Social media homework

BRANDED CONTENT

The Fateful Merging of Media and Marketing

Jonathan Hardy

1 ADVERTISING AND MEDIA

Separation and integration

Your Facebook feed says ‘Sponsored’. Your online magazine says, ‘Paid content’, another in BuzzFeed (2015) lists KFC as ‘Brand Publisher’ for an article, ‘11 Things All Busy Families Should Make Time For’, including KFC’s Popcorn Nuggets. You read a powerful series of articles on hunger in America, but it is labelled ‘paid programme’, produced by the Wall Street Journal (2016) Custom Studios in colla- boration with Mini, and includes such branded wisdom as ‘Mini owners are all di!erent. There’s no one person that Mini drivers look like. It’s the same with food insecurity. It’s all walks of life.’ You see an Instagram post for Cocoa Brown tan with the hashtag #brandambassador (ASA, 2019). From product placement in "lms and TV to mobile news feeds and social media in#uencer endorsements, brands are burrowing into media content.

The relationships between media and advertising are changing profoundly as they converge across digital platforms. Increasingly, brands are involved in the production of media content. This branded content takes various forms, from material that is self- published by brands, through to ‘publisher-hosted’ content, where brands supply or fund material carried by third-party publishers. Some of this is so-called native adver- tising, advertising that blends into the editorial or content environment in which it appears, merging brand messages with entertainment or informational content. Taken together, such non-traditional advertising, which blends brand messages with enter- tainment or information, grew at twice the rate of traditional advertising worldwide in 2017, surpassing $100 billion (PQ Media, 2018).

Branded content has grown rapidly, becoming a major focus for marketers during the last decade. In the UK, content and native advertising grew to £509m. in 2014, accounting for 22 per cent of all display ad spending (Internet Advertising Bureau [IAB UK], 2015). Spending on non-traditional, native advertising has been rising in recent years and is expected to occupy an important, if not central, posi- tion in advertising strategy and expenditure into the future.

DOI: 10.4324/9781315641065-2

Eight million signed into YouTube in 2012 to watch an event called Stratos in which Felix Baumgartner fell from high altitude space to earth in eight minutes (Swatman, 2015). Viewers watched the Red Bull logo throughout, on Baumgartner’s space suit, on the space pod, and on the clothing of crew and spectators below, although ‘the camera never lingers on these symbols’ (Einstein, 2016: 2). Welcome to the world of branded content. Red Bull’s promotions illustrate the expansion of a brand’s use of its own media, so-called ‘owned media’, using its websites, and social and mobile apps to communicate directly with audiences. Red Bull’s Media House produces TV shows, including Baumgartner’s jump, for its Red Bull TV channel, and licensed to the Discovery Channel, Net#ix, and others, while Stratos also secured worldwide publicity in news coverage as ‘earned’ media. Red Bull is now a fully functioning media company, whose Media House also creates art and photography books, a lifestyle magazine, Red Bulletin, amongst a host of music and extreme sports content that features branding but rarely includes the energy drink itself. In keeping with much so-called content marketing, the bene"ts or attributes of the product are not mentioned in Stratos. Baumgartner’s successful jump did, though, "t perfectly with the brand’s tagline: ‘Red Bull gives you wings’.

The integration of media and advertising is not new but it is intensifying. Branded content is occurring in di!erent forms across news media, entertainment and social media.

The creation of entertaining or informational media content controlled by brand owners (‘owned media’) is one kind of branded content. Another is brand commu- nications that appear within independently owned, ‘third-party’ media publications, channels, platforms, and social media spaces that are subject to control by parties other than brands. Increasingly brands are sponsoring, co-creating, sharing control, or exercising full control over content in these media. In fact, marketer control over the content, timing, publication, and dissemination of communications is key to understanding the shift to branded content and the forms and practices favoured in ever-changing environments. Media and marketing communications are merging. Marketers like Red Bull and action camera tech company GoPro are becoming broadcasters and publishers, while media increasingly incorporate brand-created or brand-sponsored content. In entertainment media, marketing integration includes advertiser-"nanced television, product placement, virtual advertising, and advergames. Boundaries between media and advertising are being tested, crossed, rede"ned, and erased. Pressures on marketers to "nd e!ective ways to reach prospective purchasers and pressures on media to attract advertising "nance and accommodate marketers are occurring in contexts of disruption and change in markets, in policy, and in creative communications practices and use. Within the overall convergence of media and communications industries and cultures, the convergence of media and marketing is gathering pace across the various dimensions of ownership, work practices and values, cultural forms, and user engagements. The emergence of new forms and practices of integrated advertising raise a host of issues ranging from consumer awareness and acceptance of advertising to the consequences for the media’s editorial independence and creative autonomy.

4 Practices

Branded Content advances the critical study of the changing relationship between media and marketing communications in the digital age. This book examines the forms, evolution, and implications of branded content practices, ranging from brands’ own media to sponsored content and programmatic native advertising. The ways in which marketers are adopting branded content is explored in the context of the ongoing convergence of paid, owned, earned, and shared media. While it focuses on forms of integration (native advertising, product placement), the book also examines how these have developed alongside the disaggregation of media and advertising and the growth of online behavioural advertising and marketers’ ‘owned’ media. This book considers: (i) what is happening; (ii) what the problems are; and (iii) what the prospects are for those problems being addressed. It describes industry practices and their relationship with changing policies. It considers how emergent practices have been ‘normalised’ and it examines where and how pro- blems have been articulated and critiques developed.

Before proceeding further, it is important to justify the book’s focus, in the context of a broad-ranging debate, and much scepticism, about what branded content encompasses and what signi"cance it has within existing and emergent marketing communications practice.

One response when branded content is discussed is to say that this is nothing new. It is now nearly two decades since Scott Donaton (2004) described the merging of advertising and entertainment in his bookMadison & Vine, based on an Advertising Age newsletter that ran from 2002. I like it when people say this since they are inviting us to pay attention to the history of branded content; but, of course, I don’t agree that this subject has been fully discussed, that the cartographers have safely mapped the terrain. Instead, I want to contribute to the excavation and re-evaluation of the his- torical formations through which branded content has developed and been under- stood. And, as we will see, branded content can be traced back far beyond the last two decades to the early formation of public communications, if not the birth of human symbolic communication. The integration of paid advertising and publishers’ ‘editor- ial’ content includes 19th-century ‘reading notices’, and 20th-century advertorials in print publishing. Product placement is coterminous with the birth of cinema, while now extending across entertainment, news, games, post-production virtual placement (Dagnino, 2020), and on to in#uencer marketing by (micro)celebrities and AI-assis- tants (Yesiloglu and Costello, 2020).

As well as being long-standing, another, contrary, charge is that branded content represents relatively #eeting and ephemeral phenomena. Branded content, native advertising, and associated terms tend to be overhyped, presented by interested parties as solutions to problems marketers face, where the framing of problems and solutions is partial and contestable. Another line of argument acknowledges the growth of bran- ded content but argues it is a short-lived, transitional stage, indicative of more pro- found changes underway that a focus on ‘branded content’ is apt to misrecognise and misread. By 2007, Scott Donaton (2007) cautioned, ‘We’ve moved past the age of interruption, and even past the age of embedded content and into a model of engagement’. One way to resolve these contradictions is to acknowledge that there are

Advertising and media 5

di!erent temporalities relevant to the discussion and analysis of branded content, across myriad diverse practices. A 2014 review of how far ‘Madison Avenue’ (the New York avenue synonymous with advertising) and ‘Vine Street’ (in Hollywood, representing media and entertainment) had actually merged reported a mixed picture, in which ‘the partnership between advertising and entertainment has become just as imperative and pervasive […] But in other ways, it’s shocking how little has changed’ (Sebastian, 2014).

These are important sets of debates that demand clarity, support, and re#exivity in considering the status and signi"cance of branded content practices. Put another way, the debate demands resources from key domains of knowledge, from industry analysis and expertise, from the qualities and resources of academic scholarship and, as this book will emphasise, from a wider range of voices and perspectives across civil society. For now, I o!er the reassurance that this book aims to consider how branded content is constituted and constructed across discourses and practices, not assume the status of the object a priori. Yet, it is the argument of this book that a profound convergence is underway between media and marketing. How to understand and assess that convergence is the challenge and focus of this work.

Donaton (2004) asserts that the alliance of advertising and entertainment media is a means to repair the damaged business models of both. Branded entertainment is vital to save the media and marketing communication industries. We are witnessing, says Donaton, a fundamental transformation of the business of marketing communications from an intrusion-based marketing economy to an invitation-based model. This represents a shift of power from communicators to consumers. Empowered consumers can bypass advertising messages. The central claim is of a power shift from producers to consumers as the driver of innovation. Donaton (2004: 3–4) writes: ‘innovators who respect the transfer of control and invite consumers to interact with brands on their own terms will survive. Resisters will be trampled.’ I invite you to keep in mind that set of claims throughout, as this book is, in part, an extended review of their merits. Whether we are indeed witnessing a profound shift of power from communication producers to users is among the critical issues this book seeks to assess.

Branded content: Main forms

Branded content covers three main areas. The "rst is brands’ own content (so-called ‘owned’ media) appearing on marketers’ websites, Instagram, Facebook pages, You- Tube channels, publications, podcasts, apps, and so on. Some restrict the term content marketing to refer only to brands’ owned media content ‘posted on your own or other unpaid platform’ (Pulizzi, 2015). Next is the ‘native’ distribution of marketers’ paid content: ads integrated into web pages, apps, and news feeds in social media. Much of this is programmatic, part of the increasing automation of advertising buying, selling, and placement (see Chapter 6). One way we encounter this is the sponsored stories on publishers’ websites, assembled by content recommendation companies like Outbrain and Taboola. Native Distribution Ad Units refer to the automated assem- bling of advertising in online media that is ‘native’ to the environment in which it

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appears, such as promoted posts that appear alongside regular posts. There are various types of native formats, including in-app and in-feed advertising; ‘These are ad formats which receive content components such as headlines, images, videos, body texts etc., which are usually formed into real-time within ad units designed to "t within a pub- lisher’s overall style and layout’ (IAB [Interactive Advertising Bureau], 2013).

The third kind of branded content is material hosted by, or made by, publishers. This includes advertorials in news media and magazines, advertising-funded program- ming (AFP) on broadcast or non-linear TV, and promoted or sponsored posts on social media like Facebook, Twitter, TikTok, and Instagram. The term ‘native advertising’ is used to cover both the second and third types of branded content and has been de"ned as ‘paid advertising where the ad matches the form, feel and function of the content of the media on which it appears’ (Native Advertising Institute, 2015). More broadly, ‘“native” advertising is content that has been designed so it doesn’t look out of place in the habitat within which it’s being viewed’ (ASA, 2020). That term captures the increasing variety of ways in which advertising is intermingled with con- tent in online, mobile, and social media. The aim is to get users to engage with advertiser-sponsored content as readily as they would non-sponsored editorial content. Of these three main types, the "rst is brands’ own media; the second and third are forms of paid advertising. However, while native is increasingly used to describe digital advertising formats where the marketer exercises control over the communications, in type three, marketers may pay for content without exercising full editorial control. This is then closer to practices, and regulatory de"nitions, of sponsorship than adver- tising. For both type two and three, it is the blurring of advertising with editorial, and the confusion about where control over content lies, that generated much of the controversies surrounding branded content.

The changing relationship between advertising and media

Digital media is at the apex of two key trends: towards the disaggregation of advertis- ing and media and towards their integration. The characteristic relationship of media and advertising in mid-20th-century media was integration with separation. Advertis- ing was integrated in the sense that it was physically combined with the media pro- duct. In newspapers and magazines, adverts appeared alongside editorial; in linear television, spot (or block) advertising appeared in designated breaks within or between programmes. While advertisers controlled their commercial communications, media "rms controlled the packaging and distribution of the ad-carrying media. Media and advertising were kept separate on the whole. It may be argued, as we will consider further, that this was, in fact, a short-lived period, between the advertiser-sponsored broadcasting of the early 20th century and the growth of integrated content, such as ad-"nanced television, from the 1990s. Yet integration with separation re#ected norms that ‘advertising – as the major funding system of the mass media – should not unduly in#uence the non-advertising content’ (McAllister, 2000: 101).

There have always been opportunities and pressures to integrate, but the prin- ciples of separation were generally upheld by journalists, and by creative

Advertising and media 7

professionals in television, supported by managers, underpinned by self-regulatory codes of conduct in both media and advertising, and subject to stronger statutory regulation in some sectors, such as UK broadcasting. In both ad-dependent print media and television, there was an institutionalised e!ort to capture the bene"ts of ad "nance while protecting the quality, integrity, and independence of media speech. This drew on a combination of values derived from democratic, consumer welfare, artistic, and cultural concerns. Media and advertising should be separated to ensure that consumers know when they are in a selling environment and to ensure that advertisers should not be the principal arbiters of media content and provision.

Media and advertising integration is by no means a new phenomenon and has a long history across all media forms. Yet, arguably the most profound change in the 21st century is that the commercial digital environment has brought increased pres- sures from marketers met with increased accommodation by media. The emergent relationship is integration without separation. The integration of media and advertising takes various forms, many with long histories, such as product placement, coterminous with the birth of cinema. However, the opportunities and challenges of convergence and digitalisation, not least the struggles to "nance an enormous expansion of media, has brought increased pressures from marketers and increased accommodation by media. Product placement, branded entertainment, advergames and infomercials are the most familiar outcomes (Lehu, 2007; Hardy, 2010; 2013). The emergent forms, then, are integration without separation, but this co-exists with trends towards dis- aggregation of media and advertising. Like integration, disaggregation of media and advertising takes various forms with di!erent consequences. The most challenging feature is that advertising is much less dependent on media vehicles as in traditional models. Advertisers can link advertising to search and users’ activity online so that advertising follows people’s pro"les rather than being bundled with media content. The greater range of opportunities to pro"le, track, and target consumers also dimin- ishes the value and exclusivity of mass media vehicles. Content matters, since it attracts the consumers whom advertisers seek to reach. However, marketers have much greater opportunity to reach consumers without subsidising or accommodating media content providers. The intermediary role of media creating an audience to sell to advertisers is being undermined, in part because the production and distribution of physical goods are expensive ways to reach audiences, and in part because of the advantages of new ways to reach target consumers. When brands can track valued users across their web browsing to whatever pages they load, those marketers have less need and less incentive to consider the editorial context and may instead see bene"ts in reaching those users in the cheapest spaces on o!er, which may be those of clickbait providers rather than prestige publications.

As search illustrates, advertising can be connected to media content but #ow to search engines. This highlights the decoupling of media production and distribution and the fragmented way in which content is accessed. As Turow (2011: 117) states ‘consumers no longer typically confront media products as uni"ed branded products or programming #ows. Many read individual newspapers articles, listen to individual

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songs and view individual program episodes unmoored from a “channel” that has been constructed by the content-creating "rms.’ So, marketers are less dependent on the intermediary role of media. The a!ordances of digital communications and tar- geting are driving marketers to demand that they pay only the actual costs of deliver- ing an advert onto a selected platform (Turow, 2011). The traditional subsidy supporting the news, information, or entertainment surrounding advertisements is diminishing, with profound consequences for communication resources, public media, and cultural pluralism (Couldry and Turow, 2014). While these trends are in some senses diametrically opposed, they both re#ect a new shift towards marketer power in an era of increased competition for and dependence on advertising "nance.

