[Podcast] Native Advertising Landscape, Benefits & CEO’s Insights

Want the latest scoop on the native advertising landscape from a network founder? Find out exactly what the benefits of native advertising are and why it’s literally taking over the advertising industry. In this native advertising podcast, our very own Jon Malach did an interview with Jelly Marketing and discussed:

  • The invaluable lessons Jon learned from starting a native advertising network
  • How the native advertising really works
  • How Facebook and Google factor in the native advertising landscape
  • Why diversification and authenticity of your ad copy is king
  • Jon’s business and life hack advice for other entrepreneurs

So, have a listen and let us know what you think!

For your convenience, you can also download this podcast on itunes (filed under released 7/11/2016) and listen to it on the go. Scroll down for a complete transcript of the podcast.


Podcast Transcript

Rod Janz: Hi, and thank you for joining us for episode number seven of the Jelly Marketing podcast. I’m your host, Rod Janz. On the Jelly Marketing podcasts, we ask global marketing leaders from world-class brands to share their best practices, stories, innovations and more to help you move your agency, business or organization ahead. Our topic today is how to win at online advertising. In this episode, we discuss why effective marketing tactics are hard to find, how to write an effective ad, why diversification and authenticity are king. Our guest, Jon Malach, is the CEO of Native Ads Inc. Jon previously worked as the COO of an online media and advertising company focusing on assisting both advertisers and publishers to increase results.Throughout Jon’s tenure as COO, he connected over thirty thousand advertisers to over eighty thousand publishers. Stay tuned to the end of this interview where we find out more about what Jon likes to spread on his toast. Episode number seven, “Early to bed, early to rise, work like hell and advertise”, here we go. Hi Jon, thanks for joining me on the Jelly Marketing podcast.

Jon Malach: It’s my absolute pleasure. Thank you so much for having me.

Rod: Jon is the CEO of Native Ads Inc. And why don’t you describe where you are right now, because there may be a bit of background noise throughout our interview, but just tell us what you’re doing today.

Jon: Absolutely. I apologize in advance if you hear some background noise. I am in a beautiful city called Leeds which is a little bit outside of Manchester, and I was really excited to come out to the UK. I’ve been following virtual reality specific to advertising storytelling and journalism and how it can work with brands for experiential advertising. And there is an event hosted by the BBC going on tomorrow in London so I wanted to come out here and catch up with some colleagues and then head out and check out the event, so, it’s a beautiful, beautiful day and we’re sitting on the 23rd floor of the Hilton Double Tree, the Skybar, so again I apologize for anything in the background.

Rod: And you’re there at an interesting time in history. Have you had any discussions about the Brexit vote?

Jon: It has been obviously the topic du jour. We were here on the very first working day since the referendum was announced, and there are mixed opinions. Some people are saying, you know that it’s a huge mistake that the youth do not want to see happen, and others think it won’t make a difference. It’s definitely one of the topics everyone is hot on right now.

Jon’s Backstory

Rod: I see that you have offices in New York and Vancouver. Where do you live?

Jon: So, I am happy to say that I’m a Vancouverite, born and raised, I represent Vancouver to the fullest, as best I can. I’m really excited about what groups like jelly are doing. We do have offices abroad, because you have to be in the Mecca of advertising, certainly New York. And we’re fortunate also to have some great colleagues in California and London, as well as in Costa Rica, India. Our developers are all in the Ukraine, just really fortunate to have a very strong group back in Vancouver, so if you’re listening to this, shout out to all you guys! You’re all rock stars and I consider you family.

Rod: You’re literally a worldwide business. You have locations all over the world.

Jon: Yes!

Rod: Cool. And how do you first become interested in marketing? Do you have a marketing degree? What got you into the marketing business?

