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Native Advertising: Beneficial for Consumers and Advertisers

It is easy to come across Internet postings containing information such as “five new ways to lose weight” or “ten local restaurant recommendations.” It is common to watch an advertisement before a video while surfing on Youtube or Naver, as well. These contents are often entertaining and interesting, even though they are forms of “native advertising.” The Sungkyun Times (SKT) introduces the concept of native advertising, its formats, and the surrounding controversies.

Native advertising is similar to blending a panda among snowmen./ instagram: @thedudolf

What are native advertisements?

Concepts and Characteristics of Native Advertisements

Native advertising is a type of commercial that focuses on the coherency between the content of the advertisement and the format which it is published on. Native advertisements are usually distributed online and blended with other postings of the same format. For example, Facebook’s sponsored stories and Youtube’s video advertisements match their respective websites’ functions, and are consistent with other contents of the published format. Native advertisements fit naturally with the situations they are presented in and do not give off a sense of disharmony. Its name “native advertising,” comes from this compatibility which makes it feel “native” to the given environment.

Survey Results on Native Advertisements/ Korea Press Foundation

Another distinguishing trait of native advertising is that it reveals its commercial objectives. Doing so sets native advertisements apart from advertorials, a combination of advertisements and editorials, which consumers do not approve of. Advertorials do not state that their contents are promotional, and they cause confusion to those who come in contact with the information. On the other hand, native advertisements clearly state their sponsors to lessen the consumers’ aversion toward disguised advertisements. According to a survey of 1,033 people conducted by the Korea Press Foundation (KPF), 68.5% of respondents felt that native advertising is not a problem as long as it states the contents’ objectives. In fact, 70% answered that native advertisements feel informative and beneficial. Some consumers even go a step further and actively spread the information they found useful to friends and family through messengers or Social Network Services (SNS). Native advertisement’s characteristics make them beneficial for both consumers and advertisers alike.

Why did it become a recent trend?

Although native advertising is a recent trend, it is not a new approach towards consumers. The strategy of native advertising goes back to as far as the 1800’s. John Deere, a company that manufactures farming equipment, used the native advertising approach by promoting its products on a farming magazine it issued. It would write about efficient ways to harvest crops and advertise its equipment along with the article. Native advertising was also used from time to time on radios and television. The strategy of native advertising has existed for over 100 years, but only recently did it become defined and start to be expressed with the term “native advertising.” The main reason for this phenomenon can be found in the drastic decrease of Internet display advertisements. Internet display advertisements are banners of different shapes and sizes that are usually placed on media sites and web portals. The average click rate of these banners is only 0.1% and is continuously dropping. Major press companies such as the Wall Street Journal, and The New York Times felt a need to improve this situation, as most of their online revenues came from banner advertisements. This led them to use native advertising tactics since 2012 under the term “brand journalism,” which was defined by Professor Rebecca Swenson of the University of Minnesota (Ph.D. in Mass Communication). The term “native advertising” was derived from brand journalism as it expanded to formats other than news articles.

Different Types of Native Advertisements

Closed Platforms

Native advertisements can be categorized into two types depending on the utilized platform. Closed platforms are platforms that use a website’s special inherent feature. For example, Naver’s brand webtoons and Youtube’s video advertisements are only possible because of their unique platforms. Advertisements published on closed platforms have originality and do not feel boring, but cannot be distributed to other websites because of their unique characteristics, hence the name.

comic.naver.com

The Cookie Run Brand Webtoon Festival is a recent example of a closed platform. Five popular webtoon artists have recently started publishing brand webtoons related to the mobile game Cookie Run, with one author per weekday from Monday to Friday. Brand webtoons are promotional online comics that state their sponsors. Even though brand webtoons are produced with commercial objectives, they are in many cases known to be of good quality. For instance, a famous webtoon author, Hong Seung-pyo (more commonly known as Miti), has published fifteen different webtoons, but his brand webtoon Salary God has the second highest rating among all of them. Salary God was issued up to Season 3 thanks to its readers’ support. As shown by these examples, authors do not neglect the literary values of their works and unconditionally promote their sponsors. This is a key feature for readers, because it allows them to enjoy comics without feeling uncomfortable. Brand webtoons are a good example of closed platforms because they use their given comic platform to the fullest and satisfy the readers at the same time.

Open Platforms

Another type of native advertising is done through open platforms. Open platform promotions are usually done through very general formats that can be published anywhere, such as blogs or news articles. Open platforms do not make use of a distinctive quality, but do not go against the websites’ established formats either. Open platform advertisements are usually mass distributed thanks to the ordinary format, giving it its name. The mass distribution of open platform advertisements is typically carried out by a third company other than the advertiser or publisher. Sharethrough is the largest company committed to the distributing process, with over 7,000 companies and three billion advertisements ever mediated. They constructed simple systems so the advertisers and publishers can easily interact with each other.

Controversies on Native Advertisements

Content Tainted by Advertisements

There was criticism on the contents of Pikicast, a Korean website that mainly acts as a contents creator and curator heavily reliant on native advertisements for profits. A popular editor with over 700,000 subscribers posted reviews and sold beauty products, but lied during the process. She had faked the make-up swatches in her reviews by editing different photographs together. The consumers were furious when the manipulation was exposed. Similar cases are increasing in frequency under the name of native advertising, but native advertisements should never disregard the websites’ original functions.

Independence of the Press

Sponsored articles are the most profitable online advertisements for press companies nowadays. Problems concerning the independence of the press, however, naturally follow. If an advertisement is written in the form of an article, journalists would have to write about products or companies that they themselves might not feel positive about. Readers would confuse advertisements as objective truth, because news articles are often considered credible. There are many reasons as to why advertisements were consistently excluded from the news, but native advertisements are left free to do so without any restrictions in particular.

Native advertisements are easily found in everyday life and are considered appealing to both consumers and advertisers. Though many agree on the advantages, there are many unsolved disputes regarding the drawbacks of native advertising. Laws concerning native advertising should be established, and regulations related to the problems surfacing today should be specified. Native advertising can become an even better means of promotion with further improvements.

최영찬  cyc1117@naver.com

<저작권자 © THE SUNGKYUN TIMES, 무단 전재 및 재배포 금지>

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