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Native Advertising: A Convenient Pitch I’m Not Buying

There is a lot of attention around native advertising these days. Up-and-coming media companies like BuzzFeed and Vice are hauling in huge valuations against business models around branded content, namely writing content for advertisers that resembles stories on their sites. Venerable media houses like The New York Times, with its “T Brand Studio” and The Wall Street Journal with its “Custom Studios” are playing right along.   

But despite the excitement, native advertising doesn’t pass my personal sniff test. I think the movement is just a bit too convenient an answer for entrenched players who have deep incentives for it to work. Ad-based media companies are desperate for a high-margin answer to scaled marketplaces on social media and search that are otherwise depreciating their businesses.

And, in a part of the debate that’s often overlooked, agencies are also desperate for native to work because it justifies their existence. At a time when media buying and creative is getting commoditized and boiling down to more science than art, pushing ads that are higher-touch allows them to generate differentiation, lock-in and higher margins.

In other words, agencies and media companies have a deep incentive to sell native advertising whether or not it actually provides the return on investment that brands want. 

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At an ecosystem level, I can’t see how the math on native advertising can benefit brands at scale after you factor in the massive overhead of managing the complexity of native advertising operations.