To The Natives Go The Spoils

Sullivan notes that native advertising is quickly becoming a key revenue source for the New York Times Co., making up 18% of total digital ad revenue in the third quarter, and still growing fast.

She also concedes that it has been clearly marked as paid posts and, until recently at least, most readers have found the NYT’s native ads “unobjectionable.” That's reflected in the fact she received almost no complaints over the first two years they have appeared on the site and occasionally, in the print edition.

However, Sullivan notes that changed with the introduction of a new native ad feature in the middle of the NYT’s home page -- a horizontal content well with a handful of blurbs for native ad content, currently highlighting five paid posts.

Although marked “From Our Advertisers,” the new feature resembles surrounding editorial content in format and graphic treatment, including some images that could easily be editorial photography.

After a number of reader complaints -- one saying it was “a classic illustration of breaching the wall between editorial and advertising” -- Sullivan took up the issue with NYT chief revenue officer Meredith Kopit Levien.

It turns out changes were already underway. The newspaper had decided to drop the word “Stories” from the header. (It previously read “Stories From Our Advertisers.”) Sullivan also gives them credit for trying, in essence, to reinvent digital advertising to fit an entirely new paradigm, in which consumers -- gasp -- actually want to read marketing content because it is interesting and useful.

Like other native ad proponents, Levien points to the rise of ad blocking as proof that earlier online ad models have often alienated consumers, making it much harder to monetize content and, thereby, support quality journalism.

On the other hand, Sullivan pulls no punches when it comes to analyzing the appeal of native advertising to marketers. No matter how people want to spin it, native advertising succeeds in part because it is formatted to resemble the surrounding editorial content -- and this raises the question whether publishers that use it are deceiving their readers in some way.

Sullivan lays out the contradiction concisely: “There is, however, an inherent problem: If native ads look too much like journalism, they damage credibility; if they look nothing like journalism, they lose their appeal to advertisers. A fine line, indeed.”

I would add that, even if publishers allow ads that resemble editorial content, it’s entirely possible consumers (who may not have been savvy to online ad strategies to begin with) will catch on and stop clicking.

So in the long-term, native ads might not be as effective as they seem at first glance. In this case, they are merely another example in a long line of ad models that worked for a while before slowly losing their novelty and wearing out their welcome.

But this time, with the added risk of sacrificing the publisher’s credibility."