Jon: It’s a really funny story. I was going to school with the ambition to become a lawyer to follow in my dad’s footsteps. Halfway through, I exited to open a martial arts school with my brother. When we opened up the martial arts school, we recognized we were using literally 11 software programs to run the business, and during that period of time we decided that it would be a good idea to consolidate those programs all into one niche specific membership-based software. And we started a company called Champion’s Way with our instructor, and Champion’s Way became a force in niche specific membership software.

In building up that company, we learned basically everything you could when it came to marketing a micro-business and were surprised how many commonalities there are in marketing and enterprise or medium-sized business. And over 11 years of working on marketing and software development, and figuring out ways to growth-hack, that’s where it became a passion and I was very fortunate to meet a gentleman, Charlo Barbosa, who I consider a pioneer in internet marketing. There’s nothing that man has not done. He decided to bring me on as a partner and taught me his vision.

And ever since then, it’s just been the only way I look at the world – through the lens of how can people communicate better, more efficiently. How can people find the right pairings, whether it be relationships, consumer relationships, a brand, or trying to tell a story.

Rod: What are some of the things you learned from him that made a difference in your life and in your approach to business?

Jon: The main thing I learned from him is that the best information will be very tough to find. Usually the blogs that talk about marketing are talking about things that are (and I don’t mean to sound in any way, shape or form disrespectful to a lot of the quality news outlets that are out there) heavy in buzzwords and heavy in theories, but not so heavy in practice. And all the things that Charlo employs are extremely valuable and effective tactics. You’re not going to get them in that textbook. You’re not going to learn them in school. If you’re lucky you might know someone else who’s doing them, but it’s one of those interesting caveats of the industry. You’d think marketing information would be readily available to everyone, but unless you’re going to really strong conferences and learning about it offline,  it’s difficult to learn just by reading things online.

The Early Days of Native Ads

Rod: Tell us about some the early days of Native Ads, Incorporated. What were some of the things that you learned? What was it like starting out?

Jon: Well, it was an interesting time. We had a theory that having the publishers and having the reach would be the way to win the game, so we focused on developing proprietary widgets. Javascript-based ad units, we made 17 of them, and for each one of them we thought ‘This is gonna be the one!’ We went from content recommendation, to in-stream, to in-stream on property in image – we had footers and anchors and mobile footers and anchors and mobile interstitials. We basically developed every kind of ad unit you could imagine, and then we learned a really hard lesson once we started to hit critical mass and make our way up the Comscore ratings.

As we started to generate direct publishers, there was one fateful day when I was on the phone with the CRO of the Daily Mail and I asked him, you know, how do we get our ad units on his page? And he let me know that one of the competitors in the market had just cut him a check for 25 million dollars, pre-paid, guaranteed, flat-rate CPM, on a unit that is sold on CPC, and that was scary.

Rod: You didn’t have 25 million dollars just sitting around.

Jon: No, no, that’s the kind of pocket change I try to reserve for my advanced yachting hobbies. No, I’m kidding. We had nothing like that at the time, and then we were fortunate enough to have a meeting with Time Inc. at their head office in New York, and it was in that discussion we learned that they had received a check for over 100 million dollars from another competitor in the market who had also prepaid for traffic at a flat-rate CPM. So it was time to go back to the drawing board and figure out how we can exist in this space if people are basically renting  from these publishers at rates that are very difficult to make money with.

And that’s where Charlo had a very strong vision and together we decided to make a big pivot. We’d focus on the direct advertisers and the age-old cliche saying, ‘If you can’t beat em’ join them.’ We ended up partnering with all of the companies we, at the time, considered competitors.

So, we were really fortunate because we had a background in content marketing and publishing ourselves. We were running high-quality blogs (at one point one of them was in the top Comscore 300 for the U.S.) and we used that knowledge to build a direct publisher base which we still manage today; it still reaches 120 million unique visitors per month in the U.S.

