Native Advertising, the new hot buzzword for local media executives hunting down new revenue models, may also provide the best mobile ad unit.
That is, sponsor posts are a much needed alternative to mobile display ads, and better-suited to the small screen.
So said Chris Lee, president of Deseret Digital Media, at the Local Innovation conference. He walked through a model of the mobile paradox that native ads can solve:
If you are lucky enough to be president of Deseret Digital and have, say, 100 million desk top page views with 4 ad units per page and an overall CPM of $5, that's $5 x 4 = $20 x 100,000 or $2,000,000 possible dollars.
It's easy to see why newspaper companies can't migrate their massive organizations to digital sales for the measley sum provided by banner ads alone.
That's why the most successful initiatives have included non-traditional revenue streams, where Deseret is a clear leader.
As consumers migrate en masse to mobile, however, the situation gets worse.
There is only one muon-sized ad unit on a phone and CPM's have fallen to around $2.
So Deseret's entire 100,000,000 in traffic could be sold out, theoretically, for $200,000.
The impact of this fact-of-media-life is still waiting to be felt, as ad spend greatly trails the consumer in use of mobile.
One of the answers to the mobile dilemma, however, is native advertising.
Sponsored posts appear in-stream and several can appear per user session on the page as readers scroll, not just click.
Facebook mis-understood the mobile advertising model at first and suffered until they finally got it right with sponsored posts.
Today, "sponsored posts" account for Facebook's fantastic growth forecast.
One of the odd quirks of media is how physical space impacts design, which profoundly impacts the business model.
And as a better, more profitable mobile ad unit, native has a strong future.
See all the reports on local native advertising in our new channel on the subject here. Many thanks to all the executives who have contributed and to the Native Advertising Summit, where we were introduced to some of the top local native programs.