Time Inc. is going native.
CEO Joe Ripp plans to “dramatically” expand into the so-called native ad business and has issued a request for proposals to find a partner that will help scale up new native ads on a wide variety of platforms.
Native advertising — or long-form sponsored content paid for by an advertiser but made to look like its part of the “native” editorial content — has set the ad world abuzz.
With interest waning in standard web banners and print ads, media and ad execs are under tremendous pressure to develop content for an emerging area that consumers seem to like.
Christopher Graves, the global CEO of Ogilvy Public Relations, called native advertising “the new gold rush” at a recent forum for the Council of Public Relations Firms, while he said more advertisers are coming to the conclusion that consumers are suffering “banner blindness.”
“There is an actual cure to banner blindness, and that cure is a new form called native advertising, brand journalism, or branded journalism, something that will move us away from the traditional ad formats to actually using content in place of advertising,” Graves said at the p.r. powwow.
Internet ad revenue rose 18 percent, to $20.1 billon, in the first half of the year, according to the Interactive Advertising Bureau. Display ads such as web banners, which accounted for 30 percent of the total, rose just 9 percent, to $6.1 billion.
The group has yet to calibrate how much is spent on native ads in part because it is so new that there is no clear agreement on what it is exactly. IAB is expected to issue a white paper on native advertising soon, which could bring some clarity.
Meanwhile, research firm eMarketer estimates native advertising could grow into a $1.8 billion industry within three years.
The tricky part is navigating the church/state divide. Editors inside Time Inc. are nervous after Ripp abolished the position of editor-in- chief and created a new role, chief content officer, in its place.
“While denoted as ‘sponsored content’ the native experience should practically mirror the look and feel of what users interact with when viewing any piece of standard content,” according to Time Inc.’s request for proposal, which was first reported by Media¬¬¬post last week.
BuzzFeed, the digital company known for its listicles and cute pet photos, is going to become profitable this year with virtually all of its revenue coming from native ads.
Eric Harris, the executive vice president of operations and a panelist at the recent Council of Public Relations Forum, said the company had 700 such “programs” last year.
“Every single one is native advertising,” he said.
General Electric was one of the first to embrace the format on BuzzFeed, whose posts about the Paris Air Show never specifically pitched GE-made airplane turbines.
Lewis DVorkin, the chief content officer at Forbes, said the company ran about 1,200 native ad programs through September as part of its Brand Voices format, charging sponsors $50,000 to $70,000 for a three-month contract.
“There were more than 1 million social engagements for those posts — tweets, re-tweets, likes, StumbleUpon’s and all those kinds of things,” DVorkin said at the p.r. forum.
He estimates about 20 percent of the company’s ad revenue will come from native ads this year and he expects it to jump to 30 percent next year.
Time Inc. has been slow to the game, but its request for proposal gives a pretty clear picture of where the publishing giant would like to head.
It is looking for a partner that will create stories, video, photo galleries, lists, infographics, recipes, boutiques, games, trivia, quizzes, polls, content hubs and custom interactive tools.
People and Entertainment Weekly will be among the first Time Inc.-owned titles to use the new system.