86% of consumers suffer from banner blindness. This means that they consciously or subconsciously ignore information that looks like an advertising banner, even if it contains the information they are looking for (Infolinks).
Furthermore, a study on adblocker usage in the United States, found that 45% of respondents aged 15 to 25 said they used an adblocker. The same was true for 42% of respondents between 26 and 33, and respondents between 46 and 55. (Statista)
Why are so many businesses focusing their advertising campaigns around advertising banners, when the vast majority of internet users are ignoring or blocking those advertising banners?
With the proliferation of adblockers and users ignoring ads online, it is becoming harder for advertisers to get their messages to potential customers. One way to get around adblockers and banner blindness are through native advertising. Native ads are 60% more engaging and 3x more memorable than traditional advertising (source: IHS).
Todd Handy, a native advertising expert, will share his insights in today’s episode. Todd Handy is the chief digital officer at Beasley Media Group, which runs 65 radio stations in 15 markets. He is an endurance athlete who has done LoToJa, a 206-mile race from Logan, UT to Jackson Hole, WY, 11 years in a row. He was the CEO of Intermountain Hearing Centers and was a sales manager at AOL during its heyday.
What is native advertising?
Native advertising is the use of paid ads that look, feel, and function like the media format in which they appear. They are often found in social media feeds or as recommended or sponsored content in the content feed of a website. Native ads usually are valuable pieces of content or features that are part of the native functionality of the site and don’t really look like ads. Consumers look at native ads 53% more than display ads, and they create an 18% increase in purchase intent (Source: Outbrain.com).
Why Use Native Advertising
Native advertising has been a tectonic shift away from banner ads, partly because native advertising helps solve the problems with banner blindness and ad blockers. Native advertising provides value first with the information it gives, and as such can help establish the credibility of the advertiser. Contrast that to banner ads which generally focus on persuading users to click and then buy their product or service, before the advertiser has provided any value to the users.
Success with Native Advertising
A little while ago, Todd helped work on an article called “10 Ways to Know You’re a Utah Driver.” This article was sponsored by a personal injury attorney. It’s difficult for personal injury attorneys to advertise because we don’t need them until we’ve had an injury. Because of this, PI attorneys are constantly trying to build their brand so that people know who to contact when they get in an accident. The article this PI attorney sponsored went viral because of its content, taking the attorney along for the ride. This virality helped the attorney build their brand and get their name out there.
In 2013 while Todd and I were working at Deseret Digital Media, our sponsored content or native advertising was taking off. We had the opportunity to go to a large conference with many big companies. This conference enabled us to be at the forefront of seeing what was working and what wasn’t in the advertising world. Todd also put together an entire conference around sponsored advertising.
AOL and CompuServe
Todd worked for AOL during its most popular time. AOL started out with an hourly model. Users paid based on how many hours they used AOL’s services. When AOL switched to a flat-rate monthly model, their customers suddenly increased the amount of time they spent using their dial-up service. The problem was that this was in the days of dial-up internet, and with the increased usage their customers frequently encountered busy signals. CompuServe, one of AOL’s competitors, decided to take advantage of this situation. A 30-second Super Bowl ad that year spent almost all of the ad playing the busy signal from AOL. Then at the end of the ad CompuServe gave their phone number: 1-888-NOT-BUSY. Although this ad does not fit the description of native advertising. Compuserve created an entertaining, memorable and unexpected ad aimed at solving a pain point of their target audience.
Shifting Businesses with Tectonic Shifts: Analog to Digital
Todd was the CEO of Intermountain Hearing Centers, a business founded on an antiquated model of advertising. People who use hearing aids are usually older people who would go to a phone book to find hearing aid companies. The internet and specifically Google changed how people search for companies and their products and services. Todd and his associates became very good at bidding on key search terms related to hearing aids, so in a Google search, they were one of the first companies shown in the results. They took a business that was founded on an antiquated model of yellow page advertising and transformed the company through the tectonic shift of digital advertising.
Focusing on Low Prices vs Target Market
Todd and I talked about some of the successful examples of credibility marketing he has seen. There seems to be a difference between brands like Walmart that focus on having low prices and brands such as Allstate or Home Depot that focus on their target market. Allstate’s slogan is “You’re in Good Hands with Allstate.” They know, being an insurance company, it is important to their customers that they feel taken care of, so they strive to do that. Home Depot’s slogan is all about doers because they know that their customers want to get things done. So their focus is all about helping them do more. In our marketing, we can choose whether we want to focus on low prices or our customers.
Tips for Setting Up Recurring Revenue
(Source: blog.fusebill.com) So how do we implement subscription business models or recurring revenue streams? Todd gives us a couple of tips.
Todd had an opportunity to build an inside sales team. One of the things he coached this team on was not saying, “that’s $500,” to the advertiser. Instead, he told them to say, “that’s $500 monthly.” It’s essentially the same thing, but it immediately sets up an ongoing transaction. This monthly cost also allowed them to set up a system to charge their credit card monthly instead of calling them every month to complete the transaction. because they told the advertisers upfront that it was a monthly cost. Todd and his team let them cancel at any time. With these strategies, their recurring revenue increased every year.
Thank you so much Todd for sharing your stories and knowledge with us today. Here are some of my key takeaways from this episode:
1. Native advertising may be a great way to solve the mounting problems with ad blockers and banner blindness.
2. Consider using native advertising to provide value first before trying to sell.
3. Native advertising can help build a sponsor’s branding and credibility.
4. As CompuServe did with their ad, we can take advantage of the situation around our businesses and niches and turn it into something unexpected and entertaining to help promote our products and services.
5. When tectonic shifts happen, we must shift our businesses to match those tectonic shifts and leverage them.
6. Consider which focus will help our businesses best succeed: low prices or focusing on providing top-quality products and services to our target market. We often cannot have both.
7. We can establish our revenue models to be immediately recurring with a few simple words to our customers.
Connect with Todd
Want to be a Better Digital Monetizer?
Did you like today’s episode? Then please follow these channels to receive free digital monetization content:
1. Get a free Monetization Assessment of your business
2. Subscribe to the free Monetization eMagazine.
3. Subscribe to the Monetization Nation YouTube channel.
5. Connect with Nathan Gwilliam on Linkedin.
Share Your Story
What problems have you seen with advertising banners and what success have you seen with native advertising? Please join our private Monetization Nation Facebook group and share your insights with other digital monetizers.