But it was time to employ the horsepower of all these other major content marketing networks and content syndication networks, so we partnered with all of them and built them into our platform. We would basically say to any advertiser on the planet looking to try native advertising or content syndication, this is the platform you can use to get traffic from literally any other source in the world. It’s about access to more traffic in the world, and it’s backed by people who understand what it’s like to market either a website for getting more loyal visitors to your content blog, or if you’re a direct advertiser looking to convert on a lead or a C.P.A. goal or something to that effect, we had all of that as well. So it was a really interesting approach to business: we basically started backwards and then realized we wanted to go the other way and as a result mapped out the industry through experience versus through theory.

What Is Native Ads Inc.?

Rod: You’ve been alluding to, well you’ve been more than alluding to, you’ve been describing what native advertising does and native advertising benefits; just tell us a little bit more about what you do and what makes Native Ads unique.

Jon: Yeah, and I apologize to all of you who have been listening. It’s long winded so I’m going to get right to the point.

If you are looking to buy traffic in the form of an image and a headline, no different than what it looks like on Facebook or on Instagram, but instead of being locked into those social platforms, where the culture of the content consumption and the viewers may not be aligned with the type of messaging that you want to communicate, what we will do for you is get these images and headlines placed on all the high quality websites specific to the interests of your consumers or your target audience. And we will get you higher click-through rates with zero risks because it’s sold through CPC, delivering the traffic to pages that will tell stories or educate and essentially warm up your audience to go from maybe upper-funnel to middle-funnel, or in the middle of the funnel through to a conversion.

In layman’s terms, you upload images, you upload headlines and a click URL; we will deliver traffic at scale at a low CPC to an advertorial-style landing page. So while we do support direct response marketers, the whole idea behind native advertising is not to just shout at your consumers to buy something or to hand over their information. Instead, it’s a value exchange: an advertising piece that can stand on its own and still deliver a value to the user, whether through education or entertainment. And that’s what native advertising’s all about.

Rod: How do you work with a client?

Jon: Being people that have spent close 20 thousand dollars a day personally on online advertising, we knew all the nuances of using the Facebook Power Editor. And I don’t mean to knock them but I think anyone listening to this understands that it, and other native advertising platforms, can be cumbersome at times. You’ve probably experienced having to manually upload images one by one.

When you log into our platform, it’s self-service with a full-service feel because we can help out at any time throughout your campaign creation. With our platform, you simply choose 10 images, you choose 10 headlines (or less). However many you choose to upload, the system will automatically create the variance, so 10 images and 10 headlines would automatically create 100 ad combinations. You tell us where you want us to send the traffic, and then you basically pick your targeting, you know, what type of audience are you after, and at what type of interest point would you like to connect with them.

Maybe you’re targeting a male between the ages of 25 and 45, but do you want to speak to him when he’s reading a site that’s talking about, maybe, cars or do you want to talk to him when he’s reading a site that’s talking about sports, or financial news? We’re all in a different mentality when we’re reading these sites. And that’s the benefit of native advertising: it goes across the web and allows you to determine…not necessarily real-time marketing, but what some people call right-time marketing.


Rod: Do you help with copywriting? I think that’s always an issue for people. I’d love to do what you’re talking about but how do I write an effective ad?

Jon: Well, we encourage everybody not to just shy away from trying. I think it’s important that every advertiser, every brand, every agency understands that we live in an age now where we’re all mini media companies, and we will not succeed if we don’t learn to produce our own media. However, there are great companies out there, I have to give a shout out to Darien and Jelly, you know they produce really engaging content and experiences, and there’s a lot of lot of freelance writers out there that can put together beautiful pieces for you. And should you require help and not know where to go we can certainly assist with that. So that eliminates a major barrier with native, which is having content, and that’s such a good point that you brought up.

Rod: It’s good for every business owner to go through the experience of writing copy, I think it’s a good process, but then I guess ultimately if you really want to polish it up and make sure it’s effective, you know, go to a company like Jelly or find a good copywriter.

Jon: Precisely. I think it’s important for all of us to follow that mentality: that the best way to learn something is to try and teach it, and the best way to understand your brand’s messaging is to try and create it yourself. You know I believe that any piece of content that you intend to promote should not have 3 variants but 5. You should try all 5 and then just let our software do all the decision-making for you. The data will do the talking.