Marketers speak of four main ways organisations communicate and present them- selves. PESO stands for paid, earned, shared, and owned media. Traditional advertising means paying to insert advertisements into media vehicles or other advertising spaces (paid). Earned media describes public relations activities to generate editorial coverage. The third area, owned media, refers to marketers’ own content, and here exponential growth has occurred across digital publishing and the production of branded content for online and mobile platforms, which has the e!ect of also increasing pressures on media for greater accommodation in paid and earned media. Finally, shared media refers to the circulation of marketing communications across social media and online as messages are created, shared, and adapted between users of various kinds, from pro- fessional to amateur, including ‘in#uencers’ like vloggers who can be encouraged to act on behalf of brands along a spectrum overlapping with paid media. The PESO model originates in the work of Don Bartholomew, vice president of digital research at Fleishman Hillard, who developed a metrics matrix for the agency (Yaxley, 2020). PESO was further developed in a blog post by Gini Dietrich (2013) and gained wider recognition through her book Spin Sucks in 2014, with an updated model adding more contemporary media channels and marketing practices (SpinSucks, 2020). PESO is displayed as four overlapping circles, showing the separation, and integration, of paid (advertising), earned (public relations), shared (social media), and owned media (Die- trich, 2013). The model is useful in considering the features of payment, ownership, and control that distinguish each mode, as well as the blurring and convergence occurring between them. Branded content occurs in each PESO circle as well as in converged, hybrid forms where they overlap, and occurs, too, within di!erent grada- tions of brand control over content, form, dissemination, and context of display. A key limitation of PESO, however, is that it lacks a historical dimension, presenting the modes as a perpetual present. We need to reincorporate history, and consider changes in the rules and regulations governing marketing communications, in order to grasp why the expansion of branded content generates a host of critical concerns from some, as well as enthusiastic support from others.

Media and marketing integration in historical perspective

Branded content is old, not new, but it has intensi"ed in the digital era. The phenomena explored in this book have become more signi"cant in scope, reach,

Advertising and media 9

and impact in recent years, and many practices originated only in digital media, but all can be traced to practices with much longer histories. Neither the production of media by brands nor the integration of brands into media are new in themselves. In 1895, the agricultural hardware manufacturer John Deere published The Furrow, ‘a journal for the American farmer’, lauded as a pioneer in brand magazine produc- tion a century before content marketing became a buzzword (Gardiner, 2013). In 1900, French tyre company Michelin produced the "rst Michelin Guide, providing instructions and travel information for motorists: branded content. Expanding its restaurant guide section in the 1920s, Michelin’s three-star rating system has grown to become one of the most highly prized international awards in the industry. Brands associated with speci"c products have often created, or licensed, other branded products, which in more contemporary terminology is branded content. For instance, the drinks company Guinness launched The Guinness Book of Records in 1955, a Christmas bestselling annual publication for decades afterwards. The tobacco brand Marlboro extended the brand into clothing, shortly before tobacco commercials in US broadcast media were banned in 1971, when the Public Health Cigarette Smoking Act came into e!ect. Brands have also sponsored media and paid or bartered to feature within or around programmes. Procter & Gamble and Colgate Palmolive sponsored radio shows (from which the term ‘soap operas’ is derived) from the late 1920s as radio became America’s mass audience medium, and then sponsored television shows (Smulyan, 1994). For the TV shows in the 1950s, the soap brand names were announced prominently at the start and end of episodes, accompanied by regular airings of advertising spots negotiated as part of the sponsorship arrangements.

Branded content has been described as the ‘re-initiation of long-standing prac- tices such as advertiser-funded programming and product placement’ (Grainge and Johnson, 2015: 38). US radio and TV shows were made by ad agencies such as J. Walter Thompson, which produced 60 hours of programming per week by the 1930s (Kretchmer, 2004: 41). Gillan (2015) examines what she calls ‘content pro- motion hybrids’ in mid-20th century American television involving product inte- gration and sponsored content. Product placement in movies can be traced back to the Lumière "lms of the 1890s and was well established in the Hollywood studio system by the 1920s (Newell et al., 2006). The Hollywood studios extracted commercial fees for product promotion and endorsement in movies from the early years of the 20th century. This intensi"ed from the 1930s when studios sent scripts and identi"ed potential promotional opportunities for marketers (Grainge and Johnson, 2015: 38). Donaton (2007) identi"ed the merging of entertainment media and advertising in the 2000s as ‘a return to the product placements and program sponsorships that in fact were the hallmarks of the earliest days of American radio and television’. By the 1930s top advertising agencies produced national radio shows such as Kraft Music Hall (1933–49) by J. Walter Thompson, Show Boat (1932–37) sponsored by Maxwell House Co!ee; and The Jack Benny Show (1935– 44) produced by Young & Rubicam for General Foods (Meyers, 2011). With increasing academic attention to promotional industries, the rich histories of

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promotional communications continue to be recovered and re-appraised. One example from the UK is the promotional "lms made by the GPO (General Post O$ce) "lm unit, most famously Night Mail (1936), the only GPO "lm to be sold for release in commercial cinemas. This 24-minute "lm ends with a verse com- mentary written by the poet W.H. Auden to an accompanying score by the composer Benjamin Britten (Grainge and Johnson, 2015: 49).

History and development of branded content: 1990s–2010s

So, branded content is old, not new, and subsequent chapters discuss in more detail the antecedent forms and arrangements with traceable lineage to contemporary formats. Yet here the phase of growth of ‘contemporary’ branded content, from the late 20th century, is traced in broad outline, before examining in more detail the key explanatory factors. Branded content sits within the broader histories of modern and especially digital communications. The "rst online advert appeared in 1993 (Oberoi, 2013). Sponsored search dates from 1998 (Jansen, 2008).

An oft-cited originary moment is BMW’s web series of eight ‘mini’ feature "lms, The Hire, in 2001 and 2002 (Lehu, 2007: 213). Developed by Fallon advertising agency, the series was produced by David Fincher’s production company Anonymous Content at an estimated cost of $25 million (Leibowitz, 2020). With separate directors for each short "lm, around ten minutes each, the series engaged leading directors and producers, including Ridley and Tony Scott, Ang Lee, John Woo, and Guy Richie, with star actors such as Clive Owen, Gary Oldman, Madonna, Mickey Rourke, Forest Whitaker, and Don Cheadle. The Hire has been described as ‘the "rst modern branded content campaign’ (Derda, cited in Dzamic and Kirby, 2018: 115) and the ‘"rst venture in branded entertainment to make concerted use of mobile video technology’ (Grainge and Johnson, 2015: 49). For Donaton (2007), this ‘groundbreaking’ partnership:

#ipped the traditional marketing model upside down, with the automaker spending the bulk of its budget on production and a fraction of it on the media buy. It also created a form of advertising that consumers would actually have to seek out and download, and then spend 10 minutes or more with. Imagine the boldness of that!

Viewed an estimated 45 million times by June 2003, this content strategy required a marketing e!ort to encourage users to locate and view the "lms on BMW’s website, and download them, usually overnight on dial-up modems, as broadband access was generally restricted to the a%uent in advanced economies and streaming was not yet available (Sebastian, 2014). The return on investment for the strategy is unpublished and, as Donaton (2007) notes, ‘There have always been those who doubted the return on the investment of that deal, but it was a brilliantly bold move and it did happen to coincide with a record sales year for BMW’.

Andrew Canter, Global CEO of the Branded Content Marketing Association, describes how he and others saw the opportunities ahead but also the threats. With the rise of the internet, ad-skipping technologies such as TiVo, the commercial television

Advertising and media 11

industry, and TV ads with it, appeared set to follow the music industry into crisis. As Holt (2016) comments, ‘The rise of new technologies that allowed audiences to opt out of ads – from cable networks to DVRs and then the internet – made it much harder for brands to buy fame. Now they had to compete directly with real entertainment.’ BMW’s The Hire was not only a strategic response to ad-skipping but one of the "rst brand part- nerships with TiVo as part of an innovative distribution strategy that included the BMW Channel on DirectTV (Leibowitz, 2020). In 1999, then an advertising executive, Canter (2017; 2018) describes how television production companies began to pitch ideas and seek to work with agency clients. He worked on what became a series of four three- minute "lms funded by Microsoft called Living in an E Worldwith branding (‘brought to you by Microsoft’) at the beginning and end. Made in 2000, the "lms were pitched to publisher-broadcaster Channel Four who featured them in The Slot, a short primetime segment, during National Science Week. Costing £100,000, far below the prevailing costs for TV ad campaigns, Canter was encouraged to o!er further content solutions to brands, such as a series of "lms highlighting the visitor-advice role of concierges for Intercontinental hotels (Canter, 2017).

New types of communicators started to appear: content marketers. These emerged from positions within advertising agencies, public relations, media production com- panies, and from brands’ own marketing departments and services. Such origins shaped practices and identities, as di!erent domains of knowledge vied for ascendency in the rapidly converging space of brand marketing and storytelling. This included what cri- tical "gures within marketing saw as hype-generation, rebadging (video producers becoming ‘rich content creators’), re-presentation, and stretching out beyond existing expertise and practices (Dzamic and Kirby, 2018: 5–6; Velocity Partners, 2013). Nevertheless, new practices reshaped businesses. Media production companies, such as the independent Somethin’ Else (2020), moved from radio and TV into branded content. Public relations practitioners, skilled in corporate communications, writing news releases, features, and other storytelling, now vied with others to manage brands’ communication channels and o!er creative content production and marketing solu- tions. Both PR and advertising disciplines were already competing in the emerging space of digital media and social media communications, where blatant promotional content and ‘push’ marketing was seen as increasingly ine!ective.

Reorganisation to facilitate branded content was occurring across marketer clients, agencies, and media from the early 2000s. For instance, in 2004, Channel Five tele- vision (UK) created a ‘specialist, client-facing commercial development division, within the overall sales department … to explore revenue opportunities outside tra- ditional spot advertising’ (Channel Five n.d.). Set up in response to an increasingly fragmented and diversi"ed broadcasting marketplace, this was developed to explore the emerging markets of sponsorship and mobile to integrate into Five’s core business. We will examine de"nitions further below but the rise of buzzwords associated with ‘content’ takes o! from the 2000s, and by the 2010s ‘content’ was ‘becoming the industry descriptor of choice’ (Bryant, cited in Grainge and Johnson, 2015: 23) and ‘the dreaded buzzword’ (Weise, 2011). The UK branch of Mindshare held its annual meeting on ‘the future of content’ in November 2012. The ‘institutional’ organisation

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of branded content occurs from the early 2000s. The Branded Content Marketing Association (BCMA) was established in 2002 in the UK. The Content Marketing Association (UK) was created in 2012 as a rebranding of the Association of Publishing Agencies. In 2013 the New York Times ran its "rst native ad.

Alongside the practices (e.g. industrial organisation), discursive (e.g. trade media), and wider institutional (e.g. trade and professional body) formation of branded content was the role of competition and award ceremonies. The most prestigious international award event for advertising, Cannes Lions, introduced its ‘Branded Content & Entertainment’ category in 2012. By 2016, the growth of that award category led to its replacement by an entire sub-festival, Cannes Lions Entertain- ment. In 2015, the "rst Brand Film Festival was held in New York. Now an annual event, the festival showcases branded content "lms, from YouTube videos to long-form documentaries, and is organised by the publisher Haymarket Media.

The Interactive Advertising Bureau (IAB), a US-headquartered organisation with national and regional subsidiaries, published the Native Advertising Playbook in 2013 and a revised version in May 2019 (IAB [Interactive Advertising Bureau], 2013; 2019). As well as updating native ad format classi"cations, the 2019 report took stock of changes. In 2013 only a ‘few dozen’ publishers invested in native while in 2019 ‘nearly every publisher’ had a dedicated content studio for native advertising. In 2013 there were no industry speci"cations and only a handful of operators involved in program- matic native advertising. Paid advertising on social media was a mere 10 per cent of total digital ad revenues, with most brands producing for their own organic (non-paid) posts: ‘Publishers could distribute content for free and garner signi"cant engagement’ (IAB [Interactive Advertising Bureau], 2019: 4). By 2019, paid social was 25 per cent.

De!nitions

Branded content has been hailed as the future for marketing communications. More accurately, branded content is one of a multiplying number of terms associated with a set of claims about the future for marketing and media. These include content marketing, native advertising, programmatic native, brand journalism, sponsored content, paid con- tent, and other terms whose de"nition and usage we will examine. All these buzzwords refer to informational and/or entertainment content that is sponsored by marketers. Yet these terms lack precision; they have been used in a variety of ways amid ongoing debates about their meaning and usefulness, with some deriding the term ‘content’ as hopelessly vague and all-encompassing. Nevertheless, content marketing was voted word of the year for 2015 by the US National Association of Advertisers (ANA, 2015), followed by programmatic and storytelling. Content marketing is ‘the discipline of creating quality branded editorial content across all media channels and platforms to deliver engaging relationships, consumer value and measurable success for brands’ (Content Marketing Association, 2017). It has also been described as ‘a straightforward sounding – yet truly vague – way to describe the means through which advertisers get people to spend time watching or reading “content” that has been paid for by an advertiser’ (Einstein, 2016: 2). Let us start with some de"nitions.

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Branded content

A research initiative by the Branded Content Marketing Association, IPSOS Mori, and academics (Asmussen et al., 2016: 34) led to this de"nition:

From a managerial perspective, branded content is any output fully/partly funded or at least endorsed by the legal owner of the brand which promotes the owner’s brand values, and makes audiences choose to engage with the brand based on a pull logic due to its entertainment, information and/or education value.

A simple de"nition is content that is produced or funded by brands. Branded content is a broad and encompassing term covering activities including advertiser- funded programmes, advertorials, advergames, branded entertainment, custom publishing, events, experience, native advertising, product placement, and spon- sorship. Branded content encompasses all types of media: audio, audiovisual, visual arts, music, theatre, and performance.

Content marketing

The Content Marketing Institute (CMI) de"nes content marketing as: ‘a strategic marketing technique of creating and distributing valuable, relevant, and consistent content to attract and acquire a clearly de"ned audience – with the objective of driving pro"table customer action by changing or enhancing consumer behaviour’ (Pulizzi, 2015). A key distinction is made between content on brands’ owned media (content marketing) and content that is paid communication in third-party media (native advertising). ‘With content marketing, [your] stories are found on your owned media properties. With native advertising, you pay vendors to dis- tribute your stories across channels they own and manage’ (Shiao, 2019).

CMI founder Joe Pulizzi (2015) describes content marketing as the provision of content that ‘is valuable and relevant, designed to attract a clearly de"ned audience, and posted on your own or other unpaid platform’. However, having distinguished this from paid advertising [including native advertising], Pulizzi then reincorporates payment within content marketing: ‘Now, this doesn’t mean you shouldn’t pay to promote your content as part of your content marketing strategy. If you don’t have an audience that is subscribed to receive your content, you should look into paid media as a way to reach a targeted audience’. So payment can occur within a content marketing strategy, rendering the demarcation indistinct. The main e!ort is to associate content marketing with owned media and native with paid: ‘Content marketing is an ongoing process that is best integrated into an overall marketing strategy. It focuses on owning media, not renting it. In content marketing, the brand owns the media’.

