InPowered study finds trusted content is 4 times more effective than native ads

Summary:Native ads are harming publishers and the brands that use them...

Co-founders of InPowered and NetShelter: Peyman Nilforoush and Pirouz Nilforoush.
Co-founders of InPowered and NetShelter: Peyman Nilforoush and Pirouz Nilforoush.

 

Yesterday  I argued that the New York Times  had committed a grave error in judgement by allowing the publication of native ads on its website. Native ads are OK in some specialist publications but certainly not in a newspaper such as important as The New York Times.

Labelling some content that largely looks and feels like your own, independently produced journalism, is an extraordinarily bad idea.  

I’m shocked that The New York Times, and its advisors, are so blind to the erosion of trust that will inevitably follow from readers.

At the very least, native ads do nothing to improve trust.  At their worst, readers will tune out trusted content just as they tune out other advertising.  Why would the management of The New York Times agree to anything that degrades their brand?

This is especially important in today’s widening world of the web where trust in content is vanishing at an astounding rate. Many readers already think that nearly everything they see is corrupt.

Surely, publishers would want to amplify their trust rating because it is rare. And rarity has value while an abundance of crap has very little. 

For those brands and agencies taking advantage of The New York Times’ gullibility, I say they are killing a golden goose. By actively eroding the readers trust, they are eroding the value of their advertising — both native and normal — in publications that matter. It’s lose-lose for both sides. 

I spoke with Peyman Nilforoush, CEO of InPowered, and co-founder of the NetShelter advertising network. He feels as strongly as I do about the harm the trend of native advertising will have on trusted content.  

I’ve been a long-time admirer of  Peyman Nilforoush and his brother Pirouz Nilforoush , the co-founders of the NetShelter ad network, which they sold to Ziff Davis last year. They now focus their energies on InPowered, based in San Francisco, which helps brands by finding great content written by trusted authors who are independent of any paid influence, and then they help distribute that content.

The brothers grew up in Iran and their family managed to escape to Canada when they were in their early teens. They created one of the very first blogging networks, often falling into debt supporting their publishers by paying for their servers and bandwidth, and later, in many other ways with tools they developed that provided insights that helped their publishers grow.

They know the value of trusted content first-hand because they saw how it boosted their advertisers campaigns.

Advertising always works best when it associates itself with trusted publications. There’s a bit of trust that rubs onto the advertiser’s brand in the reader’s mind when they see it in a respectable publication.  

Google’s PageRank works the same way with web sites. You always want to have a high PageRank. Google will punish your position in its search index if it sees you do anything that erodes that trust. 

Here’s some notes from my conversation with Peyman Nilforoush:

- I believe there is no bigger opportunity on the web than trusted content — it could potentially be bigger than search. What else is meaningful?

- Publishers only have one thing and that is their readers’ trust. Anything that erodes that trust has to be avoided. 

- Readers want trusted content and its trusted content that helps brands sell products. Native advertising is not trusted content. It is trying to deceive readers.

- I’ve been on panels where people were arguing over which native ad was better but it was all about format and typeface, and the look of native ads, as if that’s the important thing. It’s not. It always has to come down to the content — can the reader trust it?

- Growing up in Iran we remember what happened to the media. It became state controlled and you couldn’t trust it. You never know what was going on. You can never regain that loss of trust even if the censorship is lifted.

- Metrics is an issue. I’ve seen fights break out at conferences over metrics but no one knows what to measure, or they measure things that have little to do with anything. The multiplicity of metrics muddles things even further. No one is linking measurement to business outcomes.

- There’s lots of issues with native ads that people aren’t talking about. The cost of producing it, for example. Another important point is that native ads aren’t scalable. [Great point: They are locked into one look and feel.]

- Native ads won’t help when there’s not much good to say about a company. Bad news travels a lot faster than native ads can publish. 

- At InPowered we are very much focused on the credibility of the writer. We focus on promoting the best content that we can find. 

- We’ve run some reader tests. We compared the effectiveness of two types of content, one was sponsored/native and the other was trusted content. Readers were asked what was the likelihood they would buy the product? The paid content generated a 17% likely to buy, but 65% of the trusted content readers said they were likely to buy the product. That’s nearly 4 times more!

- We are at a fork in the road. It could all crash. We need to highlight the serious issues with native advertising.

Topics: Business Intelligence

About

In May 2004, Tom Foremski became the first journalist to leave a major newspaper, the Financial Times, to make a living as a full-time journalist blogger. He writes the popular news blog Silicon Valley Watcher--reporting on the business of Silicon Valley.Tom arrived in San Francisco in 1984, and has covered US technology markets for leadi... Full Bio

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