Native Advertising: Traditional Advertising On Line

Last week, Mashable asked the question, "Is Native Advertising Just Another Term For Good Advertising?" The answer is no, not quite.

From what I can tell, native advertising is a horrible and misleading term that is being used to describe something that may actually turn out to be a good idea -- the application of traditional advertising principles to online advertising. Let me explain.

Online advertising was supposed to be interactive. It was supposed to rescue us from having to force people into looking at our ads. Consumers were going to want to interact with us, they were going to want to have conversations with marketers, they were going to want to have relationships with brands.

It was all fantasies and delusions based on naive interpretations of consumer behavior by people who had a whole lot of ideological commitment to the web, and very little experience with real world marketing.

Now we’ve learned that, for the most part, consumers want no part of interacting with online advertising. What we are calling "native advertising" is a recent reaction to this realization and to the very disappointing history of online advertising, particularly banner advertising.

Nobody seems quite sure what they mean by native advertising. But I think I know what they mean. They don't know it yet, but they mean using traditional advertising strategy on the web.

They mean that if you insert advertising into an appealing environment and you make the advertising entertaining or beautiful or interesting, you’re more likely to attract some attention from consumers. Which is the exact premise on which traditional advertising is built.

What is TV advertising about? It is about finding the most appealing programming and inserting into that programming messages that are either entertaining or interesting or beautiful.

Native advertising represents the marketing industry finally starting to grasp that consumers do not want to interact with banner ads, do not want to have conversations with brands, and do not want to have relationships with marketers.

It is still early days for this realization, and marketers don't quite know yet what they've realized. They think they have to trick people into seeing their advertising by pretending it's part of the content.

They don't yet understand that the effectiveness of "native advertising" -- just like all other forms of advertising --  is going to be proportional to how interesting, entertaining or beautiful they can make it.

Native advertising may represent the first stage of the marketing and advertising industry growing up and coming to terms with the fact that the best hope for online advertising is not pie-in-the-sky nonsense about conversations and relationships.

It is taking the traditional principles of interrupting and grabbing attention, and applying them to the web.

For more, check out the BeanCast podcast which I was on last night discussing this and other subjects.

Display: A House Of Cards

Despite its dismal track record, spending on display advertising keeps growing at an astonishing rate. Forrester Research is projecting a 17% compound annual growth over the next 5 years.

As far as I'm concerned, it's a house of cards. And if the house goes down, it will take a lot of advertising-supported online businesses with it.

Here are some reasons I believe display is a house of cards:

• Interactivity has proven to be a joke. Nobody interacts with display advertising. Click through rates are abysmal and keep dropping.

• The promise of precision targeting has also proven to be a farce. Facebook, the poster child for precision targeting, has click rate results so low that they refuse to publish them. If "precision targeting" can't deliver better results, what the hell is the point?

• Ironically, despite its promise of pinpoint targeting, display is looking more and more like it's attracting the scattershot advertiser -- the tonnage direct marketer.

• Even if pinpoint targeting was real, what difference does it make if nobody notices the ads? In most cases, the physical properties of display ads render them essentially invisible. Have you ever heard anyone discuss that awesome display ad they saw?

• The amount of known click fraud is alarming. The amount of unknown click fraud is...unknown.

• The amount of known website visitor fraud is also alarming. The amount of unknown website visitor fraud is...you get the picture.

• After 15 years, can you name a single significant consumer brand that has been built by display advertising? I didn't think so.

There are plenty of smart people in the advertising industry who know display has been a mess, but are keeping their mouths shut because there is too much at stake. Remember, prudent, intelligent people in the ad industry who were skeptical of the magical powers of "interactive" advertising were excoriated for years for being Luddite dinosaurs (who moi?)

There are a few things that could destabilize display's house of cards.

• A high profile fraud scandal

• Widespread recognition of Facebook's display ad dysfunction

• Mobile not living up to expectations

• A major agency or research company throwing open the emperor's closet

I'm not predicting that display's house of cards is going to collapse. It is too well entrenched for that. But if it started to follow the downward track of print advertising, I wouldn't be shocked.

Be sure to see my piece today at Digiday on banner advertising.

How Dumb People Become Successful

After a few years in the business world, something occurred to me. I realized that the majority of the people I met in business were astonishingly stupid.

Years later I was sitting around a bar with a couple of my agency colleagues. We had won a very important piece of business from a world class client. We were working with the very top people at the client and we were  astounded by their shallowness.

A few drinks into the evening one of my colleagues turned to me and said, "I keep thinking that some day we'll meet the smart ones."

At that moment I recalled a conversation I had had years earlier. A friend introduced me to a business concept he called "achieving orbit."

With enough energy, a satellite will escape the gravitational pull of earth and will achieve orbit. Once it achieves orbit, it operates on its own. It will circle under its own power for years. And the only way to knock it down is to get in its way.

Businesses are like this, too, he claimed. After a certain period of success, they can achieve orbit and stay successful without much added energy.

Many companies are powered by products or services initiated years or even decades ago. And barring a horrible accident, they will stay in orbit. They persevere largely on inertia.

That's why all the monkeys running around having meetings and writing memos really aren't doing that much harm. It's why clueless managers really can't do too much damage. It's why all the CEOs and COOs buzzing around in their golf carts usually aren't fatal.

Of course, there are some industries, like technology, that need constant updating. But think about the market leaders in automobiles, food, soda, beer, fast food, dairy, snacks, candy, paper towels, toasters...for the most part, the market leaders today were the market leaders 30 years ago.

From time to time there come along some people who are so stupid that they knock a successful company out of orbit. But mostly, orbiting companies consist of people running around in circles pretending to make contributions. As long as they don't mess with the color of the box, or build a 3-wheeler, or change the flavor to grape, they usually can't screw things up too badly.

Businesses are successful in spite of all these monkeys, not because of them.