Despite the CMI’s e!orts, content marketing is widely used to cover both brands’ own and paid communications, with de"nitions o!ered that are indis- tinguishable for other terms such as native advertising. For instance, consumer content marketing is de"ned by PQ Media (2018) as ‘Paid marketing messages developed to

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simulate a news story or entertainment program that is cohesive with the media’s content structure, including assimilated design that is consistent with the media platform’.

Native advertising

A core de"nition of native advertising is as follows (IAB [Interactive Advertising Bureau], 2019):

Native advertising is a concept encompassing both an aspiration as well as a suite of ad products. It is clear that most advertisers and publishers aspire to deliver paid ads that are:

! so cohesive with the page content, ! assimilated into the design, and ! consistent with the platform behavior …

that the viewer feels the ads belong there.

The description itself is identical to the 2013 version apart from a subtle but sig- ni"cant change. The 2013 version reads ‘[so] that the viewer simply feels that they belong’ (IAB [Interactive Advertising Bureau], 2013: 3). The 2019 version emphasizes viewer recognition and acknowledgement of the ad status of native ‘feels the ads belong there’. This re#ects an overhaul of the approach to demon- strate full compliance with Federal Trade Commission (FTC) requirements on the disclosure of native advertising (Chapter 7).

Sharethrough (n.d.) de"nes native advertising as ‘a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed’. The de"nition combines form (‘Native ads match the visual design of the experience they live within, and look and feel like natural content’) and function (‘Native ads must behave consistently with the native user experience, and function just like natural content’). The IAB [Interactive Advertising Bureau] (2019: 14, 5) now presents ‘Branded/Native Content’ as the category term for ‘a core native ad type’, incorporating ‘brand content’, ‘sponsored content’, and ‘custom content’:

Branded/Native Content is paid content from a brand that is published in the same format as full editorial on a publisher’s site, generally in conjunction with the publisher’s content teams themselves. The content itself is, therefore, part of the native ad buy and should be considered as a native ad type.

Around these core terms are myriad other terms, some adding specialisms, others com- peting terms for the same or overlapping practices. Branded entertainment is de"ned by PQ Media (2018) as ‘Non-traditional marketing that blends brand messages with enter- tainment or information to engage consumers, build brand awareness and create positive brand associations to drive consumer sales’. A more recent addition is the term unbranded

Advertising and media 15

content, used to describe paid communications by brands that are devoid of any apparent branding. Advertising with little or no evident branding can take ‘many di!erent forms, including putting out unbranded content that has no discernible link back to the adver- tiser, to “prime” online and consumer conversations’ (Roxburgh, 2016).

Branded content is associated with advertising and para-advertising communica- tions, and that is the main focus of this book, but we will also identify the breadth of practices that are or can be encompassed, not least as these a!ect the under- standing and evaluation of branded content.

Forrester Research (2016) identi"es two types of approaches in content mar- keting: one that supports brand advertising goals (media-led), and one that supports direct-response goals (customer-led). For Dzamic and Kirby (2018: 44) this approach risks undervaluing the enormity of a ‘client-driven shift from marketing to customer experience’. They emphasise connections between ‘content’ and stra- tegies of Consumer Experience Management (CEM or CXM) de"ned by Gartner (n.d.) as: ‘the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty and advocacy’. Drawing upon concepts of user-experience (UX) and ‘attention econ- omy’ (Davenport and Beck, 2002), as well as CEM strategies, they highlight the development of a ‘more human-centered experience design “mindset” based around time that helps distinguish Content as an approach from more interruptive marketing communications such as advertising’.

Dzamic and Kirby (2018) discuss the evolution of brands’ own content, from post- sales brand publishing, such as loyalty magazines published directly by brands or con- tract publishers, to brand communications right across customers’ ‘journeys’, including pre-purchase engagements, and with the product experience no longer the required focus in such engagements. This perspective is vital, not least to expand the historical account of branded content to encompass the breadth of brand marketing and com- munications. Print was a relatively cost-e!ective way to deliver a post-sales experience to an audience marketers knew how to reach, with permission. In the digital era, ‘brands can now reach, engage and subscribe audiences pre-purchase too’ (Dzamic and Kirby, 2018: 52). However, this is a broader focus on brand marketing and the com- munication dimension inherent across all forms of marketing. It is the intersection of brand communications with non-brand communication channels that is the distinctive feature of branded content that raises critical concerns, and is the focus of this book. However, while communications is always a dimension, branded content encompasses brands’ association with events and experiences. The phenomena of branded content cannot be fully understood through a media-centric account alone, and this book addresses event and experiential content strategies that have their own range of de"- nitions (PQ Media, 2018).

De!nitional debates

Changing de"nitions of the emerging forms of branded content re#ect not only the technological development of new forms but also the recon"guration of

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industry practices, cultures, and values, and, crucially, sensitivities about the pre- sentation of practices and values to stakeholders. Usually, de"nitions are developed to serve industry stakeholders, in particular the sellers and buyers of services, although which industry sectors and identi"cations are addressed always matters. De"nitions can also re#ect the in#uence of other stakeholders and seek to promote to or assuage concerns from other industry sectors and actors, those with in#uence over governance, and directly or indirectly consumers/users.

De"nitional debates show competitive struggles for de"nitional advantage; pro- motion of valued knowledge and capabilities by individuals, "rms, professional bodies, and other groupings; tensions and antagonisms between di!erent actors, values and professional arrangements; exasperation, including at imprecision, misuse, serviceability, in#uence, and usage of de"nitions. For example, Joe Pulizzi (2015), founder of the Content Marketing Institute, describes branded content as ‘a word created by the world of paid media … by advertisers, agencies and media planners … Simply put, branded content looks and feels like advertising. If it looks like a duck and walks like a duck, well …’ (cited in Dzamic and Kirby, 2018: 44)

The most contentious term of all in this context is probably ‘content’. Critics argue variously that the term is vague, vacuous, empty of, well, content. It is considered as a term that disguises the persistence of older marketing practices (hype 1). For one marketer, ‘Today we are buried in the broadest possible interpretation of “content” with little clue to the motivation behind its creation. Much of it is nothing more than thinly-veiled traditional market messaging delivered through a new channel’ (Con- ticchio, 2017). It is associated with being ‘dressed up’, making more grandiose claims than are warranted (hype 2). One analyst warns, ‘Some marketers avoid – even loathe – the term “branded content” because it “gives agencies permission to keep talking about themselves, adding a bit of storytelling to product pitches”’ (Johnston, 2018). Another key charge is that it is an e!ort to transfer to marketing communica- tions the higher value qualities associated with media (hype 3). It is an e!ort to present advertising as something grander, more relevant and appealing, with the same qualities as entertainment or news and information associated with media.

Donaton (2007) considered the phrase ‘branded entertainment’ began to be used from around 2002 but subsequently ‘has been ill-de"ned and abused beyond recog- nition’, either unduly narrow and referring only to product placement, or broadened to encompass any form of entertainment marketing, including promotional tie-in merchandising. However, he argues the lack of clear boundaries has helped to provide the necessary #exibility for rapidly evolving media and marketing conditions, even while giving ‘ammunition to those skeptical of its legitimacy, its accountability and its role in the marketing mix’. For PQ Media (2018), ‘Branded entertainment aims to capture the consumer’s attention and elevate a brand’s image by associating it with popular personalities, media brands, organizations or events, such as TV characters, news outlets, sports teams, and activation. All branded entertainment is aimed at con- sumers, not business-to-business end users.’

So, it is not surprising there have been e!orts to foster greater de"nitional pre- cision by naming and di!erentiating speci"c practices. Ogilvy CEO Miles Young

Advertising and media 17

in 2011 divided branded content into four main categories (cited in Grainge and Johnson, 2015: 39): Leveraged content; Sponsored content; Partnered content; Originated content. The BCMA (Canter, 2012) identi"ed six variants: Branded entertainment; Advertiser-funded programming; Short or long form branded vignettes; Brand storytelling; Branded content partnerships; Brand integration.

Alternatively, there are strong defences made for terms that can encompass the range and #uidity of practices and can be used to refer to qualities and values over "xed forms. Native is a philosophy, not just format, argues Verizon (2019: 4), US telecoms company and online content publisher in its State of Native report:

It’s a philosophy. A belief that ads shouldn’t sit still. There’s no single de"ni- tion of native advertising, and that’s what makes it so unique. Native is #uid, taking many forms from sponsored articles and videos to in-feed posts to more dynamic ad experiences. Native has the ability to transform your existing assets into thousands of unique ads – perfectly adapted for the way we experience content. Its versatility allows it to change and adapt over time to match what people want in speci"c moments of intention.

The report does, however, o!er a standard de"nition, too: ‘the biggest di!erentiator between native ads and standard ads is the ability of native to follow the natural form and function of the environment in which it is placed’ (Verizon, 2019: 4). Against that expansive and positive gloss, it can be argued that ‘native’ serves as a more palatable substitute for advertising. Even though this is predominantly located in inter-industry discourse, the account o!ered also serves messaging aimed at users, policy networks, and/or non-industry stakeholders. ‘Native’ suggests an industry that is repositioned to be "tting, responsive, and welcomed by consumers. The term ‘native advertising’ has expanded to the point that it has become a substitute for ‘display advertising’. It is used to describe (and calculate) advertising formats on mobile and social media. In such usage, the ad formats that share space on digital apps and platforms are regarded as ‘native’ by type. This indicates how the label native has become a more palatable, in some contexts essential, way to signal non- interruptive advertising. It also erases di!erences in the form and quality of adverting and so displaces the characteristics of ‘interruption’ that remain all too present across mobile and social advertising.

The massive growth attributed to native includes online ad formats, the vast majority of which have more ‘ad-like’ features than ones that are genuinely ‘native’ and blended into the format. There is a claim that ads appearing in mobile are intrinsically native, "tting the #ow of dynamic content. Yet, included in this much more overarching label native are numerous varieties of ‘push’ advertising (Chapter 5). These may lead to further content being pulled, but they are as pushed, placed, and uninvited as the advertising formats they are hailed as replacing. In this con- text, there is a useful de"nitional delimiting o!ered by the IAB in their distinction between items that promote content, which they describe as ‘native’, and the content itself, which they describe as ‘sponsored content’ (Adshead et al., 2019).

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Accordingly, the various forms of advertising that direct users are ‘native’, de"ned as ‘Advertising integrated into the surrounding content, predominantly in-feed advertising such as promoted posts in social feeds or paid-for recommendations on webpages’ (Adshead et al., 2019: 6). Such ads direct users to sponsored content which is de"ned as ‘Advertiser-sponsored content on a webpage or app such as in ad-features/advertorials’ (Adshead et al., 2019: 6).

The rise of branded content: Factors and explanations

Like most complex phenomena, branded content practices are multifactorial. Fur- ther, although there are commonalities, branded content is the umbrella term for highly diverse relationships between marketing "nance and marketing purposes with communications and activities that themselves take diverse forms. Di!erent practices occurring across di!erent platforms, di!erent market conditions, and dif- ferent histories of institutional arrangements mean that in each instance there are multiple, common, and speci"c factors in#uencing outcomes.

Yet, underlying the growth of branded content are the opportunities and challenges arising from transformations in digital communications. The migration of users from legacy media to new digital sites and activities has continued to disrupt all marketing communications and pose a rapidly shifting mix of challenges and opportunities. The opportunities have included the cost e$ciencies and marketing e!ectiveness associated with the creation and dissemination of both owned and paid (native) media and the associated user data. The key challenge, and a driver for brands shifting spending to branded content, has been the increased opportunities for users to avoid traditional advertising formats. The fear of ad avoidance for television viewers began long before digitalisation, with the TV remote control allowing zapping and channel-hopping, and videocassette players allowing viewers greater control (McAllister, 1996). In the 1990s the creation of set-top boxes such as TiVo and the rising use of digital video recorders (DVRs) stoked fears of more far-reaching ad-skipping, prompting greater attention to product placement and embedding ads in content, advertiser-"nanced productions, and audiovisual branded content.

Yet, the subsequent shift from the 2000s to online viewing reduced opportunities for interruptive ads in programme breaks. In the pre-digital world, the model for much media publishing and commercial free-to-air (FTA) television and radio was one in which media o!ered content that could attract audiences, with access to those audiences sold to advertisers via advertising agencies (Sinclair, 2015: 43). What has occurred is a series of pressures on those traditional, ‘legacy’ media as vehicles to carry advertisements. In each case, there are di!erent pressures and responses but the common feature is weakening of the pre-digital advertising carriage model.

In television, there has been a deeper shift of revenue from advertiser-funded free- to-air TV towards pay subscription. In most advanced economies, pay TV revenues are now greater than advertising revenue for FTA channels. In Spain, for example, pay TV revenue (including advertising) is now just ahead: Pay TV brought in !564 mil- lion, with free-to air TV earning !560 million in the fourth quarter of 2017

Advertising and media 19

(Advanced Television, 2018). This shift has been accompanied by a further rise in brand presence within programmes, notably product placement (PP). Consumers increasingly expect to view video without adverts when they pay for video services like Net#ix and Amazon Prime Video, but marketers can use product placements. Research shows that 100 per cent of Amazon’s original programming contains brand integrations, 91 per cent of Hulu originals, and 74 per cent of Net#ix originals (Tran, 2018).

For "lmed entertainment, the rise of home entertainment cut into pro"ts from cinema exhibition while "lm production and marketing costs soared. Donaton (2007) writes:

the ad business and the entertainment business, which decades ago established outposts on separate coasts of the U.S. and mostly operated independently of each other since then were suddenly compelled towards each other. They realized that they had the potential to help each other out. If nothing else, the advertisers had the money and the entertainment companies had the creativity and the attention of audiences.

According to PQ Media president Patrick Quinn (PQ Media, 2018):

The continued growth of branded entertainment marketing is in sharp contrast to the weaker growth of traditional advertising and marketing platforms, such as live television, newspapers and direct marketing. […] younger demographics are moving away from traditional media platforms, while major brands are proactively seeking alternative media channels to engage these more mobile, tech-savvy younger audiences.

PQ Media (2018) predicts that ‘strong desire to gain brand awareness among target consumers, create positive brand associations and, ultimately, produce sales lift will con- tinue to favor branded entertainment marketing worldwide over the next "ve years’.

Television remains the dominant market for advertising in most national markets, but ad-funded linear TV, as opposed to on-demand, is slowing or declining in most advanced economies. As well as driving integrated PP advertising, there has been a more recent rise in over-the-top (OTT) advertising, usually short 30-second-or-less ads inserted into video content (Swan, 2020). Overall, the share of advertising is shifting to the internet and mobile platforms and the advertising types with strongest growth are branded content: mobile and online programmatic native advertising, and video.

Integrating advertising is also integral to the business models of the major social media platforms (Fuchs, 2014). Social media allows brands to have direct commu- nication with consumers, often at a fraction of the costs associated with TV cam- paigns, and in formats that are much more immediate to produce, test, amend, and publish to encourage engagement and sharing. Native is suitable for mobile, social media, and video contexts. The latter includes short and longer form content for

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brands’ owned media and for in-stream video ad formats. Nick Hugh, vice pre- sident of EMEA, Yahoo contends native advertising is ‘a creative and measurable format which works e!ectively on smaller screens […] a scalable solution for pub- lishers and importantly provides a contextual and relevant experience for con- sumers’ (Hammett, 2016).

