Dan Greenberg presents

Native Monetization is the Undeniable Future

Native Monetization is the undeniable future.  It may take a while to evolve, but interruptive, out of touch ads just won’t last forever.  In the long run, a company’s revenue model must be aligned with its underlying business model — and native is the only form of monetization that does just that.

Native monetization comes in two forms: Direct Payments (subscriptions, product purchases, license fees) and Native Advertising.  With that in mind, most monetization in the digital economy is already native (payments, in-app purchases, subscriptions, etc).  In fact, the only forms of non-native (foreign?) digital monetization I can think of are preroll and display advertising — boxes on pages and interruptive, fleeting ads that users can’t wait to skip and ignore.  Preroll and display are at odds with the underlying business and editorial goals, and therefore, are not native.

Google search ads?  Native.

Amazon promoted listings?  Native.

Gawker sponsored posts?  Native.

Forbes BrandVoice (where brands publish content directly into the CMS)? Native.

Facebook Sponsored Stories, Twitter Promoted Tweets, Sharethrough Promoted Videos, Buzzfeed Boost, StumbleUpon Paid Discovery?  Native, native, native, native, native.

728×90 banner ads that expand over the page when you accidentally roll over?  30-second ads that play before 2-minute YouTube videos?  No thanks.

There are three pillars to native advertising:

1. Visually-integrated

2. Choice-based

3. Content-driven

Visually integrated:

For monetization to be native, the ad experience must be visually-integrated to the user experience of the site.

In some cases, the promoted content lives endemic to the site itself.  On Twitter, you promote a Tweet.  On Facebook, you promote a Story.  On Buzzfeed, you promote a post.  For the few powerhouse platforms where brands are already creating owned media channels and publishing consistent content, native monetization enables those brands to pay to promote content that already lives on the site (generating revenue by brands paying you for users clicking around your own site ain’t bad, is it?)

For the rest of the web, native monetization enables brands to unlock their content from other platforms like YouTube and distribute that content through visually-integrated, content-driven placements on their sites.  Think Promoted Videos on WordPress (powered by Sharethrough).  Think Promoted Links as recommended content via Outbrain.  Think native ads on Reddit that click to advertiser websites.

Choice-based:

For monetization to be native, users must have the choice to opt-in to engage, rather than being interrupted.

Fast-forward 50 years: we’ll all have skip buttons, remote controls, and as a last resort, mute buttons.  We’ll never watch ads that suck.  Instead, brands will be forced to present people with content that users choose to spend time with.  YouTube introduced skippable preroll last year, and the skip rates continue to rise (I’ve heard north of 70% these days).  That number is only going up.

Content-driven:

For monetization to be native, brands must deliver content that creates value for users, not tricky ads that surprise users when they’re clicked on.  In the long run, to build a brand and sell product, marketers need attention.  If interruption no longer works (in 50 years), brands must earn that attention with funny, educational, emotional, inspirational, valuable content.

* * * * * *

The beauty of native monetization for publishers is that it aligns a publisher’s revenue model (native monetization) with the user experience, and the underlying goals of the business itself. Instead of alienating viewers with ads they don’t want to see – and interrupting the content experience they came to the site to experience – now publishers can integrate sponsored content seamlessly throughout their sites. This alignment of revenue generation with a site’s core editorial vision is what makes native monetization magical.

Take Twitter. Its product’s purpose is to help people “find out what’s happening, right now, with the people and organizations they care about.” Twitter’s revenue model revolves around enabling people and organizations to promote links, articles, videos, and photos to users who care via Promoted Tweets.

Or StumbleUpon. The product’s purpose is to help people “explore new and interesting things from every corner of the Web.” Its revenue model is to enable brands and publishers to showcase their interesting content to users on StumbleUpon via Paid Discovery.

WordPress, the largest self-hosted blogging tool in the world that is being used on millions of sites, made a major commitment to native monetization with its WordAds program with Federated Media and its partnership with Sharethrough to power native Promoted Videos across its network.

Tumblr CEO David Karp says, “You’ve already seen the Tumblr native ad format; it’s a Tumblr post.” Tumblr powers over 50 million blogs and is also on the verge of rolling out a native monetization platform.

As new publishers roll out future monetization strategies, those models will take on the same characteristics: choice-based ad content that’s promoted natively as part of the user experience.

Imagine if Pinterest rolled out a non-native monetization model: “Introducing: awkward squares in the corner of every page! Pre-rolls that interrupt before every video!” Users would revolt.

Instead of awkwardly placing banners and buttons in foreign spots around content, these new digital platforms have embraced digital advertising in a way that’s native to their sites, consistent with their user experiences and ultimately valuable for their users.

Yes, native monetization is the undeniable future.

*********

View more presentations from Sharethrough