B2C Lead Generation - What is Native Advertising?

We recently caught up with Joe Williams, founder of the highly successful content marketing agency Version Two, to do a deep dive into the world of Native Advertising and Lead Generation. Beneath is an abridged transcript of the highlights and key ideas discussed. If you would like to listen the conversation in full, be sure to visit THE B2C LEAD GENERATION PODCAST.

To begin with, can you give us a rough overview of Native and how it differs from other types of Lead Gen?

Joe Williams: So typically Native Lead Gen is sponsored ads that sit below editorial content on major news websites. So, you know, you're surfing around The Sun or The Mirror reading articles, and then below those articles will be kind of native widgets, which recommend other stories, hopefully either relevant to you, or if not, at least clickable that you will be intrigued to find out what's behind these and these little tiles.

So it's very small ad real estate. It's only a thumbnail image and an 80 character headline that you've got to attract to the click because users are obviously consuming news content. So what native lead gen does is get users on these really small ad real estates. Then we put them through to a middle Advertorial page where we then really qualify what the offer is about and what the advertisers are talking about. We educate, we inform, and then we send them off to to a lead form where they then submit their details.

So we work a lot in financial services, whether that's life insurance, mortgages, credit cards, lanes, people who want a quote to save money on their mortgage or to see if they could get a cheaper life insurance.

We never do ads that say “Here’s 50% off life insurance or here's a mortgage offer.” It's just boring. We need to understand that native users are on these websites to consume editorial content and they want to read news articles. Therefore we present the advertiser's offer as a current article - as an editorial piece.

So all of our skill and our time goes into creating these advertorial pages. We don’t really talk about the brand at all. The first 50% of the article is just around the challenge in the market right now. “Here's a problem that lots of UK consumers may have, and here's a misconception about what you may be doing… and here's a solution.”

And then the solution at the end is you click through and get a quote and it's going to be free and you could save yourself a lot of money or make yourself the money or get cheaper car insurance or whatever it may be.

So it's quite an organic journey at that point because the users almost find it through surfing news and finding out about the subject rather than just being pushed direct response messaging.

Do you or the clients write the articles?

Typically it's a joint effort. They will supply us with some copy or some assets, and then we will rewrite it to make it work. It's not an exact science, you know, we can sometimes get stuff and we think it's gonna be fantastic and it just bombs.

But again, going back to the whole VersionTwo thing, we just rather get it live, see where the breaks in the journey are, see what's working and then create more stuff that looks like that. There's definitely an art to getting somebody from an article to then fill in a lead form.

They’re two different things. So having that kind of bridge and taking them on this of journey of exploration from reading about the weather to saving money on a mortgage. It's quite an interesting journey.

At what point do you want the prospect to realise it’s an advert and not editorial content?

There's definitely a fine line. You don't want to be underhand and you don't want to completely hide that it's sponsored. You don't want to hide that. So you've got these advertorial disclosures. Our rough rough rule of thumb is the first 50% of the advertorial should be talking around the marketplace and the subject rather than about the brand.

At that point hopefully the users are engaged with the subject and they've identified themselves with the problem that you're explaining, and therefore they're open to what the solution is, even if it's a sponsored solution.

What we usually do is we have the top half of the article talking around the problem and what's happening in the market place right now and in the bottom half saying, well, here's the solution from X-Y-Z brand.

How do you see the future of native lead generation?

I think it's going almost like social. So, going back 18 months or two years ago, I was spending a lot of my time in native platforms with technology stacks, figuring out the best price to pay per click, on all these different publishers and all these different ads, right?

So we'd have quite sophisticated technology stacks that would look at our earnings per click on all these different publishers and set our CPCs lower than earnings per clicks, trying to find users that are profitable for us on the brand. We don't necessarily have to do that anymore because a lot of the native networks are developing their own algorithms similar to how Facebook has, where they know lots of data points on their users as to what content they consume, what ads they interact with, what things they purchased in the past.

So typically their own smart algorithms are better than our targeting or us manually playing around with bids. So native I think is going that way. Similar to Facebook where eventually rather than bidding CPC, you're going to set a target CPA or some kind of target goal, and it's going to change your bids based around its own thought process around whether the user's going to convert or not, which means as a business, that does a lot of native lead generation a lot more of our time now is going into the creative and the funnel to optimise that.That's the point of difference. If the algorithm is undecided where best to serve it and we don't have these bidding strategies, that is our secret sauce of how we get the best out of native, and the new way to get the best out of native is just to do better advertising with better conversion funnels.

How do you prefer working with clients? On a CPL or CPA?

Typically CPL because at least there’s some shared risk there. I quite like clients being bought into the fact that they need to work the leads properly.

Just putting myself in the client's shoes. If I’ve got two pots of leads and some are on a CPL and some on a CPA I naturally, or subconsciously, I'm always going to work the CPL leads harder because I've got cost associated with them.

I'm going to try and work some quicker because whether I sell them or not, I'm still paying for them. With the CPA leads, they’re almost an afterthought because if you sell them, that's great. That's money to you. If you don't then so what?

