The big beasts of the media industry such as The Wall Street Journal and The New York Times are bowing to the inevitable and setting up bespoke custom content studios to work with their commercial partners on native advertising projects.
They are insistent that the teams that work on these custom projects are completely separate to their main newsrooms, but the actual content integrates seamlessly within the websites’ main feed, albeit clearly labeled as sponsored.
At SXSWi, Social@Ogilvy gathered a group of representatives from these big media beasts to discuss "Native Uprising: Is Content the New Advertising?" and the issues this new paradigm raises. The mainstream media folks were joined by Stephanie Losee, managing editor at Dell, who is leading the content charge from the in-house brand point of view.
Mark Howard, chief revenue officer at Forbes, explained how the magazine publisher has been working on native advertising since 2010 through its Brand Voice initiative, describing the process as a "re-architecture journey."
"For great ads to exist there have to be natural gaps in the content," said Howard. "Natural breaks are the opportunity." He bullishly added that the integration of branded content in streams "gives us the chance to change the business model."
Dell was the first native advertiser on The Times’ new custom content platform and Losee, formerly a journalist at Fortune and PC Magazine, explained her mission was to "take Dell from being a leading social media company to be a leading media company."
She says branded content is much more than just "lists and quizzes," highlighting compelling activations such as news you can use, infographics, and tips and tricks. She believes native advertising and branded content "gives journalists a chance to live" and that they have "moved where the money moved."
Losee added that those budgets are coming from outbound marketing spend, not inbound. "It typically starts with a media buy then goes through to the global communications function for the content," she said, emphasizing that this was the pot of money marketers and their media partners were dipping into.
Sebastian Tomich, VP, advertising at The New York Times, conceded that "there isn’t naturally a place in the consumer’s heart for branded content – they have to be helped to discover it." He added that who owns the process in terms of media, advertising, or PR hasn’t settled down yet, but that it would do so over the next two years.
But despite the precedent set by the likes of Nissan and Coca-Cola, which have set up in-house newsrooms and studios, Losee is adamant brands don’t necessarily want to replace mainstream media, because it is so difficult and expensive – rather, they want to work with them and "lean on the resources of these established [media] players."
"Trust me, we don’t want to build out a newsroom within a brand," she said. "We want to use their [media’s] assets to write stories through a separate unit."
The Times has set up a commercially driven content studio, totally separate to the main newsroom, and has worked with around five native advertising partners so far, including a piece for United Airlines about how it flew the equipment for the athletes to the Winter Olympics in Sochi, which went down well with the Gray Lady’s readers.
The panelists summarized it thus: "Readers don’t have a negative view about [any] content – it just has to add value to their life."