One great thing about life here at SpotRight is that we have our own Jedi Council. Thankfully no dueling is involved and none of us have to shape our hair into cinnamon buns over our ears, rather we have a wonderful group of industry experts we can turn to for advice. Today we thought we’d share a conversation about content marketing and native advertising with our advisor Bruce Biegel, Sr. Managing Director of Winterberry Group, frequent industry speaker and thought leader.

“It’s great that we’re going to develop personas; next they need the content to go with those. Personas can get fairly granular, and they need to get content at the granular level.”

SpotRight: Bruce, let’s talk about content marketing, and its effects on advertising. What impact has the rise of native advertising had on content marketing?

Bruce Biegel: I think the rise of native advertising, as opposed to more commercial ad formats, has enabled IMG_6637-1marketers to get the story out in a less sales focused manner. This engages customers far better with the content, allowing it to significantly expand in social, and expand programmatically as well – especially given that we understand that the adoption of programmatic native grew 86% in 2016.

Though we had a very significant increase, yet we still have very little [content] coverage in terms of the total number of campaigns. There are ~50,000 advertisers who ran campaigns last year on the top 200 publishers and of that, about 4,000 campaigns were native. So less than 10 percent of the volume is native on paid media.

The other place we’ve seen an explosion of content is on-site. It’s given rise to a significant demand for more and better content, and is creating a significant impact on the formats required. You know, once upon a time content needed to be less flexible as brands decided; we’re going to make a TV commercial, or we’re going to just have an insert in a magazine, or an advertorial – and advertorials are really where native on publisher sites came from – print.

So today you are now designing content to be displayed across multiple screens, as well as sequenced based on consumption. So what you want to do is show somebody some content, and then the next piece, then the next piece, etc. But that first piece of content may be consumed on a tablet, and the next one on a mobile phone, and the third one on the computer, and eventually we will see native on TV as well. So the challenge that content creators have is to have consistent messaging across all of these touch points, and all of these formats.

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SR:  So with the need for so much content and in so many different formats, do you see other marketing functions like social or PR coming under the umbrella of content?

BB: Well, it’s a couple different ways. Some firms have gone in-house with content, so they’re increasing their investment internally on content. They’re working with their creative agencies, they’re working with their digital agencies, they’re working with their PR agencies, and specialist social agencies as well. They have multiple content creators, and the brands have to be the cheap curators, so you have a fairly significant curation issue.

The other thing that we’ve seen is the continued rise of content creation shops inside of publishers, whether it’s Hearst, or Time Inc., etc. I just saw an article that Vice Media is integrating multiple content agencies that they have bought into one content network. So not only do we have the traditional players of PR creating content, and creative creating content, we now have publisher specific content creation as well.

The amount of time and money that’s being spent is fairly phenomenal. And it is challenging the creative ecosystem, to be able to be cross format, and also to understand the dimension of time and location because you want content that is designed to be delivered at the right time in the right place. So now I have to think about, are you going to consume this on the train, at home, in the store? Where will that content be consumed, and how will that force it to be curated and presented? This is putting pressures on agencies that were never in this game. We’ve had PR agencies call and say: “Our clients are asking us to get into paid digital media buying. We are PR agencies. We’ve always owned earned media, and now we’re being told we have to sync that with paid.” And so whether it was social or native, etc., it’s forcing new competencies to occur inside the PR agencies.

At the same time media buying firms that really look at advertising creative are now saying: alright, how do I deal with native, which is not an ad format I’ve had to work with before?

SR: This makes me kind of wonder if everything is an advertisement now, or is advertising the way we’ve thought about it in the past going away?

BB: Advertising is not going away. We will always have a significant amount of content, and because we are consuming it digitally, we’re consuming it in much smaller chunks than we ever did before. With that being said, we will still have the Super Bowl commercials, but they will be tied to social. And we will still have display advertisements. So we’re not seeing a reduction in format, we’re seeing an expansion in format.

SR: Which leads me to my next question, are you noticing new forms of advertising emerging?

BB: It’s actually new formats, and native was certainly a new content format within a delivery format. Social has obviously been the huge expansion. What do I have to do on Facebook, Instagram, Pinterest, Twitter, etc., so that I can be noticed? Now we have Snapchat, we have YouTube; all of these are creating increased demand, and differentiated formats. We have over the top TV. We have addressable TV. So now with the ability to target more directly across more channels, everybody doesn’t get the same advertisement.

