Tracking the Resurgence of Native TV Advertising

In a time when ads are easier to ignore or skip, television media in particular is struggling to find ways to overcome these changes. Ad clutter, DVRs, commercial-skipping devices, online video and over-the-top services like Netflix have all added to an increasingly complex list of reasons why TV networks are continuing to explore new ways to adapt. Though in the midst of this mayhem, how do these providers go beyond adaptation in order to help brands truly stand out to viewers? Instead of reinventing the wheel, many have just identified another way to utilize the old trick we now know as native advertising.

Native advertising comes in many forms, but at its most basic is simply an advertisement organically incorporated into the medium in which it appears. The less intrusive it is to the viewer’s experience, the more successful it may be, allowing brands to connect with viewers on a more personal level. Not only can advertisers cut through clutter by eliminating the number of commercials in a program, they can also provide a better viewing experience for consumers in addition to more custom branding content.

However, to avoid the risk of reusing yet another buzzword without providing proper context, it is essential to remember that TV is no stranger to this type of advertising. Dating back to the early days of talk show hosts mentioning products on-air or utilizing clever product placement, what is now known as native ads have been an ever-present staple in the television space. Even in more recent times, this technique has flourished. Who could forget the iconic “Oprah Winfrey Show” episode from 2004 where she partnered with Pontiac and gave everyone in the audience a free car? And daily programs like NBC’s “Today” show and “Good Morning America” regularly dedicate several of their segments to showcasing themed products.

Still, with more brands facing increasing pressure to make their ads unavoidable, content providers needed to take a fresh look at this well-tested strategy. This is where the resurgence of native advertising comes into play, with outlets like Business Insider reporting that networks are preparing to woo advertisers by offering plot storylines written around products, calling it in-program advertising. The approaching upfront season will certainly provide these channels with the platform they need to entice brands and advertisers with something new. Now the only question is; will marketers bite?

Programming content

One of the most high-profile examples of an in-program integration occurred in the fall of 2015 when the hit FOX show Empire partnered with Pepsi. The duo produced a three-episode story arc wherein one of the show’s main characters was in line for a PepsiCo commercial sponsorship. According to Variety, after the three-episodes aired, a single ad starred the Empire character in a Pepsi commercial that was part of the storyline.

This type of native campaign allowed the brand to organically include their product without damaging the integrity of the program. Pepsi was able to not only build hype by incorporating the brand into the program’s story, but also delivered a 30-second ad that viewers were actually interested in watching. The tactic proved to be a success, with Variety stating that during the 2015 fourth quarter, when the Empire integration ran, Pepsi sales increased 4.7 percent.

However, large-scale partnerships with shows like Empire certainly do not come cheap, and in some cases a brand may not fit into a show organically. Ultimately, while certain executions can provide big payoffs, this strategy is not yet affordable or practical for a wide variety of companies, which could limit some of its near-term development and momentum.

Commercial-free pods

If a brand is unable to pay the large price tag of a custom Empire integration, one could purchase an entire commercial pod and then find a way to sponsor the uninterrupted programming. This type of native ad is often seen in programs ranging from high-profile sporting events to late-night talk shows.

A recent example of this occurred during one of the largest sporting events of the year: the World Series. In 2016, Fox Sports replaced a standard commercial break in the middle of the third inning with a T-Mobile native execution. According to Digiday, the commercial-free break ran for two minutes and 30 seconds. It included the T-Mobile logo on the studio desk and on the bottom of the screen for most of the segment. The break ended with one of the sportscasters performing a live read to explain the T-Mobile campaign.

The obvious benefits for this type of native advertising are viewers getting to enjoy commercial-free programming and brands receiving longer on-air time than the standard 30-seconds. That said, purchasing an entire commercial block during a highly-contested event, while possibly cheaper than a story-arc integration, can still be out of reach for some advertisers.

Cable network buildouts

Beyond program integrations, some networks are turning to the creation of entirely new divisions to encourage the rethinking of native TV. In early 2016, Turner announced the first big development in the native TV advertising space with the launch of its new Ignite division. According to AdAge, Turner has plans to become a giant native ad platform. The company aims to tell brand stories by airing two to three minute long-form branded content pieces, in lieu of five to 10 standard 30-second spots during a program.

AdAge reports that when comparing native pods to traditional pods, Turner found viewers paid more attention to native content 59 percent of the time. AdAge goes on to say that when a piece of native content was paired with the advertiser’s 30-second commercial, engagement with that spot was 62 percent higher. These statistics are certainly encouraging signs for this approach.

To take their newly expanding native advertising platform to the next level, Turner also has plans to launch Turner Ignite Sports. According to AdAge, Ignite Sports will offer clients access to intellectual property such as the March Madness Fan Festival and Sports Business Innovation at the Consumer Electronics Show, creative services, a connection to talent and improved viewer targeting capabilities. The overall goal is to help brands connect with viewers beyond the limiting parameters of sport seasons. This will be a first for the sports marketing world, so all eyes will be fixed on the new venture to see how it delivers.

Concerns

While native advertising can provide a more engaging experience for brands, that does not mean all consumers see it in a favorable light. The most popular qualm is the argument that it can mislead or dilute content for viewers.

The Empire integration for example, raises some concern over the quality of programming. While in this particular instance the native Pepsi ad was well received, does this then open the floodgates to other major script and story changes? The International Business Times predicts that in future upfront seasons, big networks will not only be selling spots around their shows—they will be selling storylines. Brands and networks obviously need to tread lightly in this area to avoid driving away viewership. One show writer recently told the International Business Times, “for me, the test will always be whether or not the use of brands in any capacity damages the viewers’ belief and immersion in the show.”

Though from the consumer perspective, perhaps the biggest concern with native advertising is the idea that an ad could be too inconspicuous. According to AdExchanger, the Federal Trade Commission (FTC) states that an ad is considered deceptive if it misleads a significant percentage of consumers, usually around 10 to 15 percent. To break this down, the commission uses tests to determine if consumers feel an ad is misleading. This is clearly an issue for brands since the point of a native ad is often to create an organic and less brand-dominant experience for the consumer. That leaves marketers in a tricky grey area on their quest to find the “sweet spot” of compliance, and some may be unwilling to flirt with this issue.

While there have been no recent cases of television networks skirting the FTC’s guidelines as they apply to native, there have already been a few instances where digital marketing has failed to comply with the new rules. The first case involved retailer Lord and Taylor with a push for a private-label spring dress. The retailer paid 50 social media endorsers to post photos wearing the same dress, though unfortunately none of these individuals disclosed that they were being paid. According to Adweek, Lord and Taylor was subsequently forced to launch an internal monitoring program for their digital ads and has to submit a report to the FTC that demonstrates how they are complying with the order.

As mentioned throughout many of the native examples cited, cost is another problem that many brands will face with large-scale native executions. The International Business Times pegs Pepsi’s Empire integration investment at around $20 million. When brands are determining their marketing budgets for the year, a large price tag like that may stop them from moving forward with including native TV in their mix.

A bright horizon

Current issues aside, native TV executions can provide brands that are open to thinking creatively with an excellent method for generating engagement and buzz. The integrated approach has already shown returns in the digital realm, so it is only natural that TV networks are again pushing the concept. Most have just begun to scratch the surface at finding new and creative ways to break through the network ad clutter, but time will likely bring forth some very interesting opportunities for advertisers that are willing to experiment.