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Will banner ads give way to native advertising?

Seeing it as the salvation for dismal click-through rates for online display ads, so-called “native advertising” is expected to get increased play from marketers in 2013, according to a survey of 800 media buyers, agency creatives, and publishers released this week by Solve Media. Just about half (49%) of media buyers say they’ll buy these content-based ad vehicles in the coming year, with 40% of them saying that they’ll devote 10% or more of clients budgets.

“The economics are dictating it. Click-throughs for banner-based ads are falling through the basement floor at 0.2%,” says Solve Media CEO Ari Jacoby.

“We’re hearing a lot about [native advertising] from a variety of clients,” adds Mark Himmelsbach, EVP and director of digital strategy for BBDO North America. “It’s the evolution of the advertorial. The wall that exists between web ads and content at publishers is coming down.”

Jacoby—who is in the native advertising business with his company’s Type-In branded CAPTCHA codes—splits the genre into two camps. One is with the brand as intermediary, in which small-scale messages attempt to engage consumers within the context of what they’re viewing, such as Google AdWords and paid Tweets. The other is the brand as publisher, which presents brand-promoting content as editorial, such as is seen on Tumblr and StumbleUpon.

There is some debate among agencies, publishers, and advertisers as to the pluses and minuses of transparency in presenting native advertising. When advertorials became popular in the print world decades ago, associations of journalists and publishers agreed on voluntary standards for their presentation as paid content. No such standards have yet been set down for native advertising.

“Publishers do want to delineate the ads from the editorial content. They don’t think it will diminish the advertising,” Jacoby says.

Agency executives seem more willing to let the concept play out and see what happens. Himmelsbach notes that the news aggregating site Buzz Feed does a good job of combining high-interest paid content with regular editorial, noting their “Listicles,” lists filled with content from sponsors like Old Navy and AT&T. “Publishers and platforms are getting smart. They partner with us to create content that people are interested in,” Himmelsbach says.

Kim Kozma, group planning director for [email protected] sees some examples of best practices being handed down by some highly credible publishers. “The Atlantic presents great opportunities in both print and digital editions, such as notes from the publisher with branded opportunities.” she says. “They have worked hard to closely tie the native ad content they co-publish closely with their own content.”

There’s an added cost for advertisers to consider when doing native advertising right, says Kozma. “The content has to be customized to each placement,” she says. “What your run on The Huffington Post has to be different from what you run on Forbes.

With that in mind, Kozma muses that native advertising currently presents a special opportunity for B2B advertisers, whose tradition is in finely crafted messages. “Native advertising is an interesting model,” she observes, “for them to talk in a more personalized way with their audiences.”

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