This article is part of a series of interviews that NAI has conducted with the directors of Native Ad Studios around the world.
Please reach out if you want to add your Native Ad Studio to the series.
Today, we feature Daniel Mandell, who is Chief Revenue Officer at Reuters, where he leads the newly established full-service custom content studio, Reuters Plus. As the world’s largest international multimedia news provider, reaching more than one billion people every day, Reuters need not much introduction. With over 2,500 publishers around the world subscribing to its services, Reuters transmits news in languages ranging from English to Arabic, Russian and Chinese.
Though Reuters already had a branded content service, 2017 is the year where it is formalized as a studio and brought to market with great expectations for educating the market, for battling fake news and for creating a unique offer to brands.
Publishers who are truly ready to embrace native advertising will grow.
However, when it comes to revenue expectations, Daniel Mandell says, “we see a tremendous growth opportunity and we’re bullish to see our own growth continue”. It doesn’t worry him that Native Ad Studios seem to be popping up everywhere you look.
“The market does have a lot of players but the premium publishers who are truly ready to embrace native advertising will grow. We have been ramping up the content team and we now have an operation in eight places around the world, which allows for a far more comprehensive marketing offering that ensures that our clients’ messages align from region to region. We are also talking directly with high-value partners to make sure they understand what we have to offer and we are going to roll out a lot more capabilities in time.”
Regarding what can really set Reuters Plus apart from other Native Ad Studios, Daniel Mandell points to credibility.
“Leveraging the DNA of Reuters, we are offering our brand partners the opportunity to create both engaging and credible content.
We also have a unique opportunity to succeed given that we are not a legacy media property trying to evolve in a digital world. We don’t have a lot of those anchors of traditional media companies. We’re completely comfortable with a publisher using the content we produce on behalf of an advertiser and in fact the content we produce often ends up on third-party platforms.”
Reuters Plus’ target audience resembles that of executive-oriented media brands. The plan is to expand it further.
“Our target audience is business professionals. The Reuters DNA has positioned us nicely in the Finance, Enterprise, and Tech category. But while we reach a business-oriented audience, their interests go beyond the sector. Our partnership with Canon, for instance, demonstrates that our users are passionate about beautiful photographs. Another example is our Excedrin campaign, for whom we produced content regarding the correlation between migraines and productivity in the workplace. We also see an interesting opportunity in the ESG space (Environmental, Social, and Governance), so we’re not only focused on one single category or audience.”
It's going to continue to be a challenge and I don't think there's a silver bullet to solve it.
One thing is reaching the right audience and getting the right clients. Another thing is to keep them coming back. Currently, native renewal rates are at only 33% across all media sites, according to research by MediaRadar. In global surveys among news media and magazine media executives, publishers point to the fact that it can be hard to document the effectiveness of native advertising.
“It's going to continue to be a challenge and I don't think there's a silver bullet to solve it. We try to focus on working with our partners to understand their goals and come up with realistic content strategy."
By ensuring that we understand those goals, we can lay out a bespoke content strategy and distribution plan that meets the objectives of each individual client. We also check in often with ongoing campaigns. One benefit of an agile team like Reuters Plus is that we can pivot quickly and adjust a campaign that is not performing at the level we expected. Content marketing and native advertising are still new to the industry and they’re going to evolve over time. Brands will have a better understanding of what they can achieve using native advertising more and more as the medium grows and evolves.
We make a point of being absolutely transparent about the levels of content a campaign might need.
Another concern publishers can have with custom content/native advertising is how to price it. For Reuters Plus, experience is everything.
“We work with our brand partners to establish a budget that works for their specific objectives. Since we produce far more content than just about any other publisher in the world, we can leverage that to understand what kind of content will fulfil the goals of a partner and what it will cost to create it. We make a point of being absolutely transparent about the levels of content a campaign might need, and we’re not afraid to say, that we’re not the right partner for a particular campaign if the brand’s objectives or the budget aren’t in line with what Reuters Plus can deliver.”
“You can create a 30 second TV spot for 10,000 dollars -- or you can create it for a million dollar. Brands know that, so to some extent, they do understand that there’s a difference in quality and in what they can achieve depending on the budget they’re willing to spend, but they still don’t embrace it fully. They do have an expectation that digital should be cheaper because it’s a CPM-driven model, but I think content is more effective across digital platforms than any other platform. Publishers just need to be smart about how they’re using native advertising and brands also need to have that understanding.”