How long are they spending on that article when they click? Are they clicking on it and converting, whether through submitting their information or making a purchase. Or if you’re a publisher yourself and you’re looking to generate more page views and engagement on your site – are they hitting your page view goals, are they hitting your 10 month cycle?  Let the data do the talking.

As marketers, we all have that 6th sense, we have that instinct. But I think that everybody can agree that sometime in their marketing career they had been completely wrong and the data suggested otherwise.

Rodney’s Craft Brew -A Beginner’s Guide To Setting Up A Native Ad Campaign

Rod: I’m a bit of a slow learner, so let’s walk through a practical example here just to make sure I’ve got it and that our listeners understand. Let’s say I’m starting a brewery, Rodney’s Craft Brew out here in Coquitlam, and I want to start to do some advertising. Just walk me through the process: I write my own ad, I have some graphics, I sign up for Native Ads, I loaded up the system, and then I decide where the best place for my ads to go is. You’re supplying the outlets for that. I decide how much money I can spend or whatever, and it will go to all of those different outlets. Is that a pretty good summary of what you do or did I miss anything?

Jon: No, I think you got the big picture quite accurately. I think it’s important to also inject into that process: thinking about activities and mentalities that promote the consumption of your Craft Beer.  

So, with summer coming up, there would be no better native ad than to talk about 10 or 15 awesome activities to do this summer and the native message in there is that you talk about activities that a beer would compliment really well. You don’t say “Have a beer from us,” no, we have sophisticated consumers today and they don’t appreciate being shouted at and they don’t appreciate being marketed to as if they’re not intelligent.

So let them create the idea in their own mind from reading your content that they feel like having a beer and isn’t it great that this beer company took the time to create a great value for them by suggesting all these great places to go, maybe they even shout out potential partners in this article that as a “give-first mentality,” and now you’ve really got a really cool piece of content. So now you put that content together, go out and find 10 really beautiful images.

And they should not be iStock photos.

We do not respond to it. We all hate that live-chat image of that same lady that’s smiling with the perfect teeth when we’re on our website, so why would anyone click on that? I got no beef with Getty, I got no beef with iStock, but when it comes to marketing…

There’s a lot of great freelance photographers that you can employ, and they’ll go out and do all kinds of beautiful things for you. You can even try a cartoon or a graphics artist that will do something unique and off the beaten path. And once you have this all put together, now you’ve got a piece that you’re proud of, and this can go on your blog in addition to being part of your native advertising strategy.

To finish elaborating on what you said so accurately: you pick the type of interest points which you’d like to hit, and our algorithm will go find the best sites that are going to match. It’s basically playing a rapid game of Marco Polo: Is this the right site, are we getting engagement from it, yes, no… and I skipped a step.

You enter in what we call your CPA goal, or your conversion goal, or you enter in your pageview goal, you know, what is the best outcome of this marketing campaign?  And then the algorithm does all the heavy lifting and figures out how to get that for you. If you get traffic from a source that you don’t feel is on brand or you don’t feel is converting, or the robot figures out that it’s not converting, it automatically just disqualifies it from the campaign and keeps things intelligent. It’s got that little A.I. thing going on where it gets smarter as you work with it.

Balance And Unbalance In The Native Advertising Landscape

Rod: This is kind of an annoying thing but I have to ask this question. I read recently that Facebook and Google have 85% of the online ad spend and people are pretty concerned about that. Would Native Ads submit my ads to those platforms as well?

