Native advertising and sponsored content: formats and results

Display banner click-through rates have settled around one tenth of one percent, a growing share of browsing happens on phones where banners barely fit, and the feed, whether on Facebook, Twitter, LinkedIn or a news app, has become the dominant way people consume content. Native units live inside the feed and get read at rates banners have not seen for a decade.

Publishers, meanwhile, need revenue that is not falling. BuzzFeed built its business entirely on sponsored posts. Forbes has run BrandVoice since 2010. The New York Times launched T Brand Studio in January and has already produced a widely praised piece on women in prison for a streaming series. The Wall Street Journal, The Atlantic, The Guardian and Mashable all have studios. Spending on native formats in the US is estimated in the low billions of dollars this year and growing faster than any other category.

The IAB's Native Advertising Playbook, published last December, is the standard taxonomy. For planning purposes, think of five tiers.

In-feed social promotion. Promoted tweets, sponsored Facebook posts, LinkedIn Sponsored Updates and, since this summer, Instagram ads for larger brands. You supply the content, the platform distributes it to a targeted audience, and you pay per engagement or per thousand impressions. This is where most small businesses should start; budgets of $500 to $3,000 a month are enough to learn.

Recommendation widgets. Outbrain, Taboola and similar networks place your article under "Around the Web" or "Recommended for you" on publisher sites. You pay per click, typically $0.20 to $0.60, and traffic quality varies widely. Good for driving readers to strong content you already have; poor for anything that looks like a sales page.

Promoted listings. Sponsored products on Amazon, Etsy and Yelp. Native in the sense that they look like organic results. Relevant if you sell on those platforms and worth treating as performance media.

Sponsored articles on individual publishers. Trade publications, regional news sites and vertical blogs sell sponsored posts for $2,000 to $15,000 depending on audience. You often write the content; the publisher labels and distributes it. Quality and labeling practices range from excellent to embarrassing, so read their existing sponsored content before buying.

Brand studio programs. The publisher's in-house team conceives, produces and promotes content for your brand, frequently with video, data visualization and interactive elements. Minimums at national publications start around $50,000 and large programs exceed $500,000. This is campaign-level work, best suited to brands with a story worth that investment.

The Federal Trade Commission held a workshop in December titled Blurred Lines on native advertising, and its position is simple: consumers must be able to tell when content is paid for, and the advertiser is responsible even when the publisher designed the unit. Guidance beyond the workshop has not yet been issued, but the direction is clear and the existing endorsement guides already apply.

The Atlantic's sponsored article for a religious organization last year, pulled within hours after readers objected to both the content and the labeling, is the cautionary tale everyone cites. A late-night comedy segment this summer mocked the industry's own survey that found many readers could not identify sponsored content. The reputational risk is real and it lands on the brand, not the publisher.

Practical rules that keep you safe:

• Use plain words: Sponsored, Paid Post, Advertisement, or Presented by [Brand]. Avoid labels that need interpretation.
• Place the label where the reader sees it before engaging, near the headline, in a readable size and contrast.
• Name the advertiser, not just the agency or a campaign brand.
• Keep the disclosure on every page and in every share. When an article is shared on Twitter, the label should travel with it.
• Do not disguise paid search results, widget recommendations or promoted tweets by stripping the platform's own markers.
• Follow the endorsement guides for any paid blogger, YouTube creator or Instagram account: they must disclose the relationship in each post.

Clear labeling also protects performance. Readers who feel tricked do not become customers, and publishers whose audiences lose trust lose the audience you were paying for.

The content has to earn the placement. Everything else is distribution.

Be useful or be entertaining, and pick one. A guide, a data story, a well-told customer story, a piece of genuine reporting about your industry. The product can appear; the sale cannot be the point.

Match the publication's voice without imitating its journalists. The best studio work reads like the publication's quality standard, not like a disguised press release.

Plan the next step. Every piece should lead somewhere: a deeper guide on your site, a tool, an email sign-up, a product page for the few who are ready. Tag every link so the journey is visible in analytics.

Budget for distribution. A $10,000 article that nobody reads is a $10,000 mistake. Reserve 30 to 50 percent of the budget for social promotion and widgets that bring readers to it.

Produce once, use many times. A sponsored piece can become a blog post, a sales enablement document, an email and a set of social posts. Negotiate reuse rights up front.

Native advertising is sold on engagement metrics and bought, too often, without agreeing what success means. Set the measures before the contract.

1. Reach and attention: impressions, article views, average time on page, scroll depth and video completion. Compare with the publisher's editorial averages, which you should ask for.
2. Engagement: shares, comments and, for social units, cost per engagement. Watch for publishers counting a tiny widget impression as a view.
3. Response: click-throughs to your site, email sign-ups, downloads, and what those visitors do next, measured in Google Analytics with campaign tagging.
4. Brand effect: for larger programs, a before-and-after survey of awareness or consideration among the audience, which the publisher or a research vendor can field.
5. Sales: attributed where possible through conversion tracking and promo codes, with an honest acknowledgment that most native work is upper-funnel.

Typical results in 2014: sponsored articles on reputable publishers hold readers two to four minutes, in-feed social units draw click-through rates of 0.5 to 2 percent against banner rates near 0.1 percent, and widget traffic bounces at 70 to 90 percent unless the landing article is strong.

Buying the label without the content. A publisher's logo on a weak article helps nobody.

Hiding the sponsorship. It is a regulatory and reputational risk, and readers notice.

No landing plan. Readers finish the piece and have nowhere to go.

Judging it like direct response. If the goal was awareness, measure awareness. If you need leads this quarter, buy search.

Discover: we study your audience, the publications and feeds they actually read, your existing content and what it says about you. Plan: we choose formats and publishers, write the brief, set the disclosure standards and define measures for each tier of the program. Build: our creative campaigns team develops the story and works with publisher studios or produces the pieces directly with our video and content production team, the growth team runs the social distribution and widgets with conversion tracking in place, and the web team builds the landing experiences the content points to. Improve: we review attention, response and cost per outcome every two weeks and shift budget toward the placements that work. Because brand, growth, web and technology sit together, the article, its promotion and the page it leads to are one piece of work rather than three.

The Content Program engagement is the representative pattern. A business with a strong point of view but limited reach built a program of long-form sponsored pieces on two trade publications, supported by promoted social posts and recommendation widgets, with every piece labeled clearly and every link tagged. The articles were repurposed into guides on the company's own site, which built an email audience the business owned. Over two quarters the measured cost of a new subscriber fell steadily and the content began to earn organic search traffic on its own.