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Surviving the AdPocalypse: What Will You Do When the Current Model Stops Working?

Written on
May 29, 2014 
Author
David Melamed  |

ADOTAS – There is a fundamental flaw in advertising. Advertising is essentially arbitrage, leveraging a disconnect between the value of your audience’s attention and the cost to reach it. All arbitrage is inherently short lived. Eventually the marketplace will catch up and realign those values. Eventually the marketplace will close the gap.

Native advertising is the first major shift into this seismic apocalypse that will eventually destroy the advertising model. Content marketing is the second major shift, showing these two paths converging on the same point.

Media companies are constantly looking to squeeze more revenues out of the audience they attract. Advertisers are constantly looking for more affordable ways to connect with their audience.

This leaves us with two very clear paths that will eventually crash into each other.

1. If it’s cheaper to produce content than to buy advertising space, brands will produce their own content.

2. If it’s more valuable to have your own products to monetize your audience, media companies will start producing their own products.

Two trains, coming from different directions, both creating a new, better kind of company. The Chicken or the Egg, the publisher or the advertiser: Which comes first?

In the future, there will only be one type of company. It will be a hybrid of a media company and a product company. Some will take the path of first creating a product, and others will take the opposite path and first build their audience. But both will end up in the same place: with their own audience and their own product.

Native advertising and content marketing are the first signs that those worlds are converging. However, those are just the first iterations of what will eventually turn the business world upside down and produce a new kind of super company.

The problem with native advertising is that it is misunderstood by most media companies. They understand the idea that they need to create a natural experience that doesn’t disrupt the user experience. This leads to pre-roll video ads and sponsored tweets.  The problem is that this is essentially deceptive. It is simply integrating advertising into the design, but it isn’t truly native.

Why not? Because native requires understanding the soul of the audience. By most definitions, native is about turning the atomic consumption unit into an ad product. The problem is that most don’t truly understand the atomic consumption unit. They think it is about what content their users interact with, or how their users interact with it, but it’s really about why they interact with your content.

A pre-roll video might work better than a display ad, but product placement would certainly work even better.

Google does an amazing job with native ads. Their secret sauce: quality score. By ensuring the most relevant ads appear, the “why” of a searcher is met by the native ad unit. There is really no difference to the user between the experience of clicking an ad or an organic listing. The “why” remains intact!

What’s a true native monetization for a publisher? It’s selling premium content. It’s hosting conferences. It’s recognizing that you need to keep the “why” of your audience intact to monetize it.

Instead of lending your credibility to an advertiser, which really only dilutes your own credibility, true native capitalizes on that trust. True native is maintaining the relationship that publisher built with their audience. True native is the relationship — the common bond that connects the publisher with the audience. Keeping that intact is the only way to maximize revenues.

This leads us to a bigger problem for brands. If the ideal monetization for a publisher is to sell premium content and host conferences, what’s the ideal media for selling product?

Even with creating native content that works with this audience, you still run into a problem in that at some point, you need to redirect the user from the native experience to buying your product. So, while native content works well, it still doesn’t keep the essence intact.

Essentially, most content marketers today believe that content is a strategy for top-of-the-funnel demand generation. I believe this is just a step in the right direction. The final destination will be much more authentic.

The real question brands need to ask themselves for the future is, “What native experience can I create that can attract and engage my audience in a way that they will naturally consume my product through that experience?”

The best example of this would be a free trial of a software, or a freemium model. This works great with bottom-of-the-funnel, ready-to-buy prospects who want to mitigate risk, but there has to be a more natural way to attract and engage your target audience without a need for disrupting them.

The answer I believe lies in understanding the “why” — why people consume your product, why they do business with you, and most importantly, why you do what you do!

Simon Sinek explains that, “Your ideal audience is not people who need what you make, but rather people who believe what you believe.” In other words, there is an underlying reason why you created your product. An underlying reason that drove not just what you made, but how you made it. Others can also make the same thing you make, and do it the same way, but if their reasons for making it are different, they will not connect with the same audience you connect with. If your underlying motivation is making money, you will fall apart, because there is a major disconnect between what you believe and what your audience believes.

Simply put, your target market is people who believe the same thing you believe. WhatsApp believed in making communication easier. Facebook believes in connecting the world. Google believes in bringing you credible relevant information when you need it.

If you want to truly win long-term, you need to rally around what you believe in. Everything you do needs to revolve around what you believe in. Every piece of content you create, every touch point with your audience should revolve around connecting with them around your shared beliefs and rallying cries.

The companies of the future will be the ones that are driven by a deep value system. These companies will have no choice but to do everything they do, because they are driven by a deep-seated belief. A belief that would drive their decisions, even under radically different circumstances. A belief that goes above and beyond the sum of their company.

Don’t believe me? Just look at religion. No organization has ever been more successful. Why? Because they all believe in the same thing. When you and your audience share a common belief, you trust each other naturally, and feel safe with each other.

If you believe, you will succeed.





David Melamed writes regularly at DavidMelamed.com offering tactical tips, tricks, and strategies to find, engage, nurture, and retain customers for life. David is also the founder of Tenfold Traffic, a search marketing agency with over $5,000,000 in profitable PPC & SEO experience, as well as Customer Hunter Corp. a content development and promotion agency.

Reader Comments.

Emerging interactive video technologies will be an incredible enabler for viewers to engage with native content on their own terms by clicking on what is of interest to them. This will motivate producers to make more viewer-centric content that will drive valuable conversions to generate a measurable ROI.

Posted by Michael Schaefer | 4:28 pm on May 29, 2014.

Michael,

Interesting theory. I think interactive video might not catch on as video is more of a passive media than an active one.

I guess only time will tell.

Posted by David Melamed | 6:56 pm on May 29, 2014.

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