In publishing, the decline in print readership, especially among the young, has reduced the value and e!ectiveness of display advertising. With digital advertising required to subsidise commercial journalism, the poor performance of some ad formats has been a problem for both publishers and marketers alike. Declining click-through rates and ‘banner blindness’ encouraged advertisers to test other for- mats, such as pop-ups and interstitials, and then animated advertisements, pre-roll, and other video formats. These formats, though, have also generated negative responses from consumers and ad avoidance strategies, most notably ad-blocking. This has been amongst the factors leading to a rise in advertising integrated into content and ‘disguised’ or ‘camou#aged’ to blend into editorial environments.

In digital media, so-called banner blindness and the notoriously low click-through rates for banner ads prompted e!orts to develop more attractive and e!ective ad formats. These were also responses to the practices and implications of the growing adoption of ad-blocking. According to the Internet Advertising Bureau [IABUK] (2019: 4), the topic of ad-blocking ‘exploded in 2015–16’, leading to investment in ‘ad formats that put the consumer experience "rst, including LEAN/DEAL ads and more emphasis on non- intrusive storytelling experiences (native)’. In publishing, ad-blocking contributed to already well-established patterns of decline in advertising revenue. As the managing director of the Association for Online Publishers (AOP), Richard Reeves notes: ‘As the loss of publisher revenue continues to increase due to ad blocking, there has been a growing demand for engaging and interactive ads that don’t disrupt the user experience, which content marketing and native formats can provide’ (Internet Advertising Bureau [IAB UK], 2018).

Branded content, in its contemporary digital forms, also originates in brands’ owned media, from the publishing and page model of the early internet from 1994, and dubbed Web 1.0, through to the more interactive architecture associated with Web 2.0 and beyond. As Conticchio (2017) writes, ‘A great deal of what we now call “content marketing” can be traced back to basic business blogging where a brand built audiences by attracting informed search to valuable, relevant content. It created a limited, but specialized and highly-engaged inbound market where relationships were built based on trust and shared interest.’

So, branded content is a response to problems of reaching target audiences. It is also a response to changing audience behaviour. And here Donaton (2004) and others are right to describe growing user resistance to advertising and in particular interruption advertising. A survey by branded content marketing "rm the McCar- thy Group (2014) found that 84 per cent of millennials don’t like or trust tradi- tional marketing. Verizon (2019) conducted survey research in 2017 which found that 86 per cent of respondents found digital advertising intrusive. The report goes on (Verizon, 2019: 2):

Advertising and media 21

There is one ad experience that continues to break the mold: native. Designed for change, native has the unique ability to evolve at the pace of

the internet and rede"ne the ad experience while matching the look and feel of its surrounding content.

We will investigate these claims further but the presentation of consumer resistance to traditional advertising as the driver for more e!ective strategies including branded content is broadly shared by industry and academics alike. Industry commentators expressed, as fear and then increasingly as common sense, that the era of ‘interruption’ advertising was becoming unviable. Users had greater control over their communica- tions than ever before, and ever-increasing choice of content and activity online, so that the power of advertisers to ‘interrupt’ media consumers was evaporating. For instance, research by IPGMediabrands found 65 per cent of US consumers skip online video advertisements, of whom 76 per cent skip out if habit, with people, on average, watching 5.5 seconds of a 15-second ad (Handley, 2017). Such fears only increased with the seemingly ready adoption of ad-blocking software solutions.

Branded content has developed in response to an actual, and perceived, crisis of e!ectiveness in advertising, as established forms fail to hold people’s attention, with skipping, blocking, banner-blindness, cynicism, and resistance to persuasion, and the relocation of audiences to communication spaces where ad formats are eschewed in various ways (Sullivan, 2013; Donaton, 2004). ‘Branded content has emerged as an e!ective means for marketers to reach audiences not only at scale but also while they are in an engaged state of mind and more receptive to brand messages’ (Fulgoni et al., 2017: 363). So, branded content has developed, in part, in response to changes in user behaviour, attitudes, and media consumption a!ecting advertising e!ectiveness. The attractions of branded content for marketers include providing relevant, valued mes- sages, increasing consumer engagement, building awareness, and generating buzz. For the US Association of National Advertisers (ANA, 2015):

The main bene"t of native adverting is the ability to create extremely relevant associations between the brand and consumer via content. Given today’s media landscape, where consumers can avoid ads more than ever, advertisers are looking for new ways to get their messages noticed and acted upon.

Disarming resistance underpins, and is used to explain, strategies to win consent, either by being welcomed and valued, or by being embedded or disguised. This is the focus of Serazio’s (2013) groundbreaking study of the turn towards guerrilla marketing and other critical academic work we will examine, as well as the invo- cations of an immense volume of a$rmative business literature, including Dona- ton, which can be summarised as follows. Marketers must learn to be invited. A variety of terms signal this shift from ‘push’ to ‘pull’ marketing, and from outbound to inbound. For Donaton, we are moving into ‘a world where the audience will determine what, whether and where they will interact with any form of content’ (Dzamic and Kirby, 2018: 118). According to this widely endorsed view, the

22 Practices

power to control access to advertising has shifted from content providers to content receivers. The latter are increasingly impatient of or alienated by ‘interruptive’ advertising, and future success depends on providing content and services in forms that people will willingly select and engage with. In industry jargon, ‘Inbound marketing is a marketing methodology that is designed to draw visitors and potential customers in, rather than outwardly pushing a brand, product or service onto prospects in the hope of generating leads or customers’ (Optimizely, n.d.).

‘Often the growth in native advertising is negatively depicted solely as a con- sequence of the rapid decline in e!ectiveness of traditional banner ads’, argues Chris Payne of the World Federation of Advertisers.

What is often forgotten is that this is itself a consequence of a shift in consumer demand from advertisers, driven by the proliferation of social media and other online platforms. It is this change in demand which the industry is reacting to; in the future minimal disruption and maximum engagement will be key.

(International Chamber of Commerce, 2014)

For Donaton (2007), ‘branded entertainment’ was born out of fear of ad avoid- ance, but has subsequently developed ‘a more con"dent and more creative posi- tion’, which he dubs ‘Branded Entertainment 2.0’: ‘one based on the concept that consumers will accept good content from any source so long as it is transparent, entertaining or informative, and relevant’. According to Andrew Mole (2016), strategy director at native advertising "rm Platform 360:

Audiences these days, especially younger Millennials, are super adept at seeing through cheap e!orts to sell to them. If brands want to engage they need to be authentic and subtle. […] Bespoke native allows brands to create a positive, informative and interesting experience for the consumer without being force- ful. When people see that a brand has given them credibility by creating a great experience, they repay that trust with their attention.

For the US Association of National Advertisers, ‘The main bene"t of native adverting is the ability to create extremely relevant associations between the brand and consumer via content. Given today’s media landscape, where consumers can avoid ads more than ever, advertisers are looking for new ways to get their mes- sages noticed and acted upon’ (ANA, 2015). In social media, brands seek to con- nect in similar ways to the way users connect and share with friends – one way in which brands seek incorporation into daily life (Serazio, 2013).

User-generated content and social media usage contributed to the declining audiences for and e!ectiveness of traditional advertising. In various ways, these were spaces that could re#ect, amplify, and bene"t from the distrust of advertising that was part of their appeal. Yet, like the internet overall, they were colonised by commercial forces and became vehicles for both digital advertising and branded content. Here, the rise of branded content in the communications of social media

Advertising and media 23

in#uencers follows core insights from public relations on the value of trusted ‘third- party’ endorsement over brands’ direct claims (advertising). People are more likely to take recommendations from someone they trust – a friend, celebrity, thought leader, or anyone perceived to be able to o!er valued experience, knowledge, or expertise. As one marketer describes:

Users are far less likely to follow a product on social media than they are to follow a celebrity. But if an in#uencer just so happens to be using my product in his/her feed, then you’ve skipped the middleman altogether. Fans trust their idols, so seeing stars aligning themselves with a particular brand is the ultimate in product placement success.

(Pfund, 2018)

The use of third-party endorsement to inform and persuade, a classic de"nition of public relations (Tench and Yeomans, 2017: 272), has been turbo-charged as the vehicle for brand communications by social media in#uencers. In#uencers can o!er the most persuasive, personable endorsement for brands and do so across the blur- red lines from paid promotions and product placement, to so-called organic men- tions, opinions, or image endorsements that are ‘freely’ given. Just as brand spending to reach younger demographics has shifted from legacy media vehicles to social, so too the orientation of branded content practitioners. The embedding of brand talk and image with in#uencer communications that have qualities of trust, authenticity, and independence engages all the problems outlined above, with added features. Not only is the nature of the communication less clear, but so too are the responsibilities. In professional ‘mass communication’ environments, there are expectations and cultures of compliance with relevant rules. In the pro-am world of in#uencers such arrangements are less assured. The relative confusion over rule adherence, compliance, and accountability is also exploited for strategic pur- poses in an emergent sector that ranges from professional in#uencers supported by sta! team, agents, and advisers, to individual vloggers, building up the followers to attract platform and marketers’ attention.

A key challenge and tension, which runs throughout branded content, is when paid communications risks undermining trusted communications. ‘If a consumer knows the in#uencer’s motivation for endorsing a product is at least partially motivated by cash or getting free stu!, the consumer may not take a recommen- dation the same way as if it was given out of the endorser’s pure adoration of the product’ (Mathes, 2018). Yet as we will examine, there is plenty to reassure mar- keters as well as their critics.

There are technological factors and their related institutional and practice-based aspects. It is now much easier to assemble marketing content, test it, and respond and adapt it. Formatting ‘native’ ads to match the surrounding content, or reas- sembling programmatic native ads based on response data, is increasingly easy, inexpensive, and automated. Marketers can manage processes through program- matic advertising, real-time billing, and automated market transactions, aiding both

24 Practices

in-house marketing teams and agencies. This is advertising that allows interaction with users in real time. Native ad formats can also evade the increasingly main- stream use of adblocking software used to block banner ads, pre-roll video, and other formats. Adblocking software has proved particularly popular with mobile users annoyed by advertising slowing page load times and a!ecting charges for those on "xed data tari!s, as well as those objecting to being tracked for marketing purposes (Fuchs, 2014).

A "nal key factor has been shifts in governance, occurring across formal regula- tion and professional norms (Chapters 7, 8).

The expansion of branded content, then, is multifactorial, within and across diverse communication sectors, and these factors mutually interact in dynamic ways to in#uence speci"c practices. To provide a full explanation of branded content, we need a political economic analysis. So far, some of the economic dimensions have been outlined, namely the reorganisation of businesses and institutional arrange- ments in response to market pressures and imperatives of capitalist growth. The political dimensions are also vital. What are often perceived as ‘natural’ market forces are the outcome of decisions and arrangements that enable and constrain how market actors behave and interact. Branded content is conducted within a regulatory environment that is subject to political control and in#uence. The critical political economy approaches on which this book draws, does not see the economic and political as separate spheres but as intertwined and mutually constitutive.

Digitalisation and internetisation

The development of branded content can only be understood in the context of the interface and dynamic interaction of technological innovation and a!ordances with the conditions in which they developed and their co-development. Those conditions are powerfully shaped, if never solely determined, by the political economy, under- stood as the organisation and in#uence of political and economic forces. These poli- tical and economic forces are always in#uential and involved in social, cultural, institutional, regulatory arrangements and processes, but the latter are not reducible to explanations derived from political and economic forces alone. From the expansion of the commercial internet, browser interfaces and domestic access after 1993, the main features of digitalisation and internetisation have been the growth of digital advertising; shifts of ad spending and ad formats from traditional advertising formats; marketers seeking to follow (or lead) users to new ad-carrying channels; the evolution of new kinds of automated advertising production and placement; the erosion of ad revenues for legacy media; and the shifts of ad revenue to platforms.

The shifts in the production of advertising online is rightly a major focus. However, arguably the greater impact of internetisation has arisen from the expansion of marketer-controlled media, of brands’ ‘owned’ media. Here, the patterns of growth of branded content map onto broader changes in internet architecture and services identi"ed, and espoused, in the nomenclature of Web 1.0, 2.0, 3.0, and beyond. In Web 1.0 from the early to late 1990s, brands started to

Advertising and media 25

develop a web presence of owned media. The push content of Web 1.0 ‘pages’ then incorporated the interactivity of wikis and early social media in Web 2.0, a term devised by a marketing practitioner seeking to reboot con"dence in web investment after the dot.com stock crisis (Hardy, 2014: 131–2).

Industry (re)organisation

Branded content needs to be understood in the context of evolving political econo- mies a!ecting relations between advertisers, marketing agencies, media publishers, and platforms (Sinclair, 2020). Later chapters examine changing industrial arrangements in greater detail, but here some broader features can be identi"ed. A core triad of actor types remain: marketers, marketing agencies, and media, around which an expanding range of intermediary actors provide specialised services, and where activities from the triad are combined. Marketers are conducting more marketing in-house and con- necting with the advertising networks and services provided by increasingly dominant platforms, both of which are squeezing and reshaping the activities of marketing agencies, alongside a host of competitive pressures. Creative content production, and its interconnections with brands, agencies, and media, is now carried out by an ever- increasing range of actors, from Instagram in#uencers to brands’ own content studios. Further, the core actors themselves incorporate hybridity by o!ering services histori- cally associated with other institutionally constituted actors. Finally, all processes are a!ected by automation so that there is a proliferation of actor-types, services, and interactions. This includes the rise of adtech and the "rms involved in programmatic advertising buying, selling, creation, distribution, and promotion. The rise of auto- mation, algorithms, and other computer-based processes require that deeply entren- ched ways of identifying and discussing actors need to be questioned and reconsidered. The challenge of mapping the emerging media–marketing ecology is to trace what has replaced the more settled relationships between marketers, agencies, and media today. The integration of media and marketing is occurring across corporate ownership and networks, operations and practices, forms and formats, and user engagements.

The interaction and competition between creative advertising agencies, media agencies, PR and various digital agencies is a key locus for the birth and development of branded content (Chapter 6). Yet, while these battles churned up the sedimented institutional identities, histories, and practices of di!erent actor-groups, there has been mounting disruption from new digital actors – the platforms. This is most starkly demonstrated by the dominance of Google and Facebook across digital advertising, taking an enormous share of revenue from the fastest-growing advertising forms. Together, Google and Facebook took more than half of the total global internet advertising revenue in 2018 (Sinclair, 2020). These companies now control and manage the marketplace itself. They control the architecture and provide the services for the market to function; they own the advertising exchanges that control ad buying and selling (Chapter 5). Moreover, they are expanding into all parts of the value chain, from creation of communications to user purchase. They control the data that drive targeting and monetisation. They control the ratings systems. They each o!er rival

26 Practices

proprietary standards but oversee an oligopolistic market so far ahead of rivals that for more than half of the total market they rule as duopolists.

