For the last 12 months, native advertising has been the industry’s It Girl. The problem is, no one agrees on how to measure native’s effectiveness – or even how to define it.

With the rise of machine-based buying, publishers have seen their CPMs fall. To combat those losses, they’ve turned to running advertising content (alternatively called sponsored content, branded content, custom marketing, native advertising). And since advertisers typically pay a premium for sponsored content, publishers gladly take their money.

The rub? Because there isn’t yet an industry-wide definition – nor, for that matter, measurement metric – for this form of advertising, buyers are getting increasingly itchy for clarity.

“There’s a sponsored-content bubble,” said John McCarus, svp of content at Digitas. “There’s such a thin understanding of the native-content opportunity in the publishing community. A lot of publishers seeing opportunity are resurrecting the old advertorial.”

For example, here are three very different advertisements, all of which fall under the “native” moniker: a promoted tweet by the Associated Press for an Edelman report; a BuzzFeed partner listicle, like this piece “12 Truly Amazing Animal Accomplishments,” brought to you by Beneful; and a brand article from Xerox that ran on Forbes’ BrandVoice. All of this variety is proving to be a thorn in the side of buyers.

“Sponsored-content pricing is similar to the strange, large boxes of candy you find at movie theaters,” said Ben Kunz, vp of strategic planning at Mediassociates. “The package is deliberately unique to obfuscate the actual price and value of the product.”

Kunz added that pricing is often a tango between how much the seller knows versus how little the buyer knows. Even though advertisers are currently willing to pay a premium, don’t think it’ll last. Buyers have a tendency to get smart, fast.

“So unless publishers can prove that sponsored content drives much higher ROI than other forms of advertising, yes, artificially high prices will not be sustainable,” Kunz said.

Because premiums for sponsored content are not sustainable, Taylor Valentine, svp of social media strategy at Horizon Media, says that publishers are in for a rude awakening.

“Look at the model and challenge they have: The crack that is their revenue stream is their banner ads,” he said. “They can’t go backwards on that. It’s hard to introduce a counter ad solution and forgo any kind of revenue from old types of solutions.”

But unlike banners that are defined by the click, measuring sponsored content is extremely difficult. “No one has third-party tools to measure,” said Christopher Williams, president of investment strategy at Magna Global.

There are multiple approaches to measurement and not one standard. McCarus said that “the success of platforms will come down to our ability to measure engagement over reach.”

Kunz, for example, measures success on a rubric of metrics: awareness, engagement, cross-channel lift and direct-response lift. Value, then, is in the eye of the beholder. And all this confusion plays to the publisher, as publishers push advertising content because it’s high margin.

“If you’re spending money on stuff like this – online assets, video, every other asset publishers have to sell –you’re helping them plug a revenue gap or sell stuff they’re personally incentivized to grow,” Williams said.

Not to get lost in these two issues is the simple fact that, as Williams pointed out, they take a lot of work to produce. “You can’t do too many at once,” he said.

As a result, buyers are increasingly urging their clients not to pin their hopes on the prospect that sponsored content, however you define it, will drive sales.

“It’s still early. We’re not there yet,” McCarus said. “A lot of people are still testing it out. But whatever you want to call it, innovative platforms to allow custom and curated content to be seen in more places with greater visibility will have a huge future.”

Tell that to the last It Girl.

Image via Shutterstock

  • LinkedIn Icon