Aside from finding new revenue streams, media companies are also faced with the phenomena of fake news and how to combat them. A recent survey shows, that a Majority of Brits associate advertising with untruths.
“One of the other reasons why we launched Reuters Plus was because of the discussion regarding fake news,” says Daniel Mandell.
“Credibility has become even more important to marketers and to consumers. We don’t want to be just another studio but a studio that stands for something in the way that we do not just create content, we create highly credible content. We have 167 years of serving media companies and the objective of credibility is core to our DNA. It’s a distinguishing advantage when creating content.”
Native advertising or branded content hasn’t created fake news, but fake news has led to a lack of trust in media publishers.
Daniel Mandell doesn’t see native advertising and its possible association with fake news as a challenge for the trustworthiness of publishers.
“Native advertising or branded content hasn’t created fake news, but fake news has led to a lack of trust in media publishers. If we’re are going to continue to flourish we have to regain that trust. In native advertising that means that the content has to be clearly differentiated from editorial content. If you think of the overall ecosystem of the media industry then fake news has disturbed that system, but the discussions around fake news give publishers an opportunity to enter the market with authentic content that creates an actual value for the audience.”
Nevertheless, some reader surveys indicate that especially the cocktail of news and native advertising might be worth avoiding for publishers. Is that bad news for a news organization such as Reuters?
“There is no reason why custom content can’t be newsworthy. We have seen that in some of our campaigns, but custom content hasn’t been done successfully in the news field so far. Generally, it’s easier to create fluffy content in verticals such as lifestyle. Our goal is to ensure that the content we create for our brand partners creates incremental value to the consumption experience.
It’s equally important that users are aware of what is editorial content and what is Reuters Plus content. We’re not trying to fool readers. What is important is that the content we create is adding value to users while at the same time hitting the brand’s objectives.”
We also constantly take user feedback and we address any concerns the audience might have in real time.
To achieve that a proper differentiation between editorial content and Reuters Plus content is “a product exercise”.
“Our Reuters Plus team work with the editorial team to make sure that the custom content is positioned correctly and that attributions on the content clearly show that it’s produced by the Reuters Plus team. We also constantly take user feedback and we address any concerns the audience might have in real time.”
That also entails that the editorial staff of Reuters does not produce native advertising, though that is not unseen among publishers such as Dennis Publishing in the UK.
“It’s imperative for us to maintain a distinction. We don’t use our own editorial staff for producing custom content. We have a large global team dedicated to producing content for partners. We have found success in hiring staff with a journalistic background, but it’s not imperative for creating content. It depends on their role. Journalists truly understand quality storytelling, but we are also very focused on the audience and the brand’s objectives. We’re not creating content for altruistic reasons, we are doing it for brand partners in order to fulfil their business goals.”
Generally there’s a lot of room for improvement and a need to raise the bar for creating credible content.
And when it comes to creating content, the industry as a whole still has a long way to go.
“There are highlights here and there, but generally there’s a lot of room for improvement and a need to raise the bar for creating credible content. Publishers don’t have a tremendous amount of experience in creating content for brand partners because it hasn’t been incumbent to them. They have primarily driven revenue through traditional advertising, but I also think that the pricing hasn’t been right which has resulted in budgets not being correctly allocated and that can hurt the quality.”
“Even though we have been creating content for media partners for 167 years, we go into 2017 truly open-eyed about partner content. We understand the pitfalls and we now have a specialised initiative in Reuters Plus that is only focused on creating quality content.”
One of the biggest challenges that native advertising has to do with the client-side.
“The marketplace has to be reeducated and brands, as well as publishers, have to understand the value of content and understand the expectations of the audience.”
How can that be done?
“We can achieve this through case studies but also sitting down with marketers and helping to educate them. We’re not always using salespeople to talk to the CMOs about partnerships. We're engaging the whole team, including the people who are actually creating the content and distribution strategies. We believe in helping to grow the industry and we’re in a good position to continue to take advantage of that growth ourselves.”
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