Summary

So, the rise of branded content is multifactorial. There are multiple drivers, as seismic shifts towards digital communications, and ad-avoidance, have created opportunities and obligations for marketers and media alike. Marketers have sought to o!er ‘non-inter- ruptive’, engaging content that users will spend time with and share, in#uencing brand recommendations. The prevailing view across communications industries is that branded content is a necessary response to ad evasion that, ‘done well’, can provide targeted and valued content to consumers. It is certainly on the rise. According to PQ Media (2015), content marketing worldwide grew by 13 per cent in 2014 to $26.5 billion. For the broader category of branded entertainment, the global market increased by 8 per cent in 2017 to $106 billion, growing at twice the overall rate of advertising and marketing rev- enues (PQ Media, 2018). The rate of growth has also been remarkable. There was a 50 per cent growth in native advertising spending in the US between 2016 and 2017 (Ster- ling, 2018). However, it is important to distinguish the varieties of marketer spending carefully. Sponsored content accounted for £124 million out of total digital display expenditure of £4.1 billion in the UK in 2017 – 3 per cent (Adshead et al., 2019: 38).

The common explanatory factors, suitable at least approximately across Euro- America, can be summarised as follows.

Media and marketing businesses

‘Crisis’ for ad-"nanced publishing; increased dependency on advertising opportunities for marketers; reorganisation of marketing services to platform management and control. Publishers: way to distinguish their ad o!ering in highly competitive internet ad markets; "nance media; monetise users. Advertisers and agencies: ‘more bang for their buck’ – native seen as more e!ective than traditional ad formats (and can evade ad-blocking). Consumers/users: Changing media habits and attitudes, communication consump- tion/use, and ad avoidance create challenges (and opportunities) for marketers; response to changes in media consumption a!ecting advertising e!ectiveness. Technical: increasingly easy and inexpensive to format ads to match the sur- rounding content. Regulation and professional norms: more permissive (Chapters 3, 7–11).

Media and marketing convergence

Media and marketing communications are merging and converging. Branded content in all its forms is part of that ongoing convergence and it is a recon"guration with enor- mous signi"cance for communications. Yet even this is very far from the totality of

Advertising and media 27

media or marketing communications, as the linked trends towards disaggregation and integration of media and marketing illustrate. Branded content, as outlined, has a long history. Moreover, attention to historical origins and developments, and to continuities and discontinuities, is vital both for understanding and for assessing the scope for e!ective policy action. Such a long-range historical approach is espoused within critical political economy of media approaches, against tendencies to presentism within both academic and industry discourses. The common formula in business books provides highly trun- cated histories as part of a narrative arc to show those operating old ways are hopelessly ill-equipped to tackle new conditions, and must change fast or face decline. Yet, while some digital marketing discourse "ts this description, it is far from uncommon for the long history of branded content to be acknowledged (Dzamic and Kirby, 2018). And here what can occur is an ideological mobilisation that does not rely on either presentism or truncated historical perspectives but instead reaches back over a longer historical span to "nd continuities that normalise the novel. Branded content is positioned as continuity.

The historical appropriation of branded content forms part of a complex and contradictory set of readings and mobilisations in which any analysis is unavoidably implicated. The route forward, which this book will attempt, is to engage re#ex- ively with the selectivity and mobilisations that inform all accounts, including this one, but which can provide a basis for critical evaluation. There is a choice of narratives, which o!er di!erent temporalities and di!erent topic selections to situ- ate branded content. Such di!erences can be illuminating, as they put into question what arrangements are regarded as the stasis from which change and disruption occur. Discourses that normalise branded content as a continuity of reciprocal brand and media engagements displace or downplay the periods in which formal and informal regulation upheld norms of separation between advertising and media content. We need to trace both the range of historical connections between brand promotions and media communications, and the ways in which these have been subject to regulation, normativity, and debate. That can provide a means to better understand both historical legacies and potential mobilisations going forward.

Approach of this book

The book is organised around three main interlinked topics: practices, policies, and problems. It describes industry practices and their relationship with changing policies. It considers how emergent practices have been ‘normalised’, and it examines where and how problems have been articulated and critiques developed. Part I examines the changing practices of branded content across publishing, audiovisual, mobile, and social media. Part II examines policies, and the broader governance of branded content, and develops the discussion of problems. The book’s arrangement "ts and serves core argu- ments. We need to evaluate and critique aspects of branded content but do so from a perspective that seeks to understand practices and practitioner attitudes. Any such cri- tique needs to engage with the adequacy of existing mechanisms and resources of governance and build proposals for reform out of that analysis and engagement with

28 Practices

stakeholders, all those a!ected by and engaged in shaping how media and marketing communications are conducted.

The relationship between media and advertising is overlaid by a deeper set of divisions between art, culture, and creativity on the one hand, and commerce and commerciali- sation on the other. Following Hesmondhalgh (2019: 465), I consider that the ‘protec- tion’ for culture was never complete, that commodi"cation and culture were and remain entwined, that as ‘the opportunities for pro"ting from culture have grown, the lines drawn around culture have been pushed back’. The argument of this book is not to mourn, ahistorically, or advocate a ‘pure’ cultural space unsullied by commercialism, but instead to embrace and seek to understand the dynamics of those tensions in the changing practices, values, motivations of participants, and the structures built up around them across media and marketing industries and institutions of governance. This book does not advocate either the integration or removal of advertising but rather the importance of understanding, evaluating, and then advocating for ways of balancing media and adver- tising in the 21st century so that the values of democratic, diverse, and accountable communications can be realised.

This book seeks to advance a contemporary critical political economy approach. In media and communication studies, critical political economy approaches are char- acterized by a central claim: that di!erent ways of organising and "nancing commu- nications have implications for the range and features of media content, and the ways in which these are consumed and used (Hardy, 2014; Mosco, 2009). Critical political economy refers to approaches that examine the unequal distribution of power and resources across societies and are critical of arrangements whereby such inequalities are sustained and reproduced, including by, and within, media industries. This approach calls for attention to the interplay between the symbolic and economic dimensions of the production of meaning. One direction of enquiry leads from media production arrangements to meaning-making and consumption; another considers the relationship of media and communication systems to wider forces and processes in society. In exploring these relationships, CPE approaches are not reliant on speci"c concepts or methods; rather the ongoing justi"cation for CPE rests on the quality and salience of its analysis of problems in communication and social systems. My own short de"nition is as follows: ‘Critical political economic of communications is a critical realist approach that investigates problems connected with the political and economic organization of communication resources’ (Hardy, 2014: 14).

The CPE analysis advanced requires attention to the organisation of communication industries, seeking explanations across all levels of operation and in#uence from the macro level of societal, political-economic arrangements, to the meso level of industry institutional arrangements, to the micro level of practices, processes, and interactions of actors and actants. This also means contexts matter. This book discusses international phenomena but focuses heavily on developments in the UK, US, and Europe, which I refer to as Euro-America. That is done to contribute to a wider e!ort to overcome the legacy of ethnocentrism and false universalism that e!orts to internationalise media stu- dies, advance comparative communications research, and decolonise education challenge.

Advertising and media 29

The CPE approach is also shaped by its orientation to consider and address problems. This book explores whether aspects of the merging of media and mar- keting are bene"cial or detrimental, and if the latter what action has been or might be taken to tackle or ameliorate the problems. In doing so, I draw on the insights and passion of those who make and do branded content and try to engage fully and fairly with their perspective so that you can make up your own mind on the balance of evidence and arguments presented. So, while I will advance my own view, I want to conclude this opening chapter and survey by returning to what are perhaps the core issues in debate about the location and exercising of power over communications. In some account the rise of user-selected content services such as Net#ix, and premium (ad-free) subscriptions such as Spotify, or YouTube Red, indicate a trend whereby audiences exercise increasing control over their exposure to advertising. Donaton sees a power shift:

I think every trend is showing you that audiences are going to be more and more in control. So, I do think the answer is that brands have to "gure out how what they want to say is worthy of someone’s time, and adds value to their life, and is something that someone would choose to spend time with.

(Dzamic and Kirby, 2018: 119)

That such shifts are occurring is widely acknowledged. For Sinclair (2015: 43), ‘The interactive properties of the internet, with the a!ordances of social network- ing and direct commercial transactions, have precipitated a shift in the balance of power between advertisers and consumers’.

To summarise an argument I will advance below, there have indeed been shifts in power from marketers to users, although how far an overall case can be advanced remains much less certain. Marketers have lost control vis-à-vis consumers in various ways. However, this much-discussed shift displaces and masks the extension of mar- keters’ power over media and communications dependent on advertising "nance. Their co-dependency underlies forms of media-marketing integration that result in complex relations of power, but ones that cannot be described, in summary, as con- stituting a power shift to users. Branded content connects to much older and long- standing issues of how culture and communications are "nanced and the role of advertising as subsidy. This involves relationships and tensions between three sets of interests: those of sponsors, those of creators, and those of audiences. These asym- metric relationships can be traced back to the earliest forms of patronage of culture and communications, but their interrelationship has the upmost importance for the quali- ties we wish to secure in our communication environments.

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34 Practices

5 GOING NATIVE IN DIGITAL MEDIA

The internet’s evolving forms have intensi"ed challenges to the separation of editorial and advertising that were already being felt across the legacy media of print and tele- vision. According to leading industry voices, the future lies in integrating marketing communications into the communication encounters of users. This chapter examines the social media practices connected with key buzzwords, including ‘native advertis- ing’, ‘sponsored posts’, and ‘stories’, and the embedding of marketing communications within digital and social media. The broader context for these new forms of marketing communications is the rise of digital media platforms and apps taking an ever-increas- ing share of user time and attention. Yet these are not merely ‘opportunities’ for marketers, or part of an ever-expanding range of media vehicles on o!er. Instead, these platforms have either arisen or subsequently developed their pitches to investors based on the monetisation opportunities of attracting advertising that will work as part of a more seamless user experience.

Digital advertising

Some key features of digital advertising will be outlined "rst before considering native advertising in greater detail. Digital advertising types include display ads (composed of images and texts and formats including banner ads and interstitials); search engine marketing; email marketing; video ads; social media ads; mobile ads; and native advertising. With the expansion of broadband access and faster wireless interconnectivity, marketers developed so-called rich media ads, predominantly video formats. Mobile advertising carries all these forms but also others developed speci"cally for mobile, such as mobile wallet, moment, tile, and dynamic product ads (Verizon, 2019). Ad types include story ads (in-feed advertising linking to edi- torial content), video ads linking to video content, app install ads enabling app download, and product (listing) ads linking to e-commerce sites (IAB [Interactive

DOI: 10.4324/9781315641065-6

Advertising Bureau], 2015: 7). Key claims made for the marketing e!ectiveness of mobile video advertising include high shareability compared to all other types of content. Video scores highly for brand recall, SEO performance, and versatility, and works well across diverse mobile devices (Brannon, 2019).

In-feed advertising refers to the placement of advertising within content, social, or product feeds (Borst, 2015). In-feed accounted for 92 per cent of total UK native advertising expenditure in 2017 (IAB [Interactive Advertising Bureau], 2017). Examples of in-feed are the images and carousels (collections of two or more scrollable images) used on Facebook. The remaining 8 per cent of the market is so-called ‘native distribution’, mostly content recommendations that appear in publisher pages and which promote branded content.

Platforms

The US tech companies dubbed FANGS (Facebook, Amazon, Net#ix, and Google) illustrate the rising power of platforms within digital communication sys- tems. In a landmark lawsuit in November 2020, the US Department of Justice described Google as a ‘monopoly gatekeeper for the internet’ that was ‘unlawfully maintaining monopolies in the markets for general search services, search advertis- ing, and general search text advertising in the United States’. The US government alleged that Google uses billions of dollars collected from advertising revenue to pay mobile-phone manufacturers, carriers, and browsers, such as Apple’s Safari, to retain Google as their pre-installed, default search engine, ‘creating a self-reinfor- cing cycle of dominance’ (Kendall and Copeland, 2020).

The US digital giants have each established market dominance in their niche areas, acquiring competitors and using market power or uncompetitive behaviour to carve out quasi-monopoly positions aided by the winner-takes- all dynamics of network e!ects. The FANGS are not dominant in all national markets and face powerful rivals. The world’s second largest advertising market, China, has its own tech giants, including Alibaba, JD.com, Tencent, Xiaomi, and Meituan. Alibaba and JD.com dominate the online retail market with Alibaba claim- ing to reach 881 million active monthly mobile users, more than half the population of China (BBC News, 2020). The largest social platforms in the world, including Face- book, Twitter, Instagram, TikTok, and Tumblr, o!er services that are free from direct charge to users but are monetised by advertising. There is direct monetisation from advertising sales and indirect monetisation from user data capture that is then mone- tised for marketing purposes by platforms and sales to third-party marketers. Most of the advertising formats are ‘native’, including in-feed native ads, sponsored posts, and sponsored stories.

In 2020, Google’s net US digital ad revenues fell for the "rst time, from $41.8 billion in 2019 to $39.6 billion, bringing its market share down from 31.6 per cent to 29.4 per cent. Google’s ad growth had been slowing compared to the growth rate in the market overall, but the company was hit by the sharp decline in retail, small business, and travel advertising during the 2020 Covid-19 pandemic

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(eMarketer, 2020). Google is the global market leader in digital advertising, with Google AdSense (61 per cent) and Google Ads’ (21 per cent) share of over 35 million websites tracked by Datanyze (2020).

Google Ads is one of the leading advertising service companies for web and mobile, supporting banner ads, and in-app, video, and other ad formats. Formerly called AdWords (2000–18), Google Ads is an online advertising platform whereby advertisers bid on keywords in order for their clickable ads to appear in Google’s search results. Advertisers pay to display advertisements, product listings, video, or other content, and can generate mobile application installations to users within the Google ad network. The Google Ads programme enables marketers to place advertisements within Google search results pages or across the Google Ads network of partner sites. Google’s AdSense pro- gramme delivers those Google Ads to publishers’ websites. AdSense matches advertise- ments to publishers’ sites, based on data analytics covering site content and visitor user data, and delivers advertisements using an auction to automatically select the highest paying ads that appear on publisher pages. Payment to publishers is made based on user clicks or ad impressions, depending on the type of ad. Google’s AdManager caters for the publisher side and is a complete ad exchange platform, facilitating the buying and selling of ads across multiple ad networks, including AdSense. AdMob was acquired by Google in 2010 and is now one of the largest mobile advertising platforms, incorporating native, video, and other ads into client’s apps. It uses Google’s AdSense and other technologies and o!ers rich reporting and analytics to track how users engage with mobile apps and ads. Measures taken by Apple, Google, and Mozilla in 2020 to increase their browsers’ privacy controls for users will impact on the adtech models of Facebook, Google, and others, but precisely how is yet to be determined (Cha!ey, 2020).

Amazon Advertising includes a suite of services, including its demand-side platform, posts, audio ads, sponsored products and display, and Amazon Live, shoppable ad streams. Amazon’s sellers are obliged to spend to advertise within and through Ama- zon’s controlled environment, with the company accumulating behavioural surplus and market power through the data pro"les of users, as it has done from its bookselling origins. The other main digital media platforms all have their own ad services: Apple Search Ads, Snapchat Ads, Twitter Ads, and so on. Snapchat introduced sponsored lenses in 2017, and the following year added features to allow marketers to sell goods with links to their websites in the lenses. Sponsored lenses enabled product marketing/ placement, such as for the Galaxy S9 and DC’s Superman lens for Action Comics #100 (Heater, 2018). With ‘Shoppable AR’, advertisers could now add a button to Snap Lens which lets users ‘click and buy the product being advertised without leaving the Snap experience’ (Heater, 2018), with eCommerce opportunities added. In 2020, Snapchat and Gucci launched ‘the "rst global sponsored augmented reality shoe try-on Lenses’, allowing users to purchase shoes directly from the Lens (Hutchinson, 2020).

