Summary:

Newspaper media are embracing native advertising as an important part of the revenue mix, while simultaneously overcoming internal cultural hurdles and developing best practices. Publishers expect sharp increases in native advertising over the next two years. This report is based on a survey of 156 mostly newspaper media companies in 48 countries from July to September 2016.

Key themes in the report:

How important is native advertising to legacy newspaper media companies?

What are the opportunities and threats to making native advertising a revenue and engagement success?

How is native advertising being sold vs. traditional advertising?

How does native advertising get produced?

What is the most popular way to label native advertising?

How lucrative is native advertising to news media companies?

Who are the best-practice media companies in the native advertising space?

Who should read the report?

Media company CEOs, advertising executives, strategists, and content creators involved with native advertising

Authors:

Jesper Laursen is the founder of Native Advertising Institute. He is a journalist from the Danish School of Journalism and currently studying an executive MBA at Henley Business School in London. Laursen founded a journalistic production company called Media Movers, content marketing and native advertising agency Brand Movers, and educational institution Clever Content – all of which he is running today.

Martha L. Stone is CEO of the World Newsmedia Network and founder of the annual Big Data for Media conference, launched in 2013 in London during Stone’s two-year tenure as associate researcher at the University of Oxford’s Reuters Institute for the Study of Journalism. The global conference has been a partnership between Stone and INMA since 2015. Stone is also a Ph.D. candidate at City University in London, focused on how experimentation is key to media companies’ success in their Big Data strategies.

Detailed overview:

News media companies expect sharp growth in native advertising revenues over the next two years as cultural obstacles are overcome and best practices embraced, according to survey results by the International News Media Association (INMA) and the Native Advertising Institute (NAI).

“Native Advertising Trends 2016: The News Media Industry” features a survey of 156 mostly newspaper media companies in 48 countries conducted in July to September 2016. Most respondents are members of INMA, representing the leading news media companies in the world.

According to the INMA-NAI survey, 11% of overall advertising revenue from newspaper media was channeled to native advertising in 2015. That share is expected to grow to 25% by 2018.

While publishers will manage this shift over the next two years, the data and the case studies suggest a growing body today of actionable best practices.

As of late 2016, 48% of newspaper media are already doing some form of native advertising, and another 39% are likely to add it as an advertising option, according to the survey. Some 89% of respondents say native advertising is important to their companies – with a plurality rating it as the most important new advertising source above programmatic. More than three out of four publishing executives surveyed are bullish about native advertising.

Beyond the survey results, the report features five best-practice case studies on native advertising:

• Helsingin Sanomat and how it marketed data storytelling tools for native advertising.


• Quartz and its award-winning Bank of America campaign centered on the World Economic Forum.


• Fairfax Media Brand Discover programme that runs like an advertising agency.


• De Persgroep and their research on how readers react to native advertising.


• Montreal Gazette and their native advertising campaign for Concordia University.

Other highlights of “Native Advertising Trends 2016: The News Media Industry” include:

The role of editorial: How native advertising gets executed is as hotly debated at media companies today as print advertorials were in years past. Yet the INMA-NAI survey sheds light on emerging trends:

• 42% use editorial teams for native advertising, 33% use their own native advertising studio, 28% use a separate native advertising team, and 26% use an external agency partner.


• The fact that publishers already have general editorial expertise is considered by 66% to be the top strength for native advertising at their companies.


• Yet 38% say the lack of separation of the editorial and commercial sides of the business is a threat to proper execution of native advertising.

Labeling: A clear consensus among media companies that participated in the survey emerged about how to label native advertising in publisher ecosystems. Some 60% say “sponsored content” is their label of choice, while 24% label native advertising as “advertisement” or “paid content.” Disturbingly, 7% of respondents don’t label native advertising, prompting a chastisement by the authors.

Native vs. traditional advertising: A slight majority of media companies surveyed (54%) sell native advertising in combination with traditional advertising, while others sell it as a separate product. Eight out of 10 respondents do not have a dedicated sales team for native advertising.

Charging more for native: While native advertising is more expensive and more time-consuming to create, it also is more lucrative. Some 65% of respondents charge more for native advertising. Laursen said that in the early days of native advertising publishers could generate up to six times the rate of traditional advertising, but a saturated market is mitigating those differences today.

Hurdles to overcome: There are hurdles to overcome with native advertising. According to the survey, explaining native advertising to marketers and convincing advertisers to tell real stories are the Top 2 challenges. Some 55% of survey participants said poor client understanding of native advertising is the biggest threat to success.

Written content top opportunity: Not surprising for a survey targeting a media segment built on the written word, the INMA-NAI survey respondents overwhelmingly said written content was the top opportunity for native advertising at their company. At 90%, written content was far ahead of the next biggest opportunity by 36 points.

Other report highlights include how publishers are measuring the effectiveness of native advertising and the most effective types of native advertising.

About International News Media Association (INMA):

The International News Media Association (INMA) is a global community of market-leading news media companies reinventing how they engage audiences and grow revenue in a multi-media environment. The INMA community consists of nearly 8,000 members at 600+ news media companies in 60+ countries. Headquartered in Dallas, INMA has offices in San Salvador, São Paulo, Antwerp, and New Delhi.

About Native Advertising Institute (NAI):

The Native Advertising Institute (NAI) is an international educational organisation on a mission to help publishers, brands, and agencies become successful with native advertising. NAI runs the world’s largest two-day industry event, Native Advertising Days, and conducts global research, publishes several reports on media about native advertising, and organizes the Native Advertising Awards with partners on five continents. Go to www.nativeadvertisinginstitute.com for more information.