What are problems you face with your clients in terms of getting the best out of the leads you're sending them?

I wouldn't say there were problems. I'd say there's varying degrees of success you have with them. Typically, measuring time to contact and improving that is always important.

So having some kind of good dialling system where leads come in real time and they actually have a CRM system in place where it's also dialled and they call it a user. There's definitely a half-life of a lead generated and time to contact. And it is linear.

On the technical side of stuff, there's lots of things that people are doing with dialling systems, because Android phones are now really sophisticated in knowing what's a call centre. We’ve had clients before that generate hundreds, thousands of leads per day, through numerous sources and over night they find it really tough because Google's released an update where all of their numbers are coming through on Android as spam, but that's something completely outside of our control but they need to fix that with Google and work with their dialer in order to make sure that the numbers are coming through correctly.

Do you have any clients that aren't taking them in real time or are trying to dial them manually or do something else?

It's a good question! We've had them before and I guess when I was more naive, it was always “Should we take them on or not?” And you think, okay, let’s give it a go. Maybe this time.

It never works. It never does. They may batch upload them. They may do at the end of the day or get CSV or whatever.

They're never going to be as competitive as a company working in real time. Therefore our cost per leads will be diminished because the value they're getting from them is lower. Therefore, they can't pay as high as their competitor and it just doesn't flush out properly.

Those relationships are usually fairly short-lived

Are there any particular niches or industries where Native works really well?

It's really just the considering the medium that you're buying media into, right? It can work for anything if the offer’s good and relevant to the users that you're looking to target. Same as any other media channels. So we do a lot of lead generation, especially in the UK, but outside of that, we've seen a big trend in direct to consumer businesses over the last year, obviously with lockdown and retailers being shut and people forced to buy online.

We've seen lots of people who traditionally - depending on a budget - go through social and particularly Facebook with e-commerce and direct to consumer offerings, they’re now moving some of that budget to native because native can work really well for those offers, especially if you’ve got a really good story to tell that can be presented as a native news article.

Do you have a max reach or target every day with each client?

Some have caps. Yeah. So we typically cap our lead gen because of call centre capacity. So they actual have a physical number of people in seats who can handle these leads. The larger ones are dealing with 500 to a thousand leads a day. The smaller guys, obviously it's a lot lower.

We typically won't take on a client unless we can generate them more than 50 leads a day. That's not to say we need to do that on day one and we need to just chuck leads at them and hope for the best! There's a test and learn process. If they can't sustain more than 50 leads a day, it's going to be really difficult to get critical mass to make it work for everyone involved.

The e-commerce guys are usually completely uncapped and if we've got the CPAs right and if we've got the funnel right, they'll open the taps. They just want to sell as much product as possible.

Do you buy all the media or do they have to pay up front?

In 99% of our clients we pay all the media. That was the biggest challenge when starting. I had to generate outside investment purely for cashflow purposes. The model is solid. We've got a really good core core team who know what they're doing, but my biggest challenge was spending a lot of money.

We have our suppliers, whether it's Taboola, Outbrain, Facebook, whoever, with no trading history as a business. So very short credit terms, if any, so we're prepaying media and we’re doing it at scale. Clients are pay me on monthly retainers you know, I’m getting money in a few days, but I’m spending tens of thousands a day. There’s a cashflow problem here! But once I solved that it wasn’t too bad.

What’s the rate of conversion in comparison to something like PPC for a lead coming in, given there’s more of a pre-qualification in advance?

It depends. Search and intent based search is always going to win if you're measuring straight conversion rates, but it's why it's the most expensive, right? If somebody is going on there and searching for the best remortgage deal in Bristol, then you bet your ass that guy wants to get a remortgage deal and they’re based in Bristol!

With native that’s a lot more difficult to do, but you do have that middle qualification page.

So yeah, conversion rates are great. They stack up really favourably against Facebook, typically because Facebook is great at finding the right users, but people do Facebook ads straight through to lead form and they didn't have an educational piece in the middle. So what they do is they’ve probably got better targeting on Facebook. You're targeting people of a certain age ,of a certain gender, a certain demographic in market for X, Y, Z. That's fantastic. You don't necessarily have all of that targeting capabilities within native, but you do typically have these advertorial pieces where you can really go into detail on the problems, the solutions that you're solving and getting them quite educated by the time they then click through and take action.

In terms of design of the ads, does the advertorial match the landing page or does the advertorial match the page to the site it’s placed on?

We try and match our advertorial to the lead form that we're sending them. It’s got a similar theme to it. There are similar fonts, similar colours at play. So there is almost a continuous journey.

We didn't want it to look like a huge disconnect. You know, they were reading this article around the subject and clicked to this thing and its just looks completely out of place. So continuity is massive in native and there are a lots of tricks we do with our ads to give continuity to the user. So if one of the simplest tricks we have with native ads… whatever ad you're using, whatever that initial headline is that someone's clicking, make the best one of those your sub-headline on your article. Sounds really easy, but tricks like that add continuity.

To listen to the rest of this interview, check out the entire podcast with Joe Williams over at THE B2C LEAD GENERATION PODCAST now.