Facebook o!ers ad formats, including ‘photo, video, stories, messenger, carousel, slideshow, collection, and playable ads’ (Grover, 2019). Owning Instagram and Messenger, Facebook o!ers cross-platform integration, enabling marketers to run ads across these apps, and thousands more via Audience Network. Marketers can use self-service tools to select objectives, such as raising brand awareness and

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generating leads, use target audience selection tools, monitor performance, and adjust campaign elements accordingly. Facebook Business also o!ers Instant Experience, which marketers can use to o!er a mobile-only, full-screen experience for storytelling in any of the formats of Facebook Ads. The platforms are not only the main bene"ciaries of digital advertising spending but have established control over the advertising market, advertising data, and the connections between brands and marketing opportunities, including in#uencers. In particular, Google and Facebook own the major ad exchanges, Facebook Exchange and AdX, Google’s programmatic advertising platform. Altogether, Google controls nearly 70 per cent of the online tech market (News Media Alliance, 2020).

The powerful duopoly of Facebook and Google accounted for an estimated 56.4 per cent of the global online ad market in 2018, predicted to grow to 61.4 per cent in 2019 (WARC, 2019). Google and Facebook are expected to hold over half of the total US market for programmatic ad revenues in 2019 and increase market share further by 2021. ‘Even with Amazon ramping up its advertising practices, as well as an in#ux of mobile, over-the-top (OTT), and connected TV ad inventory entering the space in the next 24 months, the duopoly will still dominate’ (Fisher, 2019).

Three-quarters of US internet advertising revenue in Q4 2018 was concentrated in the hands of ten ad-selling companies (IAB [Interactive Advertising Bureau], 2019b: 11). As the IAB puts it, euphemistically:

In more mature market segments, the "ght over the existing eyeballs is heating up. Large players that service both their own properties as well as o!ering sophisticated ad platforms that serve the ‘open’ internet continue to put pres- sure on stand alone publishers and smaller ad networks and platforms.

(IAB [Interactive Advertising Bureau], 2019b: 4)

If the new digital giants are biting hard into the market share and activities of marketing agencies, the latter face further massive erosion based on the same digital a!ordances. The "rst actor-group, marketers, are enabled and incentivised to bring more digital marketing activities in-house. For instance:

Marketers’ internal programmatic ad buying is the fastest-growing category programmatic spending, according to ad-tech company Index Exchange. At the end of 2013, 11% of the ads bought through Index were from brands’ in- teams. At the end of 2014, the number had grown to 15%.

(Kantrowitz, 2015)

Social media

Social media advertising is ‘delivered on social platforms, including social net- working and social gaming websites and apps, across all device types, including

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desktop, laptop, smartphone and tablet’ (IAB [Interactive Advertising Bureau], 2017: 14). The social media platforms Facebook, Facebook-owned Instagram and What- sApp, Tumblr, and Twitter were early adopters and now depend on native advertising revenues as their primary source of income. The vast majority of social media adver- tising is native (Benes, 2019a; 2019b). Native ads are considered to be less invasive and disruptive than formats such as banner ads, and integrate better with other content and scrolling on mobile. However, the supposed distinctiveness of ‘native’ is misleading, with a more complex process of naming occurring. The characteristics of being ‘native’, meaning seamlessly integrated, are being stretched to apply to a wider range of ‘new’ advertising formats, including those that are indistinguishable from ‘inter- ruptive’ display or video ads. Native is a more palatable, contemporary term to cover a broad category of advertising, or indeed all advertising, on selected social or mobile platforms. In addition, older and more derided formats, such as banner ads, have themselves continued to evolve and hybridise with ‘native’. Banner ads have con- tinued to improve on mobile sites, while remaining, in the words of one analyst, ‘fairly intrusive’ (Ho, 2017). So, the extent to which advertising is ‘native’ is a matter of variation and dispute, but social media are at the leading edge of formats for content funded or produced by brands. Branded content is integral to the business practices, cultural practices, and communication exchange in organised social media.

Sponsored stories

In October 2013, Snapchat launched Snapchat Stories, enabling users to combine their single snaps in a narrative format that friends could view for up to 24 hours (Wiltshire, 2018). The stories format was then adopted and developed by other social media platforms, most notably Instagram. The IAB identi"es brand storytelling as a growing trend across platforms: ‘consumers, especially Gen Z, are adopting social stories at warp speed [such that] social stories may surpass social feeds in becoming the prevalent way consumers engage with advertisements on social media’ (IAB [Interactive Advertising Bureau], 2019b: 5). Video-sharing platform TikTok tested and developed sponsored videos that direct users to an advertiser’s website. In one of the "rst reported uses, a video clip featured a ‘Sponsored’ label from retailer Specialized Bikes and a blue ‘Learn More’ button to tap (Williams, 2019). Sponsored videos formed part of wider e!orts by TikTok’s Chinese parent company ByteDance to intensify monetising the user- generated content posted by millions of its users. TikTok took o! rapidly in the US, with the app downloaded over 80 million times by November 2018, and nearly 800 million times worldwide. TikTok was then the only app of the "ve most popular US downloads not owned by Facebook.

Social media revenues

Social media advertising grew strongly, at a 46.6 per cent compound annual growth rate in 2012–18 before slowing (IAB [Interactive Advertising Bureau], 2019b: 17). The rate of growth continued to outpace the digital advertising market

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overall, with revenue of $28.9 billion in 2018, a 30.6 per cent growth over 2017 (IAB [Interactive Advertising Bureau], 2019b). Since 2007, brands could use Face- book’s Fans pages to create a page for their company or organisation, amass fans, and post unlimited messages to their fan base. They did so on the assumption that fans would see those messages in their News Feed. Organic reach, referring to the number of users that can see a post organically, without paid media behind it, declined during the 2010s. According to Facebook, this decline was due to the increasing amount of content created daily, making it harder for content to gain exposure in News Feeds (Boland, 2014). However, studies showed that only a fraction of fans were seeing organic posts in their news feed; a study by Edgerank Checker found that between 2012 and 2014, organic reach per fan fell from 16 per cent to 6.5 per cent for the average Facebook page (Bernazzani, 2018). Subsequent changes to Facebook’s algo- rithm contributed to the company’s successful e!orts to steer more brand promotion from (unpaid) self-publishing content to paid advertising.

In 2018, almost three-quarters of US native display ad spending was on social ads, partly because almost all social advertising is native … Paid social is the name of the game for content distribution/native advertising and organic engagement is more di$cult to achieve with publishers desiring greater reporting transparency from the social platforms.

(IAB [Interactive Advertising Bureau], 2019a: 4)

Facebook India Director, Sandeep Bhushan, promotes branded content ads on Instagram as giving ‘advertisers the ability to promote creators’ organic branded con- tent posts as feed and stories ads, thereby reaching new audiences and measuring impact’ (Farooqui, 2021). Paid social is also increasingly important for in#uencer marketing: ‘Thanks to extremely granular ad targeting provided by social media plat- forms, not only can brands ensure that their high-performing in#uencer content gets seen despite tricky algorithms, but they also can greatly amplify their overall campaign impact’ (Wiley, 2021).

The Native Advertising Institute reported native display advertising revenue in the US of $59.35 billion in 2018, more than double the growth rate of digital advertising overall. That year, US digital ad revenues exceeded $100 billion for the "rst time ($107.5 billion), increasing 21.8 per cent over 2017 (IAB [Interactive Advertising Bureau], 2019b: 2). Native advertising was expected to be two-thirds of the total US display advertising market in 2020, up from 54.2 per cent in 2017 (eMarketer, 2019). eMarketer (2019) also predicted that native advertising in the US market will become more programmatic and more mobile than in 2018, with reduced spending on social media. Mobile native was predicted to grow to 88.8 per cent of all digital display, with 87.7 per cent also being programmatic, but with the share on social media falling from 76.7 in 2018 to an estimated 73.5 per cent in 2020. Figures for high rates of growth of native can be misleading unless placed in the wider context of marketing spending. The eMarketer report cites MediaRadar’s H2 2018 analysis, which shows that the number of advertisers using native for the "rst time has not risen, indicating a mature

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market. Only 11 per cent of online advertisers were using native ad formats in 2018, according to MediaRadar (2018). For eMarketer analyst Nicole Perrin, ‘The US native ad market is still growing, but the “typical native ad” isn’t changing much: It’s bought programmatically from a social network and served to a mobile device’ (Benes, 2019a). Overall, native advertising is ‘succeeding’, argues Adyoulike Europe CEO Julien Verdier (2016), ‘because it answers a lot of the issues with display ads: creative, high-quality content is delivered in-feed in a way that works perfectly on mobiles and smaller screens’.

Programmatic advertising

A simple de"nition of programmatic advertising by the Display Trading Council is ‘the use of automation in buying and selling of media’ (Rogers, 2017). In fact, auto- mation extends more widely across processes, a!ecting how ads are constructed, sold, selected, placed, tested, formatted and reformatted, tracked, and evaluated. A subset of programmatic advertising involves Real-Time Bidding (RTB), a set of market trans- action practices that are dependent on the application of advertising technology (adtech). Adtech refers to the software, tools, and processes used to select, create, bid for, purchase, and place digital advertising opportunities. The actors involved include the core triumvirate of marketers, marketing agencies, and media, but with the latter two joined, and displaced, by platforms and digital advertising service intermediaries. Adtech is used for the buying and selling of advertising inventory and describes the ‘tools that analyse and manage information (including personal data) for online advertising campaigns and automate the processing of advertising transactions’ (ICO [Information Commissioner’s O$ce], 2019: 8). This covers the entire advertising delivery process, which often involves several intermediary third parties, although some transactions are conducted directly between advertiser and publisher.

Advertising Exchanges are ‘[p]latforms for comparing the price and quality of impressions, the “location” where the bidding aspect occurs. They serve as mediators and connectors between advertisers and publishers and operate on both the demand and supply sides’ (ICO [Information Commissioner’s O$ce], 2019). Data Manage- ment Platforms (DMPs) collate and analyse incoming data from sources such as desk- top and mobile websites and apps, social media, data analytics, and o%ine data, including bid requests, to support the personalisation and targeting of adverts to users. Demand Side Platforms (DSPs) buy advertising inventory (space on websites) ‘based on behavioural, and often personal data. If the impression matches the advertiser’s target audience then a bid is placed via the DSP’; Supply Side Platforms (SSPs) aid the sale and management of advertising by publishers; and Consent Management Plat- forms (CMPs) ‘serve as a tool for publishers, for example to enable them to manage user consent, and to facilitate the operation of frameworks such as the IAB Europe’s Transparency and Consent Framework’ (ICO [Information Commissioner’s O$ce], 2019: 11–12).

Programmatic advertising takes various forms, but the most common is an automated auction that occurs when users select and load a web page, in which

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advertisers bid to place an ad on the page. Typically, such bids are made based on what an advertiser knows about you, the user. In such transactions, the website publisher puts the ad space up for auction, advertisers (or their ad agencies) bid on it, and intermediaries known as adtech "rms handle the details (Thomas, 2018). A user visiting a site makes an ad impression available. The SSP sends a bid request on behalf of the publisher site. The DSP (native DSP in the case of native advertising) responds with metadata and bids for the space on behalf of marketers.

RTB is based around a potential advertiser accessing information about users. As a site loads, the publisher auctions space on the page and this is bought by an advertiser seeking to reach users based on speci"c information about them. Such information may be basic, such as the country location or the type of device used to access the site. It may also be highly detailed information enabling the targeting of speci"c user pro- "les with precision. A publisher or operation of an online service usually collects user data by using cookies and similar technologies whenever a user visits the site or service, including information about themselves, their device, and the visit made to the web- site or app. The process of RTB can involve many companies across the value chain and involves the rapid transfer of data and transactions: ‘the collection of the user’s information, the creation of the bid request, the auctioning, bidding and securing of the advertising space and subsequent presentation of the advert to the individual all take place in milliseconds’ (ICO [Information Commissioner’s O$ce], 2019: 11).

‘Millions of bid requests are processed every second, utilising automation, which involves the leveraging of multiple data sources into user pro"les shared throughout the ecosystem’ (ICO [Information Commissioner’s O$ce], 2019: 11). The informa- tion collected by the publisher is incorporated into a ‘bid request’. This is circulated in the RTB system so that advertisers can bid to insert their ad into the space auctioned so that it is presented to the individual user. Data is also collected for the advertising. Banner ads are composed of a single data "le. For native programmatic, by contrast, ‘the ad unit is made up of multiple components that must be transferred in the process of bid request and bid response and are considered by both the advertiser and pub- lisher’ (Sharethrough, n.d.a). These components include metadata and usually include the headline, thumbnail image, brand name, brand logo, and description. The Native SSP receives metadata and selects the winning bid, and then assembles the native ad from components to "t the design, format, and layout of the site or app.

US spending on programmatic advertising in 2018 was forecast at over $46 bil- lion, representing more than 82 per cent of total digital display ads, rising to $60 billion in 2019 (eMarketer, 2018; 2019). More than 85 per cent of native display ads were expected to be transacted programmatically in 2018, and 88 per cent by 2021 (eMarketer, 2018; 2019).

Native advertising formats

The IAB Native Advertising Playbook, "rst published in 2013 and revised in 2019, provides an authoritative classi"cation and description of native advertising types. The 2019 edition removed four categories: in-ad (with native elements); custom;

Going native in digital media 107

paid search; and promoted listing. The new classi"cation schema identi"ed three native advertising types, two retained from 2013: in-feed/in-content and content recommendation ads; and one new type: branded/native content (IAB [Interactive Advertising Bureau], 2019a: 5).

In-feed/in-content is the most prevalent native ad format and includes ads appearing within the feed of content on publisher, commercial, and social media sites and apps. Another common format is content recommendation ads (formerly widgets). As the ASA (2020) notes, ‘Native advertising is not limited to “advertorial”-style materials. It may include links to other websites; for example, where brands have paid for content aggregators (or “Content Discovery Networks”/“Content Recommendation Engines”) to serve ads for their products to readers under a heading such as “from around the web” or “you may also like these”’. The third type, Branded/Native Content, is described by the IAB (IAB [Interactive Advertising Bureau], 2019a: 7) as ‘paid content from a brand that is published in the same format as full editorial on a publisher’s site, generally in conjunction with the publisher’s content teams themselves’. The IAB notes that such content requires disclosure to the consumer that it is paid for: ‘[t]he content itself, therefore, should be considered as a native ad type’ (IAB [Interactive Advertising Bureau], 2019a: 7). In-feed and content recommendation are adverts for content located elsewhere; branded/native content is the substantive content itself.

According to the IAB (IAB [Interactive Advertising Bureau], 2019a: 13), there are three primary types of feeds where native ads typically appear:

Content feeds typically include articles, images, or video branded/native content, e.g. publisher content sites and news aggregators such as CNN and Yahoo. Product feeds typically include product, services, or app-install branded/native content, e.g., retail sites and app listings such as Amazon, Etsy, and eBay. Social feeds typically include social content, articles, videos, stories, images, and music branded/native content, e.g. social networking and messaging apps such as Facebook, Instagram, and Twitter.

