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Why native advertising and branded content works

In an interview with TechRepublic, Adweek’s Josh Sternberg talked about the blending of editorial and advertising content as a tactic to capture more consumer attention.

TechRepublic’s Dan Patterson spoke wth Adweek’s tech editor Josh Sternberg about the rise of blending editorial and advertising content in the race to capture consumer attention. Watch the video above, or read the transcript of the interview below:

Patterson: Five years ago, the New York Times launched their first native ad. I think it was March or April 2013, and in the media world this was a big deal, because there was a perception, and maybe you can help us understand the perception versus the reality, but there was a perception that native ads could help break down the wall that exists. It exists here at CBS Interactive (TechRepublic’s parent company), and at most media companies, between editorial content and advertising content. So, first, explain to us what native advertising is, where that idea came from, and where are we now?

Sternberg: Sure. So, very simply, and I don’t even know if we still use the term, native advertising, but at five years ago, six years ago, the idea of native advertising was really the atomic unit of a particular platform or media entity, and the ad that can only run on that. So if I buy a Facebook ad, I can’t use that Facebook ad on Twitter, or on the New York Times. We call that native advertising. But that kind of got distorted, so we call content marketing, sponsored content, branded content; it’s all the same thing.

But one of the interesting things about this is not that it was designed to break down the wall between edit and sales. There is a way for publishers … seeing that, back to those CPMs. CPMs were becoming depressed because of advertising technology making it easier to buy cheaper ads. Publishers were like, “Well, what can we do to make more money?” They realized, “Well, we’ve got something as publishers that advertisers want, and it’s not our audience. It’s our storytelling capabilities. It’s our journalism. So, let’s create a premium advertising product that we can go out and charge a lot more money for, and get better margins on it, so that way we can give something to the audience that isn’t a crappy banner ad, but is actually really good journalistic style content for that audience.”

And just for disclosure, I used to do this at the Washington Post, and NBC News, so my career path is kind of ping-ponged between the editorial side and the business side. Now I’m back on the editorial side.

Patterson: Where do companies, then, like NewsCred, Contently; we see branded content, not just on a publisher’s website, but you might see it in an airplane.

Sternberg: Yep.

Patterson: You might see branded content in a restaurant. What is the relationship between native ads, branded content, and these other distribution outlets?

Sternberg: So I think the distribution outlets, like the NewsCreds, Contentlys, Nativos, and, again, I’m not … There are so many, I’ve kind of lost track. Those distribution companies kind of came up as a way to mollify the naysayers of branded content who would say that branded content can’t scale; meaning, if I write branded content for the New York Times, it can only run on the New York Times, because it’s designed, and created, and produced for the New York Times, which is why it’s a premium product. So a lot of folks said, “Well, you may not like banner ads or display ads, because they don’t really work. You get a 0.01% click through rate. But they scale.” You can see a banner ad, the same banner ad on millions of sites. So these companies rose up, basically, as a way to spread sponsored content, native advertising, branded content, marketing contents, what have you.