It was Christmas 2012 when I found myself sitting down with Sarah Davidson, drawing out the wire frame for the new everyinvestor.co.uk website. Back then, Sarah was the editor, and she was visibly very excited at how her graceful editorial content (most of which was on the topic of the Retail Distribution Review (RDR)) was going to be consumed. And then it hit her! We had made a grave mistake; we forgot to leave space for banner ads!
It was at this point that I disclosed to her my revelation. Sit down Sarah, I told her calmly, this site will NOT carry banner advertising – none! We are pioneering a new era of financial advertising – or so I thought.
Two years on and native advertising is a well-discussed topic. Most people have heard about it, some are now able to define it, but few are able to make money from it.
Decline of the banner ad
My journey started with the decline in response and value of the banner ad. Having helped build the online division at Charterhouse Communications some nine years ago, I witnessed the rapid growth of digital advertising and suffered from the constant change in buyer behaviour as agencies and advertisers moved from buying high value CPM for niche content to low value cost per click or cost per lead. Back then, a publisher was constantly at war with metrics – do I need more users, more page impressions or just better sales people?
Times have certainly changed and online publishing is all about engagement. So my philosophy when planning the commercial model for everyinvestor.co.uk was to focus heavily on content that could be shared, making a website whereby users (in this case retail investors) could engage with the very people that were managing their money.
The RDR was being implemented and it was predicted that 40% of investors that previously used an IFA or advisor would now be going it alone. This left a clear gap in the financial advertising marketplace. Marketers of funds and investments traditionally distributing through IFA channels now had no way of engaging with their end users. The trust chain had been broken and marketers would need to build a trust relationship with retail investors directly.
I saw this as a great opportunity for everyinvestor.co.uk. Banners were already performing badly in terms of response and could not answer the need for engagement that investment marketers were faced with. Native ads on the other hand seemed like the perfect vehicle to deliver results.
For those of you that don’t know, native ads (as opposed to advertorials) are in stream adverts that are designed to look and function like editorial content. They should allow advertisers to speak naturally with their target audience with the aim of either building brand awareness or generating some form of engagement or response.
Six types
The Internet Advertising Bureau (IAB) has now classified six types of native ad unit which are highlighted in the table. Our offering would be ‘custom content’. I looked closely at BuzzFeed, which at the time had only just launched in the UK and saw that it was creating great shareable content in partnership with its advertisers. I wanted to do the same with the investment market but I still had some obstacles to overcome.
Firstly, I needed to think about who was going to write the content! Dare I ask Sarah to put her hand to it and cross the line to the dark side? What about her editorial integrity? Would she ever be able to work again after committing such a heinous crime?
Secondly, there was the issue of price. How much are these articles, sorry, native ads really worth? For years this type of content fell within the PR budget. Taking the editor out for a nice lunch would ensure you got all the coverage you needed! So we started by looking at the old metrics of views and clicks and worked backwards. If an advertiser was willing to pay £3000 for 100,000 banner views which produced 100 clicks, then they would surely pay a similar amount for a minimum of 100 native page views. Analytics could quite easily report on number of unique reads and time on page and an additional plug-in could report on extended reach through shares and likes. Perfect!
Who to pitch to
With the offer looking very appealing, I realised we had an issue of who we were going to pitch into. Advertisers regard content within the confines of their PR team who not only do not have any advertising budget, but who also sneer at the mere thought that you might give direction as to what they write and then charge them to publish it.
Marketing teams, on the other hand, produce banners and they give these to their agencies who duly go out and buy inventory. At the end of each month, they produce an impressions and clicks report, and so long as industry standard metrics are delivered, everyone gets to keep their job for another month. Trying to deliver a clever series of engaging articles is just too much effort and attracts too much risk. Remember, RDR was only just hitting the market and compliance teams were used to working in the protected space of B2B.
We had the additional pressure that nobody wanted to write anything that might get them in trouble with the FCA. There was also the lingering feeling in the investment market that if you close your eyes tight enough and then open them, RDR may just have gone away.
Selling native ads
While I mulled over how I would deal with these obstructions, I realised that I had forgotten another crucial factor; who here is capable of selling native ads? Unlike banner or email inventory, native ads require a level of creativity. They also require a sales person who is incentivised and excited about producing clever, engaging content. We all know that sales people are born lazy and look for the shortest route to revenue (I should know, I am one). If I was going to expect my team to pitch native with authority, they would need training and they were going to have to work closely with the editorial team. Barriers between editorial and sales would need to be broken.
Years ago, this would have been an almost impossible task. I, however, was pleasantly surprised to find that a new breed of reporter had evolved out of the ashes of the financial crisis. One that understood the pressures of sales revenues and targets!
In reality, it should not have come as such a shock. The world of publishing has been turned on its head. Bloggers, influencers and even brands believe themselves to be the voice of the industry, and they are all very much in touch with the commercials behind their writing. Whilst good journalism can be clearly marked out above the rest of the drivel that has flooded the internet, the commercialisation of the written word has without a doubt been watered down. In spite of increased digital spend year on year, budgets are being spread thinly across an ever growing number of media channels. Worryingly, I noted that freelance journalists were being paid by advertisers directly to produce social content.
In spite of all these potential barriers, we knuckled down and got to work seeing advertisers and agencies alike pitching our new offering. We had a strong team and our new website was proving popular. But I would be lying if I said that our native content offering was flying off the shelf. Changing what was then the norm was proving more difficult than I had anticipated. For all the reasons mentioned earlier, it would take time and effort before the investment market would adopt the change that was and is still engulfing the FMCG marketplace.
Onwards and upwards
I’m proud to say that we stood strong through adversity and have survived to tell the tale, admittedly with the help of some early adopters who were willing to believe in us. As I write this article, we are finalising the second redesign of everyinvestor.co.uk and have just announced the relaunch of techcitynews.com. Both products started their life two years ago without a banner ad in sight.
As I look back over the two years, I can say that lessons have been learned, some more costly than others. However we were right to steer the change which today is the backbone of all marketing communications. PR companies up and down the country are looking to merge with planning and buying agencies to fuse the divide between content and advertising. Change was inevitable, so my advice to publishers who still derive a large proportion of revenue from display banners is to start adopting native into your current mix of options. Start training your sales staff and editorial team and check that your website is sitting on a platform that can both deliver and report on native campaigns. Mobile is leading the way and native aligns itself very well with the way readers are consuming your content. Your business model needs to progress and on that note, I leave you with the words of George Bernard Shaw: “Progress is impossible without change, and those that cannot change their minds cannot change anything.”
