By Justin Choi, The Drum
From the outside looking in, native seems to be more of the same when it comes to the evolution of digital advertising: a new category that is quickly becoming noisy and crowded. I’m often asked, usually by venture capitalists (VCs), “Who are the major players in ‘native’?”
This question assumes native is simply the next iteration in the long evolution of digital advertising categories: banners, search ads, pre-roll, content recommendation, mobile, and now, native.
But what’s happening now is bigger than ‘native.’ This narrow focus on a specific trend is leading VCs to miss the bigger trend: digital advertising is undergoing a transformation, not an evolution.
Brands are shifting from advertising to content
Marketers now spend billions of dollars to create content (think white papers, website content, PR), and will spend billions more as TV and print advertising shifts focus towards digital content such as brand generated articles, long-form videos and infographics. Recent conversations with brand CMOs all indicate they will invest significantly into content.
This shift is creating significant opportunities in marketing technology (MarTech). Ajay Agarwal, managing director at Bain Capital, predicts the first $10bn-plus marketing tech company will emerge and Ashu Garg, general partner at Foundation Capital estimates that MarTech spending will increase tenfold over the next 10 years to a $120bn.
Agencies are seeking new solutions to expand their value proposition and publishers are building brand content studios to grab more content advertising dollars.
As brand-created content becomes ubiquitous, massive opportunities will form for companies and investors.
Attention: The new currency of digital advertising
Once brands have content, the next challenge they face is discovery. This is where feeds and content come together – content distributed natively into feeds is a great way to drive discovery, provided distribution can be done at scale with automation. And since the new medium for consumer engagement is content, the currency we use to measure success must also align. That currency of the future is attention.
To date, the entire digital advertising industry has been built on clicks, but clicks require marketers to deliver an interruptive user experience. This strategy is at odds with publisher goals and one that’s driven users to revolt by installing ad-blocking software. Instead of squeezing blood out of a rock and trying to further the Internet as a giant interruptive direct response machine, the larger green field opportunity is to optimize for content and attention.
Why have advertisers kept branding dollars on TV and in print? Because to date, web advertising has not offered good options for delivering branding. But now, content advertising is providing that solution. It’s only a matter of time before branding dollars flow generously online.