Native advertising has evolved from an experimental technique to a core marketing strategy for many brands. Despite being paid media, native advertising may become a significant source of revenue for public relations agencies.

Native advertising is a form of paid media where the ad experience follows the natural form and function of the media source where it appears. In other words, it’s paid advertising that looks like editorial content.

Because it’s paid media, clients are inclined to turn to their advertising agencies to produce native ads. In fact, the content and communications strategies of effective native advertising more resemble PR storytelling than product advertising. PR departments and agencies, therefore, may be more adept at crafting native advertising than their advertising counterparts. On the other hand, advertising departments and agencies are best-suited to negotiate the media buy.

UK Survey Results

A survey of PR agencies in the UK indicates that nine out of 10 see native advertising as an opportunity. Three-fourths of agencies believe they should be the best choice to create and distribute native advertising content for brands.

The survey commissioned by native advertising platform Adyoulike contacted senior directors and heads of digital at 76 top PR agencies in the UK. About half now offer native advertising solutions and 19% plan to do so.

“The PR sector should be doing more with native advertising because it’s all about content, said Francis Turner, UK managing director at Adyoulike. “After all, those agencies create eye-catching content every day. PR firms should be aiming for a larger slice of the content marketing pie and native is a great way for them to get it.”

Native Ad Spending to Grow in 2016

A Giant Media survey of Los Angeles and New York agencies revealed that 68% of advertisers plan to use native advertising in 2016, the second most after social media marketing at 75%. Out of those who used native advertising previously, 86% plan to spend more on the format in 2016. Last May, Business Insider projected that native ad spend would reach $21 billion in 2018, up from just $4.7 billion in 2013.

Some advertisers will divert funds from other marketing channels. For example, 68% of respondents will decrease their email advertising budgets this year.

“It’s clear that the brands that have tried native advertising were pleased with the results, which is why they’re increasing their spends, and this validation seems to be encouraging late adopters to join the party as well,” said Giant Media’s Vice President of Operations Ben Arnold.

The survey also found that:

  • Cost was the most important factor when choosing a native advertising platform (58% of respondents) followed by “reach/scale” at 55% and “publisher network” at 50%.
  • About a third of respondents indicated that content creation capabilities were important when selecting a vendor to create a native ad.
  • 65% indicated that the biggest pain point in dealing with native advertising is the “difficulty to track/lack of reporting.”
  • 64% said there are “too many moving parts/too customized.”

A Threat or an Opportunity

PR can view native advertising as either a threat or an opportunity, says Dominic Weeks, vice president at Shift Communications. PR could retreat behind earned media or lunge for a piece of the native advertising pie.

“PR professionals should take heart that we specialize as storytellers in helping organizations to shape their marketing messages into wider trends and interesting storylines that fit the editorial agenda of media,” Weeks writes. “Our focus as PR pros will remain on building storylines that have editorial merit in their own right, but we will also need to recognize when promotion of content, via native or social, can truly enhance campaigns.”

Research shows that many viewers remain confused about native advertising. Many are not sure if they are ads or regular articles and become disillusioned if they learn content they thought was a regular article was really an ad. To avoid that confusion, the Federal Trade Commission (FTC) now requires proper labeling of native advertising as paid media or sponsored content.

There’s a possibility that readers may ultimately ignore native advertising or even rebel against it, but for now native advertising seems to work well, especially when the goal is to enhance brand reputation.

Bottom Line: Native advertising offers a significant opportunity for PR as spending on the ads continues to grow. PR’s storytelling skills are an essential element in producing native ads.