connect
with an audience that may not be familiar with SAP.
Ultimately, native is about brand journalism and getting
the people, the profiles and the personalities out there. A
lot of this is pull marketing. People start reaching out to
them, meetings are set up, sales cycles are kicked off and
all that good stuff starts happening from there.
eMarketer: Whats key to the success of your native
advertising effort with Forbes BrandVoice program?
Clark: What it comes down to for us is being authentic.
With Forbes, we dont assign a bunch of content to
freelancers or agencies, then publish it and see what
happens. We work very closely in-house with teams of
writers. It works for us when we can let people tell the
story that they want to tell and be authentic. Then we
cultivate the talent in-house.

Advertisers, marketers, publishers and

writers are convening together. Were all
singing Kumbaya together now.

Native Advertising Roundup

Typically, we publish content first to some of our brand

sites. For example, we publish first on our SAP community
network. The best of that content then gets [published] to
the Forbes platform. Thats the reverse idea there, but it
works for us because we want to create some connective
tissue. At the bottom of our pieces on Forbes, youll
notice the notation, This story originally appeared on SAP
Business Trends, which is SAPs own branded platform.
eMarketer: By what metrics are you gauging the success
of your native ad campaigns?
Clark: We look closely at the basics. Overall page views
are still very, very important to us. If were not getting a
healthy number of page views, then something may not
be working well. Unique visitors and social shares are also
important to us.
The Forbes platform provides a nice back-end look into
how each post is doing. Theyre getting more robust with
those capabilities for BrandVoice partners. For example,
they have been updating their platform so that we are now
able to see where a post might have started to go viral. We
can look back and [identify] the first person who kicked
it off.
eMarketer: The US Federal Trade Commission (FTC) is
looking into the possibility of regulating native advertising
to avoid misleading consumers. What do you make of
this effort, and in general of the role of the government in
regulating advertising?
Clark: Its a good idea for the FTC to educate themselves
and figure out whats going on. But Im not sure it needs to
be regulated to the extent that the government would need
to get involved.
For example, Forbes does a very, very good job of
distinguishing the content that is paid for. It says Forbes
SAPVoice on our content. Its a little moniker right next
to the story that follows the reader around everywhere
on Forbes. It goes so far that if I were to comment on
somebody elses story on Forbes, it clearly says that Im
an advertiser.

Copyright 2014 eMarketer, Inc. All rights reserved. 11

SAP Sees Native Ad Space as the Industrys Kumbaya Moment (continued)

Id like to think that the clickthroughs that
we get on stories that we publish are really
the new clickthroughs of banner ads.

blog, to download a white paper or whatever it is youre

trying to accomplish. Thats what you want anyway. Why
not do more of that?

Those things make sense and theyre good enough. If too

much regulation happens it might spoil some of these
great collaborative conversations that are taking place right
now. Advertisers, marketers, publishers and writers are
convening together. Were all singing Kumbaya together
now. Its all blending. I dont think thats such a bad thing.

eMarketer: Whats your outlook for this form of

advertising for SAP and the advertising industry as
a whole?

eMarketer: Why does native advertising seem to be more

effective than display or banner ads?
Clark: Id like to think that the clickthroughs that we get
on stories that we publish are really the new clickthroughs
of banner ads. Those are what you want. You want the
engagement. This has been happening for a while.
Many of the static banner ads that you see, for whatever
reason, dont work anymore. They could be perceived as
a little old school, or even distracting. Its really about the
story, the people reading and clicking, commenting on
them, even going to the call to action at the end of the

Native Advertising Roundup

Clark: Its happening now, and is going to become a more

regular part of the media landscape. From my perspective,
its very effective and everybody wins. You cant ignore
those types of things, especially if the publishing industry
is looking for new revenue streams and looking to revamp
their business models.
Business is one great way to do that. There are some
regulation concerns and people are wondering whether
[native advertising] is from an advertiser or not. There
probably could be more scrutiny [for some of this content].
But if youre working with a partner like Forbes, there are
no issues as far as SAP is concerned.

Copyright 2014 eMarketer, Inc. All rights reserved. 12

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