I recently saw a stat that said that while we are doing audience targeting at scale-  97% of audience targeting still uses creative or content that’s not differentiated. So it’s great that we are driving personalization and targeting, but if you don’t change the content and the creative to match that and do dynamic creative optimization, you’re missing out on the benefit of all that targeting.

Why did I target everybody if it’s the same thing? So I need segments. I need much more granular personas than I ever had before. And now I need to match the content to the personas. That goes way beyond the media buyers’ capability, which I think is also driving the agencies that had separated creative from buying and planning, to pull those things back together because we need a much tighter integration under strategy.

SR: So do you think that the gap between targeting and personalization is a gap in skills or technology or scale? Why do you think that is happening?

BB: The technology is there, and there are quite a few firms that have created dynamic content optimization or dynamic creative optimization. This is becoming part of the tech ecosystem, and people assemble on demand, based on device location and engagement. I think the tech is there. People keeping up with that tech has been the challenge.

And what about budgets? This is one of the things that we’re really thinking about for 2017. With all this demand for content, and all of this ability to deliver it, what should your budget be? How much incrementalization of the content is worthwhile? Are we getting too segmented? I know people-based marketing is incredibly attractive, but are there diminishing returns once you go past the segment level and down to the people level, for prospects as opposed to customers.

SR:  And then this too joins the whole measurement question, and how to tie things across channels. It’s already difficult enough at a campaign level, let alone trying to do it at a people level.

BB: Right. And even in the tech level, much of the commerce platform world has become relatively feature rich, but harder to differentiate. The ability of the commerce platforms and their integrators to differentiate by driving traffic and helping to build engagement is causing a consolidation among the system integrators, the commerce companies, commerce platform companies, and the marketing agencies, in a way that we’ve never seen before.

That’s why you’re starting to see somebody like Salesforce buy Demandware and you have Oracle owning ATG. The separation of adtech, martech, and content tech, we’ll call it, is slowly going away, and I expect it to accelerate. It creates new challenges in terms of skills and capabilities that need to exist within the organization. We’re seeing a lot of mergers and acquisition activity on the back of that.

SR: Yes, we are indeed. You mentioned some areas that you’re really looking at for 2017. What advice would you give advertisers that are looking to content to differentiate themselves?

BB: I would tell them you have to measure. You know, we often hear we are in THE year of attribution. Well, we’re in A year of attribution, and in order to see the benefit of your content investment, you have to be able to measure and attribute. What content is actually driving engagement, or conversion, and loyalty? Based on the business objective for the advertiser, they can then determine if they are getting the appropriate return on investment and payback for all of that content effort.

I think as the tools become more automated and we see more machine learning, the cost of building content components is reduced. Good content is still hard to pull out of the can. Being able to measure what’s effective and determine just how much personalization needs to be developed and delivered is going to be really critical. So attribution is my number one for 2017. And the other side of that is understanding identity.

Do I recognize you across all of those devices, and all of those points in time, so I can deliver you the right content? Advertisers need to look at both their data and their attribution, and really understand how much is worthwhile. People sometimes think they  need a 360 degree view of my customer. The answer is you probably need two thirds of that to be very, very effective, and the cost of that last third is phenomenal, and is not necessarily worthwhile.

Attribution is my number one for 2017. And the other side of that is understanding identity.

SR: That’s got to be a moving threshold for every brand so every advertiser will have to determine their own point of diminishing returns.

BB: I also think that with all the new platforms, with commerce platforms adding deeper content capabilities, with content management systems moving into personalization, with personalization of advertising moving into personalization of content, you have to be nimble in your technology selection, and you need to be strong with your integration of the data.

SR: Certainly content creation, planning, and execution is more complicated than it ever used to be.

BB: If you think about content personalization, we went from advertorials, to print, to infomercials on TV, to native, to email, and now we’re looking at content everywhere. After awhile people will become content blind like they are ad blind, and that is the risk. You don’t want to over invest as the market matures and people become content blind. At the same time you have to be very respective of the fact that people need to understand that it is still advertising and promotion, but hopefully it’s got a more educational scent to it.

It’s not going to be easy. I think from SpotRight perspective, it’s great that we’re going to develop personas; next they need the content to go with those. Personas can get fairly granular, and they need to get content at the granular level, but not necessarily go all the way to the individual level, where we have the persona of one. I think it’s too expensive. You just have to recognize that you have to be consistent across paid, earned, and owned.