Long Story Short: Similar to "advertorials," native advertising is designed to be entertaining enough in its own right to compel visitors to consume, be influenced by, and even share the content, be it videos, images, articles, or music, based only on the targeted and contextual appeal that holds on its own.
The content tends to be camouflaged in native garb, looking and feeling like the surrounding editorial content in both tone and voice, whether it's an article on the Atlantic, a Vlog on YouTube, a snappy on Instagram, or a pithy 140 characters dose on Twitter.
While most of the popular articles I have seen on native advertising have been negative blowback gotcha exposés targeted against mainstream media sites like The Atlantic that have been serving up editorial content that looks like a duck, swims like a duck, and quacks like a duck, native advertising is more often like a shell game of links, recommendations, suggestions, images, tweets, videos, infographics, referrals, and click throughs - not just copywritten puff pieces and McArticles.
In many ways, native ads put a media blindfold on its visitors, turn them around until they get dizzy, and then set them off to paid for and sponsored content. And, since the typical visitor is undiscerning as to whether content is an ad or editorial (people generally don't discern between organic results and ad results on Google search, believe it or not), it's not hard to bait the typical user into paid content - even to the point of earning shares to social media. That said, the onus is on the native advertiser: you're only as good as your lure, only ad good as your headline, on as good ad your content.
The Short Story Long: According to Reuters' Felix Salmon, "native content tends to aspire more to going viral" more than sponsored content or display advertising. In other words, native advertising wants to compel your superconsciousness to share, tweet, retween, like, and +1 rather than just infect your subconsciousness thereby branding you - or even the holy grail of converting you to a sale.
According to Salmon, at least, native advertising is more interested in creating carriers - brand Typhoid Marys - who will spread the advertisement rather than just convert on the ad. I guess we can call it buzz advertising, if you will. Here's Felix Salmon's attempt at putting together a matrix to explain what the difference is between PR, native advertising, and brand journalism; content marketing, marketing, and blogging.
The Native Matrix Who is it written by? Editorial staff Sales staff/
Brand execs Who is it published by? Publisher Public relations Sponsored content/
Brand Content marketing Marketing Blogging *Sponsored content is designed to be read; native advertising is designed to be shared.
Agencies are Really Good at What They Do: Until a few years ago, the top videos on YouTube had authentically gone viral based on their own appeal and stickiness - they were generally amateurs engaging the world artlessly and their "going viral" was mostly organic.
In the past few years, however, the majority of these apparently consumer generated content are agency-produced and agency-promoted. Agencies really are better at this then we are.
Even when it comes to producing content, entertainment, video, infographics, and compelling video or writing hilarious copy, a team of trained professionals will generally always getting it right more often than a dude in a room with a cam. We can make fun of agencies, but funny is funny, well-produced is pretty compelling, and having a promotional machine - and budget - behind your video, image, article, and music couldn't hurt.
Native Advertising as Contextual Content Marketing: Since I'm an SEO and SEM guy, I would say that native advertising is merely an extension of contextual advertising, the sort of content- and context-aware search advertising you see when you do a search on Google; or, more recently, the content-targeted banner and video ads you'll see that attempt to cater to both your own individual interests - based on what the advertising network already knows about you - and the topic or theme of the page. Call it contextual content marketing?
The goal, of course, could be to keep you on the site (if you like this article, you should check out this one), lure you away from the site to an advertiser (other content you might be interested in), or encourage you to share, even if you don't actually click through or even read the target native advertising content. According to Wikipedia,
"Native advertising is an online advertising method in which the advertiser attempts to gain attention by providing content in the context of the user's experience. Native ad formats match both the form and function of the user experience in which it is placed. The advertiser's intent is to make the paid advertising feel less intrusive and thus increase the likelihood users will click on it."
The Back Story: Back in 1980, CNN changed the news cycle to 24/7. In 1993, HTML and the web browser razed the barrier between professional and amateur news makers. In the last 20-years, as media outlets proliferated, the hegemony main stream media possessed over news, entertainment, and content weakened and media outlets failed, downsized, and were gobbled up by much larger fish in order to survive. As fewer journalists juggled more stories for less money and security, reporters relied more and more on wire services and press releases for their story ideas; then, over time, those releases, provided by PR agencies and brand communication, became bonafide news sources. As MSM struggled, agencies, lobbyists, and organizations provided releases with produced video, graphics, and data as well in order to take some of the weight off of the news providers in order to facilitate inclusion in the news cycle. And, as the news load has increased, the staff has become too lean, and the weight of the news organization can no longer be supported by subscribers and traditional advertising alone, the impermeable blood-brain barrier between editorial and advertising is becoming more and more permeable. Many believe that native advertising is the harbinger of doom. Others believe that native advertising may well be the sort of income stream that mainstream media needs to move healily into the future - at least fiscally. Who knows of souls but God.
What This All Means: With regards to native advertising, the horse has left the barn - in full camouflage, shell game, blindfolded, spinning, dizzy mode. Long the shenanigans of sites like BuzzFeed, The Huffington Post, and Gawker Media, more austere and serious news sites like The Washington Post and the New York Times are joining The Guardian and the Atlantic.
And, it will be the wild west for the foreseeable future - or at least until the FTC weighs in on disclosure standards and what defines a chargeable offense - and what that means. In the article Native advertising has a long history and it didn't begin with BuzzFeed, Adrienne LaFrance is quoted about the long continuum of native advertising in the context of the new world where old media no longer possesses control of the printing presses:
"The difference today is not the introduction of native ads-which happened long ago-but the reality that publishing is no longer only in the hands of the influential few who control printing presses," writes Adrienne LaFrance. "News organizations that want to survive are going to be open to all kinds of funding ideas, including old-school strategies like native advertising. It's not the internet's fault that native advertising exists. Journalism needs diversified funding streams."
Lasciate ogni speranza, voi ch'entrate and go get 'em, Tiger!