Jon: Well, Facebook is actually a partnership that we’ve had signed since late 2014, and perhaps this statement is indicative of how good business has been, but we simply have not had the time to integrate them. Not that we don’t see it as a priority, but there have been other elements that have made us more successful as a result of making that decision and what I really like is, I’m not exactly sure how to say this diplomatically, but I feel like I get an opportunity to be a shepherd to bring Facebook advertisers that are already versed in selecting images and headlines that are engaging, and showing them how they can put them in other places on the rest of the Internet. So it’s great that we have these social platforms that have 85% of the online ad spend because it shows that there’s activity in all that, but I’m not worried about this becoming a monopoly because people are going to want to go to other places to get their content. And the reason Facebook is so successful is because they’ve made it easy to share content that’s not on their platform. And as long as that content exists off of their platform, so will the ad spend. It may be a little top heavy right now, but, I have a saying, the Universe doesn’t understand right from wrong but it understands balance from imbalance. Anything that isn’t balanced well will eventually balance itself.

Rod: Well, that’s good. Does that come from your martial arts background? It sounds like martial arts philosophy…

Jon: It absolutely is and it’s cool that you saw that. Martial arts is a big part of the way that we approach business: loyalty, discipline and indomitable spirit are definitely the pillars of our company.

Rod: So, it sounds then that a benefit of native ads is that your ads are even more targeted. You can be pretty targeted on Facebook but you’re still not necessarily reaching that really specific audience, like let’s say you did have a martial arts product. I’m imagining that you can get me right into native ads, or native ads publications, and martial arts websites and that sort of thing.

Jon: It’s a yes and no answer, so…

Rod: OK.

Jon: The ‘no’ part is that, unlike Facebook, you don’t create a campaign and start typing in a bunch of interests and then it automatically auto populates and finds people that have expressed their interests like in Facebook. I think Facebook really redefined what targeting is and did an amazing job to capture all this social data, and allow that to be something we can utilize in our targeting. However what native advertising does that allows that type of granular targeting, here’s the yes part of that answer, we spray every word from the landing page and the site that you’re sending traffic to. We grab all the metadata based on that, we make matches that in some cases are an exact match to the editorial content on the publisher sites that we have access to. And in some cases we find really cool combinations. Like, some readers really like to see a financial advertisement on a sports site while checking out last night’s game score. And all of a sudden there’s a financial offer, some kind of instrument, that is educating viewers, not advertising, and as a result of that there’s high click through rates and high engagements. So yes, you can target extremely fine with a granular approach; however, it’s based on the content you create in combination with the targeting of the audience.

Rod: Oh, I think I got it now, that’s excellent. I just talked to someone about snorkeling and taking the deep dive. I think you just took the deep dive and now I understand native ads, that’s great.

Jon: Yeah, I think we just grabbed a couple clams from the bottom of the ocean there. Sorry if I got too granular but of all of you listening out there it’s just something very difficult not to be passionate about! It’s really lovely to get to explain it.

Diversification and Authenticity In Native Advertising

Rod: Yeah. Do you have any other tips for us as far as advertising or online advertising is concerned?

Jon: I think it’s another cliche statement but diversification is king here and authenticity is king here. So when you go to create a campaign, mix up your ad spend in the beginning. Going all in on one discipline is always going to limit your growth and limit your opportunity to learn. Every dollar we spend we’re either right or we’re wrong and both are fine as long as we learn why we’re wrong and capture those learnings and apply them to future campaigns.

And the other element is authenticity. Today’s consumer rewards authenticity. We all know when we watch a youtube video when it’s a staged prank. As soon as that one comment pops up, “This is fake.” The viewership and the engagement go down and it’s no different with advertorial content, so don’t try and be something you’re not, don’t try and tell a story that’s not true. Dig deep, it might not come to you right away, and keep trying and as soon as you find your voice as a marketer or a brand, really the only limitation is your imagination.

The Lightning Round: Blackberry Jam, Favorite Apps and Lifehacks

Rod: So just to wrap things up we do a little lightning round, we ask all our guests the same questions. You don’t have to answer quickly but we’ll just fire these off as rapidly as we can. Our first question that we ask everybody because we’re the Jelly Marketing podcast, what do you like to spread on your toast?

Jon: On my toast, it’s gotta be peanut butter and blackberry jam.

