switching gears

July 5, 2017

Advertising is a necessary evil. Not everyone buys into this argument. From an advertiser’s perspective, it is definitely necessary, and from some (if not all) audience’s perspective, it could be annoying if not evil. If you trace the history of digital advertising you would recount the horror of infinite pop-ups while looking for the content you want. In today’s world, the consumer is going to ignore these ads right away resulting in a lost opportunity. Native advertising succeeds where traditional approach fails. It blends with the organic content seamlessly which most of the consumers will fail to notice; it looks and feels like normal content. It matches the style of the publication or site and provides the kind of information the consumer is looking for. It loads fast and does not create any interruption in user experience.

With over a billion of the world’s population connected to social media, consuming content on a consistent basis A makes a strong case for native advertising. Brands and advertisers love native advertising because it results in higher click-through rates and stronger engagement. The consumer might not be pleased if it is in excess, but is less likely to turn off advertising if it does not spoil the user experience. If done well, native advertising can sell a product or build a brand.

Rise of social media in the last decade has given rise to discovering content on the go. Consumers across all age groups are scrolling through pages and consuming content of their interest. This gives advertisers an excellent opportunity to reach the right set of audience resulting in higher engagement.

For example, according to a research study by Twitter, bilingual Hispanics are the fastest to purchase. In fact, they are 1.25 times more likely to use a mobile device to search for cars. Hispanic consumers actively look for and interact with content on Twitter; 79% of them appreciate the ad if it reflects their culture. Automotive brands have leveraged this and have targeted the consumers with native advertising in their language to focus on ‘family-first’ for these audiences. Brands such as Toyota and Honda have a designated handle to connect with the tech-savvy Hispanic consumers. This pays off as eight out of ten Hispanic Twitter users identify themselves as car enthusiasts.

In 2014, BMW advertised the ‘BMW Series 2 Active Tourer’, a versatile and dynamic family car through native advertising on The Huffington Post and other websites. The brand presence was subtle and resulted in a high ratio of consumers clicking the link from the homepage.

Auto sales and analytics website Edmunds teamed up with car dealership digital marketing company, CDK Global, on a mobile ad that used Facebook’s dynamic ads to target new in-market shoppers. The ads were targeted at custom audiences that visited a dealer’s website or the Edmunds website. Consumers were then targeted on Facebook with native and mobile optimized advertising. The results were great. The company is now eyeing to match the customers that visit the dealership and then reach them via digital medium through native ads.

Auto manufacturers and dealers understand the importance of native advertising and have been aggressively spending in this area. The competition is intense as everyone wants a bigger share of the pie. Those who have stuck to basics and understood their consumers have reaped benefits and others are still trying hard to tap the opportunity it presents.

In a study done by Nativo, native ad spends increased 600% in the past three years. The automotive industry, being the early adopter, pumped in millions of dollars and saw varied results, and hence a decline in the percentage budget allocation. These are still early years for native advertising, and publishers and advertisers are still looking for the magic formula. These initial challenges with native advertising and learnings from it have helped other industries to leverage the knowledge and make a steady progress resulting in increased spends and ROI.

As native advertising is still in its early phase, the future will see a lot many changes. Lack of regulations may tempt the publishers and advertisers to follow practices that may make the approach questionable. Even today, sometimes publishers try hard to disguise the sponsored content to increase their revenues. In the future, regulatory bodies like the Federal Trade Commission might implement regulatory measures on brands using native ads to promote their products to benefit consumers. On the other hand, browsers that already have popup blockers are also trying to find ways to block native advertising. Google has indicated that Chrome is expected to release native ad filtering in early 2018 that would filter ads that do not meet the ‘better ads standards’.

For now, it is difficult to tell how these changes would impact the advertising landscape, but one thing that could be said for sure is that native advertising is here to stay and the automotive industry will continue to make the most out of it.

* http://www.huffingtonpost.com/eli-schwartz/six-companies-that-arese_b_11384788.html