The IAB de"nitions are used for ad unit identi"cation purposes and inform the openRTB protocol established for programmatic advertising. The openRTB stan- dard was established in 2011 and continues to be updated. OpenRTB 2.0 brought together display, mobile, and video advertising. Open RTB 2.3 introduced in 2015 added a new top-level object native to the existing banner and video objects. The native object, the advertisement, was described in the communication between SSPs and DSPs in two main ways: ad unit ID and layout ID. OpenRTB 2.3 ‘ushered in an era of standardization for native advertising: programmatic native’ (Larson, 2016). In 2016, an updated speci"cation for buying and selling native ads was developed for the IAB Standard, known as Native 1.1. The original Native 1.0 spec had de"ned the native object (by ad unit ID and layout ID) so that a supply source (SSP/exchange) could request the speci"c items needed as part of the ad, such as thumbnail size and headline lengths. A demand source (DSP/bidder) could then respond with assets matching the speci"cations of the SSP. However, there was no speci"cation concerning what those assets themselves looked like. ‘Each

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supply source was free to de"ne their own standards for things like image size, aspect ratio, headline length, brand name length and more’ (Larson, 2016). This created particular problems for the demand side in managing di!erent supply side requests, notably ones requiring resizing for thumbnails, headlines, and so on. The second key challenge concerned ad unit de"nition. The original Native 1.0 speci- "cation used the IAB Playbook (2013) de"nitions which lacked precision and mixed context and layout descriptors, hampering classi"cation, measurement, and scalability. So, the new Native 1.1 speci"cation classi"ed native inventory in two ways: context and placement type, drawing on the revised IAB classi"cation, "rst set out in In-Feed Deep Dive (IAB [Interactive Advertising Bureau], 2015).

Mobile native formats

The Mobile Marketing Association (MMA [Mobile Marketing Association], 2015) distinguished mobile native from content marketing as follows: ‘Where content marketing aims to match content and format, native advertising, at least on mobile devices, is primarily an ad format that matches the style of the site or app where it serves. Moreover, native advertising can be bought programmatically, whereas content marketing usually requires editorial involvement.’

One of the fastest growing mobile advertising sectors has been in-app native ads, displayed within a mobile app, usually within gaming apps. The global in-app adver- tising market was valued at $82 billion in 2017 and was projected to grow by 20 per cent from 2019 to 2025, when it would reach $258 billion (openPR, 2019). Key players include Apple, Amobee, Groupo Mobile, Phone Valley, Mobile Dream Fac- tory, AOL, Tapjoy, InMobi, Google AdMob, among others (openPR, 2019). Native ad growth has occurred in the context of increased in-game spending with Facebook, Google, Snap, and other ad-dependent companies investing heavily in the gaming market, and creating gaming platforms, such as Google’s Stadia (Williams, 2019).

In September 2018, YouTube unveiled plans to o!er vertical video ads as well as sell video ads based on users’ personalised home feeds. The Drum reported that ‘[a]dvertisers can now snap up slots that "ll up a users’ screen when they’re viewing content on YouTube’s mobile app in a similar way to the ads served by the likes of Instagram and Snapchat’ (Stewart, 2018). According to the IAB (IAB [Interactive Advertising Bureau], 2019b: 5), marketers and in#uencers ‘ are rushing to push-out [sic] ads in a vertical video format in an e!ort to turn consumer interaction into actual conversions’, but noted that social media companies needed to convince advertisers of the e$cacy of the story ad platform for growth. Combining video with native advertising, argues Verizon (2019: 7), ‘is compelling to both advertisers and consumers. People engage with native video ads more than traditional display ads, showing "xation rates up to 90% for native video on mobile’. Both vertical and horizontal video formats on mobile work e!ectively in split screen mode, Verizon states, enabling ‘contextual material to run alongside video, making this an attractive vehicle for links to brand communications and e-commerce’ (Verizon, 2019: 7).

Going native in digital media 109

Native advertising market actors

The IAB is one of the key participants in the global native advertising market together with the content recommendation "rms Taboola and Outbrain, and native advertising platforms and providers such as Sharethrough, Adyoulike, AdsNative, TripleLift, Nativo, Instinctive, Polar, OneSpot, and Livefyre, among others. Sharethrough, OpenX, PubMatic, rubicon, and MoPub are Native SSPs, while Appnexus, Media- Math, Turn, and theTradeDes are among the leading Native DSPs. Adyoulike is a leading Native SSP, serving 33 million video ads in the "rst four months of 2018 (Sullivan, 2018). In 2019, it announced a new mobile ad service, Native Stories, in an exclusive deal with GMC, publisher of Marie Claire and other magazines. Developed as a response to the growth of ‘stories’ formats across Instagram, Snapchat, and other social media, Native Stories ‘allows premium publishers to create… a content carousel at the top of all their mobile pages… and monetize it with advertising sold in a Stories format’ (PR Newswire, 2019). Across the fast-developing market, new native ad platforms have been created by specialist "rms such as Sharethrough and MoPub, but with the major digital "rms, including Google and Yahoo!, involved in supply and increasing market share.

Native advertising effectiveness

One of the key measures for video ad e!ectiveness is the view through rate (VTR), the number of completed views of a skippable ad over the number of times it was rendered. Adyoulike (2018) reported an in-feed native video VTR average of 40 per cent worldwide, slightly higher at 42 per cent in the US, UK, and Ireland. The broader case for native advertising e!ectiveness is advanced by key industry actors. A Sharethrough/IPG Media consumer survey and eye-tracking study found native ads attracted more attention (25 per cent) and consumers ‘looked at native ads two times more than editorial content and spent the same number of seconds viewing’ (Share- though, n.d.b). Verizon Media (2019: 11) reported its research "nding that native advertising achieved higher engagement, with click-through rates (CTR) of 11 times greater than for display ads. Verizon Media’s Native Mobile Format Analysis (2018), based on a survey of 8,700 US adults 18–54, found that users viewed native video longer than native banner ads (5.9 seconds on average) with positive associations (high quality 81 per cent; entertaining 76 per cent). Two -thirds stated native ads tested were not disruptive.

Industry actors have also invested in psychosocial and in neuroscienti"c research to act on "ndings concerning engagement in the competitive struggle for the economic resources derived from attention. A neuroscience study conducted by the Association for Online Publishing (AOP) and the UK national news brands trade body News- works examined how the brain responds to advertising in social media versus premium editorial environments. The results, in line with Newsworks’ marketing campaigns, were that ‘while social media is better at delivering ad attention, premium editorial environments deliver higher long-term brand value and 50% higher engagement’

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(Verizon Media 2019: 13). Sharethrough (n.d.b) concludes from one of its own neu- roscienti"c studies: ‘[a]s mobile adoption and usage grows, consumer attention will become increasingly elusive. Native ads command focus and attention. They can be an e!ective method for marketers to share their brand’s stories and narrative to the highly distracted mobile consumer.’

Native advertising: Evolving forms and practices

Open audio platform Soundcloud operates a partnership with digital audio advertising "rm Targetspot in the developing space of audio marketing. In 2019, it expanded into 14 new national markets countries, launching an ad-free premium subscription service (SoundCloud Go+) alongside its free, ad-supported service (SoundCloud) with audio, video, and in-stream native advertising (Stewart, 2019). RTB is most commonly used to sell visual advertising inventory, but the techniques are being applied to audio streaming, as well as facial detection/recognition technology on digital outdoor billboards and screens (Digital out-of-home – OOH) (ICO [Information Commissioner’s O$ce], 2019). Branded content is now integrated into the voice assistance services, such as Google Assistant, Amazon’s Alexa, and Apple’s Siri, which manage the interface of brands and consumer purchase decisions. This voice intelligence industry has grown rapidly across Europe and North America, so that in 2019 Amazon’s Alexa was available on more than 100 million devices, and Google Assistant on more than a billion (Bohn, 2019). Through voice pro"ling and data harvesting, these companies can extend knowledge about people’s lifestyle and consumption choices, activities, conversations, and articulated thoughts, including in the most intimate and private parts of their lives.

Turow (2020: 6) links the development of voice pro"ling to an underlying dynamic of ‘the unending spiral of personalization’. Previous forms of digital per- sonalization have been based on demographics, psychographics, geodemographics, internet behaviours, and lifestyle. Going forwards, in order to identify, know, and target audiences more e!ectively, marketers will be

open to technologies – voice pro"ling, for example – that promise new forms of information through progressively greater intrusions into people’s lives. These practices will also turn out to be unsatisfying, though, and the drive for deeper ways to know the customer will continue – for instance, by linking voice intelligence to even more intrusive technologies.

(Turow, 2020: 3; 2021)

Voice pro"ling creates new means to select, assess, stratify, and discriminate by selecting but also by creating tools to de-select and exclude and to discriminate against people by algorithms and operations that will in#uence access to resources and social opportunities.

Focusing on categories of ‘media’ services, and ‘advertising’ or promotional communications, risks downplaying the scope of innovations in commercial and corporate integration undertaken to create economic value for capitalist enterprises.

Going native in digital media 111

One example is companies’ development of their own branded mobile apps. Recognising that consumers spend the majority of their mobile internet time within apps, brands have developed apps to provide services, like banking or e- commerce, but ‘many of these apps have untapped potential […] as powerful video delivery mechanisms that increase engagement and brand loyalty’ (Hurwitz, 2019). Under platform capitalism, brand marketing and brand-shaped communications are integrated into the interface between users, search, and services throughout their personal space and interactions. Digital marketing, including branded content, is the funding source, model, and driver for the development of digital services and data"cation. The current developments are only indications of the extent to which much greater integration is possible across communications content services, mar- keting and promotion, e-commerce, tracking, and data analytics.

Social media in"uencers

‘Traditional modes of publishing now sit alongside vast international online plat- forms where people and brands alike publish their own content’ (ASA, 2019).

The early internet created opportunities to publish and distribute content without at least some of the barriers that shaped traditional modes of publishing. From the early bulletin boards to web pages and weblogs (blogs), the Internet enabled organisations, movements, and individuals to have ‘voice’. The platforms for user-generated content, from YouTube to Instagram and TikTok, have vastly expanded the opportunities for mass self-communication (Castells, 2009), and for self-promotion. The relationship between advertisers and the emergent communication spaces and communicators is a rich and complex one, but very crudely follows an arc from antagonism to accom- modation. The commercialisation of the internet was contested at all levels, from infrastructure and governance to advertising messages (Schiller, 2000; Simpson, 2004; Curran and Seaton, 2018). In#uencer marketing (IM) developed in the conditions of an already thoroughly commercialised internet, yet contestation over commercialisa- tion remains a vital element. Likewise, the constitution of the promotional is a com- plex story, as advertising develops within and alongside the self-promotion and cross- promotion of those producing and publishing content (Chapters 6, 11).

An in#uencer is an individual who produces regular or recurrent communica- tions content that reaches an audience via digital media platforms.

In#uencers may have already built, or concurrently be building, their public pro"le through traditional means ("lm or television) but more often they have found their fame purely online. Crucially, they speak directly to these online audiences generally without the editorial control that exists in traditional forms of media by, for example, publishers.

(ASA, 2019)

Some in#uencers post on specialist topics only, such as craft-making or cookery, but many post about their daily lives, including mentions for products and services

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they purport to like and use. Such mentions can include hyperlinks to online locations such as a brand’s Twitter handle or Instagram (ASA, 2019). ‘In#uencers, by de"nition, inspire and empathize with the same consumers that marketers seek to engage. They bridge the gap’, says Liz Gottbrecht, VP of marketing at Mavrck (Nickalls, 2018).

The rise of in#uencers from the 2000s has occurred during a period of unpre- cedented upheaval for established marketing practices using mass media channels. Brands have responded to the new opportunities o!ered by in#uencer marketing, especially to reach younger demographics (Yesiloglu and Costello, 2020). In#uen- cer marketing activities range from brands’ supply of free products or services in the hope of favourably mentions, to elaborate contractual relations specifying content to be posted, and other arrangements, in exchange for payment. In#uencer mar- keting falls under the IAB UK’s (2018) designation of ‘[p]ublisher-hosted and/or made advertising content: commercial content that is advertiser controlled or jointly publisher/advertiser controlled […]. In this context, a “publisher” includes content creators such as in#uencers, bloggers and vloggers and advertising content includes paid promotions on social media.’

Origins and development

The history of ‘in#uencers’ is rightly extended to encompass the social and cultural organisation of human societies from its earliest formation. The growth of professional public relations and ‘third-party endorsement’ in the early 20th century built upon the attributes of in#uence demonstrated by rulers, monarchs, celebrities, artists, and opi- nion leaders, but connected these with the developing mass media channels and brand marketing (Bernays, 2004 [1928]). In the digital age, however, a much more diverse range of communicators could reach audiences, without the costs and barriers of pro- fessional, institutionalised communication, creating the conditions for micro-celeb- rities (Marwick, 2013). Blogging took o! in the early 2000s, YouTube launched in 2005, Instagram in 2010. By 2016 an estimated $570 million was spent on in#uencer marketing on Instagram alone (eMarketer, 2016). An AdWeek survey in 2018 found that over 50 per cent of in#uencers had only started producing content since 2016, a third only since 2017 (Nickalls, 2018). Most (90 per cent) wanted free products or services from brands in exchange for their posts; 63 per cent said they were looking for monetary compensation, while 44 per cent said their motivation in creating content was to share a passion (Nickalls, 2018).

According to a report on in#uencer marketing based on surveys with 181 mar- keters and agencies (Linqia, 2018), 86 per cent used in#uencer marketing in 2017 and 39 per cent planned to increase spending in 2018. A majority saw measuring ROI as the main challenge.

The issues of disclosure of brand support, misinformation and fakery, consumer protection, and brand safety are examined in Chapter 7, but form part of the tur- bulent as well as meteoric rise of in#uencer marketing. Swedish YouTuber Felix Kjellberg, known as PewDiePie, rose to prominence with his Let’s Play gaming

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videos, which he started in 2010, becoming the "rst person to reach 100 million subscribers on YouTube. Leveraging his enormous audience base, Kjellberg secured lucrative brand deals, yet a series of anti-Semitic, alt-right, racist, and mis- ogynist comments drew controversy that spread to brands who paid or were slow to cease dealings. Some brands continued to engage with Kjellberg during the controversy; an LG spokesperson ‘con"rmed that its home electronics division had sponsored the video that was uploaded on 22 June but was unaware of the con- troversy surrounding the YouTube star’ (Peterson, 2018).

Together with the volatility inherent in brand engagement with celebrities and micro-celebrities, there are pressures and incentives for monetisation that pose risks for brands both at the situational level of interaction with speci"c in#uencers and at the broader level of reputation and trust for in#uencer practices and platforms. These include being associated with the promotion of fake merchandise, illegal products, or promotions that breach advertising rules and codes. Such reputational damage occurred when the infamous sham event, the Fyre Festival in 2017, was promoted almost exclusively through in#uencer marketing.

