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Newspaper CEOs signal support for growing native advertising revenues

L:R Fairfax's Greg Hywood, WAN's Chris Wharton, News's Julian Clarke, APN's Michael Miller

L:R Fairfax’s Greg Hywood, WAN’s Chris Wharton, News’s Julian Clarke, APN’s Michael Miller

Australia’s top newspaper CEOs have told a forum the market for native advertising in this country will only grow in the years to come.

The comments at last week’s Newspaper Works’ Future Forum come after several high profile attacks on the practice of native advertising, which sees brand-funded content placed alongside editorial on news sites.

“In the US we are seeing a big increase in the amount of marketing dollars which are being siphoned off (into native advertising),” said Michael Miller, CEO of APN News & Media.

“It is 15 per cent of marketing dollars in the US that are spent on native content, in Australia it is only three per cent and I have no doubt that we will see it increase exponentially in the areas of content.”

Miller argued that the name native advertising was a misnomer and that newspapers had always had space for content that was sponsored. The APN boss also argued that the best resources had traditional not been put into the space with the result that other newer players, who specialise in the space were carving out niches in the area and making it far more competitive.

“Call it advertorial, call it product placement, it has been around for a very long time and this (native advertising) is the name we are giving it in the digital environment,” said Miller.

“There was a point that a lot of this content was traditionally given over to the least experienced and not the best people in the business. What we seeing is that native advertising is going to the people at the top of their game and that’s a big learning for us.”

West Australian Newspaper’s Chris Wharton agreed telling the audience: “Native advertising used to be called advertorial. We are monetising probably more directly and there are more of us doing it.”

Fairfax Media boss Greg Hywood told the audience at the Ivy, in Sydney that in the future native advertising would be one of many sources of revenue for publishers.”Each company has multiple engagement points with the audience and they need to. There is always the argument around what this does to our journalism,” said Hywood, who also emphasised the importance of not compromising the journalistic brand in the rush towards native content.

“Our journalism, the independence of it, is absolutely at the centre of what we do because it creates that audience. If you break down the credibility of that you can’t create the audience. You can’t – I mean they’ll just go elsewhere,” he added.

“It is absolutely vital for us but that doesn’t mean that you cannot create third party content and that doesn’t mean that you’re going to be asking an investigative journalist to do a nice piece on a bank. I mean I’m not sure they could cope. Nor should they.

“But there are many highly quality content generators who can be brought in to the organisation on a cost basis to do that.”

News Corp Australia CEO Julian Clarke said the skill involved in native content was not around fooling consumers but rather putting marketers in the “sweet spot” where they found the right audiences in the right context.

“Any marketer knows that the sweet spot in the racket for them is where their product is positioned in the right context. Now we publishers have been doing this for centuries – travel section, finance, what ever it is,” said Clarke.

“So they are there because they know an audience is interested in something themselves and it gives them an environment to represent whatever they have to market.”

However, he also warned that if implemented badly native content had the potential to undermine trust in the brand and drive away both advertisers and audiences.

“The trick for us is not to in any way damage the effectiveness of our brand itself. There is an interesting tension there and like anything else you work your way through it but trust is at the base of all of this,” said the News Corp boss.

“As Greg said, if we lose trust with our readers then the advertisers will be the first to leave.”

Nic Christensen  

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