Rod: Blackberry jam. Cool, that’s an interesting choice. Where did that come from?

Jon: I have family in Saskatchewan and they love their blackberry jam.

Rod: You’re a busy guy. You’re flying around the world, you’re going to conferences, you’re the CEO of a large company, what do you do to handle stress?

Jon: I like to go for a walk and talk with colleagues. I think that motion is one of the things that stimulate positive feelings.

I always like to ask 2 questions: are we focusing on what’s important, and what are we not doing. And whenever I ask those 2 questions, it just helps create that clarity. I find stress is the result of repeating thoughts in your head and it’s almost like having too many tabs up open on a web browser, so it’s going to bog you down, slow down your biological RAM and it’s important to close all of those. Start with a blank piece of paper in your mental projection and say what are we not doing and what are we focusing on and go for a walk. That usually does the trick for me.

Rod: You still practice martial arts?

Jon: Not as much as I like to but I’m very happy to say that I’m living vicariously through my two sons who are both training together with my best friends in the world who teach them every Saturday. Shout out to Dean and Curtis, they’re doing  such a great job with my kids.

Rod: That’s kind of one of the joys of parenting, seeing your kids grow and improve and all that sort of stuff.

Jon: Yeah. They’re little bodies but massive personalities.

Rod: Maybe kind of like their dad. The massive personality part. Are you an iPhone or an Android person?

Jon: I try to switch between the two every iteration. Right now I’m the proud owner of a Samsung Edge 7. I love it, I’m not sure I’m going back to Apple, but I like to go back and forth between the 2 just so that way I can have that user perspective from both sides of the OSs .

Rod: And what’s your favorite app or online tool?

Jon: Trello by a long shot and Last Pass. Those are my 2 life-savers.

Rod: Do you have a favorite life or business hack to share? Something that makes your life a little bit easier and maybe could make some of our listeners’ lives a little bit easier?

Jon: Oh my gosh, there’s so many out there. Let’s focus on a life-hack. Try to invest chronologically and emotionally into the people around you. Whenever you feel like you’re not getting to where you want to be, I think the best thing you can do is do the polar opposite of your instincts to “get mine” and try to give to someone else immediately. Whenever you’re trying to receive in life, the second you make the intention to give…the universe just understands this reciprocity.

Rod: I like that, and I know it’s hard to choose but maybe just for the purposes of our interview, do you have a cause that’s near and dear to your heart?

Jon: Absolutely, my good, good friend from 16 years DJing on the radio and in nightclubs, DJ Ali Baba, supports the Make a Wish Foundation and every year we throw an event called FUBAR Summer Splashdown. This one is the last one ever at splashdown as Splashdown Park is closing. We get all of the kids together and we raise a whole bunch of money for a really good cause and have a real lot of fun in the process.

Rod: Awesome. And how do people reach out to you and find out more about Native Ads?

Jon: I have a brand new twitter handle – @jonmalach. Hit me up on Twitter!

Or you can hit me up on LinkedIn, I try to connect with everyone. I’d be happy to hear from you. As for checking out Native Ads, you should definitely look at our blog! It’s nativeads.com/blog and it’s filled with lots of cool marketing hacks and tips that you can use for free.

Rod: OK,we’ll put all of those links in the show notes. So you’re over in England, have a good time, I hope you learn lots! Thank you so much for joining us today.

Jon: Thank you so much for giving me the opportunity to speak on such a great platform. You guys are great on Jelly and a huge shout out to your whole team.

Rod:  Well thanks again to Jon Malach from Native Ads Inc. for joining us on the 7th episode of the Jelly Marketing podcast. If you’d like to check out some of the links and show notes fro this episode, go to the Jelly Marketing podcasts page at jellymarketing.com and you’ll find us under the blog tab of the website. Also, be sure and check us out on iTunes and leave a comment and a rating. We’d love to hear from you and the more people that rate our podcast, the more people we can reach. Thanks for listening and we’ll talk to you soon.

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