Brands have turned to in#uencer marketing to reach aggregated audiences beyond declining mass media; eMarketer (Williamson, 2021) forecast that 68 per cent of US "rms with 100-plus employees will use paid or unpaid brand partner- ships in 2021. In the early phase, brands tended to focus on established celebrities but have since invested in fast-growing micro-celebrities. There has been a growth in spending on so-called micro-in#uencers, with closer and stronger relationships with their target audience in contrast to the macro-in#uencers, top YouTube stars with reach, but socio-culturally more remote. Brands have experimented with supporting nano-celebrities, recognising the qualities of trust and in#uence between in#uencers and audiences in the hundreds rather than millions. A com- mercial survey by In#uenster (Bazilian, 2017) of 13,000 women in US found that 87 per cent saw branded content in a positive light; the company’s president Eli- zabeth Scherle declared, ‘[Consumers] prefer content featuring real people way more than celebrities, so align your content creation accordingly and keep it real’.

In"uencer marketing actors and processes

Platforms

Google YouTube content creators are ranked by subscribers, with silver for 100,000+, gold for a million +, diamond for 10 million, and Custom Play Button awarded for 50 million. In 2019 there were more than 2,000 channels in the mil- lion+ subscriber bracket of top-tier in#uencers. The YouTube Partner programme (YPP) links content creators to brands and advertising payments through AdSense. This provides a route for display advertising, but such ad revenue tends to be modest for the majority of UCG creators. Pro"tability depends on advertisers’ willingness to pay and a host of factors, including popularity of video content and the location and value of viewers for the brand. In 2019 earnings as low as 0.32

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cents per 1,000 views were recorded, with the highest rate up to $5 dollars per 1,000 and the average around $1 (Zine, 2019)

Research by Mathias Bartl found that those in the top 3 per cent of most-viewed YouTube channels could achieve income from advertising of $16,800. The remaining 97 per cent of people would not make enough money from advertising revenue to surpass the US poverty line. However, the study relied on estimated ad revenue and did not calculate the brand sponsorship and product placement revenue that enhance the revenues of popular YouTubers (Settembre, 2018). One YouTuber, Joey Gatto, with just under 200,000 subscribers, earned approximately $5,000 for a 30-second product plug, but estimated earnings of only around $100 from a video viewed by 100,000 people (Settembre, 2018). Advertising rates usually range between $0.10 to $0.30 per view, with an average of $0.18 per view, according to In#uencer Marketing Hub (2019). The principal alternative to monetisation through display advertising is paid promotions and sponsorship: in#uencer marketing. Of course, YouTubers have diverse motivations and varying reliance on income from postings. Yet, the context for in#uencer marketing is the limited scope for digital advertising earnings for many. As In#uencer Marketing Hub (2019) advises:

In reality, only a small percentage of your viewers will click on the ads sur- rounding your videos. Even the CPM ads in the video itself require more than just a cursory glance. For it to be counted for payment, a viewer must watch them for at least 30 seconds (or half the ad for a very short video). Think how many people skip past the ad at the start of a video, thus wiping out any chance of payment to the channel. If viewers do click on or view your ads for long enough to earn income, you share any advertising revenue with You- Tube. You will only get paid once your AdSense account reaches $100.

Google (2020) de"nes paid product placements as ‘pieces of content that are created for a third party in exchange for compensation, or where that third party’s brand, message or product is integrated directly into the content’. In Google’s updated requirements, from September 2020, content creators must click a box stating, ‘My video contains paid promotion like a product placement, sponsorship or endorsement’ to notify YouTube, who will display a disclosure, remove the video (if on YouTube Kids), and ‘may replace an ad that con#icts with your brand partner with an alternative ad’.

A 2018 survey by in#uencer platform Zine (Chadha, 2018) found that Facebook-owned Instagram was by far most popular platform for social media in#uencers, with a 78 per cent share. In contrast to the photographic images and micro-videos of Instagram, YouTube videos needed more time and resources to complete, Facebook’s news feed prioritised family and friends, while Pinterest was used more for pinning personal interests than following in#uencers. By 2019, Instagram had over a billion active monthly users. Amongst the pre-eminent platforms, in#uencer marketing on Instagram was expected to be a $2 billion market in 2019, according to in#uencer agency Mediakix. Instagram, like the other major platforms (YouTube and Twitter), ‘are developing ways to control

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the market that connects brands to their platforms’ power-users’ (Sloane, 2019). From 2014, Instagram introduced enhanced business tools o!ering brands data analytics to track their own and others’ brand communications. In March 2019, Instagram created a new format – ‘branded content ads’. Previously, ‘brands could hire popular Instagram users to work on ad campaigns and promote pro- ducts with branded content, but the posts would only reach the followers of the in#uencer’; now branded content ads enable marketers to ‘promote these Insta- gram posts just like they would any other ad’ (Sloane, 2019).

In!uencer marketing agencies

The agencies rooted in advertising and public relations have vied for market share within the growing spending on in#uencer marketing, making this a key, con- temporary space for con#ict, convergence, and reorganisation within the industries. In#uencer marketing has been associated with PR/communications and involves key features of ‘third-party’ endorsement in ‘editorial’ content that is not desig- nated advertising, for purposes of extending reach and awareness. It encompasses ‘earned’ media, unpaid publicity, ‘genuine’ endorsement, and promotion. Yet, in#uencer marketing refers to planned and organised promotional activity that is usually the outcome of payment and contractual arrangements: paid communica- tion. One industry survey found a clear shift in ownership:

38% of in#uencer marketing owners are on advertising/media teams, whereas only 15% are with PR/communications, a notable decrease from 31% last year. Media teams are taking ownership of in#uencer marketing as targeting capabilities evolve and budgets continue to increase, and are managing pro- grams with the same rigor that they use to manage other digital advertising channels.

(Linqia, 2018: 5)

Specialist agencies have also developed. Talent agencies support in#uencers but also provide the intelligence and interface for clients, to match marketers and in#uen- cers. A huge industry has built up around managing celebrities’ and micro-celeb- rities’ media plans to bring in advertiser revenue, with agencies such as Izea, MyLikes, and Ad.ly managing paid endorsements. In#uencer management com- panies include God & Beauty (Hotchkiss, 2019). StyleHaul was created as a multi- channel network connecting brands with in#uencers for sponsored content, with a roster of famous in#uencers including Zoe Sugg (Zoella), Joey Grace!a, and Bubzbeauty (Bishop, 2019). Talent agencies include Gleam Futures (UK), whose CEO went from managing sisters Nic and Sam Chapman (known as Pixiwoo), their brother Jim Chapman, Jim’s then-girlfriend, Tanya Burr, and Zoe and Joe Sugg, amongst numerous others. Against the myths of egalitarian, creative access, such close, even nepotistic, networking creates exclusionary barriers, as does the selection of a shared look: ‘white, Bambi eyes’ (Bishop, 2019).

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Media publishers

Publishers including Condé Nast, Group Nine, and Re"nery29 have all created in#uencer marketing hubs (Barber, 2019). One of the more successful has been BuzzFeed, which can o!er brands in#uencers as extensions of their own editorial sta! and so provide greater brand safety, although as discussed in Chapter 4, some of its cultivated sta! writers have moved to become entirely independent.

Accompanying the growth and value of in#uencer marketing, there has been a pro- liferation of software tools to support the sector and make brand–in#uencer relationships simpler and more e!ective, or to reduce risk and improve brand safety. One such tool is The Eye, launched by StyleHaul in 2017, to monitor ‘real-time, creator-fueled social conversations about products’ (Bishop, 2019). The tool measures campaign success via post engagement and creator characteristics such as in#uencer age, ethnicity, and face shape. Such algorithms are susceptible to racial bias in their construction and training data, with The Eye’s categorisation software having an error rate up to 35 per cent for dark-skinned women, compared to 1 per cent for white men (Buolamwini, 2019; Bishop, 2019).

In!uencer contractual arrangements

According to one insider account (Lorenz, 2018):

Negotiation usually takes place entirely over Instagram direct message, and teens rarely sign formal contracts. Some companies send an article of clothing for the teen to wear in a picture; others just send images of items to be worked into a post. Sometimes they o!er guidance on how they’d like their product featured and when the post should go up, but most brands trust the teen to create and post something that will resonate with their peers.

Helen Boogzel, CEO of Boogzel Apparel, describes a steady volume of requests from young teenage girls seeking to make extra money with companies paying around $5 to $20 dollars per post, depending on the teen’s audience and experi- ence (Lorenz, 2018). Another seller of accessories describes working with teens on Instagram as ‘striking gold from an advertising standpoint’ and has shifted to paying around $20 dollars for those with fewer followers who ‘do it way better’ than the more established in#uencers charging $150 (Lorenz, 2018).

Brands working with in#uencers need to comply with legal requirements and regulations on advertising and disclosure, discussed in Chapter 7. Marketer–in#uencer relations are also shaped by risk management, from the stipulation of contractual terms, to insurance cover for the various parties involved. One US lawyer (Mathes, 2018) advises marketers to specify the channels, number of posts required, details of content and speci"c deliverables, compliance requirements, and:

! Clarify what in#uencers will receive from your brand (free product to give away, links to guide consumers to a brand’s site, etc.).

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! Speci"cs about how your brand can use, re-use, or modify content and the in#uencer’s name, photo, etc.

! Remedies if the in#uencer doesn’t follow through, does something that could get your brand in trouble, or gets arrested.

Brand authenticity and consumer response

In#uencer activity has thrived upon and cultivated visual tropes surrounding intimacy, spontaneity, unguardedness, and authenticity. In reality, major in#uencers operate closer to independent television production companies combined with the resources for media entertainment celebrities, whose ranks they join. ‘The most visible and successful in#uencers have management teams that include personal managers and assistants, literary agents, PR help – and the list goes on’ (Bishop, 2019). Overall, there is mass precarity amid a smaller number of pro"ciens, whose visibility and success dis- torts perceptions and drives more to join. Yet, the attractions of in#uencing are not only personal but socially and culturally con"gured. While dominated by those with class advantages, in#uencer communication has appeal for those whose routes to careers and advancement are restricted by barriers of class, race, and gender; and dis- crimination and structuring inequalities in societies and creative industries. Groups such as Black British Bloggers and Black Creatives: The Global Network for Multi- cultural Talent attest to the creative self-organisation and appeal of in#uencer com- munications, and the brand patronage that sustains it.

Against the powerful economic and commercial drivers to extend brand reach, whether via native advertising or in#uencer marketing, are countervailing forces. How powerful and e!ective these are now is examined in Part II; but alongside regulatory controls are the more market-based controls of cultural acceptability. For in#uencer marketing, that may be measured by market reach and engagement, but the qualitative measures of how sections of followers respond to brand promotion will also be in#u- ential. The qualities of authenticity are in play as both a value and source of tension between in#uencers, agencies, and brands. Brands often seek authenticity as the quality underlying the connection between in#uencers and followers, yet much commentary from in#uencers highlights their self-declared e!orts to safeguard their authenticity against pressure from agencies to work with brands or from brands directly.

Promotional diffusion and re"exivity

Another of the issues a!ecting regulation is pertinent here. In general, regulation of marketing communications has sought to de"ne and delimit its scope, separating paid advertising from ‘earned’ media or from ‘normal’ editorial content. In#uencer marketing, most notably, involves the conduct of a regulated activity (paid adver- tising) by actors including non-professionals. The relative absence of the training, professional advice, legal guidance, and compliance found in the institutional organisation of legacy media has been part of the a!ordances of in#uencer mar- keting, exploited by brands, agencies, and in#uencers. Yet, in#uencer promotion

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also realises the circuits of promotional re#exivity that cultural analysts such as Wernick (1991) identi"ed in an early phase of postmodernity. In#uencers are engaged unavoidably in self-branding (Marwick, 2013), albeit in varying ways. In a branded world where lifestyles and identities are constructed by brand choices, in#uencers incorporate brand references as central or ancillary features. Branded goods serve in all varieties of prop or product placement positioning (whether paid or not). In regulated UK television (Chapter 3), broadcasters have to ensure that discussions of brands, including media and entertainment branded goods, are edi- torially justi"ed. In in#uencer marketing, the dividing line between a micro- celebrity showing the contents of their shopping haul as editorial or promotion are less clear and less rule-governed. Well-established YouTubers’ activities include the product unwrapping or the ‘haul’, a video posting showing and describing recently purchased items. In one month, Zoella featured "ve of these style videos, including ‘Best Friend Does My ASOS Shop’ (Westoby, 2018).

Brands are inserted in (without control) as well as purposefully engaged in (from full to no control) these more complex promotional communications. Brands engage with the promotional activities of publisher–users on a sliding scale of professional/amateur status, levels of monetisation, and accompanying visibility and support within a com- mercial-promotional nexus. Social media provides a space for advertising and paid promotion by third parties, but also for consumer-generated content, including in#uencer content, that is not directed or controlled by brands and which may pro- mote or counter brand communications, brand image, and ‘value’. The encountering by brands of a mix of controlled communications (advertising) and ‘uncontrolled’ editorial is a feature of legacy media. Certainly, the opportunities for opposition to brands to circulate online challenges brand power, as a host of crisis PR case studies attest, such as the 2012 video of a FedEx worker throwing a computer monitor over a fence. Yet in#uencer marketing is not merely a form of ad spending but an e!ort to shape the ordering of discursive space, to present an ordering that harnesses authenti- city but is underpinned by payment and brand control.

Conclusion

This chapter has examined native advertising and in#uencer marketing in two halves, yet it is their interrelationship and convergence that is most illustrative of developing trends. The platforms for in#uencer marketing are those seeking to attract and develop brand marketing and "nancing. One key area is the fashion– media–retail nexus (Rocamora, 2016). Snapchat expanded beyond its augmented reality "lters to create Shoppable AR in 2018, which ‘allows advertisers to market and sell goods by using sponsored lenses, which come embedded with buttons/ links that direct users to a product page on a shopping portal, present an app install prompt and lets users watch videos without leaving the app’ (Sarwar, 2018). Shoppable ads combine ‘product photos with one-to-one targeting as well as sophisticated search capabilities within an ecommerce platform are turning clicks into veritable conversions’ (IAB [Interactive Advertising Bureau], 2019b: 5). This

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returns us to the main theme of advertising value creation, capture, and control. Described as a ‘direct brand economy’ (IAB [Interactive Advertising Bureau], 2019b: 4), platforms ‘continue to add features, making it easier for advertisers to target audiences ready to buy and convert searches into purchases’. Combining data"cation with AI innovations, ‘publishers and advertisers alike are able to extrapolate lucrative insights across the complete consumer journey and create a unique opportunity for advertisers: ad targeting according to anticipated purchase intent’ (IAB 2019b: 4). An example is click-through purchasing within mobile native campaigns, and native integration with mobile loyalty cards, which help brands to track ROI in relation to consumer activity (swiping and other gesture- based functionality) and purchasing (Singer, 2019). Likewise, Verizon Media (2019) describes developments in ‘native’ advertising, including shoppable catalogues, AR showrooms, and interactive gaming previews.

This chapter has discussed forms of brand communication from native advertis- ing to in#uencer promotion. There is a common e!ort to ensure control over paid-for communications, but this varies by context and client–agency–creative relationships. Brands have learned to trust professional marketing agencies to get creative and media strategies right. They now navigate trusting these agencies and new intermediaries to manage the delicate con"guration of harnessing in#uencer creativity and deep knowledge of their audience, with control over messaging and all aspects of brand safety.

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124 Practices