Startup analyst and former Cheezburger CRO Todd Sawicki will discuss the future of advertising beyond display during his keynote “Revenue Without an Ad Server” at this year’s Publisher Forum in Sonoma, Calif. We recently talked to Sawicki about native advertising, the next big digital ad trends, and how he makes startups work.
Sawicki helped move the the Cheezburger from the single website to one of the biggest humor platforms on the Web today, with over 13 million global visitors per month. And, with more than 15 years of experience in the world of startups, Sawicki has extensive experience in website monetization, digital advertising, user acquisition and more. For more on Sawicki, read our introduction.
We hear about native being the new digital trend, but implementation is a little bit harder to pin down. From content-sponsorship to brand integration, what are the most effective ways to implement native? What are the most lucrative?
Todd Sawicki: It’s important to understand what native advertising really means – native advertising means advertising in the native, central format of the publisher or property. For Google, a native ad is a sponsored search result (an ad formatted identically to a standard search result), Twitter it’s a promoted tweet, Facebook it’s a sponsored newsfeed story, for Forbes it’s a sponsored article, for Cheezburger it’s a sponsored meme. And sponsored just means it was content created by an advertiser and presented in the stream of content on a site solely because they are paying, i.e., it’s not organically appropriate.
I think Google sets the benchmark for the most effective way to present native advertising. I bet most people don’t realize that sponsored links generate as many clicks as organic search results. That’s one of the main reasons brands often buy their brand names as keywords – the sponsored link at the top of the SERP is the most click result. What’s even more telling about Google’s implementation is that user teasing tells us the majority of users don’t even realize there is a difference in how the sponsored results are presented (ie. via a commercial paid mechanism vs an organic what’s best/relevant algorithm). When you get to the point where — even with labeling — users do not realize it’s a paid placement you have done your job. And when you do your job – native advertising is extremely lucrative – why? Because it’s effective. For the first time – brand advertisers have an opportunity to actual measure the responses from their brand story telling.
On Cheezburger for instance, Branded memes are shared socially like all meme content on the platform. Brands can measure those shares, they can track real engagement, and it is engagement that isn’t forced — [it] happens because users like to interact with content. The same for promoted tweets, sponsored stories on Facebook, etc. – those engagements are extremely valuable to brands and thus are worth paying for. Google again blazed this path for digital publishers – now what we are all doing is realizing we all need to the same thing.
Why does native advertising seem daunting to many publishers? And, how can publishers get over the growing pains of downsizing display ads for native?
TS: Now there is another lesson from Google – relevance and appropriate-ness matter. If Google showed sponsored results which did not seem appropriate, then users would likely push back. And recently we have a perfect example with the sponsored article that the Atlantic ran for Scientology. What the Atlantic missed is that the label of a “Sponsor” on top of an “article” does not give them or their advertisers the free reign to say or write anything. With native advertising there is the audience’s expectation that there is still a filter – that the content in the stream formatted to look like content still maintains some semblance of the same standards as editorial content. Context still matters.
To all publishers contemplating native advertising – standards will matter even more in the future. It will be a fascinating role for advertising operations to contemplate and internalize the need for appropriate editorial policies. The biggest hurdle is for publishers to realize the old school print/traditional media divide between editorial and publishing is a false division. For native advertising to work – editorial needs to be involved to judge branded content to make sure it doesn’t harm the editorial brand of the site. For the publishing or advertising side of the house, those teams need to realize that any deal for money isn’t worth it. Again see the Atlantic. Cooperation is key. This is not yet a technology story, for now it’s an operational story. And in many ways that is a huge opportunity for progressive operation thinkers to help define best practices given native advertising is the true advertising story for the next decade of digital advertising. BuzzFeed recently scored a $19-million investment.
Do you see the BuzzFeed model becoming an influence/a new standard for ‘traditional’ publications in the digital realm?
TS: BuzzFeed is make a pure bet on native advertising. Google did it first well before them, Twitter is doing it as well and others likely as well. Display still is an incredibly effective way to monetize an audience. Look at Weather.com. They are an extremely effective at monetizing traffic in very progressive ways. At the same time Weather.com tells us that do it really well and effectively you need to invest significantly in the teams running display especially ad operations and products. Most publishers seemingly have been reluctant to make the sophisticated investments in talent and technology to do it right. BuzzFeed’s model is more akin to what’s the future of news then to me as the future of all content publishing online. News has a hard time with display and their model is a reaction to that. HuffPo in many ways is similar to BuzzFeed with their heavy emphasis on sponsored posts and given BuzzFeed’s founders were HuffPo founders, it’s not surprising.
What is the key to bringing in cash flow to new and novel startups?
TS: Hustling. Hustling and more hustling. Did I mention hustling? Given how crowded both the ad tech landscape is (we’ve all seen the ever present ad tech landscape logo slide) and how never ending the supply of ad impressions is today – it’s a fiercely competitive environment. On top of hustling – the best advice I give is after hustling and winning a deal – make sure you execute on it. Operational hustling, competency, and delivery is so amazingly important. And you would be shocked at how effective just doing what you say will reward you in closing deals and growing revenue. There’s a lot of hype make sure your hype is more doing then talk.
What kind of startups really catch your interest these days? Is there a trend to your investments?
TS: I am very interested in native advertising and content marketing. I saw the power of native advertising for publishers like Cheezburger and when brands like Campbell’s, GE and more are now investing millions of dollars in content marketing assets – I look for ways that will enable the promotions of those assets. Also, I am 100 percent convinced that banner ads, as we currently think of them, will not work on mobile and that given likely two-thirds of consumer browsing will end up on mobile devices (which includes tablets) we better figure something out quickly. Fortunately consumers have shown a willingness to consume content on devices – now we just need to figure out how to deliver commercial content inside of other content experiences.
(Image via Bravo TV)